Business Context and Reporting Period
Company: National Grid plc
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Full Year ended 31 March 2026
Filing Date: 14 May 2026
National Grid plc reported full-year results for 2025/26, marking the completion of its largest investment programme to date. The company is executing a strategic pivot to become a pure-play regulated networks business, having divested its National Grid Renewables and Grain LNG assets during the year. The focus remains on modernizing energy networks in the UK and the US Northeast to support economic growth and the energy transition.
Key Financial Metrics
| Metric | 2026 (Actual) | 2025 (Actual) | Change |
|---|---|---|---|
| Statutory Operating Profit (£m) | 5,431 | 4,934 | +10% |
| Underlying Operating Profit (£m) | 5,680 | 5,357 | +6% |
| Statutory Earnings (£m) | 3,241 | 2,826 | +15% |
| Underlying Earnings (£m) | 3,859 | 3,452 | +12% |
| Statutory EPS (pence) | 65.5 | 60.0 | +9% |
| Underlying EPS (pence) | 78.0 | 73.3 | +6% |
| Underlying EPS (Constant Currency) (pence) | 78.0 | 72.0 | +8% |
| Capital Investment (£m) | 11,576 | 9,847 | +18% |
| Net Debt (£m) | (44,160) | (41,371) | +7% |
| Regulatory Gearing | 61% | 61% | 0 bps |
| Dividend Per Share (pence) | 48.49 | 46.72 | +3.8% |
Material Changes vs. Prior Period
- Profit Growth: Statutory operating profit rose 10% to £5.43 billion, driven by exceptional gains of £376 million from the sale of non-core businesses (Grain LNG and National Grid Renewables). Underlying operating profit increased 6% to £5.68 billion, reflecting strong performance in UK Electricity Transmission and New York, partially offset by a FERC order impact in New England and the loss of divested businesses.
- Capital Investment: Record capital investment of £11.6 billion (up 18%) was deployed, primarily in UK Electricity Transmission (Accelerated Strategic Transmission Investment projects) and US network upgrades. This drove asset growth of 10.9% and regulated asset growth of 11.7%.
- Divestments: Completed the sale of National Grid Renewables (May 2025) and Grain LNG (November 2025), generating net cash proceeds of approximately £2.8 billion. These disposals reduced the asset base of National Grid Ventures but aligned the portfolio with the pure-play networks strategy.
- Net Debt: Increased by £2.8 billion to £44.2 billion, reflecting the step-up in capital investment, partially offset by proceeds from divestments.
Guidance, Outlook, and Risks
Five-Year Financial Framework (2026/27 – 2030/31)
- Investment: Committed to at least £70 billion in capital investment over the next five years.
- Asset Growth: Targeting a Compound Annual Growth Rate (CAGR) of around 10%.
- Earnings Growth: Expecting underlying EPS CAGR of 8-10% from a 2025/26 baseline of 78.0p.
- Dividend Policy: Aims to grow the dividend per share in line with UK CPIH inflation.
- Balance Sheet: Regulatory gearing expected to trend back to the high 60% range by 2030/31, maintaining investment-grade credit metrics.
2026/27 Forward Guidance
- Underlying EPS expected to increase 13-15% from the 2025/26 baseline, driven by higher allowed revenue as the company transitions from RIIO-T2 to RIIO-T3 in the UK.
- Capital investment expected to grow around 10% to nearly £13 billion.
- Net debt expected to increase by just over £6 billion, with regulatory gearing around 64%.
Risks and Contingencies
- Regulatory: A March 2026 FERC order set a lower base Return on Equity (RoE) for New England transmission owners, requiring refunds with interest. National Grid is challenging this decision.
- Operational: Exposure to major storm costs (though 2025/26 costs were below the exclusion threshold) and the need to manage supply chain constraints for the £70 billion investment programme.
- Macro: Sensitivity to foreign exchange rates (hedging 70% of US gross assets), interest rate fluctuations, and inflation impacts on costs.
Investor Verification Checklist
- Dividend Coverage: Verify the sustainability of the 3.8% dividend increase against the 1.6x underlying earnings cover and the impact of the £70 billion capex programme on future cash flows.
- FERC Order Impact: Assess the potential financial impact of the New England FERC RoE order and the outcome of the company's legal challenge.
- Capital Delivery: Monitor the progress of the £70 billion investment plan, specifically the delivery of Wave 1 and Wave 2 ASTI projects in the UK and the CLCPA projects in New York.
- Net Debt Trajectory: Track the increase in net debt against the target of maintaining investment-grade credit ratings (FFO/Net Debt > 10%, RCF/Net Debt > 7%).
- Divestment Proceeds: Confirm the finalization of cash proceeds from the Grain LNG and National Grid Renewables sales and the allocation of these funds toward debt reduction or capex.