National Grid profits energised


National Grid profits energised
National Grid has reported a 12 per cent rise in first-half pre-tax profits, with its performance aided by higher power transmission prices.

The UK's main energy network operator said that profit before tax and exceptional items rose to £872 million in the six months to September 30th, with its performance exceeding analyst expectations.

In a statement the company revealed that it was increasing its interim dividend by seven per cent, up to 10.9 per cent and would return an additional $1.9 billion (£1 billion) to its shareholders through a buy-back scheme.

Commenting on the results, the firm's chairman Sir John Parker said: "Over the last five years National Grid has consistently delivered good results and today's announcement is no exception."

He added that the company now intended to enter "the next stage of its development", with plans to "invest heavily" in its businesses.

National Grid said that it had made "significant progress" towards the completion of its planned acquisition of US energy firm KeySpan and was on track to finalise the takeover deal by mid-2007.

Following a strategic review of its operations, the company also revealed that it had decided to focus on its "priority markets" in the UK and the US.

National Grid said that it saw "significant opportunities for growth" within the UK gas and electricity market, with the government's renewable energy policy and the need to replace existing assets driving investment in the sector.

As a result, National Grid has announced that it intends to increase its capital expenditure in the market "substantially", with plans to invest about £9 billion over the five-year period to March 2011.

The company said that its UK regulatory asset base was subsequently projected to grow by almost 40 per cent over the period.

In line with its plans to focus on its UK and US transmission businesses, National Grid has also announced that it intends to de-merge its mobile phone mast unit and to sell its Basslink electricity inter-connector in Australia.

"We have reviewed and refocused our strategy. These developments reinforce our confidence in delivering continued good results and sustained growth," added Sir John.

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