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National Grid PLC on Thursday backed its five-year outlook on a strong financial 2022 performance due to smaller hit from Covid-19, and lifted its payout to shareholders.
Further, the London-based power transmission and distribution firm reported progress in its sale of Narragansett Electric Co to PPL Corp.
It recorded a pretax profit of £3.44 billion for the year ended March 31, more than doubled compared to £1.66 billion generated the year before.
This was on revenue growth of 35% to £18.45 billion from £13.67 billion.
The company attributed its performance to a ‘lower adverse impact’ from Covid-19 compared to financial 2021, higher UK Electricity Transmission net revenue and the first year of operation of IFA2 and the North Sea Link. IFA2 is a subsea electrical interconnector, running beneath the English Channel between France and the UK. The North Sea Link is a high-voltage direct current submarine power cable between Norway and the UK.
National Grid proposed a final dividend of 33.76 pence for financial 2022, an increase of 5.0% from 32.16p a year earlier. This brought its full-year dividend to 50.97p, up 3.7% from 49.16p, in line with its policy.
National Grid backed its outlook for the five-year period from financial 2021 to financial 2026.
Looking ahead, the company also continues to expect the sale of its Rhode Island utility business, Narragansett Electric Co, to be completed in the first quarter of this financial year. It said it has obtained regulatory clearances for the sale and is currently awaiting the conclusion of the legal process.
The sale of a 60% stake in National Grid Gas is still anticipated to be completed in the third quarter of this financial year.
In March, the FTSE 100 company announced the sale of Narragansett Electric Co to PPL for $3.8 billion. In the same month, it agreed to sell a 60% interest in its gas transmission and metering business in the UK to a consortium of ‘long-term infrastructure investors’ for £2.2 billion in cash. Both sales are part of its strategy to shift its portfolio focus towards electricity and away from gas, following last year's acquisition of power-distribution company Western Power Distribution for £7.8 billion.
For financial 2023, National Grid expects earnings to be ‘broadly flat’ on financial 2022, assuming an exchange rate of £1 equalling $1.30.
‘Our purchase of WPD has pivoted our business to a much greater focus on electricity infrastructure, putting us at the heart of delivering the energy transition. We've invested a record £6.7 billion in critical energy infrastructure, part of our five-year £30 billion to £35 billion investment programme. Over 70% of our five-year investment is aligned to EU taxonomy principles making us one of the FTSE's largest investors in the delivery of net-zero,’ Chief Executive John Pettigrew said.
Separately, National Grid announced that Iain Mackay, chief financial officer at FTSE 100 listed pharmaceutical firm GSK PLC, is joining its board as a non-executive director. Prior to joining National Grid and GSK, Iain was group finance director at HSBC Holdings PLC.
‘As part of our ongoing board refreshment process, it will be invaluable to have Iain in the National Grid boardroom. His breadth of experience across continents, industries and business functions will bring additional depth to our deliberations in what has emerged as a fast-moving environment,’ Chair Paula Rosput Reynolds said.
National Grid shares were trading 2.2% lower at 1,218.50 pence each in London on Thursday morning.
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