Bet the national Grid in the U.S. market will pay for their hungry dividend investors, despite concerns about the winter storms that swept over the operator of energy at the end of last year.
Shareholders of the FTSE 100 group took fright after a series of hurricanes wiped £140 million of their profits, but they are now in line for higher than expected dividend after full year earnings of National Grid topped forecasts.
A little over a month after warning on profits in the U.S. as “star band”, according to analysts at UBS.
In return, the patient investors will receive 3.75 dividends increase in PC compared with a year earlier, and the promise of 7pc growth for the company in the short term.
The main increase in revenues was mainly due to the United States, which more than offset the weakness in National grid UK electricity transmission business, which was reduced due to a drop in regulated revenues and increasing costs.
Operating profit national Grid limited 9pc higher to $ 3.5 billion last year. Although its adjusted profit before tax fell by 5.6 PC to us $ 2.65 billion, the group continues to evaluate narrowly beat analysts £2.64 billion.
The United States provided a significant profit to the National Grid, declined slightly to £1.7 billion, but still higher than estimates of £1.66 bn.
The national grid boss John Pettigrew said he expects growth at the top end of the 5-7pcs range in the medium term, and at least 7 in the near future.
The group will rely on “continued capital discipline and efficiency” within the group, as well as great potential in the US market, he added.
View national Grid in the West emerged as the political pressure ratchets higher in the UK.
Mr. Pettigrew said that the group was “very conscious of the issue of affordability in the UK” while raking in high profits.
“We were very pleased to announce that national Grid has saved consumers £540м and returned the money when we believed that additional work on the grid is not required. When you put it all together, consumers pay less than 10p per day to the power system,” he said.
National network control center
The national network also plans to increase investment in the UK and in the US, where he described the regulator as “very favorable” and “very ambitious” to reduce carbon emissions.
In the UK, Mr Pettigrew said it was “incredibly important” that there is a regulatory environment that is predictable and stable.
“In recent years we have seen a little less predictability and stability,” he said.
“As we look to the future, we are in dialogue with ofgem on what the framework should look like. And we are very clear that we need to get the right balance between accessibility and making sure that the UK is an attractive place for investment,” he said.