30th Sep 2005 07:01
National Grid PLC30 September 2005 30 September 2005 National Grid close period trading update for the six months ended 30 September 2005 Continued good underlying performance National Grid plc (the "Group") is today issuing its trading update prior toentering its close period and the announcement of its interim results onThursday 17 November 2005. These will be the first set of results the Group willreport under International Financial Reporting Standards (IFRS). Also today, theGroup is issuing comparative unaudited IFRS results for the period ending 30September 2004, a summary of which is below. The Group's operating performance is expected to be good. It has been driven bycontinued underlying volume growth in the US, favourable results from UKcapacity auctions, a continued focus on efficiencies and a full periodcontribution from Crown Castle UK. The operating performance, together withpositive weather effects, is expected to offset a significant under recovery ofhigher commodity costs in the US, which will be recovered in future periods, anda period-on-period weakening of the US dollar. For these reasons, operatingprofit* is expected to be in-line with last year. Profit before tax* is expectedto be ahead of last year due to lower interest expense this year. The effective tax rate on profit before tax* is anticipated to be around 32%. Asa result, earnings* are expected to be similar to the same period last year.Earnings per share* for the period are expected to be ahead of the same periodlast year, having benefited from the share consolidation which occurred on 1 August 2005. The seasonally more significant second half will fully reflect this consolidation**. After IFRS transition adjustments, excluding certain mark-to-market effects inthe period, net debt is expected to be around £11 billion. This reflects thereceipt of £5.8 billion upon completion of the Group's UK gas network sales on 1 June 2005, the £2 billion return of value to shareholders in August 2005, theincrease in capital investment and normal seasonal factors. * References are to continuing underlying results. Underlying results excludeexceptional items and certain mark-to-market re-measurements.** The number of ordinary shares in issue has decreased by 12%, from 3.1 billionat 31 March 2005 to 2.7 billion at 30 September 2005 as a result of the shareconsolidation. Note:As previously reported, the adoption of IFRS will lead to greater volatility onboth underlying and statutory reported earnings due to the effects IFRS has onthe accounting treatment of US regulatory assets as compared with UK GAAP andthe adoption of International Accounting Standard 39: Financial Instruments,Recognition and Measurement, which the Group adopted with effect from 1 April2005. While this may cause the reported results for any given period to be morevolatile than those reported under UK GAAP, this change in treatment does notimpact the performance of the Group or its current or future cash flows. Unaudited comparative data for the six months ended September 2004 under IFRS Underlying results* for continuing operations £mOperating profit 1,030Pre-tax profit 697Earnings 493Earnings per share 16.0p Statutory resultsOperating profit - continuing operations 958Pre-tax profit - continuing operations 625Earnings - continuing operations 448Earnings 504Earnings per share 16.4p A full statement of the Unaudited September 2004 IFRS comparatives is availableon the Group's website www.nationalgrid.com. 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,developments in legal or public policy doctrines, the impact of changes toaccounting standards, technological developments, the failure to retain keymanagement, the availability of new acquisition opportunities or the timing andsuccess of future acquisition opportunities. Other factors that could causeactual results to differ materially from those described in this announcementinclude the ability to continue to integrate the US and UK businesses acquiredby or merged with National Grid, the failure for any reason to achievereductions in costs or to achieve operational efficiencies, unseasonable weatherimpacting on demand for electricity and gas, the behaviour of UK electricitymarket participants on system balancing, the timing of amendments in prices toshippers in the UK gas market, the performance of National Grid's pensionschemes and the regulatory treatment of pension costs, the impact of theseparation and sale by National Grid of four of its UK gas distribution networksand 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 withthe US Securities and Exchange Commission (and in particular the "Risk Factors"and "Operating and Financial Review" sections in its most recent annual reporton Form 20-F). Recipients are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date of thispresentation. 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. Contacts InvestorsAlexandra Lewis +44 (0)20 7004 3170 +44 (0)7768 554879(m)David Campbell +44 (0)20 7004 3171 +44 (0)7799 131783(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) Citigate Dewe Rogerson +44 (0)20 7638 9571Anthony Carlisle +44 (0)7973 611888(m) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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