National Grid says its regulated networks are on track, but a strong first half in its Ventures division means full-year earnings growth is now expected to land slightly above guidance.
National Grid (LON: NG.) now expects growth in earnings per share for FY27 to come in slightly above its 13-15% guidance. The owner of electricity and gas networks in the UK and US stated this in a pre-close update, a trading statement ahead of results, released at 7am today.
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The company did not put a number on “slightly above”. The upgrade does not come from the regulated networks, which are tracking its expectations. It comes from the non-regulated side of the group, as the company’s statement made clear.
Overall, the Group’s regulated businesses continue to perform in line with our expectations, but a strong first half performance in National Grid Ventures & Other means we now expect to be slightly above our FY27 EPS growth guidance of 13-15%.
National Grid plc
National Grid Ventures & Other, the division that holds interconnectors (subsea power cables linking national grids) and the NG Partners investment portfolio, is expected to deliver about £130m more in the first half than the company had anticipated.
Two things drive that. NG Partners completed two successful capital market transactions, producing significant one-off fair value gains, which are paper gains from revaluing investments. Interconnectors also performed more strongly.
Because part of the uplift is one-off, it should not be read as a permanent step up in earnings. The regulated networks are not being upgraded.
The company also set out how profit should fall across the year. Underlying earnings per share, which exclude one-offs, are expected to be weighted to the second half, as usual, and the half-year group operating profit profile should be broadly consistent with last year.
UK electricity transmission and distribution profits are expected to be split broadly evenly across the year, as in FY26. US regulated profits should lean towards the second half.
In New England, the company expects a return to more typical seasonality after the one-off effect of a ruling by the US Federal Energy Regulatory Commission on allowed return on equity in the second half of FY26.
Half-year net debt, meaning borrowings minus cash, is expected to be broadly in line with full-year guidance after the Joulent investment and the second-half weighting of operating cash flows. Half-year results are due on the 5th of November.