National Grid Shares Rise as Profit Jumps

National Grid (LON: NG.) reported a robust first half for fiscal year 2025/26, marked by increased investment and solid profit growth, alongside a significant leadership transition.

The company is strategically positioning itself for future energy demands with substantial capital deployment.

Underlying operating profit rose 12% to £2.292 billion at constant currency, reflecting increased investment across regulated businesses. Profit before tax saw a similar 15% increase to £1.653 billion. Underlying earnings per share (EPS) increased by 6% to 29.8p. Statutory EPS remained constant at 12.6p.

The interim dividend was increased to 16.35p, representing 35% of the prior year's full dividend, demonstrating a commitment to shareholder returns even amidst heavy investment. Capital investment reached £5.052 billion, a 10% increase year-over-year, underscoring National Grid's dedication to infrastructure development.

National Grid is making substantial strides in securing its supply chain and delivery mechanisms, with over three-quarters of its £60 billion five-year investment plan now secured. Key achievements include an £8 billion Electricity Transmission Partnership for substation construction and a £12 billion HVDC framework for civil works in the UK. The company also finalized partnerships to support over $3 billion of capital work in New England over the next five years.

CEO John Pettigrew highlighted the company’s commitment to innovation and talent development, stating, “This investment in our networks is critical to ensure continued resilience, enable economic growth, deliver cleaner energy, and meet growing power demand.”

Pettigrew is set to retire on November 16, 2025, after a decade of leadership, succeeded by Zoë Yujnovich, who joined as Chief Executive Designate on September 1, 2025.

Driver Breakdown:

• Strategic Investments: Massive capital deployment in infrastructure projects drives revenue and profit growth.
• Synergies Realized: Early achievement of £100 million synergies from the UK Electricity Distribution acquisition.
• Regulatory Approvals: Securing approvals for key investments in both the UK and US markets.

The company reaffirmed its financial outlook, projecting an underlying EPS CAGR of 6-8% from the 2024/25 baseline of 73.3p over the next five years. This guidance incorporates assumptions about currency exchange rates, inflation, and the sale of certain assets.

National Grid anticipates regulatory gearing to increase towards the mid-60% range by March 2029 and then trend towards the high 60% range by the end of RIIO-T3.