Grid cheers City with profit pledge
NATIONAL Grid has cheered investors, boasting that full-year profits will come in at the top end of forecasts thanks to a strong showing in its core UK business. The company, which operates the electricity network, also confirmed it would take a £350m hit after the collapse in value of telco Energis.
The market has been expecting National Grid to write down the value of its 32.5% Energis stake. The shares climbed 6 1/4p to 455p.
Record peak demand from regional UK electricity suppliers had lifted revenues £15m above target, National Grid said. The release of a previous £73m tax provision would also help profits, by cutting its tax rate to just 20% from forecasts of 26%. The City has been looking for earnings of between 23p a share 29p for the year ended March, from 26.5p a year ago.
The group said its US division, based around New England, had 'maintained its strong performance'. Operating profit at its Argentinian joint venture would be 'in line with expectations', with its share of losses from telco Intelig falling to £40m from £118m.
National Grid founded Energis, and floated it in December 1997. It has raised £2.5bn by selling shares in the business. However the Energis stock has fallen to just 3p following profit warnings over the past year. National Grid has said it will not bail out the firm.
