National Grid kicks off sale of UK gas distribution business

The UK electricity and natural gas operator reported a 21 per cent jump in its adjusted pre-tax profits, up from £1.14bn to £1.37bn, in the six months to 30 September, reports CityAM.

Earnings per share were also up 22 per cent, to 28.4p.

The firm is optimistic in its full year outlook, announcing it’s “on track” to deliver strong returns. It expects full year investment around £3.7bn and asset growth of between four and five per cent.

Power supplies remain tight for National Grid. The firm warned earlier this year that Britain was facing a winter of blackouts, with power supply was at its tightest since 2005. This prophecy has already come true: Last week, the operator had to order generators to make more power after multiple plant breakdowns, and request that “heavy users” switch to back-up power, the first such warning since 2012.

National Grid has now announced that the company is preparing to sell off a majority stake in its national gas distribution business.

The potential sale is expected to start in the next couple of months, or early 2016, according to the firm’s chief executive Steve Holliday, who described the sale as a “rebalancing”:

“Following a sale, National Grid’s portfolio of businesses will have a higher asset growth profile and will remain well positioned to deliver strong returns and a sustainable, growing dividend.”

Chief executive Steve Holliday said:

Our business has delivered a strong performance in the first half of the year while maintaining high standards of safety and reliability for our customers and increasing our level of investment. Headline profits have benefited from an excellent performance from our interconnectors and property activities, which are strongly weighted towards the first half.

Our UK Regulated businesses and other activities remain on track to deliver good performance this year. In the US, we have made significant progress, managing our cost base through a time of increased activity and we expect to maintain profits in line with last year.