National Grid’s first-half revenue fell by 11% to £7.1bn, driven by the sale of its Electricity System Operator to the UK government. Excluding this, revenue was broadly flat.
Underlying operating profit moved 13% higher to £2.3bn (£2.2bn expected), ignoring exchange rate impacts. Growth was driven by a strong US performance and higher allowed revenues in UK Transmission, partially offset by reduced allowances in UK Distribution.
Despite a step-up in investment, improved profitability meant that free cash outflows improved from £1.4bn to £0.8bn. Net debt increased by £0.5bn to £41.8bn over the first half.
Full-year guidance has been reiterated, with underlying earnings per share (EPS) expected to grow by 6-8%.
An interim dividend of 16.35p per share was announced.
The shares were broadly flat in early trading.
Our view
HL view to follow.
National Grid key facts
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