29th Mar 2007 07:01
National Grid PLC29 March 2007 29 March 2007 National Grid close period trading update for the twelve months ending 31 March 2007 Continued growth National Grid plc is today issuing its close period trading update ahead ofannouncing its preliminary results on Thursday 17 May 2007. We expect operating profit* to be ahead of last year (on a constant currencybasis) with growth in earnings per share.* We anticipate higher revenues, principally driven by higher allowed revenues inelectricity transmission in the UK and recovery from the New York deferralaccount. These benefits are expected to be partially offset by the impacts oftiming, including an under-recovery of revenue in UK transmission,under-recovery of revenue in UK gas distribution due to the warm winter, andhigher storm costs in the US. Weather in the US is closer to the seasonal normthis year and so is expected to result in lower electricity distributionrevenue. We also anticipate higher controllable operating costs mainly driven byincreased workload in the UK and US. With lower financing costs and an expected effective tax rate of around 32%, weanticipate earnings to be ahead of last year.* We have completed our share buy back programme relating to this year's USstranded assets cash flows. The weighted average number of shares for the yearwill be around 2,719 million. We forecast capital expenditure of around £2.3billion** for the year and expectclosing net debt of around £11.8 billion, excluding certain mark-to-marketeffects. At our preliminary results on 17 May, we will report against our new lines ofbusiness for Transmission, Gas Distribution, Electricity Distribution, andNon-regulated businesses and other. Presented below are National Grid's 2005/06results in accordance with the new lines of business. LINES OF BUSINESS Operating profit* (£m) 2005/06Transmission 971Gas Distribution 530Electricity Distribution - excluding USstranded costs 317Non-regulated businesses and other* 150 -------Total operating profit - excluding USstranded costs 1,968 -------US stranded cost recoveries 489 -------Total operating profit 2,457 * 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 non-cash movements in the carrying value of financialinstruments and of certain commodity contracts that arise from changes inmark-to-market values or in exchange rates and are reflected in the incomestatement to the extent that hedge accounting is not achieved or is not fullyeffective. Following our announcement on 16 November 2006 of our intent to exitour Wireless Infrastructure and Basslink businesses we have, for the purposes ofthis statement, excluded these businesses from business performance **Excluding investment in Wireless and Basslink CONTACTS InvestorsDavid 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) 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 document contains certain statements that are neither reported financialresults nor other historical information. These statements are forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, as amended.These statements include information with respect to our financial condition,our results of operations and businesses, strategy, plans and objectives. Wordssuch as "anticipates", "expects", "intends", "plans", "believes", "seeks","estimates", "may", "will", "continue", "project" and similar expressions, aswell as statements in the future tense, identify forward-looking statements.These forward-looking statements are not guarantees of our future performanceand are subject to assumptions, risks and uncertainties that could cause actualfuture results to differ materially from those expressed in or implied by suchforward-looking statements. Many of these assumptions, risks and uncertaintiesrelate to factors that are beyond our ability to control or estimate precisely,such as delays in obtaining, or adverse conditions contained in, regulatoryapprovals and contractual consents, including those required to complete theproposed acquisition of KeySpan when or as planned, unseasonable weatheraffecting the demand for electricity and gas, 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 and technological developments. Other factors that couldcause actual results to differ materially from those described in thisannouncement include the ability to integrate the businesses relating toannounced acquisitions with our existing business to realise the expectedsynergies 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 any sale or exit by us from a businessor sector, the failure for any reason to achieve reductions in costs or toachieve operational efficiencies, the failure to retain key management, thebehaviour of UK electricity market participants on system balancing, the timingof amendments in prices to shippers in the UK gas market, the performance of ourpension schemes 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 itsactivities 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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