National Grid on track after first-half profits rise 16%

7th Nov 2014 07:08

British utility group National Grid said it is on track to deliver another year of strong overall returns and dividend growth after a solid first half, with profits rising by 16%.The electricity and gas network operator, with activities in both the UK and US markets, said adjusted pre-tax profit totalled £1.14bn in the six months to 30 September, up from £980m the year before.Operating profits rose only 2% to £1.61bn as 22% growth in its largest division, UK electricity transmission, offset falling profits in UK gas transmission and distribution, and US regulated activities.Revenues totalled £6.36bn during the first half, down slightly from £6.72bn previously.In the UK, National Grid said it was seeing the benefits of streamlined processes and efficiency in design, contracting and procurement.Meanwhile in the States, the company said that strong growth was balanced by increased gas mains repair costs after an "exceptionally cold winter".Nevertheless, capital investment fell 6% year-on-year to £1.58bn as increased US costs were offset by lower spending in UK electricity transmission.The company declared an interim dividend of 14.71p per share, in line with its policy of paying out 35% of the previous full-year dividend at the following half-year stage. This represents a 1.5% increase over last year's 14.49p payout."National Grid's attractive combination of performance, investment and financing discipline should, again, deliver good asset growth across the group this year along with a healthy balance sheet. This provides strong support for sustainable dividend growth, at least in line with RPI inflation, for the foreseeable future," the company said.