National Grid cuts Covid-19 losses with ‘solid’ year
National Grid this morning said it had limited the financial impact of the coronavirus pandemic to £296m, well ahead of the £400m hit it had previously predicted.
The FTSE 100 firm this morning revealed that its underlying pre-tax profit had slipped just three per cent over the full year, falling from £2.5bn to £2.4bn.
The Covid-19 hit, which the company said was a combination of bad debt and lower revenue from customers, was mitigated by £59m that has been earmarked for revenue recovery.
As a result of its “solid” performance, National Grid said it had raised its dividend 1.2 per cent, from 48.57p to 49.16p.
Shares in the company rose 1.0 per cent this morning.
The firm also earmarked £30bn-£35bn of capital investment over the next five years, which it said would help National Grid lead the energy transition.
It comes not longer after the firm, which controls the distribution of the electricity around the UK, announced a £7.8bn takeover of Western Power Distribution.
This morning it updated that the deal would likely complete in July.
The firm also announced it would enter the US offshore wind market in partnership with German renewables firm RWE.
It will explore potential opportunities off the eastern seaboard, National Grid said.
Chief executive John Pettigrew said: “In the past year we have successfully navigated the challenges of COVID-19, delivered over £5bn of capital investment and achieved a solid underlying financial performance.
“This is testament to the strength and resilience of our business model and the unwavering commitment of our employees. We also announced the transformational acquisition of WPD which will ensure National Grid is at the heart of the energy transition in the UK and enhance the future growth profile of the Group.
“National Grid has an exciting future, with numerous opportunities in the UK and US to provide energy security and support the delivery of net zero.
Mark Nelson, analyst at Killik & Co, said: “Earnings per share and operating profit came in ahead of consensus estimates in what are a solid set of numbers from National Grid.
“The impact of the Covid-19 pandemic on financial performance was lower than had been expected, while revenues in both the UK and US business are expected to increase this year, albeit offset by rising costs and interest expense.