National Grid to raise £3.2bn, profits rise

20th May 2010 07:07

National Grid announced a fully underwritten rights issue to raise £3.2bn as it posted a 57% rise in full year profits.The gas and electricity supplier said the 2 for 5 right issue will be priced at 335p per share, a 43.7% discount. It will issue 990.4m shares.The group said the rights issue will give it the appropriate financial flexibility to deliver its strategy. In particular, it will fund an increase in capital investment and maintain its A credit ratings.On the results front, pre-tax profit for the year rose to £2.19bn from £1.39bn before thanks to lower operating costs. Revenue fell to £13.98bn from £15.62bn before, mainly due to lower gas distribution in the US."These excellent results clearly demonstrate that National Grid's strategy continues to deliver," said chief executive Steve Holliday."Our performance in the first weeks of 2010/11 is encouraging and we are confident that this will be another year of growth. We believe that the rights issue announced today will give us the scope and appropriate financial flexibility to deliver the Group's strategy," he added.Full year dividend was raised to 38.49p from 35.64pThe rights issue is fully underwritten by Morgan Stanley Securities Limited, BofA Merrill Lynch and Deutsche Bank AG, London Branch.