REG - National Grid PLC - FY2026 Full Year Results Statement
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RNS Number : 2406E National Grid PLC 14 May 2026
London | 14 May 2026: National Grid plc today announces its Full Year results
for the period ended 31 March 2026.
We bring energy to power possibilities
Zoë Yujnovich, Chief Executive, said: "National Grid is embarking on the
largest investment programme in our history, committing at least £70 billion
over the next five years to modernise and expand energy networks across the UK
and the US Northeast - networks that underpin economic growth, strengthen
energy security and enable the transition to a cleaner, more flexible energy
system. At the same time, we are building the skilled workforce needed to
deliver this investment at pace, creating thousands of jobs across our
markets.
This year, we have delivered strong financial performance, including
underlying EPS growth of 8% at constant currency, and record investment of
£11.6 billion. This sets the foundation to deliver compound annual growth
rates across our five-year financial framework of around 10% asset growth and
8-10% underlying EPS growth.
Through executing today's programme with pace and precision, and transforming
our capabilities we will be able to meet the rapidly growing demand and enable
a more efficient energy system - one that supports long-term affordability and
reliability for customers. Our operational focus and commitment to innovation
will deliver for customers and communities, and create long-term value for
shareholders. I am energised by the determination of our colleagues to step up
and meet this moment."
Financial summary
Year ended 31 March Statutory results Underlying(1) Underlying at constant currency(1,2)
(continuing operations)
2026 2025 % change 2026 2025 % change 2025 % change
Operating profit (£m) 5,431 4,934 10% 5,680 5,357 6% 5,221 9%
Earnings (£m) 3,241 2,826 15% 3,859 3,452 12% 3,388 14%
Earnings per share (EPS) (p)(3) 65.5 60.0 9% 78.0 73.3 6% 72.0 8%
Dividend per share (p) 48.49 46.72 3.8%
Capital investment (£m) 11,576 9,847 18%
1. 'Underlying' is a non-GAAP alternative performance measure (APM) used by
management to monitor performance across the Group. This measure along with
other APMs used in this report are explained in more detail on pages 62 to 79.
These measures are not substitutes for IFRS measures, however management
believes such additional information is useful in assessing the performance of
the business on a comparable basis.
2. Constant currency calculated using current year average exchange rate of
$1.343 (2024/25: actual average exchange rate was $1.266).
3. 4,946 million weighted average shares for 2025/26 (2024/25: 4,707
million).
Highlights
Financial performance
- Record capital investment of £11.6 billion (2024/25: £9.8 billion),
driving asset growth of 10.9% (2024/25: 9.0%).
- Underlying EPS of 78.0p up 8% at constant currency, with strong operating
performance partially offset by divestments, storm costs, a higher share
count, and the impact of a recent FERC* order. Statutory EPS of 65.5p up 9%.
- Recommended final dividend of 32.14p, resulting in a total dividend of
48.49p up 3.8% compared to prior year, in line with policy aim to increase
with UK CPIH inflation.
Strategic progress
- Extended and upgraded our Five-Year Financial Framework to 2030/31, with at
least £70 billion capital investment over the period, reflecting increased
clarity across our businesses and the outcomes of the RIIO-T3* price control.
- Supply chain and delivery mechanisms secured for around three-quarters of
£70 billion capital investment plan.
- Completed the divestments of National Grid Renewables and Grain LNG.
Regulatory progress
- Around two-thirds of the at least £70 billion capital investment covered by
regulatory agreements. The agreements balance the need for investment with
customer affordability, demand growth and system reliability.
- Increased regulatory visibility with approval of our Niagara Mohawk rate
case in New York, ESMP* investments in Massachusetts, and acceptance of the
RIIO-T3 price control in UK Electricity Transmission.
- Filed our rate case proposal for Massachusetts Gas, focused on balancing
bill impacts with asset health and network reliability.
*See glossary on page 33.
Financial outlook and guidance: visible growth and resilience
- Financial outlook over the five-year period from 2026/27 to 2030/31:
- total cumulative capital investment of at least £70 billion;
- asset growth CAGR(1) of around 10%;
- driving underlying EPS CAGR(2) of 8-10% from a 2025/26 EPS baseline of
78.0p;
- aim to grow dividend per share in line with UK CPIH
- a strong balance sheet with credit metrics consistent with current Group
rating; and
- regulatory gearing trending back to the high 60% range by 2030/31 (2025/26:
61%), with balance sheet strength extending beyond 2030/31, complemented by
significant hybrid capacity.
- For 2026/27, we expect strong operational performance across the Group with
underlying EPS expected to increase 13-15% from the 2025/26 baseline
reflecting higher allowed revenue as we step up delivery from RIIO-T2 to
RIIO-T3.
- For further detail, please refer to the five-year financial framework and
2026/27 forward guidance on pages 10 to 13.
1. Group asset compound annual growth rate (CAGR) from a 2025/26 baseline.
Forward years based on assumed USD FX rate of 1.35; and long run UK CPIH and
US CPI inflation assumptions.
2. Underlying EPS compound annual growth rate from a 2025/26 baseline.
Forward years based on assumed USD FX rate of 1.35; long run UK CPIH and US
CPI inflation and interest rate assumptions and scrip uptake of 25%.
Contacts
Investor Relations Angela Broad +44 (0) 7825 351 918
Andrew Downey +44 (0) 7926 285 683
Tom Edwards +44 (0) 7976 962 791
Cerys Reece +44 (0) 7860 382 264
Media Peter Hesse +44 (0) 7834 502 412
Brunswick Dan Roberts +44 (0) 7980 959 590
Results presentation and webcast
Zoë Yujnovich (CEO) and Andy Agg (CFO) will host the results presentation at
Think Tank, 8 Bishopsgate, London, EC2N 4BQ, at 15:00 (BST)/10:00 (EDT) today.
A live webcast and Q&A will also be available. Please use this link to
join via a laptop, smartphone or tablet:
https://www.nationalgrid.com/investors/events/results-centre
(https://www.nationalgrid.com/investors/events/results-centre) . A replay of
the webcast will be available soon after the event at the same link.
UK (and International) +44 (0) 330 551 0200
UK (Toll Free) 0808 109 0700
US (Local) +1 786 697 3501
Password Quote "National Grid" when prompted by the operator
The Annual Report and Accounts 2025/26 (ARA) is expected to be publicly
available on 3 June 2026. When published, the ARA will be available on
National Grid's website at nationalgrid.com/investors
(https://www.nationalgrid.com/investors)
Use of Alternative Performance Measures
Throughout this release we use a number of alternative (or non-IFRS) and
regulatory performance measures to provide users with a clearer picture of the
regulated performance of the business. This is in line with how management
monitor and manage the business day-to-day. Further detail and definitions for
all alternative performance measures are provided on pages 62 (#Section33) to
79.
Financial performance
Year ended 31 March 2026 2025 change %
(£ million)
Underlying operating profit at constant currency(1)
UK Electricity Transmission 1,682 1,428 18%
UK Electricity Distribution 1,238 1,203 3%
UK Electricity System Operator - 115 (100)%
New England 866 871 (1)%
New York 1,709 1,367 25%
National Grid Ventures 327 380 (14)%
Other (142) (143) 1%
Group 5,680 5,221 9%
Capital investment at constant currency(1)
UK Electricity Transmission 4,372 2,999 46%
UK Electricity Distribution 1,617 1,426 13%
New England 2,043 1,650 24%
New York 3,428 3,101 11%
National Grid Ventures 109 362 (70)%
Other 7 4 75%
Group 11,576 9,542 21%
FFO/Net debt 13.0 13.7 -70bps
RCF/Net debt 9.3 9.8 -50bps
As at 31 March
Net debt (44,160) (41,371) 7%
UK Regulated Asset Value (RAV) 36,986 32,779 13%
US rate base (£m at constant currency)(2) 29,452 26,694 10%
Total Group RAV and rate base (£m) 66,438 59,473 12%
NGV and Other businesses (£m) 5,545 7,266 (24)%
Total (£m) 71,983 66,739 8%
Asset growth(3) 10.9% 9.0% 190bps
Regulated asset growth(3) 11.7% 10.5% 120bps
Group return on equity 9.8% 9.0% 80bps
1. Constant currency calculated using 2025/26 average exchange rate of
$1.343 (2025: actual average rate was $1.266). See pages 66 (#Page66) and 68
(#Capitalinvestmentatconstantcurrency) for details.
2. US rate base constant currency calculated using 31 March 2026 closing
rate of $1.323 (2025: actual closing rate was $1.292). See page 78 for
details.
3. Calculated excluding the reduction in RAV and non-regulated businesses
assets as a result of significant business disposals. See page 79 for details.
Responsible Business performance
Externally assured(1) 2026 2025 change
Scope 1 and 2 greenhouse gas emissions (ktCO(2)e) 7,511 7,422 1%
Scope 3 greenhouse gas emissions (ktCO(2)e) 29,503 28,435 4%
Renewable energy connected to the UK Transmission and Distribution Grids 576 2,244 (74)%
(MW)
Renewable energy connected to the US Transmission and Distribution Grids 548 772 (29)%
(MW)
Group Lost Time Injury Frequency Rate (LTIFR) 0.11 0.10 0.01
1. We engaged Deloitte LLP to undertake a limited assurance engagement,
using the International Standard on Assurance Engagements (ISAE) 3000
(Revised): 'Assurance Engagements Other Than Audits or Reviews of Historical
Financial Information' and ISAE 3410: 'Assurance Engagements on Greenhouse Gas
Statements' over a range of data points within our Responsible Business data
tables. Renewable energy connected refers to connected capacity that is
energised within the reporting year - see explanation on page 8. Further
details of National Grid's Reporting Methodology and Deloitte's full limited
assurance opinion are available on our website.
Strategic overview
Safety and operational performance: Retained focus on reliability and
resilience
Our Lost Time Injury Frequency Rate (LTIFR)(1) stood at 0.11 compared to 0.10
in 2024/25 and against our Group target of 0.10. The primary causes of Lost
Time Injuries are associated with slips, trips and falls, musculoskeletal
injuries, and 'struck-by' events. In response, we have implemented targeted
initiatives to further strengthen risk awareness, leadership engagement and
control effectiveness. The safety of our people and those working on our
behalf remains our highest priority. By sharpening our focus on high‑energy
risks and critical controls, we continue to build safer, more resilient
operations that support reliable performance over the long term.
Reliability underpins everything we do, with our regulated electricity
networks having reliability of over 99.9%, and our UK Electricity Transmission
(UK ET) network having a world-class reliability of 99.99999%, with just one
loss of supply event in 2025/26 - the lowest number in a decade. Our European
interconnectors delivered over 90% availability across the fleet, up from 86%
in 2024/25.
With our focus on delivering a reliable service for our customers, we continue
to navigate storm impacts across our UK and US businesses successfully.
Following Storm Goretti in our South West England territory, the largest in
the region for two decades, 73% of customers affected by outages were restored
within 24 hours. During severe winter storms in our US service territories,
crews worked around the clock to restore power to impacted customers. Our gas
networks in Massachusetts, New York and Long Island delivered some of the
highest throughput days on record during Storm Fern, consistently serving
customers amidst record-breaking demand and significant strains on the
region's energy grids. Our generation fleet on Long Island provided reliable
energy during peak demand for Long Island Power Authority (LIPA), meeting
around half of the power needed during the June 2025 heatwave and almost
two-thirds during winter storms.
We continue to utilise technology to improve the safety, reliability and cost
effectiveness of our operations, including in our New England business, where
tree-related outages were reduced by nearly 30% using satellite imagery and AI
to improve vegetation management, and drones were used to inspect lines in
hard to reach locations during winter storms. In our UK ET business,
autonomous drones were used for overhead line inspections increasing the
speed, efficiency and consistency of data processing and reducing the risk and
environmental impact of alternative inspection methods.
1. Employee and contractor lost time injury frequency rate per 100,000 hours
worked.
Financial performance: sets a strong baseline for our five-year framework
For detailed financial performance commentary, please refer to the Financial
Review section on page 14. Our statutory operating profit is presented on
page 14 which includes the impact of exceptional items, remeasurements, major
storms, timing and the impact of deferred tax in our UK regulated businesses
(NGET and NGED). A reconciliation between Statutory performance and our
Alternative Performance Measures (APMs) is presented on page 65. Our updated
five-year financial framework is on page 10.
The Group's financial performance in 2025/26 demonstrates continued resilience
to the impacts of inflation and cost pressures, changes in interest rates and
exchange rate fluctuations.
Underlying operating profit increased by £459 million at constant currency
to £5,680 million, 9% higher than the previous year. This improvement was
driven by strong performance across our regulated businesses including new
rates for our Niagara Mohawk (NIMO) business in upstate New York, recovery of
prior year storms and environmental costs, higher revenues supported by
increased allowances in the UK and delivery of strong cost efficiencies. This
was partly offset by the impact of the divestments of the Electricity System
Operator, National Grid Renewables and Grain LNG, and the impact of customer
refunds related to the March 2026 FERC order on New England transmission
returns.
Underlying EPS of 78.0p increased by 6.0p or 8% at constant currency compared
to the previous year, with the underlying operating profit increase more than
offsetting the impact of the increased number of shares. At actual exchange
rates, this increase was 4.7p per share, or 6% reflecting a weaker dollar.
Capital investment for continuing operations increased by £2,034 million at
constant currency to a record £11,576 million, an increase of 21% on the
prior year at constant currency, up 18% at actual exchange rates. This
increase was principally driven by the ramp up in spend on Accelerated
Strategic Transmission Investment (ASTI) projects including construction
activity and capacity reservation payments, substation developments in our UK
ET business, higher asset replacement in UK Electricity Distribution (UK ED),
increased spend on electricity distribution and transmission networks in New
England, and electricity transmission projects in New York. This was partially
offset by lower investment in National Grid Ventures (NGV) with the divestment
of National Grid Renewables and Grain LNG, and lower spend on the Viking
interconnector.
Capital investment and RAV indexation helped drive Group asset growth of
10.9%, with regulated asset growth of 11.7%.
Net debt was £44.2 billion at 31 March 2026, £2.8 billion higher than the
prior year. This increase reflected the increased capital investment in the
year, partly offset by £2.8 billion of net cash proceeds from the divestments
of National Grid Renewables and Grain LNG.
Return on Equity (RoE)
We achieved a Group RoE of 9.8% in 2025/26, an increase of 80 basis points
(bps) on the prior year. This increase was principally due to increased
regulated revenue in our UK ET and New York businesses.
In 2025/26, UK ET achieved operational returns of 8.2%, delivering 100bps of
outperformance under RIIO-T2, mainly from totex performance related to savings
on capital delivery (2025: 8.3% achieved return, or 100bps outperformance).
UK ED achieved an operational return of 8.1% in 2025/26, including 50bps
outperformance, mostly consisting of Distribution System Operator performance
incentives. (2025: 7.9% achieved return, or 20bps outperformance).
New England's achieved return of 9.2% was 96% of the allowed return in 2025/26
compared with an achieved return of 9.1% in 2024/25. This excludes the impact
of the historical adjustments to returns following the FERC order in March
2026, but includes the 2025/26 impact. New York's achieved return of 9.0% was
96% of the allowed return in 2025/26 compared with an achieved return of 8.7%
in 2024/25. The quoted returns for New England and New York represent the
weighted average return across operating companies within each jurisdiction.
For further information on RoEs for each of our business entities, please
refer to pages 77 and 78 of the APM section.
Key investments and strategic initiatives: continued progress modernising our
networks
In our continuing businesses, capital investment reached a record
£11.6 billion in 2025/26 reflecting progress on major transmission projects
in both the UK and the US, continued connections and enhancements to our
electricity distribution networks and ongoing asset replacement in our gas
networks.
Strong capital delivery
- In UK ET, construction is progressing as planned on all six Wave 1 ASTI
projects. We also submitted Development Consent Order (DCO) applications to
the UK Government for the Sea Link and Norwich to Tilbury Wave 2 ASTI projects
both of which were accepted and are now in examination.
- We connected a total of 14 GW of generation and 3.8 GW of demand in UK ET
across the five-year RIIO-T2 price control, doubling the pace of generation
connection versus RIIO-T1 and delivering a 15% increase on demand connections
compared to our RIIO-T2 business plan.
- In UK ED, we are connecting new sources of renewable low-carbon generation
to our network, increasing the total amount across our region to over 14 GW.
We also enabled more than 120,000 low‑carbon technology connections,
including a 30% increase in Electric Vehicle chargers.
- Our asset health investment in UK ED increased by 20% aligned to our
regulatory commitments, maintaining network reliability of over 99.9% for our
20 million customers.
- In New York, we energised our Smart Path Connect transmission project with
two 345 kV overhead lines covering over 100 miles, delivered on time and on
budget and allowing transmission of more than 1 GW of renewable energy to
high-demand regions. In New England, we completed construction of a
transmission line from Vermont to New Hampshire, upgrading a line that had
been in service for more than 100 years.
- Our US gas distribution businesses replaced a further 315 miles of
leak-prone pipe.
- In New York and Massachusetts, we installed more than 800,000 and 490,000
smart meters respectively supporting customers to understand their usage,
enhancing management of distributed energy resources and reducing response
times in the event of service disruption.
Delivery mechanisms secured for around three-quarters of the at least £70
billion capital investment
- Primary contracting completed for the Wave 2 ASTI offshore projects in UK ET
including cables and converter systems for Eastern Green Links (EGL) 3 and 4,
and Sea Link.
- For Wave 2 ASTI onshore projects, our Great Grid Partnership with seven
partners will deliver nine major infrastructure projects across England and
Wales covering design, consenting services and construction.
- Launched the Electricity Transmission Partnership to accelerate the delivery
of £8 billion of substation infrastructure by adopting a regional model with
a number of strategic suppliers across the RIIO-T3 price control. This
strengthens supply-chain capability and creates a platform to deploy
innovation and productivity improvements at scale.
- Agreed supply chain partners to support over $3 billion of capital
investment in electricity networks in New England across the next five years.
- Executed construction and commercial contracts for our Climate Leadership
and Community Protection Act (CLCPA) Phase 1 and 2 projects in New York,
representing more than $3.5 billion of investment to unlock almost 4.8 GW of
network capacity when fully operational.
Strategic initiatives to support continued momentum
- We supported the UK Government in its development of AI Growth Zones,
providing early network insight to inform site identification, and
feasibility, with four zones now announced each targeting 500 MW of AI-ready
data centre capacity by 2030. Overall, our RIIO-T3 investment plan is expected
to deliver 19 GW of additional demand capacity, including 10 GW to enable over
30 data centre connections to the system.
- We delivered our three-year target of £100 million cumulative synergies
from the acquisition of UK Electricity Distribution, six months ahead of
schedule.
- We completed the divestments of National Grid Renewables and Grain LNG.
- We continued to progress project opportunities including work on competitive
transmission bids for FERC regulated transmission in the US, alongside signing
a Joint Development Agreement with TenneT to progress our LionLink hybrid
interconnection project linking Dutch offshore wind farms to both the UK and
the Netherlands.
Regulatory, policy and market environment
Our networks have always been central to providing resilient and secure energy
but are now also critical to enabling economic growth by connecting new large
load demand including industrial load and data centres. We work closely with
our policy-makers and regulators across our jurisdictions, as they recognise
the need to balance supporting this economic growth together with
affordability, reliability and decarbonisation.
In the UK, we have seen significant regulatory and policy progress:
- The RIIO-T3 price control agreed for the period until March 2031 empowers us
to invest at the scale required to meet increasing electricity demand and
connect new generation, while aligning performance with what matters to
consumers. Our RIIO-T3 plans will nearly double the amount of power that can
flow across the country, avoiding constraint costs and ensuring a resilient,
clean, and future proof transmission network that supports Britain's economic
competitiveness and growth.
- We contributed to Ofgem's Sector Specific Methodology Consultation for ED3
in December 2025, shaping proposals that strengthen planning, operational
coordination and flexibility to aid the energy transition and support consumer
needs. We are preparing for Ofgem's ED3 Sector Specific Methodology Decision
and Business Plan guidance expected in May 2026.
- We engaged on the DESNZ review of Ofgem and support many of the
recommendations published in April 2026 including: streamlining duties and
remit; a more strategic outcome-focused approach to regulation that supports
innovation and timely delivery; and ensuring Ofgem is a high-performing,
expert organisation. We will continue to work closely with DESNZ and Ofgem on
the next stage of implementing the recommendations.
- As co-chair of the Electricity Network Sector Growth Plan, we are helping to
steer a ten-year road map for GB electricity network investments, including
supply chain, workforce and skills development.
- The Planning & Infrastructure Act achieved Royal Assent in December 2025
and includes measures to streamline planning for our infrastructure projects.
The Government has also announced its intent to make legislation changes
following the Electricity Infrastructure Consents, Land Access and Rights
consultation, which should speed up delivery.
- NESO has published its reformed generation connection queue, removing 221 GW
of projects to better align to Government targets and prioritise those ready
to connect. We have now re-issued offers to our first wave of customers and,
building on extensive preparations and network analysis carried out in 2025,
we are on track to deliver the next sets of offers in line with reform
programme milestones.
- We supported Ofgem's 'Curate, Plan, Connect' framework set out in its Demand
Connections Reform Call for Input in February 2026. We also responded to
DESNZ's consultation on accelerating electricity network connections for
strategic demand in April 2026 where we highlighted the need for a
Government‑led approach to prioritisation, clear investment signals and
regulatory frameworks to enable delivery at pace.
- Following the Government's decision in July 2025 to retain a single national
electricity market and not to implement zonal pricing, in April 2026, DESNZ
published its Reformed National Pricing (RNP) Delivery Plan. This sets out
proposals for how the upcoming Strategic Spatial Energy Plan (SSEP) is
translated into what gets built, where and when - in turn, this will provide
clearer long-term investment signals for networks. We are engaging with DESNZ
and Ofgem to shape these proposals.
In the US, regulators and policy makers continue to seek a balance across
rising demand, reliability, affordability and decarbonisation. Key
developments in the year include:
- In upstate New York, our NIMO Electric and Gas rate plan was approved for
three years to April 2028 enabling us to maintain reliable, resilient, and
cost-effective energy for over two million customers. In downstate New York,
we are preparing to file a rate proposal for KEDNY and KEDLI, our gas
distribution businesses with filing expected before summer 2026.
- Our Massachusetts Gas rate case proposal, filed in January 2026 for a
five-year period, balances bill impact with essential infrastructure upgrades,
emergency preparedness and support for low-income customers. A Rate Order is
expected in November 2026, with new rates effective from 1 December 2026.
- The Massachusetts Department of Public Utilities (DPU) approved $600 million
for our Electric Sector Modernization Plan (ESMP) investments, supporting
networks, technology, and non-wires alternatives, and runs in addition to our
Massachusetts Electric (MECO) rate order.
- The New York PSC's Order on our Long-Term Gas Plan addendum includes the
need for Williams' Northeast Supply Enhancement (NESE) pipeline project, where
National Grid will have the sole offtake agreement. The pipeline will
significantly enhance reliability and potentially lower wholesale electric
costs when commissioned in late 2027.
- The New York State Energy plan adopts a balanced approach, expanding
renewable energy, electrification, and continuing natural gas for reliability,
while calling for upgrades to transmission and distribution infrastructure,
prioritising affordability and equitable access to clean energy benefits.
- We are evaluating contract options with the Long Island Power Authority for
our Long Island Generation assets, ahead of renegotiations over the next two
years.
- We responded to the Massachusetts DPU Delivery Charge Investigation which
aims to address energy price volatility and improve bill transparency with
proposals that support these aims. Both New York and Massachusetts commission
dockets are exploring policies around the connection of large loads and
customer bill transparency, with both promoting clear state policies and
customer confidence in what they are paying.
- In March 2026, FERC issued an order regarding four long-pending New England
Transmission Owners (NETOs) base ROE complaints. The order set a lower base
ROE and requires the NETOs to issue refunds with interest. National Grid will
challenge the decision through the required regulatory and legal procedures.
In April 2026, National Grid, together with the other NETOs, filed a request
with FERC under Section 205 of the Federal Power Act proposing a
forward‑looking base return on equity of 11.39%. The proposal reflects
application of the Commission's current return on equity methodology using
updated market data.
Delivering as a Responsible Business
Network companies have a unique role to play in delivering a reliable, secure,
affordable energy system that supports economic growth and enables
decarbonisation. While we remain focused on reducing our own carbon emissions,
by building out the network of the future, we are enabling the deployment
of renewable energy generation and low carbon technologies including for
heat and transport, to meet society's growing electricity needs while
bringing down its emissions.
In 2025/26 our Scope 1 and Scope 2 emissions totalled 7.5 mtCO2e, an increase
of 1.2% versus 2024/25, and outside the range set out in our Climate
Transition Plan, but 3.3% lower than the 2018/19 baseline. The main driver
for this increase was the increased utilisation of our Long Island Generation
assets which we operate on behalf of the Long Island Power Authority, where
these assets played a critical role in meeting demand amid third-party
outages, and extreme weather events, partially offset by lower Scope 2
emissions due to reduced grid carbon intensity. We will remain vigilant,
closely monitoring developments in the external environment and adapting our
climate strategy as needed, ahead of our next Climate Transition Plan expected
in 2027.
We made continued progress in the year, including:
- 85% of our £11.6 billion capital investment classified as Green capital
expenditure under the principles of the EU taxonomy.
- Reduced SF(6) emissions by 11% through leak repairs and continued to invest
in alternatives to SF(6) including the decision for our Uxbridge Moor
substation to use a gas alternative with 1-2% of the global warming potential
of SF(6).
- Connected 1.1 GW of energised renewable generation, and over 120,000 low
carbon technologies to our networks. Renewable energy connected was lower in
2025/26 than the prior year largely due to third-party project delays.
- Issued £1.2 billion of bonds under our Green Financing framework.
Affordability is a critical issue:
Affordability has always been a critical issue for customers and the company
alike, and has become a whole system challenge including the impact of
commodity and policy costs. Our role is to ensure that the network - the part
we control - is delivered efficiently and reliably, that investment is
targeted to where it delivers the greatest system benefit, and that customers
see value from that investment over time. This is reflected in how we plan,
invest and support our customers:
- As we propose new rate plans in our US businesses, we are focusing our
proposals on investments that are needed to maintain safe, reliable systems,
mitigating the impact on customer bills where possible.
- We implemented tiered discount rates for low-income MECO customers, with
discounts ranging from around 30% to 70%. Multi-lingual outreach and automated
enrolment from data-sharing supported the enrolment of an additional 63,000
eligible customers since the rate order. We are working with the DPU,
government, community agencies, and other utilities to develop a standardised
tiered low-income discount programme for all Massachusetts utility customers.
- Our NIMO rate case included $290 million for low-income support within the
rate case.
- In our UK ET business, the operational outperformance across the RIIO-T2
price control delivered direct consumer savings of nearly £1 billion. Our
business plan for the RIIO-T3 price control, while adding around £21 per
year to the customer bill, supports the avoidance of around £12 billion of
constraint costs, equivalent to £40 per year savings for consumers over the
RIIO-T3 period.
- The continued strong performance of our interconnectors in NGV has enabled
the return of an additional £77 million to customers in the current year.
This is part of £354 million in returns to customers over the past three
years, with a further £313 million forecast to be returned over the next two
years subject to Ofgem approval.
- In UK ED, our winter campaign increased engagement and awareness leading to
a 168% increase in Priority Services Register activity which provides
additional help and support for 2.6 million including the elderly, very ill
and disabled customers.
- Our UK ED business has supported more than 21,000 customers to save £22
million through our fuel poverty support programme, in our latest reported
figures to March 2025.
Strategic framework
Meeting our ambitions and responding to the rapidly changing energy system
requires a relentless focus on efficiency and continuous improvement in the
way we deliver. Our new strategic framework builds on our strengths and
underpins delivery of our five-year financial framework. It introduces a set
of fundamental priorities to sharpen and simplify our approach to create
value for shareholders, and deliver for our customers and stakeholders.
Deliver brilliant basics to lead on performance:
- Capital: best-in-class delivery of our largest-ever capital programme.
- Asset: getting the most from our transmission and distribution assets.
- Customer: providing consistently strong customer experiences.
- Functions: enhancing control and oversight while reducing friction in how we
operate.
Drive big shifts to define our future:
To enable this and position us for the future, we are focused on transforming
our capabilities across three key areas - deliberate, high-impact shifts in
response to structural market change:
- developing the leaders, capabilities and performance culture we need for our
people to deliver our strategy;
- building technology capabilities that enable all our teams to step up
performance; and
- taking bold positions on topics that matter for customers to inform policies
and regulation.
Building optionality for disciplined growth:
Delivering our brilliant basics and transforming our business by embracing the
big shifts will enable us to build a platform for future growth optionality.
Five-year financial framework(*)
In March 2026, we set out our updated five-year financial framework for the
period to 2030/31.
Capital investment and asset growth
We expect to invest at least £70 billion across our regulated energy networks
and adjacent businesses, in the UK and US, over the five-year period to
2030/31, with Group assets trending towards £115 billion by March 2031. Of
this investment, around 85% is considered to be aligned with the principles of
the EU Taxonomy legislation as at the date of reporting, directly invested
into the decarbonisation of energy networks.
In the UK, we expect around £31 billion of investment in Electricity
Transmission increasing network capacity to support increased renewable
generation, and reduce constraint costs, connecting new customers, and
maintaining the resilience of the network. This includes investment across our
17 ASTI projects, as we invest in the critical infrastructure required to
enable the energy transition and a decarbonised electricity network in the
2030s. We expect our Electricity Distribution network to invest around £9
billion in asset replacement, reinforcement and new connections, facilitating
the infrastructure for electric vehicles, heat pumps and directly connected
generation.
In our US regulated businesses, we expect to invest around £17 billion in New
York, and £12 billion in New England. Of this investment, we expect over 60%
into our electricity networks, as we see a step up in investment for renewable
connections, transmission network upgrades, and digital capabilities to enable
the energy transition, and the remainder in our gas business on pipeline
replacement, safety and resilience programmes.
National Grid Ventures (NGV) has committed capex of around £1 billion
including maintenance investment across the six operational interconnectors.
With the large step up in investment, we expect to see asset growth of around
10% CAGR through to 2030/31.
Group earnings growth and dividend growth
We expect our underlying earnings per share CAGR to be 8-10% from a 2025/26
baseline of 78.0p, more aligned with our asset growth. For 2026/27, we expect
underlying EPS growth of 13-15%, reflecting higher allowed revenue as we step
up delivery from RIIO-T2 to RIIO-T3. This includes our long-run average scrip
uptake assumption of 25% per annum, which will support our sustainable,
progressive dividend policy into the future.
We will maintain a progressive level of total dividend aiming to grow the
Dividend Per Share (DPS) in line with UK CPIH (for details of our dividend
policy please refer to page 28).
Balance sheet visibility
We remain committed to a strong, overall investment grade credit rating. We
expect to maintain credit metrics above our thresholds for our current group
credit ratings through to at least 2030/31, with current thresholds of 10% for
S&P and Moody's Funds from Operations (FFO)/adjusted net debt, and 7% for
Moody's Retained Cash Flow (RCF)/adjusted net debt. Regulatory gearing is 61%
at March 2026, and is expected to trend back towards the high-60% range by the
end of 2030/31. This balance sheet strength extends beyond 2030/31,
complemented by significant hybrid capacity.
*Our five-year financial framework is set from a 2025/26 baseline. Forward
years are based on an assumed USD exchange rate of £1:$1.35, long run
UK CPIH and US CPI inflation, long run interest rate assumptions, and scrip
dividend uptake of 25%.
Macro resilience
Our investment case is underpinned by the visibility and resilience of our
business model, our robust operational delivery, and supported by our
regulatory frameworks. We are resilient to the impacts of the broader macro
environment.
- Inflation: In our UK businesses, inflation protections across our regulated
asset base, together with regulatory mechanisms that provide protection
against the impact of inflation on our cost base, provide a strong natural
hedge and underpin real equity returns. In the US, our regulatory frameworks
have mechanisms to manage impacts of changes in inflation including revenue
indexation, the ability to pace activity to remain within agreed allowances,
and mechanisms to recover efficiently incurred unremunerated spend over time.
- Commodity costs: Our businesses have limited exposure to volatility in
wholesale energy prices. In the US, customer commodity costs are treated as
pass through costs, and we use hedging programmes agreed with our regulators
to manage the cost of energy procured for our customers.
- Interest rates: Our financing strategy is designed to ensure stability, with
operating company leverage broadly matched to their regulatory frameworks
enabling the efficient recovery of debt costs. Around 30% of our debt is held
at the HoldCo level, with maturities extending into the 2030s. In addition, we
have fixed interest rates for around 80% of the total debt book. Our five-year
financial framework reflects the interest rate outlook and our refinancing
profile.
- Foreign exchange: We are deliberate in managing our currency exposure. We
hedge around 70% of our US gross assets with dollar-denominated debt. From an
earnings perspective, that means a five cent move in the dollar-sterling
exchange rate across a year translates to around a 1p impact on EPS, limiting
volatility for shareholders.
2026/27 forward guidance
The outlook and forward guidance contained in this statement should be
reviewed, together with the forward-looking statements set out in this
release, in the context of the cautionary statement. The forward guidance in
this section is presented on an underlying basis and excludes remeasurements
and exceptional items, deferrable major storm costs, net of in-year allowances
in the US (when greater than $100 million), timing and the impact on
underlying results of deferred tax in our UK regulated businesses (NGET and
NGED). The 2026/27 forward guidance assumes an exchange rate of £1:$1.35,
reflecting nearer term exchange rates.
UK Electricity Transmission
Underlying net revenue is expected to increase by just under £850 million
compared to 2025/26 primarily driven by the first year of RIIO‑T3,
reflecting semi‑nominal returns and higher levels of totex from increased
ASTI investment. Depreciation is expected to be around £80 million higher,
while costs are expected to increase by around £50 million, both linked to
the step-up in investment programmes.
We expect to deliver around 9% Return on Equity in 2026/27. Across the RIIO-T3
price control we aim to achieve an overall return on equity above 9% including
operating and financing performance.
UK Electricity Distribution
Underlying net revenue growth is expected to be broadly offset by higher
depreciation, reflecting the increasing asset base.
We expect to deliver around 70 basis points of Return on Equity operational
outperformance in the fourth year of RIIO-ED2, increasing from 2025/26,
primarily delivered through both improved incentive and totex performance. We
continue to expect outperformance to improve towards 100bps over the remainder
of RIIO-ED2.
New England
Underlying net revenue is expected to be around $450 million higher, driven by
updated rates, higher tracker revenues and the non‑repeat of the 2025/26
FERC order impact. This is expected to be partly offset by higher depreciation
of around $70 million and around $140 million of costs including those
linked to increased investment.
Return on Equity for New England is expected to be in line with 2025/26.
New York
Underlying net revenue is expected to be around $450 million higher,
reflecting updated rates and recovery of previously unremunerated costs.
Depreciation is expected to be around $150 million higher, and other costs
are expected to be around $20 million higher, linked to increased investment.
Return on Equity for New York is expected to slightly improve compared to
2025/26.
National Grid Ventures and Other activities
In NGV, we expect operating profit to be around £120 million lower than
2025/26 primarily reflecting the sale of the Grain LNG business.
We also expect underlying operating losses from other activities to be around
£100 million higher than 2025/26, including lower property disposals.
Joint Ventures and Associates
Our share of the profit after tax of joint ventures and associates is expected
to be broadly in line with 2025/26.
Interest and Tax
Net finance costs in 2026/27 are expected to be around £200 million higher
than 2025/26 reflecting our debt issuance programme net of higher capitalised
interest, both driven by our investment programme.
For the full year 2026/27, the underlying effective tax rate, excluding the
share of post-tax profits from joint ventures and associates, is expected to
be around 13%. This is calculated following our definition of underlying
earnings which excludes the impact on underlying results of deferred tax in
our UK regulated businesses (NGET and NGED).
Investment, Growth and Net Debt
Overall Group capital investment in 2026/27 is expected to grow around 10% to
nearly £13 billion.
Asset Growth is expected to be around 10%.
Operating cash flow generated from operations is expected to increase by
around 20% compared to 2025/26 driven by increased underlying performance and
the recovery of timing balances.
Net debt is expected to increase by just over £6 billion (from £44.2 billion
as at 31 March 2026), with operating cash inflows more than offset by our
continued levels of significant investment in critical energy infrastructure.
Reflecting this, regulatory gearing is expected to be around 64%.
Weighted average number of shares (WAV) is expected to be approximately 5,000
million in 2026/27.
Financial review
In managing the business, we focus on various non-IFRS alternative performance
measures (APMs) and regulatory performance measures (RPMs) which provide
meaningful comparisons of performance between years, monitor the strength of
the Group's balance sheet and ensure profitability reflects the Group's
regulatory economic arrangements. Such APMs and RPMs are supplementary to, and
should not be regarded as a substitute for IFRS measures, which we refer to as
statutory results. We explain the basis of these measures and, where
practicable, reconcile to statutory results on pages 62 to 79. Adjusted
results exclude exceptional items and remeasurements whereas underlying
results exclude (i) revenue timing differences arising from our regulatory
contracts; (ii) major storm costs recoverable in future periods, where above
$100 million (in aggregate, net of in-year allowances and deductibles) in the
year; and (iii) impact on underlying results of deferred tax in our UK
regulated businesses (NGET and NGED); none of which give rise to economic
gains/losses.
Performance for the year ended 31 March
Financial summary for continuing operations
(£ million) 2025/26 2024/25 change %
Accounting profit
Gross revenue 17,687 18,378 (4)%
Operating costs (12,745) (13,444) 5%
Statutory operating profit 5,431 4,934 10%
Net finance costs (1,325) (1,357) 2%
Share of joint ventures and associates 76 73 4%
Tax (939) (821) (14)%
Non-controlling interest (2) (3) 33%
Statutory IFRS earnings (note 7) 3,241 2,826 15%
Exceptional items and remeasurements(1) (333) (171) n/m
Tax on exceptional items and remeasurements(1) (16) (40) 60%
Adjusted earnings(1) 2,892 2,615 11%
Timing and major storm costs(1) 636 592 n/m
Tax on timing and major storm costs(1) (168) (156) n/m
Deferred tax on underlying profits in NGET and NGED(1) 499 401 24%
Underlying earnings(1) 3,859 3,452 12%
Statutory EPS - (pence) (note 7) 65.5p 60.0p 9%
Adjusted EPS - (pence) (note 7)(1) 58.5p 55.6p 5%
Underlying EPS(1) 78.0p 73.3p 6%
Dividend per share 48.49p 46.72p 4%
Dividend cover - underlying(1) 1.6x 1.6x 3%
Capital investment and asset growth
Capital investment 11,576 9,847 18%
Regulated asset growth(1) 11.7% 10.5% 120bps
Asset growth(1) 10.9% 9.0% 190bps
Balance sheet strength
FFO/adjusted net debt(1) 13.0% 13.7% -70bps
RCF/adjusted net debt(1) 9.3% 9.8% -50bps
Net debt (note 11) 44,160 41,371 7%
Add: held for sale net debt - (55) n/m
Net debt (including held for sale)(1) 44,160 41,316 7%
Group regulatory gearing(1) 61% 61% 0bps
1. Non-GAAP alternative performance measures (APMs) and/or regulatory
performance measures (RPMs). For further details see pages 62 to 79.
Statutory IFRS earnings were £3,241 million in 2025/26, £415 million (15%)
higher than the prior year. Statutory earnings benefited from pre-tax net
exceptional gains of £376 million related to the sale of our two non-core
businesses (Grain LNG and National Grid Renewables) in 2025/26; and pre-tax
remeasurement losses of £43 million (2025: pre-tax net exceptional credits
of £42 million and pre-tax remeasurement gains of £129 million). For
details on exceptional items refer to note 4. Timing swings were £131 million
adverse year on year, with a £636 million net under-recovery in 2025/26
(2025: £505 million net under-recovery). These factors, the net impact
of tax on these items and an improvement in underlying business performance
meant that statutory EPS for continuing operations of 65.5p was 5.5p higher
than the prior year.
Our 'adjusted' results exclude the impacts from exceptional items and
remeasurements as explained on page 64. In 2025/26, adjusted earnings from
continuing operations were £2,892 million, up £277 million (11%) from the
prior year. Adjusted earnings in 2025/26 included a timing net under-recovery
after tax of £468 million (2025: £372 million net under-recovery). As a
result, adjusted operating profit of £5,044 million was up £279 million
(2025: £4,765 million). Adjusted net finance costs of £1,271 million were
£90 million lower, as a result of higher average net debt and higher interest
rates being more than offset by higher capitalised interest and other interest
income. Share of profits from joint ventures and associates of £76 million
were £1 million. Adjusted tax of £955 million was £94 million higher,
driven by the increase in profits, but resulted in a stable effective tax rate
of 25.3% (2025: 25.3%).
As explained above, our 'underlying' results exclude the total impact of
exceptional items, remeasurements, timing, major storm costs and deferred tax
in UK regulated businesses (NGET and NGED). A reconciliation between
these alternative performance measures and our statutory performance
is detailed on page 65.
Our policy is to exclude deferrable storm costs (net of allowances and
deductibles) from underlying results if these exceed a $100 million aggregate
pre-tax threshold. In 2024/25, we included $110 million (£87 million) of
storm costs in our adjusted results, but excluded these from underlying
results. In 2025/26 our allowances were higher and deferrable storm costs were
below this threshold, so $52 million (£39 million) of deferrable storm costs
that are recoverable in future periods are included in our underlying results.
Underlying operating profit was up 6% driven by improved performance in New
York (from updated rates and the collection of unremunerated costs in prior
periods) along with higher allowed revenues in UK Electricity Transmission
(RAV growth and increased ASTI-related 'fast money'). New England was lower
with updated rates and capital trackers being more than offset by a FERC order
on Transmission Owner RoEs across New England (mostly related to historical
years). National Grid Ventures was lower mainly as a result of the sale of
two businesses in the year (Grain LNG and National Grid Renewables). Other
activities and the contribution from joint ventures and associates were
broadly flat year on year. Regulated controllable costs were 2% higher (at
constant currency), with inflation and workload increases being partly offset
by efficiency savings. Depreciation and amortisation were higher than the
prior year due to our growing asset base. Net debt-related financing costs
were higher, driven by our ongoing investment programme. Other interest was
favourable year on year driven by higher levels of capitalised interest.
After accounting for non-controlling interests, underlying earnings increased
by 12% and resulted in a 6% increase in underlying EPS to 78.0p.
Capital investment of £11,576 million was £1,729 million (18%) higher
than 2024/25, driven by a step up in investment across our regulated
businesses, partly offset by lower investment in National Grid Ventures.
Higher capital investment and the impact of RAV indexation have helped deliver
asset growth of 10.9% (2025: 9.0%).
Reconciliation of different measures of profitability and earnings
In calculating adjusted profit measures, where we consider it is in the
interests of users of the financial statements to do so we exclude certain
discrete items of income or expense that we consider to be exceptional in
nature. The table below reconciles our statutory profit measures for
continuing operations, at actual exchange rates, to adjusted and underlying
versions. Further information on exceptional items and remeasurements is
provided in notes 2, 4 and 5. Further information on non-GAAP alternative
performance measures (APMs) and regulatory performance measures (RPMs) is
provided on pages 62 to 79.
Reconciliation of profit and earnings from continuing operations
Operating profit Profit after tax Earnings per share (pence)
(£ million) 2026 2025 2026 2025 2026 2025
Statutory results 5,431 4,934 3,243 2,829 65.5 60.0
Exceptional items (376) (42) (384) (118) (7.7) (2.4)
Remeasurements (11) (127) 35 (93) 0.7 (2.0)
Adjusted results 5,044 4,765 2,894 2,618 58.5 55.6
Timing 636 505 468 372 9.5 7.9
Major storm costs - 87 - 64 - 1.3
Deferred tax on underlying results in NGET and NGED - - 499 401 10.0 8.5
Underlying results 5,680 5,357 3,861 3,455 78.0 73.3
Statutory operating profit increased in the year, primarily as a result
of exceptional net gains of £376 million in 2025/26 compared with net gains
of £42 million in the prior year. For details on exceptional items refer to
note 4. This was largely offset by £131 million adverse year-on-year
movements in timing, £116 million adverse year‑on-year movements
in commodity derivative remeasurements and the impact of a weaker exchange
rate. Statutory operating profit was also supported by an improved underlying
performance in our UK Electricity Transmission, UK Electricity Distribution
and New York businesses, partially offset by the prior year including a
contribution from the UK Electricity System Operator prior to its disposal,
along with lower underlying profits in New England, adversely impacted by the
FERC order (mainly related to historical periods) and lower underlying profits
in National Grid Ventures, with the latter being driven by the sales of
National Grid Renewables and Grain LNG in 2025/26.
Timing over/(under)-recoveries
In calculating underlying profit, we exclude regulatory revenue timing over-
and under-recoveries, major storm costs (defined below) and deferred tax on
underlying results of our UK regulated business (NGET and NGED), also defined
below. Under the Group's regulatory frameworks, most of the revenues we are
allowed to collect each year are governed by regulatory price controls in the
UK and rate plans in the US. If more than this allowed level of revenue is
collected, an adjustment will be made to future prices to reflect this
over-recovery; likewise, if less than this level of revenue is collected, an
adjustment will be made to future prices in respect of the under‑recovery.
These variances between allowed and collected revenues and timing of revenue
collections for pass-through costs give rise to 'timing' over-
and under-recoveries.
The following table summarises management's estimates of such amounts for the
two years ended 31 March 2026 and 31 March 2025 for continuing operations.
All amounts are shown on a pre-tax basis and, where appropriate, opening
balances are restated for exchange adjustments and to correspond with
subsequent regulatory filings and calculations, and are translated at the
2025/26 average exchange rate of $1.343:£1.
Timing over/(under)-recoveries
(£ million) 2026 2025(1)
Balance at start of year (restated) 60 1,018
UK Electricity Transmission (77) (151)
UK Electricity Distribution (116) 407
UK Electricity System Operator (sold in 2024/25) - (479)
New England 94 57
New York (537) (323)
In-year (under)/over-recovery - continuing operations (636) (489)
Disposal of UK Electricity System Operator - (462)
Balance at end of year (576) 67
1. March 2025 balances restated to correspond with 2024/25 regulatory
filings and calculations.
In relation to timing under-recoveries, the estimated closing net
under-recovered balance at 31 March 2026 (at an average exchange rate of
$1.34) was £576 million, comprising: a net £68 million asset to be recovered
in UK Electricity Transmission; a net £2 million liability to be returned in
UK Electricity Distribution; a net £274 million asset to be recovered in New
England; and a net £236 million asset to be recovered in New York (for
further details see page 67). In calculating the post-tax effect of these
in‑year timing recoveries, we impute a tax rate based on the regional
marginal tax rates, consistent with the relative mix of UK and US balances.
Major storm costs
We exclude the impact of major storm costs in the US where the aggregate
amount is sufficiently material in any given year. Such costs (net of
in-year allowances and deductibles) are recoverable under our rate plans but
are expensed as incurred under IFRS. Accordingly, where the aggregate total US
major storm costs incurred (net of in-year allowances and deductibles)
exceeds $100 million in any given year, we exclude the net costs from
underlying earnings. In 2025/26, we incurred deferrable storm costs (net of
allowances) which are eligible for future recovery of $52 million, but this
did not exceed our pre-set $100 million threshold to be excluded from
underlying results. In the prior year, we incurred $110 million
(£87 million) of deferrable storm costs (net of allowances) before tax, or
£64 million post-tax and consequently these were all excluded from our
reported underlying results.
Deferred tax in UK regulated businesses
We exclude deferred tax in our UK regulated businesses (NGET and NGED) in our
underlying earnings measure. Tax is generally considered to be a pass-through
cost by our UK regulator, with revenue tax allowances linked to the level
of cash tax expected to be paid in the year. In 2025/26, we excluded
£499 million (2025: £401 million) of deferred tax charges from our
underlying results.
Segmental operating profit
Statutory results Underlying results
(£ million) 2026 2025 change % 2026 2025 change %
UK Electricity Transmission 1,605 1,277 26 1,682 1,428 18
UK Electricity Distribution 1,122 1,598 (30) 1,238 1,203 3
UK Electricity System Operator - (213) (100) - 115 (100)
New England 947 1,008 (6) 866 924 (6)
New York 1,184 1,269 (7) 1,709 1,450 18
National Grid Ventures 715 5 n/m 327 380 (14)
Other activities (142) (10) n/m (142) (143) (1)
Total operating profit - continuing 5,431 4,934 10 5,680 5,357 6
The following segmental commentaries describe the reasons for the movements in
statutory, adjusted and underlying operating profit compared with the prior
year. Unless otherwise stated, the discussion of performance in the remainder
of this Financial review focuses on underlying results.
UK Electricity Transmission
(£ million) 2026 2025 % change
Revenue 2,898 2,619 11
Operating costs (1,293) (1,342) (4)
Statutory operating profit 1,605 1,277 26
Exceptional items - - -
Adjusted operating profit 1,605 1,277 26
Timing 77 151 n/m
Underlying operating profit 1,682 1,428 18
Underlying net revenue 2,584 2,315 12
Regulated controllable costs (including pensions) (290) (293) (1)
Other operating costs (62) (54) 15
Depreciation and amortisation (550) (540) 2
Underlying operating profit 1,682 1,428 18
Timing (77) (151) n/m
Adjusted operating profit 1,605 1,277 26
UK Electricity Transmission statutory operating profit was £328 million
higher in the year. Timing under-recoveries were £77 million in 2025/26
compared with an under-recovery of £151 million in 2024/25.
This year-on-year less adverse under-recovery is mainly the impact of the
return in 2024/25 of prior period balances (primarily tax allowances), a
lower inflation true-up and a lower in-year recovery on volumes and
pass-through costs than 2024/25.
UK Electricity Transmission underlying operating profit increased by 18%.
Underlying net revenues were £269 million (12%) higher principally from
higher totex allowances (including fast money on ASTI spend) but also the
impact of inflationary increases linked to RAV growth.
Regulated controllable costs including pensions were £3 million lower with
the impact of inflationary and workload increases, due to a larger workforce
to support the growing asset base, being more than offset by efficiency
savings, non-recurring benefits related to IT and support service recharges
and the reclassifications of insurance recharges. Other costs were slightly
higher than the prior year at £62 million, including cost reclassifications,
but this was partly offset by lower customer-funded diversions and favourable
gains on disposals of assets compared with 2024/25.
The higher depreciation and amortisation principally reflects a higher asset
base as a result of continued investment.
UK Electricity Distribution
(£ million) 2026 2025 % change
Revenue 1,937 2,424 (20)
Operating costs (815) (826) (1)
Statutory operating profit 1,122 1,598 (30)
Exceptional items - 12 (100)
Adjusted operating profit 1,122 1,610 (30)
Timing 116 (407) n/m
Underlying operating profit 1,238 1,203 3
Underlying net revenue 1,869 1,832 2
Regulated controllable costs (including pensions) (311) (302) 3
Other operating costs (49) (78) (37)
Depreciation and amortisation (271) (249) 9
Underlying operating profit 1,238 1,203 3
Timing (116) 407 n/m
Adjusted operating profit 1,122 1,610 (30)
UK Electricity Distribution statutory operating profit was £476 million lower
in the year, reflecting the impact of £523 million adverse year-on-year
timing movements. Timing under-recoveries of £116 million in 2025/26 were
mainly due to the return of prior period balances, principally driven by an
over-collection in K‑factor (i.e. volumes/prices) in 2024/25 which was
effectively returned in 2025/26, partly offset by true-ups for pass-through
costs and inflation. This compares with a timing over-recovery of
£407 million in the prior year, which was favourably driven by an
over-collection of K-factor.
In 2025/26 there were no exceptional costs compared with £12 million of
exceptional costs in 2024/25 related to our major transformation programme.
UK Electricity Distribution underlying operating profit increased by
£35 million (3%). Underlying net revenues were £37 million higher than the
prior year due to the impact of higher inflation, higher totex allowances and
improved DSO incentives performance partly offset by lower engineering
recharge income.
Regulated controllable costs including pensions were £9 million (3%) higher
than the prior year from the impact of increased inspection and maintenance
work, combined with investment in capability build and inflation impacts,
partly offset by efficiencies achieved. Other costs were £29 million lower,
reflecting costs incurred in the prior year associated with Storm Darragh and
lower engineering recharges.
Depreciation and amortisation increased by £22 million compared with the
prior year due to the increasing asset base.
UK Electricity System Operator
(£ million) 2026 2025 % change
Revenue - 1,029 (100)
Operating costs - (1,242) (100)
Statutory operating profit - (213) (100)
Exceptional items - (151) (100)
Adjusted operating profit - (364) (100)
Timing - 479 (100)
Underlying operating profit - 115 (100)
Underlying net revenue - 291 (100)
Controllable costs - (159) (100)
Post-retirement benefits - (10) (100)
Other operating costs - (7) (100)
Underlying operating profit - 115 (100)
Timing - (479) (100)
Adjusted operating profit - (364) (100)
UK Electricity System Operator was purchased by the UK Government on 1 October
2024 and had been classified as 'held for sale' since October 2023. Based on
the scale and pass-through nature of the UK Electricity System Operator, it
was not considered to be a separate major line of business and hence, did not
meet the definition of a discontinued operation under IFRS 5.
UK Electricity System Operator had a statutory operating loss of
£213 million in 2024/25 as a result of adverse timing (net of provisions
for regulatory liabilities recognised under IFRS). In 2023/24
a £498 million exceptional provision was made for the return of the
estimated remaining balance of over‑collected revenues at the expected date
of disposal (at that time, expected to be June 2024). This provision was
partially reversed in 2024/25 generating an exceptional credit of £151
million. Under IFRS a regulatory liability is not usually recognised on
balance sheet for the return of such over-recoveries, however due to the
intended disposal of this business during 2024/25, a liability was recognised
given these amounts were expected to be settled through the planned sale
process as opposed to reduced future revenues. The remaining £347 million
exceptional provision at the disposal date was reflected in the reported gain
on disposal of this business.
During 2024/25, UK Electricity System Operator had a timing under-recovery of
£479 million arising from the return of prior period over-recovered balances.
The over-recovery was the result of higher revenues collected through the
BSUoS fixed price charges compared with total system balancing costs incurred.
At the disposal date, the impact of the residual net over-recovered position
was assessed when calculating the overall net disposal proceeds.
UK Electricity System Operator underlying operating profit in 2024/25 was
£115 million. No depreciation and amortisation was charged while the business
was classified as 'held for sale'.
New England
(£ million) 2026 2025 2025 at constant currency % change at actual currency
Revenue 4,174 4,306 4,293 (3)
Operating costs (3,227) (3,298) (3,343) (2)
Statutory operating profit 947 1,008 950 (6)
Exceptional items - 3 3 (100)
Remeasurements 13 (29) (28) n/m
Adjusted operating profit 960 982 925 (2)
Timing (94) (61) (57) n/m
Major storm costs - 3 3 (100)
Underlying operating profit 866 924 871 (6)
Underlying net revenue 2,629 2,587 2,439 2
Regulated controllable costs (668) (706) (665) (5)
Post-retirement benefits (9) (21) (20) (57)
Bad debt expense (84) (62) (59) 35
Other operating costs (509) (405) (382) 26
Depreciation and amortisation (493) (469) (442) 5
Underlying operating profit 866 924 871 (6)
Timing 94 61 57 n/m
Major storm costs - (3) (3) (100)
Adjusted operating profit 960 982 925 (2)
New England's statutory operating profit was £61 million lower (or £3
million lower on a constant currency basis). This included commodity
derivative remeasurement losses of £13 million (£42 million adverse year on
year), partially offset by £33 million favourable year‑on-year timing
movements. Timing over-recoveries of £94 million in 2025/26 are mainly due
to the recognition of a receivable for FERC RoE refunds in Mass Electric from
New England Transmission Owners (which will be returned to customers
in future periods). In 2024/25, timing was over-recovered by £61 million
mainly due to phasing of energy efficiency programme spend and commodity
costs. In 2024/25, there were £3 million of exceptional
items related to £7 million of charges for our major transformation
progress and a £4 million gain related to environmental provision movements.
New England's underlying operating profit decreased by £58 million (6%) or
£5 million (1%) on a constant currency basis. Underlying net revenue was £42
million higher (£190 million higher at constant currency) driven by updated
rates, higher revenues from capital trackers and storm recoveries, partly
offset by the adverse impact of the FERC order. New England controllable
costs were lower by £38 million (£3 million higher at constant currency)
as a result of additional workload and inflation, which were offset by
efficiency savings. Bad debt expense increased by £22 million
(£25 million at constant currency) as a result of higher accounts
receivables and higher reserve rates. Depreciation and amortisation increased
by £24 million (£51 million at constant currency) as a result of higher
investment. Other costs (on an underlying basis) were £101 million higher
(£124 million higher at constant currency) due to higher investment-related
expenses and higher property taxes, both driven by the growth in asset base
along with higher funded programme costs.
New York
(£ million) 2026 2025 2025 at constant currency % change at actual currency
Revenue 7,618 6,689 6,307 14
Operating costs (6,434) (5,420) (5,111) 19
Statutory operating profit 1,184 1,269 1,196 (7)
Exceptional items - (133) (125) (100)
Remeasurements (12) (113) (106) n/m
Adjusted operating profit 1,172 1,023 965 15
Timing 537 343 323 n/m
Major storm costs - 84 79 (100)
Underlying operating profit 1,709 1,450 1,367 18
Underlying net revenue 5,042 4,545 4,285 11
Regulated controllable costs (1,032) (1,049) (989) (2)
Post-retirement benefits (19) (33) (31) (42)
Bad debt expense (156) (141) (133) 11
Other operating costs (1,357) (1,141) (1,076) 19
Depreciation and amortisation (769) (731) (689) 5
Underlying operating profit 1,709 1,450 1,367 18
Timing (537) (343) (323) n/m
Major storm costs - (84) (79) (100)
Adjusted operating profit 1,172 1,023 965 15
New York statutory operating profit was lower by £85 million (or £12 million
lower at constant currency). In the prior year New York incurred
£133 million of net exceptional credits (a £142 million credit on
environmental provision movements, partly offset by a £9 million charge on
our major transformation programme). Timing under-recoveries in 2025/26 were
£537 million (principally related to revenue decoupling in KEDNY/KEDLI and
the impact of levelisation of new rate increases in NIMO, along with lower
auction sale prices on transmission wheeling). In 2024/25, timing
under-recoveries were £343 million (driven by transmission wheeling and
commodity under-recoveries due to colder weather and KEDNY/KEDLI rate
levelisation under-recoveries). This resulted in a £194 million
adverse year-on-year timing swing (£214 million adverse at constant
currency).
New York underlying operating profit increased by £259 million (18%), or
£342 million (25% at constant currency). This was driven by higher net
underlying revenues which increased by £497 million (11%), or £757 million
at constant currency) principally driven by updated rates including higher
storm cost allowances and the recovery of previously unremunerated costs (e.g.
environmental and property taxes). Regulated controllable costs
were £17 million lower (£43 million higher at constant currency) year on
year, primarily as a result of increased workload (gas safety and reliability
initiatives, CLCPA and increased IT spend on new digital platforms) plus the
impact of inflation, partly offset by efficiency savings. Bad debt expense
increased by £15 million (£23 million at constant currency) driven by
increased customer billings. Depreciation and amortisation increased due to
the growth in assets. Other costs (on an underlying basis) increased due to
higher storm costs (partly offset by increased storm cost allowances in
revenues), higher property taxes, inflation related environmental costs and
investment-related costs.
National Grid Ventures
(£ million) 2026 2025 2025 at constant currency % change at actual currency
Revenue 1,098 1,397 1,362 (21)
Operating costs (383) (1,392) (1,336) (72)
Statutory operating profit 715 5 26 n/m
Exceptional items (403) 375 356 n/m
Remeasurements 15 - - n/m
Underlying/adjusted operating profit 327 380 380 (14)
Statutory post-tax share of JVs and associates 76 73 71 4
Remeasurements - 2 2 (100)
Adjusted post-tax share of JVs and associates 76 75 73 1
Analysed by business:
Interconnectors(1) 227 233 233 (3)
Grain LNG 115 150 150 (23)
US Ventures (15) (3) (3) n/m
Underlying/adjusted operating profit 327 380 380 (14)
Interconnectors(2) 70 49 49 43
NG Renewables - 17 15 (100)
Other 4 9 9 (56)
Adjusted post-tax share of JVs and associates 74 75 73 (1)
Total NGV contribution (underlying/adjusted) 401 455 453 (12)
Interconnectors 7 74 74 (91)
NG Renewables - 174 163 (100)
Grain LNG - 47 47 (100)
NG Generation 48 36 33 33
Other 54 47 45 15
Capital investment 109 378 362 (71)
1. Includes interconnector business development costs and other UK
activities.
2. Includes BritNed and Nemo joint ventures.
National Grid Ventures' statutory operating profit improved by £710 million,
principally as a result of a £489 million exceptional gain on sale on the
disposal of Grain LNG in November 2025, partly offset by a £96 million
exceptional loss on disposal of National Grid Renewables sold in May 2025
(mainly driven by the recycling of cumulative exchange rate adjustments since
2019/20 when this business was originally acquired). This compared with
exceptional charges in 2024/25 of £303 million (impairment of our Community
Offshore Wind investment), along with £57 million of transaction and
separation costs for the planned disposal of National Grid Renewables.
Commodity remeasurements were gains of £12 million in 2025/26 compared with
losses of £15 million in 2024/25. Our underlying and adjusted results exclude
the impact of these exceptional items and remeasurements.
National Grid Ventures' underlying operating profit was £53 million lower
than 2024/25. On 29 May 2025 the sale of National Grid Renewables was
completed, and on 28 November 2025 the sale of Grain LNG was completed. The
sale of Grain LNG in 2025/26 reduced underlying operating profit by £35
million year on year. In the UK, interconnector profits decreased versus the
prior year primarily as a result of lower interconnector revenues as market
spreads remained low. In the US, profit was lower, due to a £24 million
Revolution Wind gain on sale recognised in 2024/25, partly offset by lower
development expenditure.
Other
(£ million) 2026 2025 2025 at constant currency % change at actual currency
Revenue 97 122 118 (20)
Operating costs (239) (132) (128) 81
Statutory operating loss (142) (10) (10) n/m
Exceptional items - 133 133 n/m
Underlying/adjusted operating loss (142) (143) (143) (1)
Analysed by business:
Property 46 54 54 (15)
NG Partners 11 (82) (81) (113)
Corporate and other activities (199) (115) (116) 73
Adjusted operating loss (142) (143) (143) (1)
Other activities incurred a statutory operating loss of £142 million (2025:
£10 million loss, which included a £187 million exceptional gain on
disposal of UK Electricity System Operator, £46 million of exceptional
charges related to our major transformation programme and £8 million of
exceptional transaction and separation costs incurred by our corporate
function related to the planned disposal of our Grain LNG business). Following
a review of strategic priorities in 2025/26, the major transformation
programme launched in 2024 has been reshaped and the associated programme
costs in the current year no longer meet the quantitative threshold to be
treated as exceptional.
Other activities' underlying operating loss was £142 million (including
corporate costs) in 2025/26 compared with £143 million loss in 2024/25. This
improvement was driven by favourable year on year fair value movements in our
NG Partners investment portfolio and higher insurance captive profits,
mostly offset by increases in central costs to help deliver our overall
group efficiency programme and other corporate centre cost increases along
with lower UK property sales in 2025/26 compared with the prior year.
Summary income statement
Statutory results - continuing Underlying results
(£ million) 2026 2025 change % 2026 2025 change %
Total operating profit 5,431 4,934 10 5,680 5,357 6
Net finance costs (1,325) (1,357) 2 (1,271) (1,361) 7
Share of post-tax results of joint ventures and associates 76 73 4 76 75 1
Profit before tax 4,182 3,650 15 4,485 4,071 10
Tax (939) (821) (14) (624) (616) (1)
Profit after tax 3,243 2,829 15 3,861 3,455 12
Non-controlling interest (2) (3) 33 (2) (3) 33
Earnings 3,241 2,826 15 3,859 3,452 12
EPS (pence) 65.5 60.0 9 78.0 73.3 6
Net finance costs
Statutory net finance costs of £1,325 million were down from £1,357 million
in 2024/25 and included derivative remeasurement net losses of £54 million
(2025: £4 million net gains). Underlying net finance costs of
£1,271 million for 2025/26 were £90 million or 7% lower (£37 million or
3% lower at constant currency) than 2024/25. Net debt related finance costs
were £89 million higher (£146 million higher at constant currency), driven
by higher levels of average net debt (to fund our capex programme) and
slightly higher interest rates, partly offset by gains on favourable debt
buy-backs. The effective interest rate for continuing operations of 4.3% is
20bps higher than the prior year rate. Other interest was favourable year on
year reflecting £122 million higher capitalised interest, principally
attributable to the step up in ASTI investment in UK Electricity
Transmission, along with favourable pension and OPEB interest income, lower
discount unwind on provisions and higher other interest income.
Joint ventures and associates
The Group's share of net profits from joint ventures and associates
on a statutory basis increased to £76 million (2025: £73 million). Due to
the sale of our Emerald joint venture on 29 May 2025, there are no derivative
remeasurements in the current year (2025: £2 million of losses). On an
adjusted basis, the share of net profits from joint ventures and associates
increased by £1 million compared with 2024/25, mostly reflecting higher
BritNed revenues driven by higher auction prices, offset by a shorter
ownership period of our Emerald joint venture, which was sold as part of the
National Grid Renewables disposal.
Tax
The statutory tax charge for continuing operations was £939 million (2025:
£821 million) including the impact of tax on exceptional items and
remeasurements of £16 million credit (2025: £40 million credit). The
adjusted tax charge for continuing operations was £955 million (2025: £861
million), resulting in an adjusted effective tax rate for continuing
operations (excluding profits from joint ventures and associates) of 25.3%
(2025: 25.3%).
The underlying tax charge for the year (a non-GAAP measure) was £624 million
(2025: £616 million). The underlying effective tax rate (excluding joint
ventures and associates) of 14.2% was 120bps lower than last year (2025:
15.4%). This is mainly due to profit mix within the Group being more weighted
towards NGET and higher levels of capital investment in NGED leading to a
lower underlying tax charge. Our definition of underlying tax excludes
deferred tax for NGET and NGED (as these entities do not receive a regulatory
revenue allowance for tax that has not yet been paid i.e. current tax is
effectively a pass-through from a regulatory perspective).
Cash flow, net debt and funding
Net debt is the aggregate of cash and cash equivalents, borrowings, current
financial and other investments and derivatives (excluding commodity contract
derivatives) as disclosed in note 11 to the financial statements. 'Adjusted
net debt' used for the RCF/adjusted net debt calculation is principally
adjusted for pension deficits and hybrid debt instruments. For a full
reconciliation see page 69. The following table summarises the Group's cash
flow for the year, reconciling this to the change in net debt.
Summary cash flow statement
(£ million) 2026 2025 change %
Cash generated from continuing operations 7,861 6,991 12
Purchase of intangibles, PP&E, investments in JVs and acquisition of (10,601) (9,713) (9)
financial investments (net of disposals)
Dividends from JVs and associates 105 126 (17)
Business net cash outflow from continuing operations (2,635) (2,596) (2)
Net interest paid (1,701) (1,588) (7)
Net tax paid (32) (183) 83
Cash dividends paid (1,623) (1,529) (6)
Other cash movements 39 11 255
Net cash outflow (continuing) (5,952) (5,885) (1)
Disposals of subsidiaries and associates(1) 2,809 1,263 122
Discontinued operations - 22 (100)
Rights Issue (net of costs) - 6,839 (100)
Other, including net financing raised/(repaid) in year 2,195 (1,474) n/m
(Decrease)/increase in cash and cash equivalents (948) 765 n/m
Reconciliation to movement in net debt
(Decrease)/increase in cash and cash equivalents (948) 765 n/m
Less: other net cash flows from investing and financing transactions (2,195) 1,474 n/m
Net debt reclassified to held for sale - (55) 100
Impact of foreign exchange movements on opening net debt 624 528 18
Other non-cash movements (270) (476) 43
(Increase)/decrease in net debt (2,789) 2,236 n/m
Net debt at start of year (41,371) (43,607) 5
Net debt at end of year (44,160) (41,371) (7)
1. Cash proceeds of £1,499 million for Grain LNG (less £163 million
balance of cash and cash equivalents disposed) and £1,531 million for
National Grid Renewables (less £58 million balance of cash and cash
equivalents disposed) (2025: cash proceeds of £628 million for ESO (less £51
million balance of cash and cash equivalents disposed) and £686 million for
the disposal of 20% retained interest in National Gas Transmission.
Cash flow generated from continuing operations was £7.9 billion, £0.9
billion higher than last year, mainly due to higher net revenues (i.e. after
deducting pass-through costs) increasing operating profit and favourable
working capital inflows. Cash expended on investment activities increased as
a result of continued growth in our regulated businesses including a
significant step-up of cash capital investment in UK Electricity Transmission
which was £1.1 billion higher than the prior year, along with higher
investment in New York, New England and UK Electricity Distribution. This
includes ongoing cash investment in Grain LNG and National Grid Renewables,
subsequent to these businesses being reclassified as held for sale.
Net interest paid increased mainly as a result of lower interest income
following Rights Issue proceeds being utilised to fund the capital investment
programme across the Group, along with the impact of the timing of cash
interest payments (accrued interest movements), partly offset by a higher
average level of net debt. The Group made net tax payments of £32 million
(2025: £183 million) during 2025/26. This decrease mainly related to lower
cash tax payable in our US business as a result of offsetting losses and
lower cash tax payable in the UK as a result of our expanding capital
programme.
The higher cash dividend reflected a lower weighted average scrip uptake of
28% in the current year (2025: 31%) along with the annual inflationary
increase and a higher share count.
In 2025/26, we completed the sale of our National Grid Renewables business for
net cash proceeds of £1,473 million and also sold our UK Grain LNG business
for net cash proceeds of £1,336 million. These net cash proceeds exclude
cash balances sold with these businesses and exclude a provision for estimated
post closing capital expenditure obligations (see note 9). In 2024/25 we had
cash inflows of £628 million from the sale of our UK Electricity System
Operator business to the UK. We also sold our final 20% interest in National
Gas Transmission for proceeds of £686 million.
The Board has considered the Group's ability to finance normal operations
as well as funding a significant capital programme. This includes stress
testing of the Group's finances under a 'reasonable worst-case' scenario,
assessing the timing of the sale of businesses held for sale and the further
levers at the Board's discretion to ensure our businesses are adequately
financed. As a result, the Board has concluded that the Group will have
adequate resources to do so.
Financial strength
Our overall Group credit rating remains at a strong investment grade level,
BBB+/Baa1 with stable outlook
During the year we raised £4.2 billion of new long-term senior debt
to refinance maturing debt and to fund a portion of our significant capital
programme. In addition, we signed £2.4 billion of new loan facilities,
undrawn as at 31 March 2026, which we expect to draw in the future, including
£1.7 billion across two loan facilities that are guaranteed by European
Export Credit Agencies and which are aligned with our Green Financing
Framework. Finally, on 13 April 2026, National Grid North America Inc. signed
a new £0.7 billion equivalent term loan.
As at 13 May 2026, we have £8.0 billion of undrawn committed facilities
available for general corporate purposes, all of which have expiry dates no
earlier than May 2027. National Grid's balance sheet remains robust, with
strong overall investment grade ratings from Moody's, Standard & Poor's
(S&P) and Fitch.
Regulatory gearing was maintained at 61% as at 31 March 2026 (2025:
61%). Regulatory gearing is a non-GAAP measure and is calculated as net debt
as a proportion of total regulatory asset value and other business invested
capital. Beneficial inflows from the proceeds for the sales of businesses
(National Grid Renewables and Grain LNG) were offset by financing outflows for
net interest and dividend payments. Taking into account the benefit of our
hybrid debt, adjusted gearing as at 31 March 2026 was 61% (2025: 60%).
Retained cash flow as a proportion of adjusted net debt was 9.3%. We remain
committed to maintaining the current strong overall investment grade credit
rating for the Group. National Grid currently has strong investment grade
credit ratings across almost all of its major operating companies, as well as
senior unsecured debt ratings at the holding company, National Grid plc, at
Baa2/BBB/BBB from Moody's, S&P and Fitch respectively. We consider these
ratings critical to optimising our cost of capital and deliver appropriate
access to capital markets. We expect to maintain credit metrics above our
thresholds for our current group credit ratings through to at least the end
of the RIIO-T3 price control period, with thresholds of 10% for S&P's and
Moody's FFO/adjusted net debt, and 7% for Moody's RCF/adjusted net debt.
Dividend increase of 3.8% recommended for 2025/26
The Board has recommended a final dividend of 32.14p per ordinary share
($2.1738 per American Depository Share), which will be paid on 23 July 2026 to
shareholders on the register of members as at 29 May 2026. If approved, this
will bring the full-year dividend to 48.49p per ordinary share, representing
an increase of 3.8% to the dividend per share for 2024/25. This is in line
with the increase in average UK CPIH inflation for the year ended 31 March
2026 as set out in our dividend policy.
The Board aims to grow annual dividend per share (DPS) in line with UK CPIH,
thus maintaining the DPS in real terms. The Board will review this policy
regularly, taking into account a range of factors including expected business
performance and regulatory developments.
At 31 March 2026, National Grid plc had £17.0 billion of distributable
reserves, which is sufficient to cover more than five years of forecast
Group dividends. If approved, the final dividend will absorb approximately
£1,598 million of shareholders' funds. The 2025/26 full dividend is covered
approximately 1.6x by underlying earnings.
The Directors consider the Group's capital structure at least twice a year
when proposing an interim and final dividend and aim to maintain distributable
reserves that provide adequate cover for dividend payments.
A scrip dividend alternative will again be offered in respect of the 2025/26
final dividend.
Capital investment and asset growth
A balanced portfolio to deliver asset and dividend growth
National Grid seeks to create value for shareholders through developing a
balanced portfolio of businesses that offer an attractive combination of asset
growth and cash returns.
Strong organic growth driven by critical investment
In 2025/26, we achieved asset growth of 10.9% driven by our capital investment
programme alongside RAV indexation. This investment continued our focus on
building and maintaining world-class networks that are safe, reliable,
resilient and ready for the future. It is specifically focused on our
regulated businesses, with the objective of upgrading and modernising ageing
infrastructure, in both the UK and US, to meet the changing needs of customers
and to drive the decarbonisation of energy supply.
In 2026/27, we expect Group capital investment to be around £13 billion.
We are confident that this high-quality growth will continue to generate
attractive returns for shareholders and add to our long-term investment
proposition of sustainable asset and income growth.
£11.6 billion of capital investment in 2025/26, 18% higher at actual
exchanges rates (21% higher at constant currency)
We continued to make significant investments in critical energy infrastructure
during 2025/26. Total capital investment for continuing operations across the
Group was £11,576 million, an increase of £1,729 million, 18% compared to
the prior year.
Capital investment
Year ended 31 March (£ million) At actual exchange rates At constant currency
2026 2025 % change 2026 2025 % change
UK Electricity Transmission 4,372 2,999 46% 4,372 2,999 46%
UK Electricity Distribution 1,617 1,426 13% 1,617 1,426 13%
New England 2,043 1,751 17% 2,043 1,650 24%
New York 3,428 3,289 4% 3,428 3,101 11%
National Grid Ventures 109 378 (71%) 109 362 (70%)
Other 7 4 75% 7 4 75%
Total capital investment 11,576 9,847 18% 11,576 9,542 21%
Capital investment represents additions to property, plant and equipment,
prepayments to suppliers to secure production capacity in relation to our
capital projects, non-current intangibles and additional equity investments
in joint ventures and associates. Capital investments exclude additions for
assets or businesses from the point they are classified as held for sale.
UK Electricity Transmission investment was £1,373 million higher than 2024/25
with this 46% increase primarily driven by expenditure on strategic investment
(both Wave 1 and Wave 2 projects) including offshore spend on EGL4 and Sea
Link capacity reserve advance payments, and increased onshore spend including
North London Reinforcement, Yorkshire Green, Tilbury-Grain and Norwich-Tilbury
along with other smaller projects. In addition, investment was higher from
progress on projects such as Uxbridge Moor, Wallend and Margam and also
increased for IT and cyber including a new state-of-the-art control room and
Supervisory Control and Data Acquisition (SCADA) system. Capitalised interest
and interest on prepayments of £229 million was £86 million higher than
the prior year due to higher levels of assets under construction.
UK Electricity Distribution increased by £191 million primarily due to
increased asset replacement and refurbishment, higher reinforcement works (in
line with the scale up under RIIO-ED2), along with higher non‑load capex
driven by higher volumes across overhead lines and diversions and increased
investment in IT and telecoms.
In New England capital investment increased by £292 million (up £393 million
at constant currency) compared with the prior year. This was driven by spend
on electric distribution including increases in asset condition and system
capacity, as well as grid modernisation through Advanced Metering
Infrastructure and Fault Location Isolation and Service Restoration (FLISR),
higher electric transmission investment primarily from asset condition and
system capacity work, along with an increase in IT investment. Investment in
gas distribution remained relatively stable, with lower Gas System
Enhancement Plan activity being partly offset by increased enhanced safety
regulation compliance investment.
Capital investment in New York was £139 million higher (up £327 million at
constant currency) compared with the prior year. The principal driver of this
was higher electric investment, driven by system reinforcement and increasing
capacity to fulfil clean energy investment commitments (Upstate Upgrade and
Climate Leadership and Community Protection Act programmes) but also higher
from an increase in the level of IT system development. Investment in our
gas networks was lower than in the prior year, with reduced investment on our
mains replacement programme, partly offset by higher spend on city state
construction and other mandated programme spend.
Capital investment in National Grid Ventures was £269 million lower (£253
million lower at constant currency) with £210 million of this decrease
attributable to the disposals of NG Renewables and Grain LNG, and
£53 million reflects the completion of construction of Viking Link
interconnector during 2024/25.
Achieved asset growth of 10.9% and regulated asset growth of 11.7%
During 2025/26, UK RAV increased by 12.8% (2025: 9.8%) including the impact of
CPIH inflation on RAV indexation, partly offset by RAV depreciation. The US
rate base grew strongly by 10.3% during the year (2025: 11.5%). This
resulted in an overall 'regulated asset growth' (i.e. UK RAV and US rate base)
of 11.7% (2025: 10.5%). Asset growth in NGV and Other was 4.3% primarily as a
result of investment in IT systems in our US Servco, which will be used to
support our US operating companies.
For 2025/26, asset growth was 10.9% and regulated asset growth was 11.7%,
which excludes the impact of the reduction in assets from the sales of NG
Renewables and Grain LNG during the year (2024/25: excluding the reduction in
RAV as a result of the sale of the UK Electricity System Operator business,
based on an estimated RAV value at the date of disposal).
For detailed calculations of asset growth and regulated asset growth see page
79.
Assets Sale of Grain LNG and NG Renewables
Year ended 31 March (£ million at constant currency) 2026 2025 increase % change
UK RAV 36,986 - 32,779 4,207 12.8%
US rate base 29,452 - 26,694 2,758 10.3%
Total RAV and rate base ('regulated asset growth') 66,438 - 59,473 6,965 11.7%
NGV and Other businesses 5,545 (2,032) 7,266 311 4.3%
Total assets ('asset growth') 71,983 (2,032) 66,739 7,276 10.9%
Provisional 2026/27 financial timetable
Date Event
14 May 2026 2025/26 Full Year Results
28 May 2026 Ex-dividend date for 2025/26 final dividend - ordinary shares
29 May 2026 Ex-dividend date for 2025/26 final dividend - ADRs
29 May 2026 Record date for 2025/26 final dividend
4 June 2026 Scrip reference price announced for 2025/26 final dividend
15 June 2026 (5pm EDT) Scrip election date for 2025/26 final dividend - ADRs
18 June 2026 (5pm BST) Scrip election date for 2025/26 final dividend - ordinary shares
14 July 2026 2026 Annual General Meeting
23 July 2026 2025/26 final dividend paid to qualifying shareholders
5 November 2026 2026/27 Half Year Results
19 November 2026 Ex-dividend date for 2026/27 interim dividend - ordinary shares
20 November 2026 Ex-dividend date for 2026/27 interim dividend - ADRs
20 November 2026 Record date for 2026/27 interim dividend
26 November 2026 Scrip reference price announced for 2026/27 interim dividend
7 December 2026 (5pm EST) Scrip election date for 2026/27 interim dividend - ADRs
10 December 2026 (5pm GMT) Scrip election date for 2026/27 interim dividend - ordinary shares
12 January 2027 2026/27 interim dividend paid to qualifying shareholders
American Depositary Receipt (ADR) Deposit Agreement
The Company's Deposit agreement under which the ADRs are issued allows a fee
of up to $0.05 per ADR to be charged for any cash distribution made to ADR
holders, including cash dividends. ADR holders who receive cash in relation to
the 2025/26 final dividend will be charged a fee of $0.02 per ADR by the
Depositary prior to distribution of the cash dividend.
CAUTIONARY STATEMENT
This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These statements include information with respect to
National Grid's (the Company) financial condition, its results of operations
and businesses, strategy, plans and objectives. Words such as 'aims',
'anticipates', 'expects', 'should', 'intends', 'plans', 'believes', 'outlook',
'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' and
similar expressions, as well as statements in the future tense, identify
forward-looking statements. This announcement also references
sustainability-related targets and sustainability-related risks (including
climate-related targets and climate-related risks) which differ from
conventional financial risks in that they are complex, novel and tend to
involve projection over long term scenarios which are subject to significant
uncertainty and change. These forward-looking statements and targets are not
guarantees of National Grid's future performance and are subject to
assumptions, risks and uncertainties that could cause actual future results to
differ materially from those expressed in or implied by such forward-looking
statements and targets. Many of these assumptions, risks and uncertainties
relate to factors that are beyond National Grid's ability to control or
estimate precisely, such as changes in laws or regulations and decisions by
governmental bodies or regulators, including those relating to current and
upcoming price controls in the UK and rate cases in the US; the timing of
construction and delivery by third parties of new generation projects
requiring connection; breaches of, or changes in, environmental, climate
change and health and safety laws or regulations, including breaches or other
incidents arising from the potentially harmful nature of its activities;
network failure or interruption, the inability to carry out critical
non-network operations and damage to infrastructure, due to adverse weather
conditions including the impact of major storms as well as the results of
climate change, due to counterparties being unable to deliver physical
commodities; reliability of and access to IT systems, including due to the
failure of or unauthorised access to or deliberate breaches of National Grid's
systems and supporting technology; failure to adequately forecast and respond
to disruptions in energy supply; performance against regulatory targets and
standards and against National Grid's peers with the aim of delivering
stakeholder expectations regarding costs and efficiency savings, including
affordability considerations, as well as against targets and standards
designed to support its role in the energy transition; and customers and
counterparties (including financial institutions) failing to perform their
obligations to the Company. Other factors that could cause actual results to
differ materially from those described in this announcement include
fluctuations in exchange rates, interest rates and commodity price indices;
restrictions and conditions (including filing requirements) in National Grid's
borrowing and debt arrangements, funding costs and access to financing;
regulatory requirements for the Company to maintain financial resources in
certain parts of its business and restrictions on some subsidiaries'
transactions such as paying dividends, lending or levying charges; the delayed
timing of recoveries and payments in National Grid's regulated businesses, and
whether aspects of its activities are contestable; the funding requirements
and performance of National Grid's pension schemes and other post-retirement
benefit schemes; the failure to attract, develop and retain employees with the
necessary competencies, including leadership and business capabilities, and
any significant disputes arising with National Grid's employees or breaches of
laws or regulations by its employees; the failure to respond to market
developments, including competition for onshore transmission; the threats and
opportunities presented by emerging technology, including AI; the risk that
global actions may not be effective in transitioning to net zero and in
managing relevant ESG risks, including in particular climate, nature-related
and human rights risks; the failure by the Company to respond to, or meet its
own commitments as a leader in relation to, climate change development
activities relating to energy transition, including the integration of
distributed energy resources, which may result in the Company's failure to
achieve the expected benefits of its strategic priorities; and the need to
grow the Company's business to deliver its strategy, as well as incorrect or
unforeseen assumptions or conclusions (including unanticipated costs and
liabilities) relating to business development activity, including its
strategic infrastructure projects and joint ventures. Furthermore, in
preparing the ESG-related information contained in this document, National
Grid has made a number of key judgements, estimations and assumptions, and the
processes and issues involved are complex. The ESG data, models and
methodologies used are often relatively new, are rapidly evolving and are not
of the same standard as those available in the context of other financial
information, nor are they subject to the same or equivalent disclosure
standards, historical reference points, benchmarks or globally accepted
accounting principles. This means the ESG-related forward-looking statements
and ESG metrics discussed in this document carry an additional degree of
inherent risk and uncertainty. For further details regarding these and other
assumptions, risks and uncertainties that may affect National Grid, please
read the Strategic Report section and the 'Risk factors' on pages 263 to 268
of National Grid's Annual Report and Accounts for the year ended 31 March
2025, as updated by the principal risks and uncertainties statement on page 44
of the Company's half year results statement published on 6 November 2025. In
addition, new factors emerge from time to time and National Grid cannot assess
the potential impact of any such factor on its activities or the extent to
which any factor, or combination of factors, may cause actual future results
to differ materially from those contained in any forward-looking statement.
Except as may be required by law or regulation, the Company undertakes no
obligation to update any of its forward-looking statements, which speak only
as of the date of this announcement.
Glossary
Term Meaning
ADR American Depositary Receipt
APM Alternative Performance Measure
ASTI Accelerated Strategic Transmission Investment
CAGR Compound Annual Growth Rate
CLCPA Climate Leadership and Community Protection Act
CPIH UK Consumer Prices Index including Owner Occupiers' Housing Costs
DPS Dividend Per Share
DSO Distribution System Operator
EGL1 Eastern Green Link 1: Torness to Hawthorn Pit (ASTI project); JV with SP
Energy Networks
EGL2 Eastern Green Link 2: Peterhead to Drax (ASTI Project); JV with SSEN
EGL3 Eastern Green Link 3: Aberdeenshire to Anderby Creek (ASTI Project); JV with
SSEN
EGL4 Eastern Green Link 4: Fife to Anderby Creek (ASTI Project); JV with SP Energy
Networks
ESMP Electric Sector Modernization Plan
ESO Electricity System Operator
FERC Federal Energy Regulatory Commission
FFO Funds from Operations
FLISR Fault Location Isolation and Service Restoration
HVDC High Voltage Direct Current
KEDNY and KEDLI KeySpan Energy Delivery New York (KEDNY) and KeySpan Energy Delivery Long
Island (KEDLI)
LIPA Long Island Power Authority
LNG Liquefied Natural Gas
LTIFR Lost Time Injury Frequency Rate
MADPU Massachusetts Department of Public Utilities (state energy regulator)
MECO Massachusetts Electric Company
NESE Williams' Northeast Supply Enhancement pipeline project
NESO National Energy System Operator
NGED/UK ED National Grid Electricity Distribution
NGET/UK ET National Grid Electricity Transmission
NGV National Grid Ventures
NIMO Niagara Mohawk (National Grid's electric and gas distribution business in
upstate New York)
NYPSC New York Public Service Commission (state energy regulator)
OpCo Operating Company
RAV Regulated Asset Value
RCF Retained Cash Flow
RIIO "Revenue = Incentives + Innovation + Outputs" a Price control Framework used
by the UK regulator OFGEM
RoE Return on Equity
RPI Retail Price Index
RPM Regulatory Performance Measure
SCADA Supervisory Control and Data Acquisition
UK CPIH UK Consumer Prices Index including Owner Occupiers' Housing Costs
US CPI US Consumer Prices Index
Consolidated income statement
for the years ended 31 March
2026 Notes Before Exceptional Total
exceptional items and remeasurements £m
items and remeasurements (see note 4)
£m £m
Continuing operations
Revenue 2(a),3 17,687 - 17,687
Impairment losses on financial assets (243) - (243)
Other operating costs 4 (12,400) (102) (12,502)
Operating profit 2(b) 5,044 387 5,431
Finance income 4,5 378 2 380
Finance costs 4,5 (1,649) (56) (1,705)
Share of post-tax results of joint ventures and associates 76 - 76
Profit before tax 2(b) 3,849 333 4,182
Tax 4,6 (955) 16 (939)
Total profit for the year 2,894 349 3,243
Attributable to:
Equity shareholders of the parent 2,892 349 3,241
Non-controlling interests 2 - 2
Earnings per share (pence)
Basic earnings per share - continuing 7 65.5
Diluted earnings per share - continuing 7 65.2
2025 Notes Before Exceptional Total
exceptional items and remeasurements £m
items and remeasurements (see note 4)
£m £m
Continuing operations
Revenue 2(a),3 18,378 - 18,378
Impairment losses on financial assets (200) - (200)
Other operating costs 4 (13,413) 169 (13,244)
Operating profit 2(b) 4,765 169 4,934
Finance income 4,5 449 1 450
Finance costs 4,5 (1,810) 3 (1,807)
Share of post-tax results of joint ventures and associates 75 (2) 73
Profit before tax 2(b) 3,479 171 3,650
Tax 4,6 (861) 40 (821)
Profit after tax from continuing operations 2,618 211 2,829
Profit after tax from discontinued operations 9 4 72 76
Total profit for the year 2,622 283 2,905
Attributable to:
Equity shareholders of the parent 2,619 283 2,902
Non-controlling interests 3 - 3
Earnings per share (pence)
Basic earnings per share (continuing) 7 60.0
Diluted earnings per share (continuing) 7 59.8
Basic earnings per share (continuing and discontinued) 7 61.6
Diluted earnings per share (continuing and discontinued) 7 61.4
Consolidated statement of comprehensive income
for the years ended 31 March
2026 2025
Notes £m £m
Profit after tax from continuing operations 3,243 2,829
Profit after tax from discontinued operations - 76
Other comprehensive income from continuing operations
Items from continuing operations that will never be reclassified to profit or
loss:
Remeasurement gains/(losses) on pension assets and post-retirement benefit 132 (106)
obligations
Net gains/(losses) in respect of cash flow hedging of capital expenditure 22 (16)
Tax on items that will never be reclassified to profit or loss (44) 27
Total items from continuing operations that will never be reclassified 110 (95)
to profit or loss
Items from continuing operations that may be reclassified subsequently to
profit or loss:
Retranslation of net assets offset by net investment hedge (348) (352)
Exchange differences reclassified to the consolidated income statement on 76 -
disposal
Net (losses)/gains in respect of cash flow hedges (120) 218
Net gains/(losses) in respect of cost of hedging 36 (52)
Net gains on investment in debt instruments measured at fair value through 8 1
other comprehensive income
Tax on items that may be reclassified subsequently to profit or loss 6 21 (40)
Total items from continuing operations that may be reclassified subsequently (327) (225)
to profit or loss
Other comprehensive loss (217) (320)
Other comprehensive (loss)/income for the year from discontinued operations, 9 - (10)
net of tax
Other comprehensive loss (217) (330)
Total comprehensive income for the year from continuing operations 3,026 2,509
Total comprehensive income for the year from discontinued operations 9 - 66
Total comprehensive income for the year 3,026 2,575
Attributable to:
Equity shareholders of the parent
From continuing operations 3,022 2,508
From discontinued operations - 66
3,022 2,574
Non-controlling interests
From continuing operations 4 1
Consolidated statement of changes in equity
for the years ended 31 March
Share Share Retained Other equity reserves £m Total Non- Total
capital premium account earnings share-holders' controlling interests equity
£m £m £m equity £m £m
£m
At 1 April 2024 493 1,298 32,066 (3,990) 29,867 25 29,892
Profit for the year - - 2,902 - 2,902 3 2,905
Other comprehensive loss for the year - - (80) (248) (328) (2) (330)
Total comprehensive income/(loss) for the year - - 2,822 (248) 2,574 1 2,575
Rights Issue 135 - - 6,704 6,839 - 6,839
Transfer between reserves - - 6,704 (6,704) - - -
Equity dividends - - (1,529) - (1,529) - (1,529)
Scrip dividend-related share issue(1) 10 (10) - - - - -
Issue of treasury shares - - 18 - 18 - 18
Transactions in own shares - 4 (11) - (7) - (7)
Other movements in non-controlling interests - - - - - (3) (3)
Share-based payments - - 37 - 37 - 37
Tax on share-based payments - - (1) - (1) - (1)
Cash flow hedges transferred to the statement of financial position, net of - - - 5 5 - 5
tax
1 April 2025 638 1,292 40,106 (4,233) 37,803 23 37,826
Profit for the year - - 3,241 - 3,241 2 3,243
Other comprehensive income/(loss) for the year - - 93 (312) (219) 2 (217)
Total comprehensive income/(loss) for the year - - 3,334 (312) 3,022 4 3,026
Equity dividends - - (1,623) - (1,623) - (1,623)
Scrip dividend-related share issue(1) 9 (9) - - - - -
Issue of treasury shares - - 40 - 40 - 40
Transactions in own shares - 2 (3) - (1) - (1)
Other movements in non-controlling interests - - - - - 4 4
Share-based payments - - 45 - 45 - 45
Tax on share-based payments - - 10 - 10 - 10
Cash flow hedges transferred to the statement of financial position, net of - - - 3 3 - 3
tax
At 31 March 2026 647 1,285 41,909 (4,542) 39,299 31 39,330
1. Included within the share premium account are costs associated with scrip
dividends.
Consolidated statement of financial position
as at 31 March
2026 2025
Notes £m £m
Non-current assets
Goodwill 9,417 9,532
Other intangible assets 3,879 3,564
Property, plant and equipment 81,520 74,091
Other non-current assets 1,384 959
Pensions and other post-retirement benefit assets 10 2,507 2,489
Financial and other investments 842 798
Investments in joint ventures and associates 624 608
Derivative financial assets 623 369
Total non-current assets 100,796 92,410
Current assets
Inventories 559 557
Trade and other receivables 3,867 4,092
Current tax assets 16 11
Financial and other investments 2,453 5,753
Derivative financial assets 215 113
Cash and cash equivalents 375 1,178
Assets held for sale 9 - 2,628
Total current assets 7,485 14,332
Total assets 108,281 106,742
Current liabilities
Borrowings (3,900) (4,662)
Derivative financial liabilities (268) (381)
Trade and other payables (5,049) (4,472)
Contract liabilities (110) (96)
Current tax liabilities (45) (219)
Provisions (425) (357)
Liabilities held for sale 9 - (434)
Total current liabilities (9,797) (10,621)
Non-current liabilities
Borrowings (42,855) (42,877)
Derivative financial liabilities (750) (821)
Other non-current liabilities (1,114) (876)
Contract liabilities (2,699) (2,418)
Deferred tax liabilities (9,040) (8,038)
Pensions and other post-retirement benefit obligations 10 (360) (573)
Provisions (2,336) (2,692)
Total non-current liabilities (59,154) (58,295)
Total liabilities (68,951) (68,916)
Net assets 39,330 37,826
Equity
Share capital 647 638
Share premium account 1,285 1,292
Retained earnings 41,909 40,106
Other equity reserves (4,542) (4,233)
Total shareholders' equity 39,299 37,803
Non-controlling interests 31 23
Total equity 39,330 37,826
Consolidated cash flow statement
for the years ended 31 March
2026 2025
Notes £m £m
Cash flows from operating activities
Total operating profit from continuing operations 2(b) 5,431 4,934
Adjustments for:
Exceptional items and remeasurements 4 (387) (169)
Other fair value movements (31) 66
Depreciation, amortisation and impairment 2,247 2,175
Share-based payments 45 37
Changes in working capital 759 104
Changes in provisions (127) 10
Changes in pensions and other post-retirement benefit obligations (31) (90)
Cash flows relating to exceptional items (45) (76)
Cash generated from operations - continuing operations 7,861 6,991
Tax paid (32) (183)
Net cash inflow from operating activities - continuing operations 7,829 6,808
Cash flows from investing activities
Purchases of intangible assets (586) (526)
Purchases of property, plant and equipment (9,989) (8,780)
Disposals of property, plant and equipment 68 26
Investments in joint ventures and associates (94) (396)
Dividends received from joint ventures, associates and other investments 105 126
Disposal of interest in National Grid Renewables(1) 9 1,473 -
Disposal of interest in Grain LNG(1) 9 1,336 -
Disposal of interest in the UK Electricity System Operator(1) - 577
Disposal of interest in the UK Gas Transmission business(1) 9 - 686
Disposal of financial and other investments 67 85
Acquisition of financial investments (67) (122)
Net movements in short-term financial investments 3,285 (2,606)
Interest received 231 332
Cash inflows on derivatives 20 11
Cash outflows on derivatives (6) (6)
Net cash flow used in investing activities - continuing operations (4,157) (10,593)
Net cash flow from investing activities - discontinued operations - 22
Cash flows from financing activities
Proceeds of Rights Issue - 7,001
Transaction fees related to Rights Issue - (162)
Proceeds from issue of treasury shares 40 18
Transactions in own shares (1) (7)
Proceeds received from loans 4,172 3,237
Repayment of loans (2,961) (2,861)
Payments of lease liabilities (145) (130)
Net movements in short-term borrowings (2,225) 925
Cash inflows on derivatives 93 62
Cash outflows on derivatives (38) (106)
Interest paid (1,932) (1,920)
Dividends paid to shareholders (1,623) (1,529)
Net cash flow (used in)/from financing activities - continuing operations (4,620) 4,528
Net (decrease)/increase in cash and cash equivalents (948) 765
Reclassification to held for sale 153 (123)
Exchange movements (8) (23)
Cash and cash equivalents at start of year 1,178 559
Cash and cash equivalents at end of year 375 1,178
1. Balances consist of cash proceeds received, net of cash disposed.
Notes
1. Basis of preparation and recent accounting developments
The full year financial information contained in this announcement, which does
not constitute statutory accounts as defined in Section 434 of the Companies
Act 2006, has been derived from the statutory accounts for the year ended 31
March 2026, which will be filed with the Registrar of Companies in due course.
Statutory accounts for the year ended 31 March 2025 have been filed with the
Registrar of Companies. The auditors' report on each of these statutory
accounts was unqualified and did not contain a statement under Section 498 of
the Companies Act 2006.
The full year financial information has been prepared in accordance with the
accounting policies applicable for the year ended 31 March 2026 which are
consistent with those applied in the preparation of our Annual Report and
Accounts for the year ended 31 March 2025, with the exception of any new
standards or interpretations adopted during the year.
Our income statement and segmental analysis separately identify financial
results before and after exceptional items and remeasurements. We continue to
use a columnar presentation as we consider it improves the clarity of the
presentation, and assists users of the financial statements to understand the
results. The Directors believe that presentation of the results in this way is
relevant to an understanding of the Group's financial performance. The
inclusion of total profit for the period from continuing operations before
exceptional items and remeasurements forms part of the incentive target set
annually for remunerating certain Executive Directors and accordingly we
believe it is important for users of the financial statements to understand
how this compares to our results on a statutory basis and period on period.
Areas of judgement and key sources of estimation uncertainty
Areas of judgement that have the most significant effect on the amounts
recognised in the financial statements are:
- categorisation of certain items as exceptional items or remeasurements and
the definition of adjusted earnings (see notes 4 and 7). In applying the
Group's exceptional items framework, we have considered a number of key
matters, as detailed in note 4; and
- the judgement that, notwithstanding legislation enacted and targets
committing the states of New York and Massachusetts to achieving net zero
greenhouse gas emissions by 2050, these do not shorten the remaining useful
economic lives (UELs) of our US gas network assets, which we consider will
have an expected use and utility beyond 2050 (see other areas of estimation
uncertainty below).
Key sources of estimation uncertainty that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are:
- the future cash flows and real discount rates applied in determining the US
environmental provisions, in particular relating to two Superfund sites and
certain other legacy Manufacturing Gas Plant (MGP) sites (see note 4); and
- the valuation of liabilities for pensions and other post-retirement benefits
(see note 10).
Other areas of estimation uncertainty
A further area of estimation uncertainty pertains to the estimates made
regarding the UELs of our gas network assets due to uncertainty over the pace
of delivery of the energy transition and the multiple pathways by which it
could be delivered. Our estimates consider anticipated changes in customer
behaviour and developments in new technology, the potential to decarbonise
fuel through the use of renewable natural gas and green hydrogen, and the
feasibility and affordability of increased electrification.
New accounting standards and interpretations effective for the year ended 31
March 2026
The Group adopted the following amendments to standards which have had no
material impact on the Group's results or financial statement disclosures:
- amendments to IAS 21 'Lack of exchangeability'.
1. Basis of preparation and recent accounting developments continued
New accounting standards not yet adopted
The following new accounting standards and amendments to existing standards
have been issued but are not yet effective or have not yet been endorsed by
the UK:
- IFRS 18 'Presentation and Disclosure in Financial Statements';
- IFRS 9 and IFRS 7 'Amendments to the Classification and Measurement of
Financial Instruments';
- Amendments to IFRS 9 and IFRS 7 'Contracts Referencing Nature-dependent
Electricity';
- Annual Improvements to IFRS Accounting Standards - Volume 11; and
- IFRS 19 'Subsidiaries without Public Accountability: Disclosures'.
Effective dates will be subject to the UK endorsement process.
The Group is currently assessing the impact of the above standards, but they
are not expected to have a material impact other than in respect of IFRS 18.
IFRS 18 replaces IAS 1 and the Group will apply the new standard from 1 April
2027, with retrospective application. The Group is in the process of assessing
the impact of IFRS 18 and anticipates changes to certain presentational and
disclosure-related matters in its consolidated financial statements. The
adoption of IFRS 18 will not affect the Group's profit after tax; however,
it will result in changes to the presentation of the primary financial
statements and to certain disclosures. In particular, income and expenses will
be grouped into five categories in the Consolidated income statement, namely
the operating, investing, financing, discontinued operations and income tax
categories. There will also be an additional mandatory subtotal for 'Profit
before financing and income taxes' and the 'useful structured summary' concept
will necessitate certain changes to line items presented in the Consolidated
income statement, although the overall impact is not expected to be
significant. Management-defined performance measures will also require
disclosure in a single note. Preparatory work is currently underway to support
adoption, including updates to reporting systems and the chart of accounts.
The Group has not adopted any other standard, amendment or interpretation that
has been issued but is not yet effective.
Date of approval
This announcement was approved by the Board of Directors on 13 May 2026.
2. Segmental analysis
Revenue and the results of the business are analysed by operating segment,
based on the information the Board of Directors uses internally for the
purposes of evaluating the performance of each operating segment and
determining resource allocation between them. The Board is National Grid's
chief operating decision maker (as defined by IFRS 8 'Operating Segments') and
as a matter of course, the Board considers multiple profitability measures by
segment, being 'adjusted profit' and 'underlying profit'. Adjusted profit
excludes exceptional items and remeasurements (as defined in note 4) and is
used by management and the Board to monitor financial performance as it is
considered that it aids the comparability of our reported financial
performance from year to year. Underlying profit, as presented in the Annual
Report and Accounts, represents adjusted profit and also excludes the effects
of timing, major storm costs and deferred tax expenses in our UK Electricity
Transmission and UK Electricity Distribution businesses. The measure of profit
disclosed in this note and the primary profitability benchmark considered by
the chief operating decision maker is operating profit before exceptional
items and remeasurements, adjusted profit, as this is the measure that is most
consistent with the IFRS results reported within these financial statements.
The results of our five principal businesses are reported to the Board of
Directors and are accordingly treated as reportable operating segments.
All other operating segments are reported to the Board of Directors on an
aggregated basis. The following table describes the main activities for
each reportable operating segment:
UK Electricity Transmission The high-voltage electricity transmission networks in England and Wales. This
includes our Accelerated Strategic Transmission Investment projects to connect
more clean, low-carbon power to the transmission network in England
and Wales.
UK Electricity Distribution The electricity distribution networks of NGED in the East Midlands, West
Midlands and South West of England and South Wales.
New England Electricity distribution networks, high-voltage electricity transmission
networks and gas distribution networks in New England.
New York Electricity distribution networks, high-voltage electricity transmission
networks and gas distribution networks in New York.
National Grid Ventures Comprises our electricity interconnectors in the UK, our electricity
generation business in the US, all commercial operations in LNG at Providence,
Rhode Island in the US and the Isle of Grain in the UK, and our investment in
NG Renewables, our renewables business in the US. While NGV operates outside
our regulated core business, the electricity interconnectors in the UK are
subject to indirect regulation by Ofgem regarding the level of returns they
can earn. The Group sold its interest in NG Renewables on 29 May 2025 and in
Grain LNG on 28 November 2025 (see note 9).
Included within the comparative years are the results of the UK Electricity
System Operator which also represented a separate operating segment. The Group
completed the disposal of the ESO to the UK Government in the prior year.
Other activities that do not form part of any of the segments in the above
table primarily relate to our UK property business together with insurance and
corporate activities in the UK and US and the Group's investments in
technology and innovation companies through National Grid Partners.
2. Segmental analysis continued
(a) Revenue
Revenue primarily represents the sales value derived from the generation,
transmission and distribution of energy, together with the sales value derived
from the provision of other services to customers. Refer to note 3 for
further details.
Sales between operating segments are priced considering the regulatory and
legal requirements to which the businesses are subject. The analysis
of revenue by geographical area is on the basis of destination. There are no
material sales between the UK and US geographical areas.
2026 2025
Total Sales Sales Total Sales Sales
sales between to third sales between to third
segments parties segments parties
£m £m £m £m £m £m
Operating segments - continuing operations:
UK Electricity Transmission 2,898 (87) 2,811 2,619 (135) 2,484
UK Electricity Distribution 1,937 - 1,937 2,424 (3) 2,421
UK Electricity System Operator - - - 1,029 (17) 1,012
New England 4,174 - 4,174 4,306 - 4,306
New York 7,618 - 7,618 6,689 - 6,689
National Grid Ventures 1,098 (41) 1,057 1,397 (47) 1,350
Other 97 (7) 90 122 (6) 116
Total revenue from continuing operations 17,822 (135) 17,687 18,586 (208) 18,378
Split by geographical areas - continuing operations:
UK 5,472 6,707
US 12,215 11,671
Total revenue from continuing operations 17,687 18,378
The principal revenues of the UK Electricity Transmission segment arise from
the provision of electricity transmission services and are invoiced to, and
collected from, National Energy System Operator (NESO). Amounts are invoiced
and settled in equal monthly instalments throughout the financial year. No
other single customer contributed 10% or more of the Group's revenue in any of
the years presented.
2. Segmental analysis continued
(b) Operating profit
A reconciliation of the operating segments' measure of profit to profit before
tax from continuing operations is provided below. Further details of the
exceptional items and remeasurements are provided in note 4.
Total operating profit/(loss) before exceptional items and remeasurements Exceptional items and remeasurements Total operating profit/(loss) after exceptional items and remeasurements
2026 2025 2026 2025 2026 2025
£m £m £m £m £m £m
Operating segments - continuing operations:
UK Electricity Transmission 1,605 1,277 - - 1,605 1,277
UK Electricity Distribution 1,122 1,610 - (12) 1,122 1,598
UK Electricity System Operator - (364) - 151 - (213)
New England 960 982 (13) 26 947 1,008
New York 1,172 1,023 12 246 1,184 1,269
National Grid Ventures 327 380 388 (375) 715 5
Other (142) (143) - 133 (142) (10)
Total Group 5,044 4,765 387 169 5,431 4,934
Split by geographical area - continuing operations:
UK 2,948 2,775 484 257 3,432 3,032
US 2,096 1,990 (97) (88) 1,999 1,902
Total Group 5,044 4,765 387 169 5,431 4,934
Before exceptional items and remeasurements Exceptional items and remeasurements After exceptional items and remeasurements
2026 2025 2026 2025 2026 2025
£m £m £m £m £m £m
Reconciliation to profit before tax:
Operating profit from continuing operations 5,044 4,765 387 169 5,431 4,934
Share of post-tax results of joint ventures and associates 76 75 - (2) 76 73
Finance income 378 449 2 1 380 450
Finance costs (1,649) (1,810) (56) 3 (1,705) (1,807)
Total Group 3,849 3,479 333 171 4,182 3,650
The following items are included in the total operating profit by segment:
Depreciation, amortisation and impairment(1) 2026 2025
£m £m
Operating segments:
UK Electricity Transmission (550) (540)
UK Electricity Distribution (271) (249)
New England (493) (469)
New York (769) (731)
National Grid Ventures (151) (173)
Other (13) (13)
Total (2,247) (2,175)
Asset type:
Property, plant and equipment (1,929) (1,878)
Non-current intangible assets (318) (297)
Total (2,247) (2,175)
1. Depreciation, amortisation and impairment relates to property, plant and
equipment and other intangible assets. The charge is stated net of
depreciation and amortisation capitalised.
2. Segmental analysis continued
(c) Capital investment
Capital investment represents additions to property, plant and equipment,
prepayments to suppliers to secure production capacity in relation to our
capital projects, non-current intangibles and additional equity investments
in joint ventures and associates. Capital investments exclude additions for
assets or businesses from the point they are classified as held for sale.
2026 2025
£m £m
Operating segments:
UK Electricity Transmission 4,372 2,999
UK Electricity Distribution 1,617 1,426
New England 2,043 1,751
New York 3,428 3,289
National Grid Ventures 109 378
Other 7 4
Total 11,576 9,847
Asset type:
Property, plant and equipment 9,924 8,894
Non-current intangible assets 693 478
Equity investments in joint ventures and associates 27 116
Capital expenditure prepayments 932 359
Total 11,576 9,847
(d) Geographical analysis of non-current assets
Non-current assets by geography comprise goodwill, other intangible assets,
property, plant and equipment, investments in joint ventures and associates
and other non-current assets.
2026 2025
£m £m
Split by geographical area:
UK 47,551 42,623
US 49,273 46,131
96,824 88,754
Reconciliation to total non-current assets:
Pension assets 2,507 2,489
Financial and other investments 842 798
Derivative financial assets 623 369
Non-current assets 100,796 92,410
3. Revenue
Revenue arises in the course of ordinary activities and principally comprises:
- transmission services;
- distribution services; and
- generation services.
Transmission services, distribution services and certain other services
(excluding rental income) fall within the scope of IFRS 15 'Revenue from
Contracts with Customers', whereas generation services (which solely relate to
the contract with the Long Island Power Authority (LIPA) in the US) are
accounted for under IFRS 16 'Leases' as rental income, also presented within
revenue. Revenue is recognised to reflect the transfer of goods or services to
customers at an amount that reflects the consideration to which the Group
expects to be entitled to in exchange for those goods or services and excludes
amounts collected on behalf of third parties and value added tax. The Group
recognises revenue when it transfers control over a product or service to a
customer.
Revenue in respect of regulated activities is determined by regulatory
agreements that set the price to be charged for services in a given period
based on pre-determined allowed revenues. Variances in service usage can
result in actual revenue collected exceeding (over-recoveries) or falling
short (under-recoveries) of allowed revenues. Where regulatory agreements
allow the recovery of under-recoveries or require the return of
over-recoveries, the allowed revenue for future periods is typically adjusted.
In these instances, no assets or liabilities are recognised for under- or
over-recoveries respectively, because the adjustment relates to future
customers and services that have not yet been delivered.
Revenue in respect of non-regulated activities primarily relates to the sale
of capacity on our interconnectors, which is determined at auctions. Capacity
is sold in either day, month, quarter or year ahead tranches. The price
charged is determined by market fundamentals rather than regulatory agreement.
The interconnectors are subject to indirect regulation with regards to the
levels of returns they are allowed to earn. Where amounts fall below this
range they receive top-up revenues; where amounts exceed this range, they must
pass-back the excess. In these instances, assets or liabilities are recognised
for the top-up or pass-back respectively.
The following is a description of principal activities, by reportable segment,
from which the Group generates its revenue. For more detailed information
about our segments, see note 2.
(a) UK Electricity Transmission
The UK Electricity Transmission segment principally generates revenue by
providing electricity transmission services in England and Wales.
Our business operates as a monopoly regulated by Ofgem, which has established
price control mechanisms that set the amount of annual allowed returns our
business can earn (along with the Scottish and Offshore transmission operators
amongst others).
The transmission of electricity encompasses the following principal services:
- the supply of high-voltage electricity - revenue is recognised based on
usage. Our performance obligation is satisfied over time as our customers make
use of our network. We bill monthly in advance and our payment terms are up to
60 days. Price is determined prior to our financial year end with reference to
the regulated allowed returns and estimated annual volumes; and
- construction work (principally for connections) - revenue is recognised over
time, as we provide access to our network. Customers can either pay over the
useful life of the connection or up front. Where the customer pays up front,
revenues are deferred as a contract liability and released over the life of
the asset.
For other construction where there is no consideration for any future services
(for example diversions), revenues are recognised as the construction work
is completed.
3. Revenue continued
(b) UK Electricity Distribution
The UK Electricity Distribution segment principally generates revenue by
providing electricity distribution services in the Midlands and South West
of England and South Wales. Similar to UK Electricity Transmission, UK
Electricity Distribution operates as a monopoly in the jurisdictions that it
operates in and is regulated by Ofgem.
The distribution of electricity encompasses the following principal services:
- electricity distribution - revenue is recognised based on usage by customers
(over time), based upon volumes and price. The price control mechanism that
determines our annual allowances is similar to UK Electricity Transmission.
Revenues are billed monthly and payment terms are typically within 14 days;
and
- construction work (principally for connections) - revenue is recognised over
time as we provide access to our network. Where the customer pays up front,
revenues are deferred as a contract liability and released over the life of
the asset.
For other construction where there is no consideration for any future
services, revenues are recognised as the construction work is completed.
(c) New England
The New England segment principally generates revenue by providing electricity
and gas supply and distribution services and high-voltage electricity
transmission services in New England. Supply and distribution services are
regulated by the Massachusetts Department of Public Utilities (MADPU) and
transmission services are regulated by the Federal Energy Regulatory
Commission (FERC), both of whom regulate the rates that can be charged
to customers.
The supply and distribution of electricity and gas and the provision of
electricity transmission facilities encompasses the following principal
services:
- electricity and gas supply and distribution and electricity transmission -
revenue is recognised based on usage by customers (over time). Revenues are
billed monthly and payment terms are 30 days; and
- construction work (principally for connections) - revenue is recognised over
time as we provide access to our network. Where the customer pays up front,
revenues are deferred as a contract liability or customer contributions (where
they relate to government entities) and released over the life of the
connection.
(d) New York
The New York segment principally generates revenue by providing electricity
and gas supply and distribution services and high-voltage electricity
transmission services in New York. Supply and distribution services are
regulated by the New York Public Service Commission (NYPSC) and transmission
services are regulated by the FERC, both of which regulate the rates that can
be charged to customers.
The supply and distribution of electricity and gas and the provision of
electricity transmission facilities encompasses the following principal
services:
- electricity and gas supply and distribution and electricity transmission -
revenue is recognised based on usage by customers (over time). Revenues are
billed monthly and payment terms are 30 days; and
- construction work (principally for connections) - revenue is recognised over
time as we provide access to our network. Where the customer pays up front,
revenues are deferred as a contract liability or customer contributions (where
they relate to government entities) and released over the life of the
connection.
3. Revenue continued
(e) National Grid Ventures
National Grid Ventures generates revenue from electricity interconnectors, LNG
at the Isle of Grain in the UK and Providence, Rhode Island in the US, NG
Renewables and rental income.
The Group recognises revenue from transmission services through
interconnectors and LNG importation at the Isle of Grain and Providence by
means of customers' use of capacity and volumes. Revenue is recognised over
time and is billed monthly. Payment terms are up to 30 days. The Group
disposed of its interest in Grain LNG in November 2025 (see note 9).
Electricity generation revenue is earned from the provision of energy services
and supply capacity to produce energy for the use of customers of LIPA through
a power supply agreement, where LIPA receives all of the energy and capacity
from the asset until at least 2028. The arrangement is treated as an operating
lease within the scope of the leasing standard where we act as lessor, with
rental income being recorded as other revenue, which forms part of total
revenue. Lease payments (capacity payments) are recognised on a straight-line
basis and variable lease payments are recognised as the energy is generated.
Other revenue in the scope of IFRS 15 principally includes sales of renewables
projects from NG Renewables to Emerald Energy Venture LLC (Emerald), which was
jointly controlled by National Grid and Washington State Investment Board
(WSIB). The Group disposed of its interest in NG Renewables, together with
Emerald, in May 2025 (see note 9). NG Renewables developed wind and solar
generation assets in the US, while Emerald had a right of first refusal to
buy, build and operate those assets. Revenue was recognised as it
was earned.
Other revenue, recognised in accordance with standards other than IFRS 15,
primarily comprises adjustments in respect of the interconnector cap and
floor and Use of Revenue regimes constructed by Ofgem for certain wholly
owned interconnector subsidiaries. Under the cap and floor regime, where
an interconnector expects to exceed its total five-year cap, a provision and
reduction in revenue is recognised in the current reporting period. Where an
interconnector does not expect to reach its five-year floor, either an asset
will be recognised where a future inflow of economic benefits is considered
virtually certain, or a contingent asset will be disclosed where the future
inflow is concluded to be probable. Under the Use of Revenue framework, any
revenues in excess of an agreed incentive level must be passed on as savings
to consumers. Where the obligation to transfer excess revenues arises, a
payable and reduction in revenue is recognised in the current
reporting period.
(f) Other
Revenue in Other relates to our UK commercial property business. Revenue is
predominantly recognised in accordance with standards other than IFRS 15 and
comprises property sales by our UK commercial property business. Property
sales are recorded when the sale is legally completed.
3. Revenue continued
(g) Disaggregation of revenue
In the following tables, revenue is disaggregated by primary geographical
market and major service lines. The table below reconciles disaggregated
revenue with the Group's reportable segments (see note 2).
Revenue for the year ended UK Electricity Transmission UK Electricity Distribution New New National Grid Ventures Other Total
31 March 2026 £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
Transmission 2,597 - 55 355 713 - 3,720
Distribution - 1,859 4,061 7,204 - - 13,124
Other(1) 29 73 9 17 20 4 152
Total IFRS 15 revenue 2,626 1,932 4,125 7,576 733 4 16,996
Other revenue
Generation - - - - 364 - 364
Other(2) 185 5 49 42 (40) 86 327
Total other revenue 185 5 49 42 324 86 691
Total revenue from continuing operations 2,811 1,937 4,174 7,618 1,057 90 17,687
1. The UK Electricity Distribution other IFRS 15 revenue principally relates
to engineering recharges, which are the recovery of costs incurred for
construction work requested by customers, such as the rerouting of existing
network assets.
2. Other revenue, recognised in accordance with accounting standards other
than IFRS 15, includes property sales by our UK commercial property business,
rental income, income arising in connection with the Transition Services
Agreements following the sale of the ESO, and an adjustment to NGV revenue in
respect of the interconnector cap and floor and Use of Revenue regimes
constructed by Ofgem.
Geographical split for the UK Electricity Transmission UK Electricity Distribution New New National Grid Ventures Other Total
year ended 31 March 2026 £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
UK 2,626 1,932 - - 713 - 5,271
US - - 4,125 7,576 20 4 11,725
Total IFRS 15 revenue 2,626 1,932 4,125 7,576 733 4 16,996
Other revenue
UK 185 5 - - (61) 72 201
US - - 49 42 385 14 490
Total other revenue 185 5 49 42 324 86 691
Total revenue from continuing operations 2,811 1,937 4,174 7,618 1,057 90 17,687
3. Revenue continued
Revenue for the year ended UK Electricity Transmission UK Electricity Distribution UK Electricity System Operator New New National Grid Ventures Other Total
31 March 2025 £m £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
Transmission(1) 2,265 - 46 85 252 879 1 3,528
Distribution - 2,327 - 4,193 6,371 - - 12,891
System Operator - - 966 - - - - 966
Other(2) 29 90 - 9 16 171 3 318
Total IFRS 15 revenue 2,294 2,417 1,012 4,287 6,639 1,050 4 17,703
Other revenue
Generation - - - - - 384 - 384
Other(3) 190 4 - 19 50 (84) 112 291
Total other revenue 190 4 - 19 50 300 112 675
Total revenue from continuing operations 2,484 2,421 1,012 4,306 6,689 1,350 116 18,378
1. The UK Electricity System Operator transmission revenue generated in the
period up until its disposal represented transmission revenues collected, net
of payments made to transmission owners.
2. The UK Electricity Distribution other IFRS 15 revenue principally relates
to engineering recharges, which are the recovery of costs incurred for
construction work requested by customers, such as the rerouting of existing
network assets. Within NGV, the other IFRS 15 revenue principally relates to
revenue generated from our NG Renewables business.
3. Other revenue, recognised in accordance with accounting standards other
than IFRS 15, includes property sales by our UK commercial property business,
rental income, income arising in connection with the Transition Services
Agreements following the sales of NECO, the UK Gas Transmission business and
the ESO, and an adjustment to NGV revenue in respect of the interconnector cap
and floor and Use of Revenue regimes constructed by Ofgem.
Geographical split for the year UK Electricity Transmission UK Electricity Distribution UK Electricity System Operator New New National Grid Ventures Other Total
ended 31 March 2025 £m £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
UK 2,294 2,417 1,012 - - 889 1 6,613
US - - - 4,287 6,639 161 3 11,090
Total IFRS 15 revenue 2,294 2,417 1,012 4,287 6,639 1,050 4 17,703
Other revenue
UK 190 4 - - - (111) 11 94
US - - - 19 50 411 101 581
Total other revenue 190 4 - 19 50 300 112 675
Total revenue from continuing operations 2,484 2,421 1,012 4,306 6,689 1,350 116 18,378
Contract liabilities represent revenue to be recognised in future periods
relating to contributions in aid of construction of £2,809 million (2025:
£2,514 million).Revenue is recognised over the life of the asset. The asset
lives for connections in UK Electricity Transmission, UK Electricity
Distribution, New England and New York are up to 40 years, 69 years, 51 years
and 51 years respectively. The weighted average amortisation period over which
revenue for contract liabilities is recognised is 26 years.
Future revenues in relation to unfulfilled performance obligations amount to
£1.4 billion (2025: £1.5 billion). £1.4 billion (2025: £1.5 billion)
relates to connection contracts in UK Electricity Transmission which will be
recognised as revenue over a weighted average of 25 years.
The amount of revenue recognised for the year ended 31 March 2026 from
performance obligations satisfied (or partially satisfied) in previous
periods, mainly due to changes in the estimate of the stage of completion, is
£nil (2025: £nil).
4. Exceptional items and remeasurements
To monitor our financial performance, we use an adjusted consolidated profit
measure that excludes certain income and expenses. We exclude items from
adjusted profit because, if included, these items could distort understanding
of our performance for the year and the comparability between periods. This
note analyses these items, which are included in our results for the year but
are excluded from adjusted profit.
2026 2025
£m £m
Included within operating profit
Exceptional items:
Net loss on disposal of NG Renewables (96) -
Net gain on the sale of Grain LNG 489 -
Transaction, separation and integration costs(1) (17) (65)
Changes in environmental provisions - 146
Net gain on the sale of the ESO - 187
Provision for UK electricity balancing costs - 151
Impairment of joint venture - (303)
Major transformation programme - (74)
376 42
Remeasurements - commodity contract derivatives 11 127
387 169
Included within finance income and costs
Remeasurements:
Net gains on financial assets at fair value through profit and loss 2 1
Net (losses)/gains on financing derivatives (56) 3
(54) 4
Included within share of post-tax results of joint ventures and associates
Remeasurements:
Net losses on financial instruments - (2)
Total included within profit before tax 333 171
Included within tax
Tax on exceptional items 8 76
Tax on remeasurements 8 (36)
16 40
Total exceptional items and remeasurements after tax 349 211
Analysis of total exceptional items and remeasurements after tax
Exceptional items after tax 384 118
Remeasurements after tax (35) 93
Total exceptional items and remeasurements after tax 349 211
1. Transaction, separation and integration costs represent the aggregate of
distinct activities undertaken by the Group in the years presented.
Exceptional items
Management uses an exceptional items framework that has been discussed and
approved by the Audit & Risk Committee. This follows a three-step process
which considers the nature of the event, the financial materiality involved
and any particular facts and circumstances. In considering the nature of the
event, management focuses on whether the event is within the Group's control
and how frequently such an event typically occurs. With respect to
restructuring costs, these represent additional expenses incurred that are not
related to the normal business and day-to-day activities. These can take place
over multiple reporting periods given the scale of the Group, the nature and
complexity of the transformation initiatives and due to the impact of
strategic transactions. In determining the facts and circumstances,
management considers factors such as ensuring consistent treatment between
favourable and unfavourable transactions, the precedent for similar items,
the number of periods over which costs will be spread or gains earned, and the
commercial context for the particular transaction. The exceptional items
framework was last updated in March 2022.
Items of income or expense that are considered by management for designation
as exceptional items include significant restructurings, write-downs
or impairments of non-current assets, significant changes in environmental
or decommissioning provisions, integration of acquired businesses, gains or
losses on disposals of businesses or investments and significant debt
redemption costs as a consequence of transactions such as significant
disposals or issues of equity, and the related tax, as well as deferred
tax arising on changes to corporation tax rates.
4. Exceptional items and remeasurements continued
Costs arising from efficiency and transformation programmes include redundancy
costs. Redundancy costs are charged to the consolidated income statement in
the year in which a commitment is made to incur the costs and the main
features of the restructuring plan have been announced to affected employees.
Set out below are details of the transactions against which we have considered
the application of our exceptional items framework in each of the years
for which results are presented.
2026
Net loss on disposal of NG Renewables
In the year the Group recognised a net loss of £96 million (before tax) on
the disposal of its interest in National Grid Renewables Development LLC (NG
Renewables) to Brookfield Asset Management for cash consideration of
£1,531 million ($2,061 million) (see note 9). The receipt of cash has
been recognised within net cash used in investing activities within the
consolidated cash flow statement.
Net gain on disposal of Grain LNG
In the year the Group recognised a net gain of £489 million on the disposal
of its interest in Grain LNG to a consortium of multinational energy company,
Centrica plc and energy transition infrastructure investment firm, Energy
Capital Partners LLC, part of Bridgepoint Group plc for expected consideration
of £1.53 billion, which includes an estimate for an adjustment to the
consideration under the Sale and Purchase Agreement (see note 9). The receipt
of cash has been recognised within net cash used in investing activities
within the consolidated cash flow statement.
Transaction, separation and integration costs
In May 2024, we announced the sale of NG Renewables and Grain LNG as part of
our strategic focus on becoming a leading pureplay networks business. Both
disposals were completed in the current year, and the transaction costs were
included in gain or loss on disposal (see note 10). Separation costs
of£17 million were incurred in relation to the disposals of NG Renewables
and Grain LNG. The costs incurred primarily related to professional fees and
employee costs. These costs have been classified as exceptional in accordance
with our exceptional items policy. While the costs incurred in isolation
are not sufficiently material to warrant classification as an exceptional
item, when taken in aggregate with the respective disposals, the impact to
the consolidated income statement incurred over both years is sufficiently
material to be classified as exceptional in line with our policy. The total
cash outflow for the year was £44 million.
Changes in environmental provisions
In the US, we recognise environmental provisions related to the remediation of
the Gowanus Canal, Newtown Creek and the former manufacturing gas plant
facilities previously owned or operated by the Group or its predecessor
companies. The sites are subject to both state and federal environmental
remediation laws in the US. Potential liability for the historical
contamination may be imposed on responsible parties jointly and severally,
without regard to fault, even if the activities were lawful when
they occurred. The provisions and the Group's share of estimated costs are
re-evaluated at each reporting period. In the year, following discussions with
the Environmental Protection Agency on the scope and design of remediation
activities related to the Gowanus and Newtown Creek, we have re-evaluated our
estimates of total costs and recognised a net movement in the associated
provision of nil. Under the terms of our rate plans, we are entitled to
recovery of environmental clean-up costs from rate payers in future reporting
periods. Such recoveries through overall allowed revenues are not classified
as exceptional in the future periods that they occur due to the extended
duration over which such costs are recovered and the immateriality of the
recoveries in any given year.
Major transformation programme
Following the appointment of a new Chief Executive Office in November 2025,
strategic priorities were updated and as a result the transformation programme
launched in 2024 has been reshaped. The costs expected to be incurred in
aggregate going forward no longer meet the quantitative threshold to be
presented as exceptional. Accordingly, in line with our exceptional items
policy, these costs have been reclassified from exceptional items to other
operating costs before exceptional items and remeasurements.
4. Exceptional items and remeasurements continued
2025
Changes in environmental provisions
In the prior year, following discussions with the New York State Department of
Environmental Conservation and the Environmental Protection Agency on the
scope and design of remediation activities related to certain of our
responsible sites, we re-evaluated our estimates of total costs and recognised
a net decrease of £64 million in relation to our provisions. Under the terms
of our rate plans, we are entitled to recovery of environmental clean-up
costs from rate payers in future reporting periods. Such recoveries through
overall allowed revenues are not classified as exceptional in the future
periods that they occur due to the extended duration over which such costs are
recovered and the immateriality of the recoveries in any given year.
In the year ended 31 March 2025, the real discount rate applied to the Group's
environmental provisions was also revised to 2.0% to reflect the substantial
and sustained change in US Government bond yield curves. The principal impact
of this rate increase was a £82 million decrease in our US environmental
provisions. The weighted average remaining duration of our cash flows was
around 10 years.
Net gain on disposal of the ESO
In the year ended 31 March 2025, the Group completed the disposal of the ESO
to the UK Government for consideration of £673 million. As a result, the
Group derecognised net assets of £486 million, resulting in a gain of
£187 million. The receipt of cash was recognised within net cash used in
investing activities within the consolidated cash flow statement.
Provision for UK electricity balancing costs
In the year ended 31 March 2024, the ESO's operating profit increased due to a
substantial over-recovery of allowed revenues received under its regulatory
framework. Under IFRS a corresponding liability is not recognised for the
return of over-recoveries as this relates to future customers and services
that have not yet been delivered. Following legislation to enable the
separation of the ESO and the formation of the NESO, the Group recognised a
liability of £498 million in the year ended 31 March 2024 representing the
element of the over-recovery that was expected to be settled through the sale
process. In the prior year, the liability was remeasured at £347 million to
reflect the final amount of over-recovered revenues that transferred through
with the ESO on disposal on 1 October 2024.
Impairment of joint venture
In the prior year, we agreed with our joint venture partner, RWE Renewables,
that our investment in Community Offshore Wind, LLC will pause project
development for the time being. The Group determined that the investment has
negligible value and an impairment of £303 million was recognised.
Transaction, separation and integration costs
In the year ended 31 March 2025, transaction and separation costs of
£26 million were incurred in relation to the planned disposal of NG
Renewables and £8 million in relation to the planned disposal of Grain LNG.
The costs incurred primarily related to professional fees and employee costs.
In remeasuring the NG Renewables disposal group to fair value less costs to
sell in accordance with IFRS 5, the Group also recognised a £31 million
impairment loss. These costs were classified as exceptional in accordance
with our exceptional items policy. While the costs incurred in isolation were
not sufficiently material to warrant classification as an exceptional item,
when taken in aggregate with the respective disposals, the impact to the
consolidated income statement incurred over both years would be sufficiently
material to be classified as exceptional in line with our policy. The total
cash outflow for the year was £6 million.
Major transformation programme
Following the announcement of our strategic priorities in May 2024, the Group
entered into a new four-year transformation programme designed to implement
our refreshed strategy to be a pre-eminent pureplay networks business. In the
prior year, the Group incurred £74 million of costs in relation to the
programme. The costs recognised primarily related to technology implementation
costs, employee costs and professional fees incurred in delivering the
programme. While the costs incurred since the commencement of the programme
did not meet the quantitative threshold to be classified as exceptional on a
standalone basis, when taken in aggregate with the costs expected to be
incurred over the duration of the programme, we concluded that the costs
should be classified as exceptional in line with our exceptional items policy.
The total cash outflow for the period was £62 million.
4. Exceptional items and remeasurements continued
Remeasurements
Remeasurements comprise unrealised gains or losses recorded in the
consolidated income statement arising from changes in the fair value of
certain of our financial assets and liabilities accounted for at fair value
through profit and loss (FVTPL). Once the fair value movements are realised
(for example, when the derivative matures), the previously recognised fair
value movements are then reversed through remeasurements and recognised within
earnings before exceptional items and remeasurements. These assets and
liabilities include commodity contract derivatives and financing derivatives
to the extent that hedge accounting is not available or is not
fully effective.
The unrealised gains or losses reported in profit and loss on certain
additional assets and liabilities treated at FVTPL are also classified within
remeasurements. These relate to financial assets (which fail the 'solely
payments of principal and interest test' under IFRS 9), the money market fund
investments used by Group Treasury for cash management purposes and the net
foreign exchange gains and losses on borrowing activities. These are offset by
foreign exchange gains and losses on financing derivatives measured at fair
value. In all cases, these fair values increase or decrease because
of changes in foreign exchange, commodity or other financial indices over
which we have no control.
We report unrealised gains or losses relating to certain discrete classes of
financial assets accounted for at FVTPL within adjusted profit. These
comprise our portfolio of investments made by National Grid Partners and our
investment in Sunrun Neptune 2016 LLC (both within NGV). The performance of
these assets (including changes in fair value) is included in our assessment
of adjusted profit for the relevant business units.
Remeasurements excluded from adjusted profit are made up of the following
categories:
i. Net gains/(losses) on commodity contract derivatives represent
mark-to-market movements on certain physical and financial commodity contract
obligations in the US and UK. These contracts primarily relate to the forward
purchase of energy for supply to customers, or to the economic hedging
thereof, that are required to be measured at fair value and that do not
qualify for hedge accounting. Under the existing rate plans in the US,
commodity costs are recoverable from customers although the timing of recovery
may differ from the pattern of costs incurred;
ii. Net gains/(losses) on financing derivatives comprise gains and losses
arising on derivative financial instruments, net of interest accrued, used for
the risk management of interest rate and foreign exchange exposures and the
offsetting foreign exchange losses and gains on the associated borrowing
activities. These exclude gains and losses for which hedge accounting has been
effective and have been recognised directly in the consolidated statement of
other comprehensive income or are offset by adjustments to the carrying value
of debt. Net foreign exchange gains and losses on financing derivatives used
for the risk management of foreign exchange exposures are offset by foreign
exchange losses and gains on borrowing activities; and
iii. Net gains/(losses) on financial assets measured at FVTPL comprise gains
and losses on the investment funds held by our insurance captives which
are categorised as FVTPL.
5. Finance income and costs
2026 2025
£m £m
Finance income (excluding remeasurements)
Net interest income on pensions and other post-retirement benefit obligations 114 98
Interest income on financial instruments:
Bank deposits and other financial assets 263 341
Dividends received on equities held at fair value through other comprehensive - 1
income (FVOCI)
Other income 1 9
378 449
Finance costs (excluding remeasurements)
Interest expense on financial liabilities held at amortised cost:
Bank loans and overdrafts (115) (110)
Other borrowings(1) (1,591) (1,553)
Interest on derivatives (229) (285)
Unwinding of discount on provisions and other payables (123) (130)
Other interest (15) (26)
Less: interest capitalised(2) 424 294
(1,649) (1,810)
Remeasurements - Finance income
Net gains on FVTPL financial assets 2 1
2 1
Remeasurements - Finance costs
Net (losses)/gains on financing derivatives³
Derivatives designated as hedges for hedge accounting (24) 4
Derivatives not designated as hedges for hedge accounting (32) (1)
(56) 3
Total remeasurements - Finance income and costs (54) 4
Finance income 380 450
Finance costs(4) (1,705) (1,807)
Net finance costs from continuing operations (1,325) (1,357)
1. Includes interest expense on lease liabilities.
2. Interest on funding attributable to assets in the course of construction
in the current year was capitalised at a rate of 4.4% (2025: 4.3%). In the UK,
capitalised interest qualifies for a current year tax deduction with tax
relief claimed of £65 million (2025: £39 million). In the US, capitalised
interest is added to the cost of property, plant and equipment, and qualifies
for tax depreciation allowances.
3. Includes a net foreign exchange loss on borrowing and investment
activities of £711 million (2025: £241 million gain) offset by foreign
exchange gains and losses on financing derivatives measured at fair value and
the impacts of hedge accounting.
4. Finance costs include principal accretion on inflation-linked liabilities
of £168 million (2025: £152 million).
6. Tax
Tax charged to the consolidated income statement - continuing operations
2026 2025
£m £m
Tax before exceptional items and remeasurements 955 861
Total tax reported within exceptional items and remeasurements (16) (40)
Total tax charge from continuing operations 939 821
Tax as a percentage of profit before tax - continuing operations
2026 2025
% %
Before exceptional items and remeasurements - continuing operations 24.8 24.7
After exceptional items and remeasurements - continuing operations 22.5 22.5
2026 2025
£m £m
Current tax:
UK corporation tax at 25% (2025: 25%) 9 66
UK corporation tax adjustment in respect of prior years (4) (36)
5 30
Overseas corporation tax 9 47
Overseas corporation tax adjustment in respect of prior years (168) (39)
(159) 8
Total current tax from continuing operations (154) 38
Deferred tax:
UK deferred tax 642 524
UK deferred tax adjustment in respect of prior years (7) 25
635 549
Overseas deferred tax 289 195
Overseas deferred tax adjustment in respect of prior years 169 39
458 234
Total deferred tax from continuing operations 1,093 783
Total tax charge from continuing operations 939 821
Factors that may affect future tax charges
The main UK corporation tax rate is 25% and deferred tax balances as at 31
March 2026 have been calculated at 25%.
There are currently no legislative federal tax proposals being considered in
the US that would impact National Grid. Therefore, the income tax balances as
of 31 March 2026 have been calculated at the prevailing tax rates based on
the current tax laws.
7. Earnings per share (EPS)
Adjusted earnings and EPS, which exclude exceptional items and remeasurements,
are provided to reflect the adjusted profit subtotals used by the Company. For
further details of exceptional items and remeasurements, see note 4. We have
included reconciliations from this additional EPS measure to earnings for both
basic and diluted EPS to provide additional detail for these items. The EPS
calculations are based on profit after tax attributable to equity shareholders
of the parent company which excludes non-controlling interests.
(a) Basic EPS
Earnings EPS Earnings EPS
2026 2026 2025 2025
£m pence £m pence
Adjusted earnings from continuing operations 2,892 58.5 2,615 55.6
Exceptional items and remeasurements after tax from continuing operations 349 7.0 211 4.4
(see note 4)
Earnings from continuing operations 3,241 65.5 2,826 60.0
Adjusted earnings from discontinued operations (see note 9) - - 4 -
Exceptional items and remeasurements after tax from discontinued operations - - 72 1.6
Earnings from discontinued operations - - 76 1.6
Total adjusted earnings 2,892 58.5 2,619 55.6
Total exceptional items and remeasurements after tax 349 7.0 283 6.0
(including discontinued operations)
Total earnings 3,241 65.5 2,902 61.6
2026 2025
millions millions
Weighted average number of ordinary shares - basic 4,946 4,707
(b) Diluted EPS
Earnings EPS Earnings EPS
2026 2026 2025 2025
£m pence £m pence
Adjusted earnings from continuing operations 2,892 58.2 2,615 55.4
Exceptional items and remeasurements after tax from continuing operations 349 7.0 211 4.4
(see note 4)
Earnings from continuing operations 3,241 65.2 2,826 59.8
Adjusted earnings from discontinued operations - - 4 -
Exceptional items and remeasurements after tax from discontinued operations - - 72 1.6
(see note 9)
Earnings from discontinued operations - - 76 1.6
Total adjusted earnings 2,892 58.2 2,619 55.4
Total exceptional items and remeasurements after tax 349 7.0 283 6.0
(including discontinued operations)
Total earnings 3,241 65.2 2,902 61.4
2026 2025
millions millions
Weighted average number of ordinary shares - diluted 4,971 4,729
8. Dividends
Interim dividends are recognised when they become payable to the Company's
shareholders. Final dividends are recognised when they are approved
by shareholders.
2026 2025
Pence Cash dividend Scrip dividend Pence Cash Scrip dividend
per share £m £m per share dividend £m
£m
Final dividend in respect of the prior year 30.88 894 617 39.12 811 643
Interim dividend in respect of the current year 16.35 729 80 15.84 718 59
47.23 1,623 697 54.96 1,529 702
The Directors are proposing a final dividend for the year ended 31 March 2026
of 32.14p per share that would absorb approximately £1,598 million
of shareholders' equity (assuming all amounts are settled in cash). It will
be paid on 23 July 2026 to shareholders who are on the register of members
at 29 May 2026 (subject to shareholders' approval at the AGM). A scrip
dividend will be offered as an alternative.
9. Assets held for sale and discontinued operations
Assets and businesses are classified as held for sale when their carrying
amounts are recovered through sale rather than through continuing use. They
only meet the held for sale condition when the assets are ready for immediate
sale in their present condition, management is committed to the sale and it is
highly probable that the sale will complete within one year. Once assets and
businesses are classified as held for sale, depreciation and equity accounting
ceases and the assets and businesses are remeasured if their carrying value
exceeds their fair value less expected costs to sell.
The results and cash flows of assets or businesses classified as held for sale
or sold during the year, that meet the criteria of being a major separate line
of business or geographical area of operation, are shown separately from our
continuing operations, and presented within discontinued operations in the
income statement and cash flow statement.
National Grid Renewables
On 24 February 2025, the Group agreed to sell NG Renewables, its US onshore
renewables business, to Brookfield Asset Management. The disposal
subsequently completed on 29 May 2025 for consideration of £1,531 million
($2,061 million). As NG Renewables did not represent a separate major line of
business or geographical operation, it did not meet the criteria for
classification as discontinued operations and therefore the results for the
period until disposal are not separately disclosed on the face of the
income statement.
Financial information relating to the loss arising on the disposal of NG
Renewables is set out below:
£m
Goodwill 51
Property, plant and equipment 438
Investment in joint venture 906
Trade and other receivables 141
Cash and cash equivalents 58
Financial investments 41
Other assets 66
Total assets on disposal 1,701
Borrowings (2)
Other liabilities (159)
Total liabilities on disposal (161)
Net assets on disposal 1,540
Satisfied by:
Proceeds 1,531
Total consideration 1,531
Less:
Disposal-related costs (11)
Loss on disposal before tax and reclassification of foreign currency (20)
translation reserve
Reclassification of foreign currency translation reserve¹ (76)
Tax 5
Post-tax loss on disposal (91)
1. The reclassification of the foreign currency translation reserve
attributable to NG Renewables comprises a loss of £84 million relating to the
retranslation of NG Renewables' operations offset by a gain of £8 million
relating to borrowings, cross-currency swaps and foreign exchange forward
contracts used to hedge the Group's net investment in NG Renewables.
NG Renewables generated a loss after tax of £14 million for the period until
29 May 2025 (2025: £60 million loss).
9. Assets held for sale and discontinued operations continued
Grain LNG
On 14 August 2025, the Group agreed to sell Grain LNG, its UK LNG asset, to a
consortium of multinational energy companies, Centrica plc and energy
transition infrastructure investment firm, Energy Capital Partners LLC, part
of Bridgepoint Group plc. The disposal subsequently completed on 28 November
2025. As Grain LNG did not represent a separate major line of business or
geographical operation, it did not meet the criteria for classification as
discontinued operations and therefore the results for the period until
disposal are not separately disclosed on the face of the income statement.
The Group has recognised a £124 million liability as an adjustment to the
consideration under the Sale and Purchase Agreement for post closing capital
project obligations based on management's best estimate of the expected
outflow. Given the inherent complexity of the project, and the number of
parties involved, the Group has considered a range of potential outcomes,
including the risk that costs could exceed our estimates. The Group has
concluded the risk of a materially adverse impact to our operations, cash
flows or financial position is remote.
Financial information relating to the gain arising on the disposal of Grain
LNG is set out below:
£m
Other intangible assets 27
Property, plant and equipment 962
Trade and other receivables 27
Cash and cash equivalents 163
Other assets 20
Total assets on disposal 1,199
Borrowings (135)
Other liabilities (196)
Total liabilities on disposal (331)
Net assets on disposal 868
Satisfied by:
Proceeds 1,375
Total consideration 1,375
Less:
Disposal-related costs (18)
Gain on disposal 489
Grain LNG generated a profit after tax of £89 million for the period until
28 November 2025 (2025: £120 million).
9. Assets held for sale and discontinued operations continued
The UK Gas Transmission business
In July 2024, the Group sold its remaining 20% equity interest in the UK Gas
Transmission business (held through its holding in GasT TopCo Limited). This
interest had been classified as held for sale from 31 January 2023 until the
date of disposal, as detailed in the Annual Report and Accounts for the year
ended 31 March 2025. The total sales proceeds were £686 million and the
gain on disposal, after transaction costs, was £25 million.
The disposal of the Group's remaining interest in GasT TopCo Limited was the
final stage of the plan to dispose of the UK Gas Transmission business first
announced in 2021. As a result, the gain on disposal and any remeasurements
pertaining to the financial derivatives noted above are shown separately from
the continuing business for all periods presented on the face of the income
statement as a discontinued operation. This is also reflected in the
statement of comprehensive income, as well as earnings per share (EPS) being
shown split between continuing and discontinued operations.
The summary income statement for the year ended 31 March 2025 is as follows:
Before exceptional items and remeasurements Exceptional items and remeasurements Total
£m £m £m
Operating profit - - -
Finance income 5 - 5
Finance costs(1) - 47 47
Profit before tax 5 47 52
Tax (1) - (1)
Profit after tax from discontinued operations 4 47 51
Gain/(loss) on disposal - 25 25
Total profit after tax from discontinued operations 4 72 76
1. Exceptional finance costs included the remeasurement of the Further
Acquisition Agreement option and the Remaining Acquisition Agreement, as
detailed in the Annual Report and Accounts for the year ended 31 March 2025.
The summary statement of comprehensive income for the year ended 31 March 2025
is as follows:
£m
Profit after tax from discontinued operations 76
Other comprehensive (loss)/income from discontinued operations
Items from discontinued operations that may be reclassified subsequently to
profit or loss:
Net (losses)/gains on investments in debt instruments measured at fair value (13)
through other comprehensive income
Tax on items that may be reclassified subsequently to profit or loss 3
Total (losses)/gains from discontinued operations that may be reclassified (10)
subsequently to profit or loss
Other comprehensive (loss)/income for the year, net of tax from discontinued (10)
operations
Total comprehensive income for the year from discontinued operations 66
Details of the cash flows relating to discontinued operations are set out
within the consolidated cash flow statement.
10. Pensions and other post-retirement benefit obligations
2026 2025
£m £m
Present value of funded obligations (15,098) (16,154)
Fair value of plan assets 17,780 18,441
2,682 2,287
Present value of unfunded obligations (247) (247)
Other post-employment liabilities (44) (47)
2,391 1,993
Restrictions on asset recognised (244) (77)
Net defined benefit asset 2,147 1,916
Represented by:
Liabilities (360) (573)
Assets 2,507 2,489
2,147 1,916
The net pensions and other post-retirement benefit obligations position, as
recorded under IAS 19, at 31 March 2026 was a net asset of £2,147 million
compared to a net asset of £1,916 million at 31 March 2025. The movement of
£231 million reflects falls in gross asset values, partially offset by
changes in UK and US financial assumptions that resulted in a decrease in
liabilities.
Actuarial Assumptions:
UK pensions US pensions US other
post-retirement benefits
2026 2025 2026 2025 2026 2025
% % % % % %
Discount rate - past service 6.00 5.73 5.60 5.50 5.60 5.50
Discount rate - future service 6.35 5.95 5.60 5.50 5.60 5.50
Rate of increase in RPI - past service 3.17 2.99 n/a n/a n/a n/a
Rate of increase in RPI - future service 3.06 2.85 n/a n/a n/a n/a
Salary increases 3.32 3.08 4.50 4.50 4.50 4.50
Initial healthcare cost trend rate n/a n/a n/a n/a 7.10 7.80
Ultimate healthcare cost trend rate n/a n/a n/a n/a 4.50 4.50
11. Net debt
Net debt is comprised as follows:
2026 2025
£m £m
Cash and cash equivalents 375 1,178
Current financial investments 2,453 5,753
Borrowings (46,755) (47,539)
Financing derivatives(1) (233) (763)
(44,160) (41,371)
1. The derivatives balance included in net debt excludes the commodity
derivative liabilities of £53 million (2025: assets of £43 million).
12. Reconciliation of net cash flow to movement in net debt
2026 2025
£m £m
(Decrease)/increase in cash and cash equivalents (948) 765
(Decrease)/increase in financial investments (3,516) 2,274
Decrease in borrowings 2,785 429
Increase in related derivatives(1) 210 352
Change in debt resulting from cash flows (1,469) 3,820
Changes in fair value of financial assets and liabilities and exchange 457 756
movements
Net interest charge on the components of net debt (1,705) (1,610)
Other non-cash movements (223) (207)
Movement in net debt (net of related derivative financial instruments) in the (2,940) 2,759
year
Net debt (net of related derivative financial instruments) at start of year (41,371) (43,607)
Reclassification to held for sale 151 (523)
Net debt (net of related derivative financial instruments) at end of year (44,160) (41,371)
1. The derivatives balance included in net debt excludes the commodity
derivative liabilities of £53 million (2025: assets of £43 million).
2026 2025
Borrowings Financing Borrowings Financing
and other derivatives and other derivatives
£m £m £m £m
Cash flows per financing activities section of cash flow statement:
Proceeds received from loans 4,172 - 3,237 -
Repayment of loans (2,961) - (2,861) -
Payments of lease liabilities (145) - (130) -
Net movements in short-term borrowings (2,225) - 925 -
Cash inflows on derivatives - 93 - 62
Cash outflows on derivatives - (38) - (106)
Interest paid (1,659) (273) (1,608) (312)
Cash flows per financing activities section of cash flow statement (2,818) (218) (437) (356)
Adjustments:
Non-net debt-related items 33 - 8 -
Derivative cash (outflow)/inflow in relation to capital expenditure - (5) - (9)
Derivative cash (outflow)/inflow included in revenue - (1) - 8
Derivative cash inflows per investing section of cash flow statement - 20 - 11
Derivative cash outflows per investing section of cash flow statement - (6) - (6)
Cash flows relating to financing liabilities within net debt (2,785) (210) (429) (352)
Analysis of changes in net debt:
Borrowings (2,785) - (429) -
Financing derivatives - (210) - (352)
Cash flow movements relating to financing liabilities within net debt (2,785) (210) (429) (352)
13. Post balance sheet events
On 13 April 2026, National Grid North America Inc. entered into a 10-year loan
of $864.9 million, with the proceeds received on 21 April 2026. As the loan
was entered into after the reporting date, it has not been reflected in the
consolidated statement of financial position as at 31 March 2026.
Alternative performance measures/
non-IFRS reconciliations
Within the Annual Report, a number of financial measures are presented. These
measures have been categorised as alternative performance measures (APMs), as
per the European Securities and Markets Authority (ESMA) guidelines and the
Securities and Exchange Commission (SEC) conditions for use of non-GAAP
financial measures.
An APM is a financial measure of historical or future financial performance,
financial position, or cash flows, other than a financial measure defined
under IFRS. The Group uses a range of these measures to provide a better
understanding of its underlying performance. APMs are reconciled to the most
directly comparable IFRS financial measure where practicable.
The Group has defined the following financial measures as APMs derived from
IFRS: net revenue, the various adjusted operating profit, earnings and
earnings per share metrics detailed in the 'adjusted profit measures' section
below, net debt, funds from operations (FFO), FFO interest cover and retained
cash flow (RCF)/adjusted net debt. For each of these we present a
reconciliation to the most directly comparable IFRS measure. We present
'constant currency' comparative period performance and capital investment by
applying the current year average exchange rate to the relevant US dollar
amounts in the comparative periods presented, to remove the year-on-year
impact of foreign exchange translation.
We also have a number of APMs derived from regulatory measures which have no
basis under IFRS; we call these Regulatory Performance Measures (RPMs). They
comprise: Group RoE, operating company RoE, regulated asset base, regulated
financial performance, regulatory gearing, asset growth and regulated asset
growth. These measures include the inputs used by utility regulators
to set the allowed revenues for many of our businesses.
We use RPMs to monitor progress against our regulatory agreements and certain
aspects of our strategic objectives. Further, targets for certain of these
performance measures are included in the Company's APP and LTPP and
contribute to how we reward our employees. As such, we believe that they
provide close correlation to the economic value we generate for our
shareholders and are therefore important supplemental measures for our
shareholders to understand the performance of the business and to ensure a
complete understanding of Group performance.
As the starting point for our RPMs is not IFRS, and these measures are not
governed by IFRS, we are unable to provide meaningful reconciliations to any
directly comparable IFRS measures, as differences between IFRS and the
regulatory recognition rules applied have built up over many years. Instead,
for each of these we present an explanation of how the measure has been
determined and why it is important, and an overview as to why it would not
be meaningful to provide a reconciliation to IFRS.
Alternative performance measures
Net revenue and underlying net revenue
'Net revenue' is revenue less pass-through costs, such as UK system balancing
costs and gas and electricity commodity costs in the US. Pass-through costs
are fully recoverable from our customers and are recovered through charges
that are designed to recover those costs with no profit. Where revenue
received or receivable exceeds the maximum amount permitted by our regulatory
agreement, adjustments will be made to future prices to reflect this
over-recovery. No liability is recognised, as such an adjustment to future
prices relates to the provision of future services. Similarly, no asset is
recognised where a regulatory agreement permits adjustments to be made to
future prices in respect of an under-recovery. 'Underlying net revenue'
further adjusts net revenue to remove the impact of 'timing', i.e. the
in‑year difference between allowed and collected revenues, including revenue
incentives, as governed by our rate plans in the US or regulatory price
controls in the UK (but excluding totex-related allowances in NGET and
certain other adjustments).
Year ended 31 March 2026 Gross Pass- Net revenue Timing Underlying
revenue through £m £m net revenue
£m costs £m
£m
UK Electricity Transmission 2,898 (391) 2,507 77 2,584
UK Electricity Distribution 1,937 (184) 1,753 116 1,869
New England 4,174 (1,451) 2,723 (94) 2,629
New York 7,618 (3,113) 4,505 537 5,042
National Grid Ventures 1,098 - 1,098 - 1,098
Other 97 - 97 - 97
Sales between segments (135) - (135) - (135)
Total 17,687 (5,139) 12,548 636 13,184
Year ended 31 March 2025 Gross Pass- Net revenue Timing Underlying
revenue through £m £m net revenue
£m costs £m
£m
UK Electricity Transmission 2,619 (455) 2,164 151 2,315
UK Electricity Distribution 2,424 (185) 2,239 (407) 1,832
UK Electricity System Operator 1,029 (1,217) (188) 479 291
New England 4,306 (1,658) 2,648 (61) 2,587
New York 6,689 (2,487) 4,202 343 4,545
National Grid Ventures 1,397 - 1,397 - 1,397
Other 122 - 122 - 122
Sales between segments (208) - (208) - (208)
Total 18,378 (6,002) 12,376 505 12,881
Adjusted profit measures
In considering the financial performance of our business and segments, we use
various adjusted profit measures in order to aid comparability of results
year-on-year. The various measures are presented on pages 14 to 27 and
reconciled below.
Adjusted results: These exclude the impact of exceptional items and
remeasurements that are treated as discrete transactions under IFRS and can
accordingly be classified as such. This is a measure used by management that
is used to derive part of the incentive target set annually for remunerating
certain Executive Directors, and further details of these items are included
in note 4.
Underlying results: Further adapts our adjusted results for continuing
operations to take account of volumetric and other revenue timing differences
arising due to the in-year difference between allowed and collected revenues,
including revenue incentives, as governed by our rate plans in the US or
regulatory price controls in the UK (but excluding certain totex-related
allowances in NGET and adjustments or allowances for pension deficit
contributions). For 2025/26, as highlighted below, our underlying results
exclude £636 million (2024/25: £505 million) of timing differences, but did
include $52 million (£39 million) of major storm costs (net of in-year
allowances and deductibles) as in the current year these did not exceed our
$100 million threshold to be excluded from underlying results. In 2024/25 we
incurred $110 million (£87 million) of major storm costs (net of in‑year
allowances) which were excluded from our underlying results. We expect to
recover major storm costs incurred through regulatory mechanisms in the US.
Underlying results also exclude deferred tax in our UK regulated businesses
(NGET and NGED). Our UK regulated revenues contain an allowance for current
tax, but not for deferred tax, so excluding the IFRS deferred tax charge
aligns our underlying results APM more closely with our regulatory performance
measures.
Constant currency: 'Constant Currency Basis' refers to the reporting of the
actual results against the results for the same period last year which, in
respect of any US dollar currency denominated activity, have been translated
using the average US dollar exchange rate for the year ended 31 March 2026,
which was $1.34 to £1.00. The average rate for the year ended 31 March 2025,
was $1.27 to £1.00. Assets and liabilities as at 31 March 2025 have been
retranslated at the closing rate at 31 March 2026 of $1.32 to £1.00. The
closing rate for the reporting date 31 March 2025 was $1.29 to £1.00.
Reconciliation of statutory, adjusted and underlying profits from continuing
operations at actual exchange rates
Year ended 31 March 2026 Statutory Exceptionals and remeasurements Adjusted Timing Major storm costs Deferred tax on underlying profits in Underlying
£m £m £m £m £m NGET and NGED £m
£m
UK Electricity Transmission 1,605 - 1,605 77 - - 1,682
UK Electricity Distribution 1,122 - 1,122 116 - - 1,238
New England 947 13 960 (94) - - 866
New York 1,184 (12) 1,172 537 - - 1,709
National Grid Ventures 715 (388) 327 - - - 327
Other (142) - (142) - - - (142)
Total operating profit 5,431 (387) 5,044 636 - - 5,680
Net finance costs (1,325) 54 (1,271) - - - (1,271)
Share of post-tax results of joint ventures and associates 76 - 76 - - - 76
Profit before tax 4,182 (333) 3,849 636 - - 4,485
Tax (939) (16) (955) (168) - 499 (624)
Profit after tax 3,243 (349) 2,894 468 - 499 3,861
Year ended 31 March 2025 Statutory Exceptionals and remeasurements Adjusted Timing Major storm costs Deferred tax on underlying profits in Underlying
£m £m £m £m £m NGET and NGED £m
£m
UK Electricity Transmission 1,277 - 1,277 151 - - 1,428
UK Electricity Distribution 1,598 12 1,610 (407) - - 1,203
UK Electricity System Operator (213) (151) (364) 479 - - 115
New England 1,008 (26) 982 (61) 3 - 924
New York 1,269 (246) 1,023 343 84 - 1,450
National Grid Ventures 5 375 380 - - - 380
Other (10) (133) (143) - - - (143)
Total operating profit 4,934 (169) 4,765 505 87 - 5,357
Net finance costs (1,357) (4) (1,361) - - - (1,361)
Share of post-tax results of joint ventures and associates 73 2 75 - - - 75
Profit before tax 3,650 (171) 3,479 505 87 - 4,071
Tax (821) (40) (861) (133) (23) 401 (616)
Profit after tax 2,829 (211) 2,618 372 64 401 3,455
Operating profit exceptional items and remeasurements split by segment
Year ended 31 March 2026 Net loss on disposal of NG Renewables Net gain on sale of LNG Grain Environmental provision Major transformation programme Transaction, separation and integration costs Exceptional impairment Commodity remeasurements Exceptionals and remeasurements
UK Electricity Transmission - - - - - - - -
UK Electricity Distribution - - - - - - - -
UK Electricity System Operator - - - - - - - -
New England - - - - - - (13) (13)
New York - - - - - - 12 12
National Grid Ventures (96) 489 - - (17) - 12 388
Other - - - - - - - -
Total operating profit exceptional items and remeasurements (96) 489 - - (17) - 11 387
Year ended 31 March 2025 ESO BSUoS provision Gain on disposal of UK ESO Environmental provision Major transformation programme Transaction, separation and integration costs Exceptional impairment Commodity remeasurements Exceptionals and remeasurements
UK Electricity Transmission - - - - - - - -
UK Electricity Distribution - - - (12) - - - (12)
UK Electricity System Operator 151 - - - - - - 151
New England - - 4 (7) - - 29 26
New York - - 142 (9) - - 113 246
National Grid Ventures - - - - (57) (303) (15) (375)
Other - 187 - (46) (8) - - 133
Total operating profit exceptional items and remeasurements 151 187 146 (74) (65) (303) 127 169
Reconciliation of adjusted and underlying earnings from continuing operations
at constant currency
At constant currency
Year ended 31 March 2025 Adjusted Constant currency adjustment Adjusted Timing Major storm costs Deferred tax on underlying profits in Underlying
at actual exchange rate NGET and NGED
£m £m £m £m £m £m £m
UK Electricity Transmission 1,277 - 1,277 151 - - 1,428
UK Electricity Distribution 1,610 - 1,610 (407) - - 1,203
UK Electricity System Operator (364) - (364) 479 - - 115
New England 982 (57) 925 (57) 3 - 871
New York 1,023 (58) 965 323 79 - 1,367
National Grid Ventures 380 - 380 - - - 380
Other (143) - (143) - - - (143)
Total operating profit 4,765 (115) 4,650 489 82 - 5,221
Net finance costs (1,361) 53 (1,308) - - - (1,308)
Share of post-tax results of joint ventures and associates 75 (2) 73 - - - 73
Profit before tax 3,479 (64) 3,415 489 82 - 3,986
Tax (861) 15 (846) (130) (20) 401 (595)
Profit after tax 2,618 (49) 2,569 359 62 401 3,391
Attributable to non-controlling interests (3) - (3) - - - (3)
Earnings 2,615 (49) 2,566 359 62 401 3,388
Earnings per share (pence) 55.6 (1.1) 54.5 7.7 1.3 8.5 72.0
Earnings per share calculations from continuing operations
The table below reconciles the profit after tax from continuing operations as
per the previous tables back to the earnings per share from continuing
operations for each of the adjusted profit measures.
Year ended 31 March 2026 Profit after tax Non-controlling interest Profit after tax attributable to the parent Weighted Earnings
£m £m £m average per share
number of pence
shares
millions
Statutory 3,243 (2) 3,241 4,946 65.5
Adjusted 2,894 (2) 2,892 4,946 58.5
Underlying 3,861 (2) 3,859 4,946 78.0
Year ended 31 March 2025 Profit after tax Non-controlling interest Profit after tax attributable to the parent Weighted Earnings
£m £m £m average per share
number of pence
shares
millions
Statutory 2,829 (3) 2,826 4,707 60.0
Adjusted 2,618 (3) 2,615 4,707 55.6
Underlying 3,455 (3) 3,452 4,707 73.3
Underlying at constant currency 3,391 (3) 3,388 4,707 72.0
Timing and regulated revenue adjustments
Under the Group's regulatory frameworks, the majority of the revenues that
National Grid is allowed to collect each year are governed by a regulatory
price control or rate plan. If we collect more than the allowed revenue,
adjustments will be made to future prices to reflect this over-recovery, and
if we collect less than the allowed level of revenue, adjustments will be made
to future prices to reflect the under-recovery. A number of costs in the UK
and the US are pass-through costs (including commodity and energy efficiency
costs in the US) and are fully recoverable from customers. Timing differences
between costs of this type being incurred and their recovery through revenues
are also included in over and under-recoveries. In the UK, timing
differences include an estimation of the difference between revenues earned
under revenue incentive mechanisms and associated revenues collected. UK
timing balances and movements exclude adjustments associated with changes to
controllable cost (totex) allowances or adjustments under the totex incentive
mechanism. Opening balances of over and under-recoveries have been restated
where appropriate to correspond with regulatory filings and calculations. New
England and New York in-year over/(under)-recovery and all New England and New
York balances have been translated using the average exchange rate of
$1.34 for the year ended 31 March 2026.
UK UK UK New New Total
Electricity Transmission Electricity Distribution Electricity System Operator England York £m
£m £m £m £m £m
1 April 2025 opening balance(1) 9 118 - (368) 301 60
(Under)/over-recovery (77) (116) - 94 (537) (636)
31 March 2026 closing balance to (recover)/return(2) (68) 2 - (274) (236) (576)
UK UK UK New New Total
Electricity Transmission Electricity Distribution Electricity System Operator England York £m
£m £m £m £m £m
1 April 2024 opening balance(1) 160 (282) 941 (425) 624 1,018
(Under)/over-recovery (151) 407 (479) 57 (323) (489)
Disposal - - (462) - - (462)
31 March 2025 closing balance to (recover)/return(2) 9 125 - (368) 301 67
1. Opening balances have been restated to reflect the finalisation of
calculated over/(under)-recoveries in both the UK and the US and also adjusted
for the regulatory time value of money impact on opening balances, where
appropriate, in the UK.
2. The closing balance at 31 March 2026 was £584 million under-recovered
(translated at the closing rate of $1.32:£1). 31 March 2025 was £65 million
over-recovered (translated at the closing rate of $1.29:£1).
Capital investment at constant currency
Capital investment measures are presented at actual exchange rates, but are
also shown on a constant currency basis to show the year-on-year comparisons
excluding any impact of foreign currency translation movements.
At actual exchange rates At constant currency
Year ended 31 March 2026 2025 % 2026 2025 %
£m £m change £m £m change
UK Electricity Transmission 4,372 2,999 46 4,372 2,999 46
UK Electricity Distribution 1,617 1,426 13 1,617 1,426 13
New England 2,043 1,751 17 2,043 1,650 24
New York 3,428 3,289 4 3,428 3,101 11
Capital investment (regulated networks) 11,460 9,465 21 11,460 9,176 25
National Grid Ventures 109 378 (71) 109 362 (70)
Other 7 4 75 7 4 75
Group capital investment - total 11,576 9,847 18 11,576 9,542 21
Capital expenditure
Capital expenditure (for the purposes of measuring green capex aligned to the
EU Taxonomy) comprises additions to property, plant and equipment
and intangible assets, but excludes capital prepayments and equity
contributions to joint ventures and associates during the period.
2026 2025
£m £m
Asset type:
Property, plant and equipment 9,924 8,894
Non-current intangible assets 693 478
Transfers from prepayments 501 87
Group capital expenditure 11,118 9,459
Equity investments in joint ventures and associates 27 116
Capital expenditure prepayments 932 359
Transfers to capital expenditure additions (501) (87)
Group capital investment 11,576 9,847
Net debt
See notes 11 and 12 for reconciliation of net debt.
Funds from operations and interest cover
FFO are the cash flows generated by the operations of the Group. Credit rating
metrics, including FFO, are used as indicators of balance sheet strength.
Year ended 31 March 2026 2025¹
£m £m
Interest expense (income statement) 1,649 1,810
Hybrid interest reclassified as dividend (13) (37)
Capitalised interest 424 294
Pensions interest adjustment 12 13
Unwinding of discount on provisions (123) (130)
Adjusted interest expense 1,949 1,950
Net cash inflow from operating activities 7,829 6,808
Interest received on financial instruments 231 332
Interest paid on financial instruments (1,932) (1,920)
Dividends received 105 126
Working capital adjustment (632) (104)
Excess employer pension contributions 16 26
Hybrid interest reclassified as dividend 13 37
Add back accretions 168 152
Difference in net interest expense in income statement to cash flow 14 (45)
Difference in current tax in income statement to cash flow 186 145
Current tax related to prior periods (172) -
Funds from operations (FFO) 5,826 5,557
FFO interest cover ((FFO + adjusted interest expense)/adjusted interest 4.0x 3.8x
expense)
1. Numbers for 2025 reflect the calculations for the total Group as based on
the published accounts for that year.
Funds from operations/adjusted net debt and retained cash flow/adjusted net
debt
FFO/adjusted net debt and RCF/adjusted net debt are credit metrics that we
monitor in order to ensure the Group is generating sufficient cash to service
its debts, consistent with maintaining a strong investment-grade credit
rating.
Year ended 31 March 2026 2025(1)
£m £m
Funds from operations (FFO) 5,826 5,557
Hybrid interest reclassified as dividend (13) (37)
Ordinary dividends paid to shareholders (1,623) (1,529)
RCF 4,190 3,991
Borrowings 46,755 47,539
Less:
50% hybrid debt (328) (814)
Cash and cash equivalents (375) (1,178)
Financial and other investments (1,370) (5,156)
Underfunded pension obligations 237 247
Adjusted net debt (includes pension deficit) 44,919 40,638
FFO/adjusted net debt 13.0% 13.7%
RCF/adjusted net debt 9.3% 9.8%
1. Numbers for 2025 reflect the calculations for the total Group as based on
the published accounts for that year.
Regulatory performance measures
Regulated financial performance - UK
Regulatory financial performance is a pre-interest and tax measure, starting
at segmental operating profit and making adjustments (such as the elimination
of all pass-through items included in revenue allowances and timing) to
approximate regulatory profit for the UK regulated activities. This measure
provides a bridge for investors between a well-understood and comparable IFRS
starting point and the key adjustments required to approximate regulatory
profit. This measure also provides the foundation to calculate Group RoE.
Under the UK RIIO regulatory arrangements the Company is incentivised to
deliver efficiencies against cost targets set by the regulator. In total,
these targets are set in terms of a regulatory definition of combined total
operating and capital expenditure, also termed 'totex'. The definition
of totex differs from the total combined regulated controllable operating
costs and regulated capital expenditure as reported in this statement
according to IFRS accounting principles. Key differences are capitalised
interest, capital contributions, exceptional costs, costs covered by
other regulatory arrangements and unregulated costs.
For the reasons noted above, the table below shows the principal differences
between the IFRS operating profit and the regulated financial performance,
but is not a formal reconciliation to an equivalent IFRS measure.
UK Electricity Transmission
Year ended 31 March 2026 2025
£m £m
Adjusted operating profit 1,605 1,277
Movement in regulatory 'IOUs' 278 256
UK regulatory notional deferred taxation adjustment 276 238
RAV indexation - 2% CPIH long-run inflation 410 368
Regulatory vs IFRS depreciation difference (622) (575)
Fast money/other (435) (261)
Performance RAV created 76 65
Regulated financial performance 1,588 1,368
UK Electricity Distribution
Year ended 31 March 2026 2025
£m £m
Adjusted operating profit 1,122 1,610
Less non-regulated profits (11) (7)
Movement in regulatory 'IOUs' 131 (417)
UK regulatory notional deferred taxation adjustment 36 15
RAV indexation - 2% CPIH long-run inflation 245 230
Regulatory vs IFRS depreciation difference (551) (547)
Fast money/other (72) (46)
Performance RAV created 5 (1)
Regulated financial performance 905 837
UK Electricity System Operator
Year ended 31 March 2026 2025
£m £m
Adjusted operating profit - (364)
Movement in regulatory 'IOUs' - 479
UK regulatory notional deferred taxation adjustment - 3
RAV indexation - 2% CPIH long-run inflation - 9
Regulatory vs IFRS depreciation difference - (50)
Fast money/other - (44)
Regulated financial performance - 33
Regulated financial performance - US
New England
Year ended 31 March 2026 2025
£m £m
Adjusted operating profit 960 982
Major storm costs - 3
Timing (94) (61)
US GAAP pension adjustment and other(1) 79 60
Regulated financial performance 945 984
1. £2 million unfavourable COVID-19 bad debt provision adjustment included
in 2025 other.
New York
Year ended 31 March 2026 2025
£m £m
Adjusted operating profit 1,172 1,023
Provision for bad and doubtful debts (COVID-19), net of recoveries(1) (37) (47)
Major storm costs - 84
Timing 537 343
US GAAP pension adjustment 43 48
Regulated financial performance 1,715 1,451
1. New York financial performance includes an adjustment reflecting our
expectation for future recovery of COVID-19 related provisions for bad and
doubtful debts.
Total regulated financial performance
Year ended 31 March 2026 2025
£m £m
UK Electricity Transmission 1,588 1,368
UK Electricity Distribution 905 837
UK Electricity System Operator - 33
New England 945 984
New York 1,715 1,451
Total regulated financial performance 5,153 4,673
New England and New York timing, major storms costs and movement in UK
regulatory 'IOUs' - Revenue related to performance in one year may
be recovered in later years. Where revenue received or receivable exceeds
the maximum amount permitted by our regulatory agreement, adjustments will
be made to future prices to reflect this over-recovery. No liability is
recognised under IFRS, as such an adjustment to future prices relates to the
provision of future services. Similarly, no asset is recognised under IFRS
where a regulatory agreement permits adjustments to be made to future prices
in respect of an under-recovery. In the UK, this is calculated as the movement
in other regulated assets and liabilities.
Performance RAV - UK performance efficiencies are in part remunerated by the
creation of additional RAV which is expected to result in future earnings
under regulatory arrangements. This is calculated as in-year totex
outperformance multiplied by the appropriate regulatory capitalisation ratio
and multiplied by the retained company incentive sharing ratio.
Pension adjustment - Cash payments against pension deficits in the UK are
recoverable under regulatory contracts. In US regulated operations, US GAAP
pension charges are generally recoverable through rates. Revenue recoveries
are recognised under IFRS but payments are not charged against IFRS operating
profits in the year. In the UK this is calculated as cash payments against
the regulatory proportion of pension deficits in the UK regulated business,
whereas in the US it is the difference between IFRS and US GAAP pension
charges.
2% CPIH RAV indexation - Future UK revenues are expected to be set using an
asset base adjusted for inflation. This is calculated as UK RAV multiplied
by 2% long-run CPIH inflation assumption under RIIO-2.
Total regulated financial performance continued
UK regulatory notional deferred taxation adjustment - Future UK revenues are
expected to recover cash taxation cost including the unwinding of deferred
taxation balances created in the current year. This is the difference between:
(1) IFRS underlying EBITDA less other regulatory adjustments; and (2) IFRS
underlying EBITDA less other regulatory adjustments less current taxation
(adjusted for interest tax shield) then grossed up at full UK statutory
tax rate.
Regulatory depreciation - US and UK regulated revenues include allowance for a
return of regulatory capital in accordance with regulatory assumed asset
lives. This return does not form part of regulatory profit.
Fast/slow money adjustment - The regulatory remuneration of costs incurred is
split between in-year revenue allowances and the creation of additional RAV.
This does not align with the classification of operating costs and fixed asset
additions under IFRS accounting principles. This is calculated as the
difference between IFRS classification of operating costs versus fixed asset
additions and the regulatory classification.
Regulated asset base
The regulated asset base is a regulatory construct, based on predetermined
principles not based on IFRS. It effectively represents the invested capital
on which we are authorised to earn a cash return. By investing efficiently in
our networks, we add to our regulated asset base over the long term, and
this in turn contributes to delivering shareholder value. Our regulated
asset base comprises our regulatory asset value in the UK plus our rate
base in the US.
Maintaining efficient investment in our regulated asset base ensures we are
well positioned to provide consistently high levels of service to
our customers and increases our revenue allowances in future years. While we
have no specific target, our overall aim is to achieve around 10% growth in
regulated asset base each year through continued investment in our networks in
both the UK and US.
In the UK, the way in which our transactions impact RAV is driven by
principles set out by Ofgem. In a number of key areas these principles differ
from the requirements of IFRS, including areas such as additions and the
basis for depreciation. Further, our UK RAV is adjusted annually for
inflation. RAV in each of our retained UK businesses has evolved over the
period since privatisation in 1990 and, as a result, historical differences
between the initial determination of RAV and balances reported under UK GAAP
at that time still persist. In the case of UK ED, differences arise as the
result of acquisition fair value adjustments (where PP&E at acquisition
has been valued above RAV). Due to the above, substantial differences exist
in the measurement bases between RAV and an IFRS balance metric, and
therefore it is not possible to provide a meaningful reconciliation between
the two.
In the US, rate base is a regulatory measure determined for each of our main
US operating companies. It represents the value of property and other assets
or liabilities on which we are permitted to earn a rate of return, as set out
by the regulatory authorities for each jurisdiction. The calculations
are based on the applicable regulatory agreements for each jurisdiction and
include the allowable elements of assets and liabilities from our US
companies. For this reason, it is not practical to provide a meaningful
reconciliation from the US rate base to an equivalent IFRS measure.
'Total regulated and other balances' for our UK regulated businesses include
the under- or over-recovery of allowances that those businesses target to
collect in any year, which are based on the regulator's forecasts for that
year. Under the UK price control arrangements, revenues will be adjusted in
future years to take account of actual levels of collected revenue, costs and
outputs delivered when they differ from those regulatory forecasts. In the
US, other regulatory assets and liabilities include regulatory assets and
liabilities which are not included in the definition of rate base, including
working capital where appropriate.
'Total regulated and other balances' for NGV and other businesses includes
assets and liabilities as measured under IFRS, but excludes certain assets
and liabilities such as pensions, tax, net debt and goodwill.
Regulated asset base continued
RAV, rate base or Total regulated
other business assets (for asset growth) and other balances
As at 31 March 2026 2025¹ 2026(2,3) 2025(1,2,3)
(£m at constant currency)
UK Electricity Transmission 23,847 20,525 23,786 20,186
UK Electricity Distribution 13,139 12,254 13,026 12,010
New England 10,289 9,198 12,059 11,060
New York 19,163 17,496 21,840 19,281
Total regulated 66,438 59,473 70,711 62,537
National Grid Ventures and other business balances 5,545 7,266 3,955 6,477
Total Group regulated and other balances 71,983 66,739 74,666 69,014
1. Figures relating to prior periods have, where appropriate, been
re-presented at constant currency, for segmental reorganisation, opening
balance adjustments following the completion of the UK regulatory reporting
pack process and finalisation of US balances.
2. Includes totex-related regulatory IOUs of £105 million (2025: £250
million) and under-recovered timing balances of £568 million (2025: £62
million over-recovered).
3. Includes assets for construction work-in-progress of £3,084 million
(2025: £2,468 million), other regulatory assets related to timing and other
cost deferrals of £1,230 million (2025: £1,087 million) and net working
capital assets of £134 million (2025: £93 million net working capital
assets).
New England and New York rate base and other total regulated and other
balances for 31 March 2025 have been re-presented in the table above
at constant currency. At actual currency the values were £11.3 billion and
£19.8 billion respectively.
Group return on equity (RoE)
Group RoE provides investors with a view of the performance of the Group as a
whole compared with the amounts invested by the Group in assets attributable
to equity shareholders. It reflects the regulated activities as well as the
contribution from our non-regulated businesses together with joint ventures
and non‑controlling interests. We use Group RoE to measure our performance
in generating value for our shareholders, and targets for Group
RoE are included in APP and LTPP incentive mechanisms for Executive
members. Group RoE is underpinned by our regulated asset base. Goodwill and
indefinite-lived intangible assets are amortised in the denominator over 20
years, to reflect the estimated period over which the value related to the
premium paid on acquisition would be realised. For the reasons noted above, no
reconciliation to IFRS has been presented, as we do not believe it would
be practical.
Calculation: Regulatory financial performance including a long-run inflation
assumption (2% CPIH for RIIO-2), less adjusted interest and adjusted taxation
divided by equity investment in assets:
- adjusted interest removes accretions above long-run inflation rates,
interest on pensions, capitalised interest in regulated operations and unwind
of discount rate on provisions;
- adjusted taxation adjusts the Group taxation charge (before exceptional
items and remeasurements) for differences between IFRS profit before tax and
regulated financial performance less adjusted interest; and
- equity investment in assets is calculated as opening UK RAV, opening US rate
base, goodwill and indefinite-lived intangibles (adjusted for 'asset swap'
transactions and the 'value realisation' of goodwill over 20 years), plus
opening net book value of NGV and other activities (excluding certain
pensions, tax and commodities balances) and our share of JVs and associates,
minus opening net debt as reported under IFRS restated to the weighted average
sterling-dollar exchange rate for the year.
Group RoE
Year ended 31 March 2026 2025
£m £m
Regulated financial performance 5,153 4,673
Operating profit of other activities - continuing 231 275
and discontinued operations
Group financial performance 5,384 4,948
Share of post-tax results of joint ventures and associates(1) 76 100
Non-controlling interests (2) (3)
Adjusted total Group interest charge (including discontinued) (1,633) (1,590)
Total Group tax charge (including discontinued) (955) (861)
Tax on adjustments (4) 8
Total Group financial performance after interest and tax 2,866 2,602
Opening rate base/RAV 59,071 55,326
Opening other balances 7,212 8,223
Opening RAV, rate base and other balances 66,283 63,549
Opening goodwill 11,145 11,430
Opening goodwill adjustment (realisation of value over 20 years) (4,599) (4,441)
Opening strategic pivot (asset swap) adjustment(2) (3,387) (3,450)
Opening capital employed 69,442 67,088
Opening net debt (40,343) (43,509)
Rights Issue adjustment (£6.8 billion net proceeds pro-rated from June 2024) - 5,471
Opening equity 29,099 29,050
Group RoE 9.8% 9.0%
1. 2026 includes £nil (2025: £25 million; 2024: £73 million) in respect
of the Group's minority interest in National Gas Transmission, which was fully
divested during 2024/25.
2. The regulatory gains on disposal of NECO and UK Gas Transmission
(proceeds received less RAV, rate base and other related balances used to
calculate the Group RoE denominator) deducted against IFRS goodwill and
indefinite-lived intangibles recognised on acquisition of NGED. For this
metric, the purchase of NGED and sales of NECO and UK Gas Transmission were
deemed to be linked transactions with the opening equity reflecting the impact
of these as asset swaps rather than as unrelated transactions.
UK and US regulated RoE
Year ended 31 March Regulatory Debt: Achieved Return Base or Allowed
Equity assumption on Equity Return on Equity
2026 2025 2026 2025
% % % %
UK Electricity Transmission 55/45 8.2 8.3 7.2 7.3
UK Electricity Distribution 60/40 8.1 7.9 7.6 7.7
New England Avg. 45/55 9.2 9.1 9.6 9.9
New York Avg. 52/48 9.0 8.7 9.4 9.2
UK businesses' regulated RoEs
UK regulated businesses' RoEs are a measure of how the businesses are
performing against the assumptions used by our UK regulator. These returns are
calculated using the assumption that the businesses are financed in line with
the regulatory adjudicated capital structure, at the cost of debt assumed by
the regulator, and that inflation is equal to a long-run assumption of 2% CPIH
under RIIO-2. They are calculated by dividing elements of
out/under-performance versus the regulatory contract (i.e. regulated financial
performance disclosed above) by the average equity RAV in line with the
regulatory assumed capital structure and adding to the base allowed RoE.
These are important measures of UK regulated businesses' performance, and our
operational strategy continues to focus on these metrics. These measures can
be used to determine how we are performing under the RIIO framework and also
help investors to compare our performance with similarly regulated
UK entities. Reflecting the importance of these metrics, they are also key
components of the APP scheme.
The respective businesses' UK RoEs are underpinned by their RAVs. For the
reasons noted above, no reconciliation to IFRS has been presented,
as we do not believe it would be practical.
US businesses' regulated RoEs
US regulated businesses' RoEs are a measure of how the businesses are
performing against the assumptions used by the US regulators.
This US operational return measure is calculated using the assumption that
the businesses are financed in line with the regulatory adjudicated
capital structure and allowed cost of debt. The returns are divided by the
average rate base (or where a reported rate base is not available, an
estimate based on rate base calculations used in previous rate filings)
multiplied by the adjudicated equity portion in the regulatory adjudicated
capital structure.
These are important measures of our New England and New York regulated
businesses' performance, and our operational strategy continues to focus
on these metrics. This measure can be used to determine how we are performing
and also helps investors compare our performance with similarly regulated US
entities. Reflecting the importance of these metrics, they are also key
components of the APP scheme.
The New England and New York businesses' returns are based on a calculation
which gives proportionately more weighting to those businesses which have a
greater rate base. For the reasons noted above, no reconciliations to IFRS for
the RoE measures have been presented, as we do not believe it would be
practical to reconcile our IFRS balance sheet to the equity base.
UK and US regulated RoE continued
The table below shows the principal differences between the IFRS result of the
New England and New York segments, and the 'returns' used to derive their
respective US jurisdictional RoEs. In outlining these differences, we also
include the aggregated business results under US GAAP for New England
and New York jurisdictions.
In respect of 2024/25, this measure is the aggregate operating profit of our
US OpCo entities' publicly available financial statements prepared under US
GAAP for the New England and New York jurisdictions respectively. For
2025/26, this measure represents our current estimate, since local financial
statements have yet to be prepared.
2026 2025
£m £m
Underlying IFRS operating profit for New England segment 866 924
Underlying IFRS operating profit for New York segment 1,709 1,450
Weighted average £/$ exchange rate $1.343 $1.266
New England New York
2026 2025 2026 2025
$m $m $m $m
Underlying IFRS operating profit for US segments 1,164 1,170 2,296 1,836
Adjustments to convert to US GAAP as applied in our US OpCo entities
Adjustment in respect of customer contributions (31) (30) (44) (51)
Pension accounting differences(1) 108 78 59 61
Environmental charges recorded under US GAAP 11 5 (140) (144)
Storm costs and recoveries recorded under US GAAP (98) (59) 57 (7)
Other regulatory deferrals, amortisation and other items (402) (314) (833) (518)
Results for US regulated OpCo entities, aggregated under US GAAP(2) 752 850 1,395 1,177
Adjustments to determine regulatory operating profit used in US RoE
Levelisation of rate increases - - 184 196
FERC RoE order(3) 157 - - -
Net other 116 96 157 178
Regulatory operating profit 1,025 946 1,736 1,551
Pensions(1) 95 70 308 169
Regulatory interest charge (241) (219) (588) (459)
Regulatory tax charge (240) (218) (404) (351)
Regulatory earnings used to determine US RoE 639 579 1,052 910
1. An element of the pensions charge is reported outside operating profit
under US GAAP.
2. Based on US GAAP accounting policies as applied by our US regulated OpCo
entities.
3. The US GAAP impact of the FERC rate order in March 2026 is not included
in New England's reported RoE for 2025/26 (as our US RoEs are a measure of our
current year performance against current year allowances) and the FERC rate
order relates to complaints filed against FERC allowed RoE rates dating back
to 2011 in relation to reductions in historical years' revenues. The impact of
lower rates did not have a significant impact as applied to current year
allowed revenues.
New England New York
2026 2025 2026 2025
$m $m $m $m
Average US equity base 6,988 6,352 11,637 10,512
US jurisdiction RoE 9.2% 9.1% 9.0% 8.7%
Detailed RoE and Regulated Financial Position - UK Electricity Transmission
RoE
2026 2025
Year ended 31 March % %
Base return (including avg. 2% long-run inflation)(1) 7.2 7.3
Totex incentive mechanism(2) 1.0 1.1
Other revenue incentives - (0.1)
Return on Equity 8.2 8.3
1. Assuming regulatory gearing at 55%.
2. Excludes impact of exceptional restructuring costs (post sharing)
For Regulated Financial Performance, please refer to page 70.
Regulated Financial Position up 17%
2026 2025
£m £m
Opening Regulated Asset Value (RAV)(1) 20,525 18,388
Asset additions (slow money) - actual 3,711 2,586
Performance RAV or assets created 76 65
Inflation adjustment (actual CPIH) 707 646
Depreciation and amortisation (1,172) (1,115)
Closing RAV 23,847 20,570
Opening balance of other regulated assets and (liabilities)(1) (339) (536)
Movement 278 256
Closing balance (61) (280)
Closing Regulated Financial Position 23,786 20,290
1. Opening RAV and other regulated balances are re-presented to reflect
opening balance adjustments following the completion of the UK regulatory
reporting pack process and also for the finalisation of calculated
over/(under)-recoveries and the regulatory time value of money impact where
appropriate.
Detailed RoE and Regulated Financial Position - UK Electricity Distribution
RoE
2026 2025
For the year ended 31 March % %
Base return (including avg. 2% long-run inflation) 7.6 7.7
Totex incentive mechanism 0.1 -
Other revenue incentives 0.4 0.2
Return on Equity 8.1 7.9
For Regulated Financial Performance, please refer to page 70.
Regulated Financial Position up 9%
2026 2025
£m £m
Opening Regulated Asset Value (RAV)(1) 12,254 11,497
Asset additions (slow money) - actual 1,287 1,137
Performance RAV or assets created 5 (1)
Inflation adjustment (actual CPIH) 415 398
Depreciation and amortisation (822) (796)
Closing RAV 13,139 12,235
Opening balance of other regulated assets and (liabilities)(1) (244) 136
Movement 131 (417)
Closing balance (113) (281)
Closing Regulated Financial Position 13,026 11,954
1. Opening RAV and other regulated balances are re-presented to reflect
opening balance adjustments following the completion of the UK regulatory
reporting pack process and also for the finalisation of calculated
over/(under)-recoveries and the regulatory time value of money impact where
appropriate.
Detailed RoE and Regulated Financial Position - New England
RoE
Return on Equity (%) Rate Base ($m) as at 31 March
Regulated Entity 2026 2025 2024 Allowed 2026 2025 % change
most recent
Massachusetts Gas 9.4 8.6 9.2 9.7 5,867 5,408 8
Massachusetts Electric 8.0 8.1 7.6 9.4 4,399 3,766 17
Total Massachusetts 8.8 8.4 8.6 9.5 10,266 9,174 12
New England Power 10.1 11.1 11.1 9.6 3,271 2,938 11
Canadian Interconnector & Other 11.1 11.1 11.1 11.1 76 58 31
Total FERC 10.1 11.1 11.1 9.6 3,347 2,996 12
Total New England 9.2 9.1 9.2 9.6 13,613 12,170 12
Regulated Financial Position
New England Regulated Assets 2026 2025 % change
As at 31 March $bn $bn
Rate Base excluding working capital 13.3 11.9 12
Working capital in Rate Base 0.3 0.3 3
Total Rate Base 13.6 12.2 12
Regulated assets outside Rate Base excluding working capital 2.5 2.5 1
Working capital outside Rate Base (0.2) (0.1) 236
Total regulated assets outside Rate Base 2.3 2.4 (5)
Total New England Regulated Assets 15.9 14.6 9
2026 2025 % change
As at 31 March £bn £bn
Total New England Regulated Assets at actual currency 12.0 11.3 6
Total New England Regulated Assets at constant currency 12.0 11.0 9
Detailed RoE and Regulated Financial Position - New York
RoE
Return on Equity (%) Rate Base ($m) as at 31 March
Regulated Entity 2026 2025 2024 Allowed 2026 2025 % change
most recent
KEDNY 9.6 10.5 9.0 9.4 8,025 7,212 11
KEDLI 10.5 10.6 9.7 9.4 4,760 4,439 7
NMPC Gas 7.5 4.6 6.0 9.5 2,569 2,266 13
NMPC Electric 8.3 7.2 8.1 9.5 10,000 9,232 8
Total New York 9.0 8.7 8.5 9.4 25,354 23,149 10
Regulated Financial Position
New York Regulated Assets 2026 2025 % change
As at 31 March $bn $bn
Rate Base excluding working capital 24.8 22.7 9
Working capital in Rate Base 0.5 0.4 32
Total Rate Base 25.4 23.1 10
Regulated assets outside Rate Base excluding working capital 3.2 2.2 45
Working capital outside Rate Base 0.4 0.2 76
Total regulated assets outside Rate Base 3.5 2.4 48
Total New York Regulated Assets 28.9 25.5 13
2026 2025 % change
As at 31 March £bn £bn
Total New York Regulated Assets at actual currency 21.8 19.7 11
Total New York Regulated Assets at constant currency 21.8 19.3 13
Asset growth and regulated asset growth
To help readers' assessment of the financial position of the Group, the table
below shows an aggregated position for the Group, as viewed from a regulatory
perspective. The asset growth and regulated asset growth measures included in
the table below are calculated in part from financial information used to
derive measures sent to and used by our regulators in the UK and US, and
accordingly inform certain of the Group's regulatory performance measures,
but are not derived from, and cannot be reconciled to, IFRS. These
alternative performance measures include regulatory assets and liabilities and
certain IFRS assets and liabilities of businesses that were classified as
held for sale under IFRS 5.
Asset growth is the annual percentage increase in our RAV and US rate base and
other non-regulated business balances (including our investments in NGV, UK
property and other assets and US other assets) calculated at constant
currency.
Regulated asset growth is the annual percentage increase in our RAV and US
rate base (calculated at constant currency), but does not include other
non-regulated business balances.
2025/26
£m constant currency 31 March 2026 Sale of Grain LNG and NG Renewables 31 March 2025 Increase Asset growth
UK RAV 36,986 - 32,779 4,207 12.8%
US rate base 29,452 - 26,694 2,758 10.3%
Total RAV and rate base (used to calculate regulated asset growth) 66,438 - 59,473 6,965 11.7%
National Grid Ventures and other 5,545 (2,032) 7,266 311 4.3%
Total assets (used to calculate asset growth) 71,983 (2,032) 66,739 7,276 10.9%
For 2025/26, asset growth was 10.9% and regulated asset growth was 11.7%,
which excludes the impact of the reduction in assets from the sales of NG
Renewables and Grain LNG during the year (2024/25: excluding the reduction in
RAV as a result of the sale of the UK Electricity System Operator business,
based on an estimated RAV value at the date of disposal).
2024/25
£m constant currency 31 March 2025 Sale of ESO 31 March 2024 Increase Asset growth
UK RAV 32,805 (469) 30,310 2,964 9.8%
US rate base 27,345 - 24,527 2,818 11.5%
Total RAV and rate base (used to calculate regulated asset growth) 60,150 (469) 54,837 5,782 10.5%
National Grid Ventures and other 7,352 - 7,509 (157) (2.1)%
Total assets (used to calculate asset growth) 67,502 (469) 62,346 5,625 9.0%
Figures relating to prior periods have, where appropriate, been re-presented
at constant currency, for opening balance adjustments following
the completion of the UK regulatory reporting pack process and finalisation
of US balances.
Regulatory gearing
Regulatory gearing is a measure of how much of our investment in RAV and rate
base and other elements of our invested capital (including our investments in
NGV, UK property and UK other assets and US other assets) is funded through
debt. Comparative amounts as at 31 March 2025 are presented at historical
exchange rates and have not been restated for opening balance adjustments.
As at 31 March 2026 2025
£m £m
UK RAV 36,986 32,805
US rate base 29,452 27,345
Other invested capital included in gearing calculation 5,545 7,352
Total assets included in gearing calculation 71,983 67,502
Net debt (including 100% of hybrid debt and held for sale) (44,160) (41,316) change
Group gearing (based on 100% of net debt including held for sale) 61% 61% -% pts
Group gearing (excluding 50% of hybrid debt from net debt) including held for 61% 60% 1% pts
sale
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