National Grid upgraded its full-year guidance as the power network operator reported a strong rise in first-half profit.
Underlying operating profit for the six months to the end of September rose 47% to £1.4bn. Statutory pretax profit rose 86% to £1.08bn. The FTSE 100 group increased its interim dividend to 17.21p a share from 17p a year earlier.
Profit was boosted by a £257m first contribution from Western Power Distribution (WPD), which National Grid bought in June. Excluding WPD, underlying operating profit rose 20% driven by the first six months of the IFA2 low carbon connector, reduced Covid-19 impact and higher UK electricity transmission net revenue.
National Grid said it expected underlying earnings per share growth “significantly above” the top end of its 5-7% range based on the strong first half. The company also announced a programme to cut costs by at least £400m over three years.
The company overhauled its business in 2021 by paying £7.8bn for WPD, the UK’s biggest electricity distribution business, and agreeing to sell its Rhode Island division and a majority stake in National Grid Gas. The WPD purchase was a move to secure growth as UK consumers use more electricity in the shift to lower carbon emissions.
Chief Executive John Pettigrew said: “I’m very pleased with the group’s financial, strategic and regulatory progress in the last six months. Whilst delivering this strong performance, we have completed our acquisition of WPD, launched the process to sell a majority stake in National Grid Gas and the sale of our Rhode Island business is on track to be finalised by the end of our financial year, progressing our strategic pivot towards higher growth electricity.”
National Grid shares rose 0.8% to 983p at 08:26 GMT.
