- National Grid to raise nearly £7bn through issuing new equity.
- Underlying operating profit of £4.8bn, up 6% ignoring exchange rates.
- Total dividend per share of 58.52p, up 6%.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“With the energy landscape changing fast, National Grid’s results show it’s moving fast to plant itself at the heart of the electric transition. Investment levels are set to rise significantly to around £60bn over the five years ending March 2029, nearly double the level of investment over the past five years. That should deliver annual asset growth of around 10%. But the plans won’t come cheap, so alongside full-year results, the group’s announced it’s raising nearly £7bn by issuing new equity shares in a rights issue. That means investors can buy 7 new shares at a discount of roughly a third, for every 24 shares they already own. Incentives like this allow existing shareholders to fund and benefit from National Grid’s potential growth.
The portfolio is also getting a significant streamline as the group’s strategy evolves to focus on networks. Its UK liquid natural gas asset and its US onshore renewables business are being put up for sale, which should help free up some extra cash to fund the mammoth investment plans. In return for investing those billions to maintain and upgrade its infrastructure, regulators allow National Grid to earn a reasonable profit. That helped underlying operating profits climb 6% higher because of rate increases and higher allowed revenues in its UK Transmission business. All this feeds into fairly predictable revenues, low borrowing costs and what should be a relatively dependable dividend. National Grid has the traditional pros of a utility, but also major growth opportunities – a rarity for the sector.”
