30th Mar 2006 07:01
National Grid PLC30 March 2006 30 March 2006 National Grid close period trading update for the year ending 31 March 2006 Continued good performance and strong earnings per share growth National Grid plc (the "Group") is today issuing its trading update as it entersits close period ahead of the announcement of its preliminary results onThursday 18 May 2006. The Group expects to deliver growth in operating profit* and, due tosignificantly lower financing costs this year, strong growth in profit beforetax* for the year. The effective tax rate for the year is anticipated to bearound 31%. Earnings per share* are expected to be well ahead of last year,reflecting the 1 August 2005 share consolidation**. The good operating performance reflects a continued focus on efficiencies acrossthe Group, as well as underlying volume growth in the US and higher UK capacityauction income. This, together with the strengthening US dollar, is forecast tomore than offset a significant increase in depreciation charges, a decrease inincentive profits, timing on the recovery of US pension costs and highershrinkage gas costs. As expected, net debt is anticipated to be around £11 billion, excluding certainmark-to-market effects. * Results are measured on a Business Performance basis. Business Performanceresults are the primary financial performance measure used by the Group, beingthe results for continuing operations before exceptional items and certainnon-cash mark-to-market re-measurements of commodity contracts and financialinstruments that are held for economic hedging purposes but which do not achievehedge accounting. ** The number of ordinary shares in issue is expected to decrease by 12%, from3.1 billion at 31 March 2005 to 2.7 billion at 31 March 2006 as a result of theshare consolidation. CONTACTS Investors David Campbell +44 (0)20 7004 3170 +44 (0)7799 131783(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) Citigate Dewe Rogerson +44 (0)20 7638 9571 Anthony Carlisle +44 (0)7973 611888(m) Audited comparative data for the year ended 31 March 2005 under IFRS Underlying results* for continuing operations £mOperating profit 2,443Pre-tax profit 1,740Earnings 1,303Earnings per share 42.3p Statutory results £mOperating profit - continuing operations 2,142Pre-tax profit - continuing operations 1,439Earnings - continuing operations 1,120Earnings 1,424Earnings per share 46.2p Note:As previously reported, the adoption of International Financial ReportingStandards (IFRS) will lead to greater volatility on both underlying andstatutory reported earnings due to the effects IFRS has on the accountingtreatment of US regulatory assets as compared with UK GAAP and the adoption ofInternational Accounting Standard 39: Financial Instruments, Recognition andMeasurement, which the Group adopted with effect from 1 April 2005. While thismay cause the reported results for any given period to be more volatile thanthose reported under UK GAAP, this change in treatment does not impact theperformance of the Group or its current or future cash flows. 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. Because these forward-looking statements are subject to assumptions,risks and uncertainties, actual future results may differ materially from thoseexpressed in or implied by such statements. Many of these assumptions, risks anduncertainties relate to factors that are beyond National Grid's ability tocontrol or estimate precisely, such as delays in obtaining, or adverseconditions contained in, regulatory approvals, competition and industryrestructuring, changes in economic conditions, currency fluctuations, changes ininterest and tax rates, changes in energy market prices, changes in historicalweather patterns, changes in laws, regulations or regulatory policies, theimpact of changes to accounting standards, technological developments, thefailure to retain key management, the availability of new acquisitionopportunities or the timing and success of future acquisition opportunities.Other factors that could cause actual results to differ materially from thosedescribed in this announcement include the ability to obtain, delays inobtaining or adverse conditions contained in regulatory approvals or otherconsents to acquisitions made by or mergers with National Grid, the ability tointegrate these businesses once acquired or merged or to realise the expectedsynergies from such transactions, the failure for any reason to achieveanticipated reductions in costs or to achieve operational efficiencies,unseasonable weather impacting on demand for electricity and gas, the behaviourof UK electricity market participants on system balancing, the timing ofamendments in prices to shippers in the UK gas market, the performance ofNational Grid's pension schemes and the regulatory treatment of pension costsand any adverse consequences arising from outages on or otherwise affectingenergy networks owned and/or operated by National Grid. For a more detailed description of these assumptions, risks and uncertainties,together with any other' risk factors, please see National Grid's filings withand submissions to the US Securities and Exchange Commission (and in particularthe "Risk Factors" and "Operating and Financial Review" sections in its mostrecent annual report on Form 20-F). Recipients are cautioned not to place unduereliance on these forward-looking statements, which speak only as of the date ofthis announcement. National Grid does not undertake any obligation to releasepublicly any revisions to these forward-looking statements to reflect events orcircumstances after the date of this announcement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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