7th Nov 2014 07:28
LONDON (Alliance News) - National Grid PLC Friday said its pretax profit rose in the first half of its financial year and said it's on track to deliver "sustainable" dividend growth at least in line with Retail price Index inflation for the foreseeable future.
The electricity and gas grid operator, with operations in both the UK and US, reported a pretax profit of GBP1.18 billion for the six months to end September, up from GBP1.05 billion a year earlier, as a drop in operating costs more than offset a decline in revenue to GBP6.36 billion, from GBP6.72 billion.
It raised its interim dividend to 14.71 pence, up 0.22 pence on the previous year, in line with its target of paying out 35% of the total dividend for the last financial year at the halfway stage of this year.
National Grid said its first half performance was in line with its own expectations. In the UK, it continued to drive a good operational performance while making capital programme efficiencies, and in the US it reported strong growth and the completion of a major financial system upgrade, which were offset by increased gas mains repair costs in the wake of the exceptionally cold winter.
It said it expects full-year investment of between GBP3.1 billion and GBP3.3 billion to drive regulated asset growth of about 5% in the current financial year.
"Our UK businesses continue to deliver strong performance within their clear, long-term, regulatory arrangements. We expect to deliver overall improvements in both totex and revenue incentive outcomes this year compared to 2013/14. In the US, the outlook for additional asset growth is increasingly positive and we are taking further action to drive operating cost efficiencies, file for incremental allowances where possible and prepare for future regulatory filings in Massachusetts and New York," Chief Executive Steve Holiday in the statement.
National Grid also announced a property joint venture with Berkeley Group Holdings PLC in an attempt to get value out of its London property portfolio.
The venture will be called St William Homes LLP and will create residential and mixed-use developments across London and the South East. The companies will have an equal share of the venture, and the equity investment for each shareholder will be initially capped at GBP175 million, meaning the vehicle will have available funding of up to GBP700 million including bank debt.
"National Grid (through National Grid Property Holdings Limited) has a significant portfolio of surplus brownfield land which it is committed to releasing for development. The launch of St William is intended to bring together land from National Grid's portfolio, initially from across the Greater London area, and combine this with Berkeley's development expertise," it said in a statement.
St William aims to commence development activity on its first site in 2016, with the first homes being delivered in 2017.
By Steve McGrath; [email protected]; @stevemcgrath1
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