14 April 2022
National Grid plc
Pre-Close Update ahead of 2021/22 Full Year Results
National Grid today issues a pre-close update in respect of the full year ending 31 March 2022. Full year results will be announced on 19 May 2022.
We expect underlying operating profit across our New England, New York, and National Grid Ventures (NGV and Other) business units to be in line with the guidance given at our half year results on 18 November 2021. However, we now expect to deliver underlying operating profit in our UK Electricity Transmission and Electricity Distribution business units above that guidance, largely driven by higher inflation.
We also now expect a higher underlying effective tax rate (pre joint ventures) for FY22 of around 25%, due to an additional tax charge of around £100m which reflects the expected impact in the income statement of deferred tax reversing at a higher rate in the future. The underlying effective tax rate for FY23 is expected to reduce to around 23%.
Taking all of the above into account, we expect full year underlying earnings per share to be modestly higher than the guidance given on 18 November.
We also note, and as previously disclosed,
- the acquisition of Western Power Distribution (WPD) completed on 14 June 2021, and its contribution has been included since this date,
- following the announcement of a sale of a majority stake in National Grid Gas on 27 March 2022, both the UK Gas Transmission and our legacy Metering businesses will continue to be held as discontinued operations until the transaction closes, expected later in 2022, and
- the sale of our 50% equity interest in the St William Homes joint venture to The Berkeley Group was announced on the 15 March 2022, with the gain on sale to be reported as exceptional.
The sale of our Rhode Island business to PPL continues to make progress. While all regulatory approvals have been obtained, the Rhode Island Attorney General has appealed one of the approvals and we now expect the sale to complete in the first quarter of this financial year. Rhode Island will continue to be reported within the New England business unit until the transaction completes.
Finally, the UK government announced on 6 April 2022 its intention to create a Future System Operator (FSO), that will take on all the main existing Electricity System Operator (ESO) roles and the longer-term elements of the Gas System Operator (GSO). We will continue to work closely with all relevant parties to ensure a smooth transition, subject to parliamentary approval and conclusion of the transaction process, expected by or in 2024.