The transmission company’s operating profits were broadly in line with investor expectations at £3.86 billion, prompting investors at RBC Capital to label the results “solid, but not spectacular”.
“Results this year were always likely to be relatively benign and much of FY15/16 is also expected to be quiet as progresses with RIIO investments in the UK and prepares for rate filing in Massachusetts and New York in late 2015/early 2016,” analysts at the investment bank said.
National Grid chief executive Steve Holliday also described his firm’s performance as “solid” saying the outlook for the coming year would include continued investment following the £3.5 billion invested over the previous year.
“We finished the year in a solid position, with a strong cash flow performance, good growth in our asset base and healthy gearing. We are on track with our programme of rate filings, operational efficiencies and enhancements to customer service,” Holliday said.
“At the same time, we continue to invest in our UK and US businesses, driving organic growth, which together with strong returns, support our commitment to a sustainable, growing dividend,” he added.
Key investments for the company moving forward include the €1.4 billion (£1.4 billion) planned investments approved for Norway and Belgium interconnector projects and continued progress developing multiple US transmission investment opportunities.
National Grid added that its London property joint venture has been agreed with the first site transfer expected this year.
“We invested around £3.5 billion in essential infrastructure during another year of strong network reliability, safety and resilience. Effective regulation continues to drive efficient investment,” Holliday said.
Of the £3.5 billion total investment, £1.8 billion was spent in the UK with the remainder of the firm’s investment focused on the US business.
National Grid’s UK chief operating officer John Pettigrew told Utility Week that the US investment will be the highest the company has spent in the region so far and that the spend is “really delivering”.
UK consumers are also set to reap the benefits of National Grid’s investment in its regulated business, Holliday said.
“In the UK, for example, savings generated in the first two years of the RIIO price controls will reduce future customer bills by around £200 million,” he said.
Pettigrew told Utility Week that although RIIO challenged the company in 2013/14 to “think innovatively”, the benefits would begin to see “the £200 million in benefits start to flow back to customers” from this year.