By Alex MacDonald
LONDON--National Grid PLC (NG.LN) said Thursday that net profit
fell in its last financial year due in part to higher taxes and
exceptional charges, but that strong cash flow generation prompted
it to increase its dividend.
The U.K. and U.S. power and gas transmission company reported an
18% drop in net profit to 2.02 billion pounds ($3.12 billion) for
the financial year ended March 31, compared with GBP2.48 billion a
year earlier when the company booked a large exceptional pension
credit and deferred tax credit. The higher tax charge and
exceptional items helped offset a 2.6% rise in revenue to GBP15.2
billion and 5% rise in operating profit to GBP3.86 billion.
The FTSE 100 company said that all of its key businesses, with
the exception of the U.K. natural gas distribution business,
reported higher operating profit during the financial year.
The U.S. regulated business reported a return on equity of 8.4%
during the last financial year compared with 9% the year before,
due in part to extra operating costs incurred from gas main
leakages and repair activities that were exacerbated by a severe
U.S. winter.
Nevertheless, group return on equity rose to 11.8% in the last
financial year from 11.4% the year before.
"We finished the year in a solid position, with a strong cash
flow performance, good growth in our asset base and healthy
gearing," said Chief Executive Steve Holliday. "We are on track
with our program of rate filings, operational efficiencies and
enhancements to customer service," he said, adding that the company
continues to invest in its U.K. and U.S. businesses.
The strong cash flow generation prompted the company to
recommended a 2.3% rise in the final dividend to 28.16 pence a
share. This contributed to a 2% rise in the full-year dividend to
42.87p a share, in line with inflation and its dividend policy.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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