30th Jul 2007 12:45
National Grid PLC30 July 2007 30 July 2007 National Grid plc Interim Management Statement for the period 1 April 2007 to 27 July 2007 HIGHLIGHTS • Acquisition of KeySpan close to completion • £530m of value returned to shareholders through share buy-back programme • Overall outlook ahead of expectations STRATEGIC UPDATE During the period National Grid has continued to make good progress inimplementing its strategy. We are close to completing the acquisition ofKeySpan. In June, the Long Island Power Authority Board of Trustees voted toapprove the renewal of contracts for the provision of electricity transmissionand distribution system management and operation services on Long Island. InJuly, the New Hampshire Public Utilities Commission issued an order approvingthe acquisition, and we reached agreement in principle with the New York PublicService Commission (NYPSC) staff on the transaction. The latest proceduralschedule indicates that the merger approval may be before the NYPSC for a voteon 22 August, and completion of the acquisition is expected shortly thereafter. In May, Ofgem published initial proposals on the UK Gas Distribution PriceControl Review for the five years to March 2013. We continue to work closelywith Ofgem to reach a fair settlement that balances risk and reward, ensuring asafe and reliable network for customers, and an appropriate return forinvestors. Updated proposals are expected in September. In April, we announced that we had sold our UK Wireless business and agreed thesale of our US Wireless business generating total proceeds of £2.7bn. The saleof Basslink, our interconnector in Australia, is well advanced and we expect toannounce a sale shortly. During the period we repurchased 72.8m shares at a cost of £530m, completing thereturn of around £150m of US stranded asset post-tax cash flows for 2007/08, andmaking significant progress towards the return of £1.8bn following the sale ofour Wireless businesses. The Board remains confident in National Grid's earnings growth prospects, whichwe expect to be enhanced by the KeySpan acquisition. We will be announcing arevised dividend policy later in the financial year, which will reflect thestrong outlook for the earnings of the enlarged business from this new base. FINANCIAL UPDATE National Grid's outlook for the year is ahead of our previous expectations. In June and July, the UK has seen some of the wettest weather since recordsbegan, and the resultant flooding has affected our Transmission and GasDistribution operations in many parts of the country. Initial assessmentssuggest that the impact to date on operating profit* is not significant. The earlier than anticipated completion of the sale of our UK Wireless businessis expected to result in an interest charge lower than we had previouslyprojected. During the period, the pound has continued to strengthen against thedollar - this is expected to have only a small impact on earnings. Both cash flow and capital expenditure remain broadly in line with our plans.Our financial position remains strong, with around 80% of our net debt either atfixed rates or index linked, and we have committed financing in place tocomplete the acquisition of KeySpan. BOARD CHANGES On 12 July we announced the appointment of Tom King as an Executive Directorwith effect from 13 August 2007. Tom will be based in the US and will haveresponsibility for the Electricity Distribution and Generation business. As announced in May, Paul Joskow, one of our Non-executive Directors, will stepdown from the Board on 31 July 2007. COMPARATIVE HALF-YEAR RESULTS (for the six months ended 30 September 2006) On 15 November 2007 we will report our half-year results against our new linesof business. The following table provides comparative results for the six monthsended 30 September 2006. Operating profit for continuing operations* (£ million, at actual exchange rate)--------------------------------------------------------------------------------Transmission 494Gas Distribution 100Electricity Distribution (excluding US stranded costs) 222Non-regulated businesses and other 60--------------------------------------------------------------------------------Total operating profit (excluding US stranded costs) 876--------------------------------------------------------------------------------US stranded cost recoveries 202--------------------------------------------------------------------------------Total operating profit 1,078-------------------------------------------------------------------------------- * Results are measured on a Business Performance basis. Business Performanceresults are the primary financial performance measures that we use, being theresults for continuing operations before exceptional items and remeasurements.Remeasurements are movements in the carrying value of financial instruments andcommodity contracts that arise from changes in mark-to-market values or inexchange rates and are reflected in the income statement to the extent thathedge accounting is not achieved or is not fully effective. £47m relating todiscontinued operations (comprising Wireless Infrastructure and Basslink) isexcluded from Business Performance. CONTACTS Investors David Rees +44 (0)20 7004 3170 +44 (0)7901 511322 (m)Richard Smith +44 (0)20 7004 3172 +44 (0)7747 006321 (m)James Waite +44 (0)20 7004 3171 +44 (0)7977 440902 (m) Media Clive Hawkins +44 (0)20 7004 3147 +44 (0)7836 357173 (m) Brunswick Paul 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 our financialcondition, our results of operations and businesses, strategy, plans andobjectives. Words such as "anticipates", "expects", "intends", "plans","believes", "seeks", "estimates", "may", "will", "continue", "project" andsimilar expressions, as well as statements in the future tense, identifyforward-looking statements. These forward-looking statements are not guaranteesof our future performance and are subject to assumptions, risks anduncertainties that could cause actual future results to differ materially fromthose expressed in or implied by such forward-looking statements. Many of theseassumptions, risks and uncertainties relate to factors that are beyond ourability to control or estimate precisely, such as delays in obtaining, oradverse conditions contained in, regulatory approvals and contractual consents,including those required to complete the proposed acquisition of KeySpan when oras planned, unseasonable weather affecting the demand for electricity and gas,competition and industry restructuring, changes in economic conditions, currencyfluctuations, changes in interest and tax rates, changes in energy marketprices, changes in historical weather patterns, changes in laws, regulations orregulatory policies, developments in legal or public policy doctrines, theimpact of changes to accounting standards and technological developments. Otherfactors that could cause actual results to differ materially from thosedescribed in this announcement include the ability to integrate the businessesrelating to announced acquisitions with our existing business to realise theexpected synergies from such integration, the availability of new acquisitionopportunities and the timing and success of future acquisition opportunities,the timing and success or other impact of the sales of our non-core businesses,the failure for any reason to achieve reductions in costs or to achieveoperational efficiencies, the failure to retain key management, the behaviour ofUK electricity market participants on system balancing, the timing of amendmentsin prices to shippers in the UK gas market, the performance of our pensionschemes and the regulatory treatment of pension costs, and any adverseconsequences arising from outages on or otherwise affecting energy networks,including gas pipelines, which we own or operate. For a more detaileddescription of some of these assumptions, risks and uncertainties, together withany other risk factors, please see our filings with and submissions to the USSecurities and Exchange Commission (the "SEC") (and in particular the "RiskFactors" and "Operating and Financial Review" sections in our most recent AnnualReport on Form 20-F). Except as may be required by law or regulation, NationalGrid undertakes no obligation to update any of its forward-looking statements.The effects of these factors are difficult to predict. New factors emerge fromtime to time and we cannot assess the potential impact of any such factor on ouractivities or the extent to which any factor, or combination of factors, maycause results to differ materially from those contained in any forward-lookingstatement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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