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National Grid PLC on Friday said its performance for the year ended on March 31 was in line with its expectations but expects growth to be at the lower end of guidance going forward.
The electricity infrastructure company said it continues to expect underlying earnings per share growth in the middle of its 6% to 8% compound annual growth rate.
However, it warned that from financial 2024 to 2026, the UK government’s introduction of ’full expensing’ tax relief for capital expenditure will impact underlying EPS.
It is ‘economically neutral’ to the firm, however.
‘Expected lower cash tax payable will result in reduced revenues in UK Electricity Transmission and UK Electricity Distribution, resulting in a broadly neutral cash position. However, these impacts, alongside a corresponding increase in IFRS deferred tax liabilities, will result in a net adverse impact to statutory and underlying earnings,’ it explained.
Looking ahead, National Grid expects underlying EPS growth between financial 2022 to 2026 to be at the ‘lower end’ of its 6-8% CAGR range.
Back in November, the company said pretax profit for the six months to September 30 rose by 45% to £1.57 billion from £1.08 billion a year ago. Revenue grew 36% to £9.44 billion from £6.94 billion.
Shares were down 0.9% at 1,134.00 pence each on Friday morning in London.
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