18th May 2023 15:15
(Alliance News) - National Grid PLC kept its long-term outlook unchanged on Friday, though a hit from new UK capital rules are a "reminder of the regulatory influences" in the energy infrastructure sector, according to Edison analyst Neil Shah.
For the year ended on March 31, the electricity infrastructure and gas utility company reported revenue of GBP21.66 billion, up 17% from GBP18.45 billion the year before.
Pretax profit was GBP3.59 billion, up 4.4% from GBP3.44 billion, as earnings per share rose 22% to 74.2p from 60.6p the year before. Underlying EPS improved 6.7% to 69.7p from 65.3p.
Looking ahead, National Grid said the outlook over the period to financial 2025 remains unchanged. However, for the current financial year, it expects underlying EPS to be modestly below financial 2023 levels, following the UK government's change to its capital allowance regime.
The changes came into effect at the start of last month.
National Grid had previously warned on the measures, which it said would see the introduction of "full expensing tax relief for capital expenditure". The rules will be economically neutral, though it would hit its underlying EPS by 6p to 7p, it said.
"Despite this near-term challenge, National Grid is holding steady on its long-term outlook, reaffirming that this change won't affect its financial forecast for the five-year period from 2020-21 to 2025-26," Edison's Shah commented.
"National Grid's robust financial health is evident in these results, though the impending capital allowance changes serve as a reminder of the regulatory influences that energy infrastructure groups must navigate."
By Eric Cunha, Alliance News news editor
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