National Grid leaves dividend question open at year-end
By Josh White
Date: Thursday 02 Apr 2020
(Sharecast News) - National Grid said on Thursday that its financial performance for the year ended 31 March, before any Covid-19 coronavirus pandemic impacts, was expected to be in line with prior guidance.
The FTSE 100 company said that, following updated guidance from various regulatory authorities on challenges that companies and their auditors currently faced in preparing audited financial information as a result of the pandemic, it had reviewed its reporting timetable and now aimed to publish its full-year results in mid-June.
"Our primary focus is on our people, our customers and operations as we look to manage the impact from the Covid-19 outbreak, and meet our obligations to provide essential services to our customers," the board said in its statement.
"Our teams have swiftly and successfully implemented our business continuity plans, which are working well across our businesses.
"This is enabling us to assess impacts on our capital delivery programmes day by day to maintain safe working environments for our teams."
National Grid said it was working with regulators and governments across its operations to ensure customers and communities had access to energy.
In the United States, it confirmed it had filed to defer some rate increases that were scheduled to come into effect on 1 April.
At the current stage, National Grid said it had not seen a material impact on its financial performance as a result of Covid-19, although it was starting to see some delays and disruption to its capital programme.
In progressing its capital programme, working closely with regulators and other relevant authorities in its jurisdictions, the firm said it would prioritise the health and safety of employees, customers and communities.
"In the US, we have suspended debt collection and customer termination activities across our jurisdictions, which is resulting in near term lower customer collections, and could result in increasing levels of bad debt and associated provisions.
"Whilst this uncertainty persists, we will continue to monitor the situation closely."
The board said National Grid's balance sheet remained "strong", with ?5.5bn of undrawn committed bank facilities.
Looking at the financial year ended 31 March, the company said it expected to deliver underlying earnings, before any Covid-19 impacts, in line with the technical guidance provided at its half-year results last November.
In determining the final dividend for the financial year, the board said it would take into account expected business performance and regulatory developments, including an assessment of the impact of the pandemic.
"Compared to our previous guidance, we expect higher operating costs in our US business due to further storm remediation costs, however, these are expected to be offset by stronger National Grid Ventures (NGV) performance and lower net finance costs, partly due to lower costs on RPI-linked debt.
"As a result, our expectation for underlying earnings per share for the group is in line with our previous guidance, before taking account of any Covid-19 impacts."
In a separate announcement, National Grid said Badar Khan has been appointed as president of its US business, following the departure of Dean Seavers at the end of 2019.
Khan has been acting as interim president since November.
He joined National Grid in April 2017 as group director of corporate development and president of National Grid Ventures, which included responsibility for group strategy and National Grid Partners.
Prior to National Grid, Khan worked at Centrica for 14 years in the US and the UK, including four years as the chief executive officer of its North American subsidiary Direct Energy.
At the same time, Jon Butterworth was appointed as managing director of National Grid Ventures and a member of the group executive committee, after fulfilling that role on an interim basis since November.
At 0809 BST, shares in National Grid were down 2.1% at 892.47p.
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