ii view: National Grid commits to record £70bn investment

Credit: Thomas Fuller/SOPA Images/LightRocket via Getty Images.

Full-year results to 31 March

• Adjusted operating profit up 6% to £5.68 billion
• Adjusted earnings up 8% to 78p per share
• Final dividend of 32.14p per share
• Total dividend for the year up 3.8% to 48.49p per share
• Net debt up 6.7% year over year to £44.16 billion

Guidance:

• Expects compound annual growth in adjusted earnings per share (EPS) of 8-10% over next five years

Chief executive Zoë Yujnovich said:

“National Grid is embarking on the largest investment programme in our history, committing at least £70 billion over the next five years to modernise and expand energy networks across the UK and the US Northeast - networks that underpin economic growth, strengthen energy security and enable the transition to a cleaner, more flexible energy system.

"Through executing today's investment programme with pace and precision and transforming our capabilities we will be able to meet the rapidly growing demand and enable a more efficient energy system - one that supports long-term affordability and reliability for customers.”

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ii round-up:

National Grid has reported record annual investment, with the utility company planning to invest at least £70 billion expanding and renewing infrastructure in the UK and Northeast USA over the next five years.

Investment of £11.6 billion was up by almost a fifth from the year before. National Grid expects continuing spend in areas such as connecting new wind farms to underpin compound growth in adjusted earnings of between 8% and 10% over the next five years.

Earnings for the year to late March rose 8% to 78p per share. A final dividend of 32.14p per share payable to eligible shareholders on 23 July, takes the total annual payment up 3.8% to 48.49p per share.

Shares in the UK’s largest utility company by stock market value rose 1% in UK trading having come into these latest results up by around a tenth so far in 2026. That’s similar to gas and wind farm operator SSE. The FTSE 100 index is up around 4% year to date.

National Grid operates in the UK and across the Eastern coastal states of the USA. The UK is looking to generate almost all of its energy via clean sources by 2030.

The grid operator stressed the importance of investments in supporting economic growth, strengthening energy security and enabling the transition to a cleaner, more flexible energy system.

Adjusted earnings for the new financial year are expected to grow by up to 15%, aided by increased revenue and the regulatory framework regarding pricing controls.

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the results, highlighting the shares as a ‘top pick’ and flagging fair value share price of 1,480p.

ii view:

National Grid operates primarily in the transmission and distribution of electricity in the UK and the US. Its divisions include UK electricity transmission, UK electricity distribution, as well as divisions in New York and New England in the US. Geographically, the UK made most profit during this latest year at 63%, with the US the balance.  

For investors, negotiations with UK and US regulators offer periodic uncertainty. Adjustments to taxes and capital allowances made by governments can impact financial performance. Environmental considerations include potential new pylons across green fields and near homes, while operational incidents and potential fines such as last year’s fire at a substation powering Heathrow airport, are not to be forgotten.

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More favourably, and given a degree of predictability for energy usage, National Grid can offer five-year financial predictions which few other companies can. Major investment in the group’s core transmission business is being made to help connect renewables such as offshore windfarms. Geographical diversity includes exposure to the US, while a previous £7 billion rights issue has strengthened the group’s balance sheet.

In all, and offering a prospective dividend yield of close to 4%, this broadly defensive utility continues to justify its place in many investor portfolios.

Positives:

• Attractive dividend payment (not guaranteed)
• Geographical diversity

Negatives:

• Subject to regulatory decisions
• Subject to currency movements

The average rating of stock market analysts:

Cautious buy