31st Jan 2008 07:01
National Grid PLC31 January 2008 National Grid plc Interim Management Statement for the period 1 October 2007 to 30 January 2008 HIGHLIGHTS • 15% recommended dividend increase for 2007/08 and 8% annual increases targeted through to 31 March 2012 • £1,326m of value returned to shareholders through the share buy-back programme • Financial performance in line with our expectations DIVIDEND POLICY UPDATE National Grid is today announcing an updated dividend policy, which reflects theBoard's confidence in the Group's growth prospects. The current dividend policyis to increase dividends per ordinary share by 7% per annum until 31 March 2008. The Board intends to recommend a new policy with the following two components: • for the current financial year a one-off increase of 15% over last year's full year dividend; and • thereafter a targeted increase of 8% per annum from this enhanced base until 31 March 2012. This will result in a recommended final dividend for the year ending 31 March2008 of 21.3 pence per ordinary share and a full year dividend of 33 pence. This policy represents a balance between an initial increase and a significantsustainable growth commitment which is supported by earnings. REVIEW OF THE PERIOD National Grid continues to deliver on its strategy of focusing on electricityand gas markets in the UK and the US - and implementing its global operatingmodel. In December, we accepted Ofgem's final proposals for the UK Gas DistributionPrice Control Review, for the five years to March 2013. The proposals providefor a significant increase in investment in our gas distribution networks in theUK that is expected to grow our asset base by almost 25% over the price controlperiod. Additionally, in our two downstate New York gas distribution utilities(formerly part of KeySpan), new rate plans became effective on 1 January. In our upstate New York electricity business we have implemented the third resetof the 'deferral account', with approval from the New York Public ServiceCommission (NYPSC) to recover $124m during calendar year 2008 and $124m duringcalendar year 2009. During the period we also filed with the NYPSC our $1.47bnfive year investment programme for our New York electric transmission anddistribution system and, under the terms of our existing rate plan, we alsofiled a petition for a special rate recovery mechanism for major incrementalelectric transmission and distribution investment that is in excess of thecurrent rate plan assumptions. In October, we announced our intention to pursue the sale of Ravenswood, our2.5GW generation plant in New York City. Sale of the plant is a condition of theNYPSC order approving the acquisition of KeySpan. The sale process, which isbeing conducted through a competitive auction, is well underway. FINANCIAL UPDATE National Grid's financial performance is in line with its expectations. During the period, there have been no events that have resulted in any materialchanges to our expectations for the full year. Both cash flow and capitalexpenditure remain in line with our plans. Our financial position remainsstrong, with around 70% of our net debt either at fixed rates or index linkedfor the long term and virtually all other debt fixed up to 31 March 2008. Under our share buy-back programme we have, to date, repurchased 175.6m sharesat a cost of £1,326m. This leaves around £600m remaining to be returned. Thiskeeps us on track with our buyback programme comprising £1.8bn from the sale ofour Wireless business, and the return of around £150m of US stranded assetpost-tax cash flows for 2007/08. CONTACTS InvestorsDavid Rees +44 (0)20 7004 3170 +44 (0)7901 511322 (m)George Laskaris +1 718 403 2526 +1 917 375 0989 (m)Richard Smith +44 (0)20 7004 3172 +44 (0)7747 006321 (m) MediaClive Hawkins +44 (0)20 7004 3147 +44 (0)7836 357173 (m) BrunswickPaul Scott +44 (0)20 7396 5333 +44 (0)7974 982333 (m) CAUTIONARY STATEMENT This announcement contains certain statements that are neither reportedfinancial results nor other historical information. These statements areforward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,as amended. These statements include information with respect to National Grid'sfinancial condition, National Grid's results of operations and businesses,strategy, plans and objectives. Words such as "anticipates", "expects","intends", "plans", "believes", "seeks", "estimates", "may", "will", "continue","project" and similar expressions, as well as statements in the future tense,identify forward-looking statements. These forward-looking statements are notguarantees of National Grid's future performance and are subject to assumptions,risks and uncertainties that could cause actual future results to differmaterially from those expressed in or implied by such forward-lookingstatements. Many of these assumptions, risks and uncertainties relate to factorsthat are beyond National Grid's ability to control or estimate precisely, suchas delays in obtaining, or adverse conditions contained in, regulatory approvalsand contractual consents, unseasonable weather affecting the demand forelectricity and gas, competition and industry restructuring, changes in economicconditions, currency fluctuations, changes in interest and tax rates, changes inenergy market prices, changes in historical weather patterns, changes in laws,regulations or regulatory policies, developments in legal or public policydoctrines, the impact of changes to accounting standards and technologicaldevelopments. Other factors that could cause actual results to differ materiallyfrom those described in this announcement include the ability to integrate thebusinesses relating to announced or recently completed acquisitions withNational Grid's existing business to realise the expected synergies from suchintegration, the availability of new acquisition opportunities and the timingand success of future acquisition opportunities, the timing and success or otherimpact of the sales of National Grid's non-core businesses, the failure for anyreason to achieve reductions in costs or to achieve operational efficiencies,the failure to retain key management, the behaviour of UK electricity marketparticipants on system balancing, the timing of amendments in prices to shippersin the UK gas market, the performance of National Grid's pension schemes and theregulatory treatment of pension costs, and any adverse consequences arising fromoutages on or otherwise affecting energy networks, including gas pipelines ownedor operated by National Grid. For a more detailed description of some of theseassumptions, risks and uncertainties, together with any other risk factors,please see National Grid's filings with and submissions to the US Securities andExchange Commission (the "SEC") (and in particular the "Risk Factors" and"Operating and Financial Review" sections in its most recent Annual Report onForm 20-F). Except as may be required by law or regulation, National Gridundertakes no obligation to update any of its forward-looking statements. Theeffects of these factors are difficult to predict. New factors emerge from timeto time and National Grid cannot assess the potential impact of any such factoron its activities or the extent to which any factor, or combination of factors,may cause results to differ materially from those contained in anyforward-looking statement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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