National Grid increased its dividend
Companies Results Summaries

November 21, 2012

Last week, National Grid released results for the six months to the end of September, 2012. The company runs the networks that deliver gas and electricity across the United Kingdom, almost as a near-monopoly, and also operates in the USA as a power provider.

I reported extensively on National Grid’s six months results Here. What follows is a summary.

National Grid results

The group reported headline profits up 17 percent for the six months to the end of September to £1.7 billion. However, adjusted for currency movements, regulatory revenue caps and the costs of storm damage (note: not ‘Superstorm’ Sandy!), underlying profits advanced 7 percent to £1.59 billion.

The group’s underlying pre-tax profit amounted to £1,154m, up 21 percent from £953m the year before, while statutory profit before tax of £1,285m was up 37 percent higher than the £941m achieved at the halfway stage last year.

2012 first half year underlying earnings per share rose 20 percent to 23.0 pence from 19.2 pence the year before while statutory EPS jumped 32 percent to 28.8 pence from 21.9 pence.

Expecting a utility to have high gearing – National Grid not being the exception – worryingly its net debt stood at a massive £20.4bn with gearing levels at 224 percent, an increase from 213 percent at the March year end. Furthermore, the company is expecting net debt to increase further by between £1.0bn – 1.5bn at the 2013 year end.

The company is currently awaiting the outcome of a regulatory review in the United Kingdom, before setting a longer-term dividend policy some time in 2013.

National Grid confirmed that its first half-year dividend payout had been raised by 4 percent to 14.49 pence per share going ex-dividend on 28 November and payable on January 16th, while also confirming that the payout for the year as a whole, will be increased by 4 percent as well. Therefore shareholders should expect to receive a total 2012/13 dividend of 40.85 pence per share.


While a ‘comparable’ electricity and gas utility – although SSE is fundamentally different from National Grid – SSE released adjusted earnings per share for the period up 41 percent warning that it is the full year results which are the more indicative of performance. Nevertheless, SSE is paying a 5 percent increased dividend of 25.2 pence going ex-dividend on 23 January and payable on 22 March.

SSE current dividend policy is to raise the payout by at least RPI+2% to March 2013 and above inflation increases after that. The dividend forecast for 2012/13 is around 84 pence per share.

Unfortunately, SSE is following the utility ‘trend’ outlined above, with increased net debt rising to about £7.05bn making gearing of a massive 232 percent, up from 197 percent last March.

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Company results and dividends

Several other dividend paying companies have released their interim results, including:


Sainsbury remains the darling of the high street supermarkets, outperforming the market, with so-called Like-For-Like sales (excluding fuel) up 1.7 percent and increasing their market share to 16.7 percent, which makes 31 consecutive quarters of LFL sales growth. A pleasing contrast with Tesco.

Sainsbury announced a 7.7 percent increase in its dividend of 4.8 pence for the half year going ex-dividend on 21 November and payable on 04 January.

British Land

Quarterly dividend payer British Land is paying a second quarter dividend of 6.6 pence going ex-dividend on 9 January and will be paid on 15 February. That makes a half-year total of 13.2 pence, compared to last year’s 13.0 pence.


With trading volumes down significantly across nearly all asset classes and geographies, interdealer broker and information provider ICAP announced revenues down 14 percent and adjusted earnings per share down 21 percent.

Nevertheless, with good cash flow ICAP appear confident in the future, announcing an inflation beating 10 percent increased half-year dividend of 6.6 pence despite lowered profits, going ex-dividend on 2 January and payable on 8 February. Consensus dividend forecast for 2013 is the same as for 2012: 22 pence.

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