REG - National Grid PLC - FY2025 Full Year Results Statement
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RNS Number : 7312I National Grid PLC 15 May 2025
London | 15 May 2025: National Grid plc today announces its Full Year results
for the period ended 31 March 2025.
Building our energy future
John Pettigrew, Chief Executive, said: "We've made significant progress in the
first year of our five-year financial framework, with record capital
investment of almost £10 billion, 20% higher than 2024, helping to drive
regulated asset growth of around 10% this year. Strong performance across all
areas of the business underpins our plans to successfully invest c.£60
billion over five years. At a time of international economic uncertainty,
National Grid continues to provide stable and predictable growth through our
resilient business model. We remain focused on delivering secure, affordable
and clean energy to our customers and communities, and providing long-term
value and returns for our shareholders."
Financial summary
Year ended 31 March Statutory results Underlying(1) Underlying at constant currency(1,2)
(continuing operations)
2025 2024 % change 2025 2024 % change 2024 % change
Operating profit (£m) 4,934 4,475 10% 5,357 4,773 12% 4,768 12%
Profit before tax (£m) 3,650 3,048 20% 4,071 3,395 20% 3,392 20%
Earnings per share (p)(3) 60.0 55.5 8% 73.3 72.1 2% 72.1 2%
Dividend per share (p) 46.72 58.52 (20%)
Dividend per share (rebased) (p) 46.72 45.26 3%
Capital investment (£m) 9,847 8,235 20%
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 73
(#Page73) to 89 (#Page89) . 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
$1.266 (2024: actual average exchange rate was $1.262).
3. 4,707 million weighted average shares for 2024/25 (2023/24: 3,991
million). Comparative amounts for weighted average shares and earnings per
share restated for bonus element of the Rights Issue (in accordance with IAS
33).
An exciting year of delivery and growth
Financial performance
■ Underlying EPS of 73.3p up 2% and slightly ahead of guidance.
Increase in shares following the Rights Issue more than offset by improved
performance in our regulated businesses, particularly in New York. Statutory
EPS of 60.0p up 8%.
■ Recommended final dividend of 30.88p, resulting in a total dividend
of 46.72p up 3.2% compared to rebased dividend per share (see page 89
(#Page89) ), in line with policy aim to increase with UK CPIH inflation.
Key projects
■ All six Wave 1 ASTI* projects under construction.
■ Connected 2.2 GW of renewable generation in the UK, including 1.2 GW
of offshore wind from the Dogger Bank wind farm.
■ Smart Path Connect major transmission project to increase network
capacity in upstate New York on track to energise by December 2025.
■ Replaced a further 352 miles of leak-prone pipe across our gas
networks in the US in 2024.
Strategic initiatives
■ Secured the supply chain for all 12 onshore and Eastern Green Links 1
& 2 offshore ASTI projects.
■ Established a group-wide HVDC* framework to cover remaining offshore
ASTI projects and beyond, and the Great Grid Partnership for onshore ASTI
project delivery.
■ Supply chain and delivery mechanisms secured for more than two thirds
of £60 billion investment plan.
■ National Gas Transmission and ESO divestments completed; agreed sale
of National Grid Renewables.
Regulatory updates
■ Agreed new rate cases for KEDNY and KEDLI*, MECO* and joint proposal
for NIMO*.
■ Around 70% of the US investment in our five-year frame agreed with
our regulators.
■ ESMP* approved in Massachusetts as a strategic roadmap to support a
stronger, smarter and cleaner network.
■ Submitted £35 billion RIIO-T3 business plan; to reinforce and expand
the grid, enabling a near doubling of the power that can be transferred around
the country, and connection of 35 GW of generation and 19 GVA of demand
customers.
*See glossary on page 4 (#Section19) 3 (#Section19) .
Financial outlook and guidance
■ Guidance is based on our continuing businesses, as defined by IFRS.
■ Financial outlook over the five-year period from 2024/25 to 2028/29:
■ total cumulative capital investment of around £60 billion;
■ asset growth CAGR(1) of around 10% backed by strong balance sheet;
■ driving underlying EPS CAGR(2) of 6-8% from a 2024/25 EPS baseline of
73.3p;
■ credit metrics consistent with current Group rating; and
■ regulatory gearing is currently 61%, trending back to the high 60%
range by the end of RIIO-T3.
■ For 2025/26, we expect strong operational performance across the Group
with underlying EPS expected to be in line with the 6-8% CAGR range from the
2024/25 baseline.
■ For further detail, please refer to the five-year financial framework
and 2025/26 forward guidance on pages 9 (#Page9) to 1 (#Page11) 1 (#Page11)
.
1. Group asset compound annual growth rate from a FY24 baseline. Forward
years based on assumed USD FX rate of 1.25; and long run UK CPIH and US CPI.
Assumes sale of ESO, Grain LNG, and National Grid Renewables. 20% stake in
National Gas Transmission classified as a discontinued operation and therefore
did not contribute to asset growth.
2. Underlying EPS compound annual growth rate from FY25 baseline. Forward
years based on assumed USD FX rate of 1.25; long run UK CPIH, US CPI and
interest rate assumptions and scrip uptake of 25%. Assumes sale of Grain LNG
and National Grid Renewables. 20% stake in National Gas Transmission
classified as a discontinued operation and therefore did not contribute to
underlying EPS.
Chief Executive Officer succession
On 1 May 2025, we announced that Zoë Yujnovich would become our next Chief
Executive Officer with effect from 17 November 2025, succeeding John
Pettigrew, who after almost ten years in role, will retire from National Grid
on 16 November 2025.
Contacts
Investor Relations Angela Broad +44 (0) 7825 351 918
Tom Edwards +44 (0) 7976 962 791
Cerys Reece +44 (0) 7860 382 264
Media Miranda Cochrane +44 (0) 7745 122 714
Ben Trounson +1 781 426 5737
Brunswick Dan Roberts +44 (0) 7980 959 590
Results presentation and webcast
John Pettigrew (CEO) and Andy Agg (CFO) will host the results presentation at
9:00 am (BST) today with a live Q&A. 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 2024/25 (ARA) is expected to be publicly
available on 29 May 2025. When published, the ARA will be available on
National Grid's website at 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 73 (#Page73) to 89
(#Page89) .
Financial performance
Year ended 31 March 2025 2024 change %
(£ million)
Underlying operating profit (continuing) at constant currency(1)
UK Electricity Transmission 1,428 1,314 9%
UK Electricity Distribution 1,203 1,152 4%
UK Electricity System Operator 115 80 44%
New England 924 800 16%
New York 1,450 1,013 43%
National Grid Ventures 380 469 (19%)
Other (143) (60) (138%)
Group 5,357 4,768 12%
Capital investment (continuing) at constant currency(1)
UK Electricity Transmission 2,999 1,912 57%
UK Electricity Distribution 1,426 1,247 14%
UK Electricity System Operator - 85 (100%)
New England 1,751 1,668 5%
New York 3,289 2,645 24%
National Grid Ventures 378 661 (43%)
Other 4 2 100%
Group 9,847 8,220 20%
RCF/Net debt 9.8 9.2 60bps
As at 31 March
Net debt (41,371) (43,607) (5%)
UK RAV 32,805 30,310 8%
US rate base (£m at constant currency)(2) 27,345 24,527 11%
Total Group RAV and rate base (£m) 60,150 54,837 10%
NGV and Other businesses (£m) 7,352 7,509 (2%)
Total (£m) 67,502 62,346 8%
Asset growth(3) 9.0% 9.7% -70bps
Regulated asset growth(3) 10.5% 9.1% 140bps
Group return on equity(4) 9.0% 10.5% -150bps
1. Constant currency calculated using 2024/25 average exchange rate of
$1.266 (2024: actual average rate was $1.262). See pages 77 (#Page77) and 80
(#Page80) for details.
2. US rate base constant currency calculated using 31 March 2025 closing
rate of $1.2916 (2024: actual closing rate was $1.262). See pages 33 (#Page33)
to 36 (#Page36) for details.
3. Calculated excluding the reduction in RAV as a result of the sale of the
UK Electricity System Operator business during 2024/25. See page 88 (#Page88)
for details.
4. Our calculation methodology for Group RoE changed in 2024/25. Comparative
amounts have been restated accordingly. See page 86 (#Page88) for details.
Responsible Business performance
Externally assured(1) 2025 2024 change
Scope 1 and 2 greenhouse gas emissions (ktonnes CO(2)e) 7,422 6,852 8%
Scope 3 greenhouse gas emissions (ktonnes CO(2)e) 28,435 27,384 4%
Renewable energy connected to the UK Transmission and Distribution Grids 2,244 2,444 (8%)
(MW)
Renewable energy connected to the US Transmission and Distribution Grids 772 586 32%
(MW)
Group Lost Time Injury Frequency Rate (LTIFR) 0.10 0.08 0.02
1. We engaged Deloitte LLP in the current year and PricewaterhouseCoopers
LLP (PwC) in the prior year 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. Details of Deloitte's full limited assurance opinion and National
Grid's Reporting Methodology are available on our website.
Strategic overview
Safety and operational performance: Retained focus on reliability and
resilience
In 2024/25, National Grid delivered strong operational performance with high
levels of network reliability across all our electricity networks with
reliability above 99.84%, and reliability of 99.99983% in UK Electricity
Transmission. Our interconnector fleet availability was 86%. These strong
levels of reliability were achieved despite 8 named storms across our networks
in the UK, 25 major storm events in New York, and 5 reportable storms across
our New England territories, demonstrating the benefits of our continued
investment in network reinforcement and the steadfast commitment of our
operational teams.
During Storm Darragh in the UK, we resolved 9,000 incidents and restored
700,000 customers, with 95% of customers reconnected within 48 hours. In New
England, we expanded our Fault Location, Isolation and Service Restoration
(FLISR) technology to around 25% of our customers. Through this technology
deployment, we have restored power to 77,000 customers within one minute this
year, avoiding longer outages.
On 8 May 2025 the NESO issued its interim review report investigating the
outage following the fire at our North Hyde electrical substation in March
2025. We welcome the report which establishes the timeline and sequence
of events, and outlines further steps required ahead of the NESO delivering
their final report, expected in June 2025.
During the year, we achieved a Lost Time Injury Frequency Rate (LTIFR) 1
(#_ftn1) of 0.10, compared to 0.08 in 2023/24 and against our Group target of
0.10, primarily driven by an increase in incidents such as trips, falls and
manual handling injuries. Our recent implementation of an enhanced safety
reporting system is driving continuous improvements and data insights,
recognition of positive safety behaviours, and ongoing learning and
development.
We continue to invest in our people to attract, develop and retain a qualified
and competent workforce, delivering robust training programmes built around a
culture of safety. Our commitment to achieving safety excellence extends to
our contractors where we deploy standards and protocols for them to follow
when working for National Grid.
Financial performance: A strong start to our five-year financial framework
For detailed financial performance commentary, please refer to the Financial
Review section on page 12 (#Page12) . Our statutory operating profit is
presented on page 12 (#Page12) which includes the impact of exceptional
items, remeasurements, major storms, timing and the impact of deferred tax in
our UK regulated businesses. A reconciliation between Statutory performance
and our Alternative Performance Measures (APMs) is presented on page 76
(#Page76) .
The Group's financial performance in 2024/25 continued to demonstrate the
resilience of our business model which enables us to effectively manage the
impacts of inflation and cost pressures, changes in interest rates and
exchange rate fluctuations.
Underlying operating profit for continuing operations increased by
£589 million at constant currency to £5,357 million, an increase of 12% on
the prior year. This improvement was principally driven by strong performance
across our regulated businesses including new rates for our downstate gas
businesses in New York, new rates for our Massachusetts Electric business,
higher revenues supported by increased allowances and indexation in the UK and
delivery of strong cost efficiency. This was partly offset by lower revenues
from our interconnectors.
Underlying EPS of 73.3p increased by 1.2p per share, or 2% compared to the
previous year, with the underlying operating profit increase more than
offsetting the increased number of shares after the Rights Issue.
Capital investment for continuing operations increased by £1,627 million at
constant currency to a record £9,847 million, an increase of 20% on the
prior year. This increase was principally driven by the ramp up in spend on
Wave 1 Accelerated Strategic Transmission Investment (ASTI) projects and
customer connections in our UK Electricity Transmission business, increased
spend on leak-prone pipe replacement and electricity transmission projects in
New York; partially offset by lower investment in National Grid Ventures (NGV)
with the commissioning of the Viking interconnector in the prior year, and
National Grid Renewables and Grain LNG being classified as held for sale (see
note 9).
During the year, our Community Offshore Wind joint venture paused development
activity in line with the broader slowdown of the US offshore wind industry.
Whilst there are longer term trends that give us confidence in the need for
offshore wind generation in the north east, significant nearer term policy
uncertainty has led us to recognise an accounting impairment of £303 million
as an exceptional charge.
Capital investment and RAV indexation helped drive regulated asset growth of
10.5%, but lower investment and asset write-downs in our non-regulated
businesses resulted in an overall asset growth of 9.0%.
Net debt was £41.4 billion at 31 March 2025, more than £2.2 billion lower
than the prior year. This reduction reflected the £6.8 billion net proceeds
from the Rights Issue, and £1.3 billion from divestments of the UK
Electricity System Operator (ESO) and our remaining 20% interest in National
Gas Transmission, partially offset by the increased capital investment in the
year.
Return on Equity (RoE)
We achieved a Group RoE of 9.0% 2 (#_ftn2) in 2024/25, down on the prior year
by 150 basis points (bps). This decrease was principally due to an increase
in the equity denominator as a result of lower gearing following the Rights
Issue proceeds.
In 2024/25, UK Electricity Transmission achieved operational returns
of 8.3%, delivering 100bps of outperformance under RIIO-T2, mainly
from totex performance related to savings on capital delivery (2024: 8.0%
achieved return, or 100bps above the allowed base return). UK Electricity
Distribution achieved an operational return of 7.9% in 2024/25, including
20bps outperformance, mostly consisting of non‑totex performance incentives.
Outperformance was impacted by the costs associated with Storm Darragh and
the adverse impact of the RIIO‑ED2 Real Price Effect (RPE) mechanism, where
lower than anticipated allowances due to reductions in commodity indices have
not tracked actual costs incurred (2024: 8.5% achieved return, or 110bps
above the allowed base return).
New England's achieved return of 9.1% was 92% of the allowed return in 2024/25
compared with an achieved return of 9.2% in 2023/24. New York's achieved
return of 8.7% was 94% of the allowed return in 2024/25 compared with
an achieved return of 8.5% in 2023/24. 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 the Business Review section on pages 23 (#Page23) to 37 (#Page37) .
Key projects and investments: A further step up in growth
Our financial performance reflects the first year of delivery against our five
year financial framework. Capital investment reached a record £9,847 million
in 2024/25, reflecting progress on our ASTI projects in the UK, and progress
with a number of major transmission projects to unlock renewable generation
and upgrade infrastructure across our jurisdictions in the US, alongside
increased investment in our KEDNY and KEDLI gas businesses under new rate
agreements.
The progress we have made during the course of the year in both the UK and the
US with partners, across supply chains, and on policy measures, gives us
increased confidence around the scale and profile of our investment programme
through the rest of this decade, and the regulatory frameworks that will sit
around this investment. For further information, please refer to the five-year
financial framework section on page 9 (#Section5) .
■ In our UK Electricity Transmission business, all six of our wave 1 ASTI
projects are now under construction, including our Eastern Green Link (EGL) 1
and EGL2 offshore projects.
■ We connected a further 1.6 GW of renewable energy to our UK Electricity
Transmission network in 2024/25, and across our UK Electricity Distribution
network we connected 0.6 GW of renewable generation, over 100,000 low carbon
connections, and 208 large demand projects over 1 MW.
■ In UK Electricity Distribution, we have seen a step up in asset health
and network reinforcement in line with our RIIO-ED2 plans.
■ In the US we have continued to make good progress with our leak-prone
pipe replacement programme, with 218 miles of pipeline replaced in New York,
and 134 miles replaced in Massachusetts in 2024.
■ In New York, we continued to make strong progress on our Upstate
Upgrade Electricity Transmission programme across key projects, including
Smart Path Connect, which is on track to energise by December 2025.
Strategic initiatives
Following our decision last year to focus on networks, we have made good
progress with portfolio activities.
We have:
■ completed our £7 billion Rights Issue, a part of our comprehensive
financing plan;
■ completed the divestment of ESO to the UK Government for proceeds of
£673 million;
■ completed the divestment of the final 20% equity interest in National
Gas Transmission to a consortium of long-term infrastructure investors led by
Macquarie Asset Management for proceeds of £686 million;
■ agreed the sale of our National Grid Renewables onshore business in the
US to Brookfield Asset Management and its institutional partners;
■ launched the divestment process on Grain LNG in April 2025 and expect
to announce a transaction later this year; and
■ in UK Electricity Distribution, we have continued to make progress with
£88 million of synergies achieved since the acquisition, with synergies
through procurement strategy, reviewing how we run and operate shared sites,
operational delivery, and aligning with wider Group functions.
We have made significant progress on ensuring supply chain availability for
our investment programmes, prioritising those areas with tightest market
capacity, longest lead times and highest supply chain risks:
■ We have agreed a Great Grid Partnership supply chain framework with
seven partners. This £9 billion framework covers the design and construction
of the onshore ASTI projects as well as projects that deliver beyond 2030.
■ We have agreed a HVDC framework to secure supply for HVDC cables and
converter systems. This framework covers up to £21 billion of HVDC cable
supply across six suppliers, and up to £26 billion of converter systems
supply over four suppliers. This supply is sufficient to cover cable and
converter systems requirements for our ASTI wave 2 projects and beyond.
■ Since signing the HVDC framework, we have moved to the preferred bidder
stage for our Sea Link project selecting Siemens Energy as the supplier of
converter stations for this project.
■ In New York, we have awarded the first phase of our CLCPA projects and
the engineering for the second phase. Procurement for the construction
elements of phase 2 is in its final stages with awards expected in the coming
months.
■ In Massachusetts, our Electric Sector Modernization Plan (ESMP) was
approved in August as a 'strategic roadmap' outlining critical investments of
up to $2 billion over five years in the local electric distribution system to
meet Massachusetts' climate goals.
Regulatory, policy and market environment
During the year we have made good progress with our rate cases for our New
York businesses and Massachusetts Electric. These rate plans balance necessary
improvements for asset health, resilience, growth and clean energy, with
affordability and low-income customer programmes.
■ In New England, in October 2024 we received a rate case order for our
Massachusetts Electric business (MECO) with rates set for a five-year period,
including an allowed RoE of 9.35%, a new mechanism that enables timely
recovery of growing capital investment needs up to a cap, and an increase in
storm cost recovery of around $60 million per annum.
■ In New York, in August 2024, the New York Public Service Commission
(PSC) adopted the terms of the Joint Proposal for KEDNY and KEDLI for a
three-year rate plan with 9.35% allowed RoE and around $5 billion capital
allowances to modernise infrastructure.
■ Also in New York in April 2025, we filed a joint proposal with the New
York PSC for a three-year rate plan for our upstate New York electric and gas
distribution business Niagara Mohawk Power Corporation (NIMO). This includes
funding for around $1.8 billion of capital investment in the first year, and a
9.5% allowed RoE.
■ From a regulatory perspective, in Massachusetts in November, Governor
Healey approved legislation to reform the permitting process for utility
infrastructure and clean energy projects. This new approach sets maximum
timeframes for approvals, supporting the delivery of capital projects in the
State.
■ In April 2025, we submitted our Climate Compliance Plan setting out the
strategic roadmap required in our Massachusetts gas network to advance state
decarbonisation goals, whilst maintaining safe, reliable and cost-effective
service for our customers. The filing details our efforts to reduce greenhouse
gas emissions from our existing gas distribution network.
In our UK Electricity Transmission business we have submitted our business
plan for the RIIO-T3 price control period, which will run for five years from
April 2026. The plan includes up to £35 billion of totex over the five years
to March 2031, and, amongst other outcomes, will nearly double the power that
can flow across the country, avoid £12 billion of constraint costs, directly
connect 35 GW of generation and 19 GVA of demand to our network and create
optionality for a further 26 GW, all while delivering 99.9999% reliability.
In the UK more broadly, we welcome the policy progress we have seen across a
number of critical areas:
■ The UK Government published its Clean Power Action Plan in December
2024, following the National Energy System Operator's advice in October to
achieve clean power by 2030. The report reaffirmed the need for our 17 ASTI
electricity transmission projects in order to address current system
constraints and enable the connection of Offshore Wind projects, however
planning and connections reform is required to deliver this plan and we have
seen some progress in these areas.
■ In March 2025, the UK Government published the Planning and
Infrastructure Bill with proposals that could both reduce the risk of delays
and potentially accelerate energy infrastructure projects, as well as improve
the acceptability of projects for the local communities they impact (alongside
the separately published guidance on wider community benefits). Whilst we
expect the proposals' impact within our five-year frame to be limited, there
are some important measures in the bill that have the potential to further
de-risk projects.
■ In April 2025, we saw Ofgem's decision on connections for a new process
that reforms the existing queue to prioritise those projects that are most
ready and needed to meet the country's clean power targets. This will deliver
a rationalised queue of projects aligned to the clean power plan.
■ In April 2025, we welcomed Ofgem's decision on the framework for the
RIIO-ED3 price control, which will run for five years from April 2028. Ofgem
has been clear on the critical role electricity distribution networks, like
our UK Electricity Distribution business, will play in achieving regional
growth, resilient networks, and a clean power system. We agree with Ofgem that
there is need for a longer-term, proactive approach to network planning whilst
balancing resilience and capacity with affordability. We will continue to work
closely with Ofgem and engage meaningfully with our customers and stakeholders
as we develop our ED3 plan.
■ There has also been development in policies governing Offshore Hybrid
Assets (OHA) with Ofgem approving the establishment of the regulatory regime
for OHA Pilot Scheme projects in April 2025.
Delivering as a Responsible Business
In May 2024, we published our updated Climate Transition Plan (CTP). The plan
sets out our actions to deliver our Group greenhouse gas reduction targets by
2050, including how we will meet them and where we need support from others.
We put the plan to an advisory vote at our AGM in July 2024, where it received
99% support from voting shareholders.
In 2024/25, our Scope 1 and 2 emissions increased by 8.3%, or a 4.4% reduction
against the 2018/19 baseline, largely due to circumstances outside of National
Grid's control as our Long Island generation facilities in the US fulfilled
contractual obligations with LIPA, and a temporary surge in demand resulting
from an unplanned maintenance outage at a third-party power plant. Our total
Scope 3 GHG emissions increased by 3.8% year-on-year. Against our SBTi
approved target (which excludes sold electricity) our Scope 3 GHG emissions
have increased by 5.8% since 2018/19. This was principally driven by emissions
linked to higher annual spend in relation to purchased goods and services
(including capital investment) within our supply chain for the construction of
new energy infrastructure. We did not expect a linear trajectory, as explained
in our CTP, and this performance demonstrates the technical dependencies as
well as policy and regulatory frameworks required to support our emission
reduction plans and targets.
As we delivered another record year of capital investment, we also reached a
higher proportion of green capital investment at 81% of Group capital
expenditure 3 (#_ftn3) , with £7.7 billion aligned with EU Taxonomy
principles for sustainable investment in 2024/25. This is an increase from
£6.0 billion or 78% of Group capital expenditure in 2023/24. The increase is
due to investments in key infrastructure projects supporting the energy
transition, including a 35% increase in electricity network investments and a
16% increase in leak-prone pipe replacements across our gas networks.
In the face of affordability challenges, we continue to support our customers
through payment assistance programmes, flexible payment plans and energy
efficiency solutions. In February 2025, we announced a new Grid for Good
Energy Affordability Fund. This £13.8 million programme will support UK and
US households that are struggling with energy costs over a three-year period.
The continued strong performance of our interconnector portfolio enabled the
return of a further £89 million to UK consumers this year, part of a total of
£277 million returned to reduce customer bills in the last two years, with a
further £149 million to be returned over the next two years resulting in a
total benefit to customers of £426 million.
Five-year financial framework
Our five-year financial framework is based on our continuing businesses, as
defined by IFRS, which included the ESO until its disposal in October 2024 and
includes Grain LNG and National Grid Renewables until their planned disposals.
It excludes the minority stake in National Gas Transmission, which was
classified as a discontinued operation until its disposal in September 2024.
The five-year financial framework assumes an exchange rate of £1:$1.25.
Capital investment and asset growth
We expect to invest around £60 billion across our energy networks and
adjacent businesses, in the UK and US, over the five-year period to 2028/29,
with Group assets trending towards £100 billion by March 2029. Of the £60
billion investment over the five years to March 2029, around £51 billion is
considered to be aligned with the principles of the EU Taxonomy legislation as
at the date of reporting.
In the UK, we expect around £23 billion of investment in Electricity
Transmission for asset health and anticipatory system reinforcement to
facilitate offshore generation and other new onshore system connections. This
also 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 £8 billion over the five years to
2028/29 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 £11 billion in New England, over the five years to 2028/29. We
expect to invest nearly 60% in this plan period 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 over
the five years to 2028/29, 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 2028/29.
Group gearing
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 the end of the RIIO-T3 price control
period, with current thresholds of 10% for S&P's FFO/adjusted net debt,
and 7% for Moody's RCF/adjusted net debt. Following completion of the Rights
Issue, regulatory gearing has reduced to 61% at March 2025, but is expected to
trend back towards the high 60% range by the end of RIIO-T3.
Group earnings growth and dividend growth
We expect our CAGR in underlying EPS to be in the 6-8% range from the 2024/25
baseline of 73.3p. 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 DPS
in line with UK CPIH in keeping with the current dividend policy (for details
of our dividend policy please refer to page 2 (#Page20) 0 (#Page20) ).
2025/26 forward guidance
This forward guidance is based on our continuing businesses, as defined by
IFRS. It includes Grain LNG and the controlling stake of National Grid
Renewables which are held for sale within continuing operations before they
are assumed to be sold in the 2025/26 financial year.
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 in the US (when greater
than $100 million), timing and the impact on underlying results of deferred
tax in our UK regulated businesses. The 2024/25 forward guidance assumes an
exchange rate of £1:$1.30, reflecting nearer term exchange rates.
UK Electricity Transmission
Underlying net revenue is expected to increase by over £250 million compared
to 2024/25 primarily driven by higher allowances as a result of growing RAV,
including returns on increasing ASTI investment and indexation. Depreciation
is expected to be around £20 million higher in the year due to the increasing
asset base.
We expect to deliver around 100bps of outperformance in the final year of
RIIO-T2 in Operational Return on Equity. This is in line with our target to
deliver 100 basis points of operational outperformance on average through the
five-year period of the RIIO-T2 price control.
UK Electricity Distribution
Underlying net revenue is expected to be broadly in line with 2024/25 with
higher allowances as a result of a growing RAV including indexation, offset by
lower tax allowances from increased investment that attracts greater capital
allowances. Increased depreciation, reflecting the increasing asset base is
expected to be offset by the non-recurrence of Storm Darragh costs.
We expect to deliver around 50 basis points of outperformance in the third
year of RIIO-ED2 in operational Return on Equity. Increasing from 2024/25,
primarily as a result of the one-off impact of Storm Darragh costs in 2024/25,
alongside the impact of Real Price Effects. We expect outperformance to
improve towards 100bps over the remainder of RIIO-ED2.
New England
Underlying net revenue is expected to be around $400 million higher, driven
primarily by rate increases and higher tracker revenue. This is expected to be
offset by just over $50 million higher depreciation as a result of the
increasing asset base and around $250 million of other cost increases linked
to investments.
Return on Equity for New England is expected to be similar to 2024/25.
New York
Underlying net revenue is expected to be around $950 million higher, including
expected increases from the NIMO rate settlement and rate increases from the
KEDNY and KEDLI rate cases. Depreciation is expected to be just over $150
million higher, reflecting the increasing asset base and other costs are
expected to be around $250 million higher, linked to investments. We also
expect no repeat of the $50 million environmental accounting benefit in
2024/25.
Return on Equity for New York is expected to slightly improve compared to
2024/25.
National Grid Ventures and Other activities
In NGV, we expect operating profit to be nearly £50 million lower than
2024/25 driven by expected lower interconnector revenues.
We also expect other activities underlying operating loss to be broadly flat
year-on-year.
Joint Ventures and Associates
Our share of the profit after tax of joint ventures and associates is expected
to be around £20 million lower than 2024/25 as a result of lower profits from
our Emerald joint venture (part of the National Grid Renewables disposal
group) which has not contributed to IFRS continuing profit since its
classification as held for sale in September 2024.
Interest and Tax
Net finance costs in 2025/26 are expected to be around £40 million higher
than 2024/25 as a result of higher debt issuance to fund investment growth.
For the full year 2025/26, the underlying effective tax rate, excluding the
share of post-tax profits from joint ventures and associates, is expected to
be around 15%. This is calculated following our definition of underlying
earnings which excludes the impact of deferred tax on underlying results of
our UK regulated businesses.
Investment, Growth and Net Debt
Overall Group capital investment for continuing operations in 2025/26 is
expected to be over £11 billion.
Asset Growth is expected to be around 11%, normalised in year for business
disposals, reflecting an increase in investment, predominantly ASTI projects
and New York investment.
Depreciation is expected to increase, reflecting the impact of continued high
levels of capital investment.
Operating cash flow generated from continuing operations (excluding
acquisitions, disposals and transaction costs) is expected to increase by
around 20% compared to 2024/25 driven by increased underlying performance and
lower timing under-recoveries, including non-recurrence of the 2024/25
significant ESO return of prior year over-recoveries.
Net debt is expected to increase by just over £6 billion (from £41.4 billion
as at 31 March 2025), driven by our continued levels of significant investment
in critical energy infrastructure, partially offset by operating cash inflows,
with regulatory gearing expected to be in the low-mid 60% range. The forecast
excludes the expected sale proceeds from the National Grid Renewables and
Grain LNG disposals.
Weighted average number of shares (WAV) is expected to be approximately 4,925
million in 2025/26.
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 7 (#Page73) 3
(#Page73) to 89 (#Page89) . 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 of deferred
tax on our UK regulated businesses' underlying results (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) 2024/25 2023/24 change %
Accounting profit
Gross revenue 18,378 19,850 (7%)
Other operating income - 12 (100%)
Operating costs (13,444) (15,387) 13%
Statutory operating profit 4,934 4,475 10%
Net finance costs (1,357) (1,464) 7%
Share of joint ventures and associates 73 37 97%
Tax (821) (831) 1%
Non-controlling interest (3) (1) (200%)
Statutory IFRS earnings (note 7) 2,826 2,216 28%
Exceptional items and remeasurements (171) 1,036 n/m
Tax on exceptional items and remeasurements (40) (152) 74%
Adjusted earnings 2,615 3,100 (16%)
Timing and major storm costs(1) 592 (689) n/m
Tax on timing and major storm costs(1) (156) 166 n/m
Deferred tax on underlying profits in NGET and NGED(1) 401 302 33%
Underlying earnings(1) 3,452 2,879 20%
Statutory EPS - (pence) (note 7)(2) 60.0p 55.5p 8%
Adjusted EPS - (pence) (note 7)(2) 55.6p 77.7p (28%)
Underlying EPS(1,2) 73.3p 72.1p 2%
Dividend per share 'rebased'(1,3) 46.72p 45.26p 3%
Dividend cover - underlying(1) 1.6x 1.2x 27%
Capital investment and asset growth
Capital investment 9,847 8,235 20%
Regulated asset growth(1) 10.5% 9.1% 140bps
Asset growth(1) 9.0% 9.7% -70bps
Balance sheet strength
RCF/adjusted net debt (Moody's)(1) 9.8% 9.2% 60bps
Net debt (note 29 to the financial statements) 41,371 43,607 (5%)
Add: held for sale net debt (55) (23) n/m
Net debt (including held for sale)(1) 41,316 43,584 (5%)
Group regulatory gearing(1) 61% 69% -800bps
1. Non-GAAP alternative performance measures (APMs) and/or regulatory
performance measures (RPMs). For further details see pages 73 (#Page73) to 89
(#Page89) .
2. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
3. Dividend per share (rebased) calculated by dividing the total dividend
paid by to the total number of shares in issue following the Rights Issue. The
actual dividend per share paid to shareholders in respect of 2023/24 profits
was 58.52 pence per share (interim 19.40p and final 39.12p).
Statutory IFRS earnings were £2,826 million in 2024/25, £610 million (28%)
higher than the prior year. Statutory earnings benefited from pre-tax net
exceptional credits of £42 million and pre-tax remeasurement gains of
£129 million (2024: pre-tax net exceptional charges of £1,011 million and
pre-tax remeasurement losses of £25 million). For details on exceptional
items refer to note 4. Timing swings were £1,420 million adverse
year-on-year, with a £505 million net under-recovery in 2024/25 (2024: £915
million net over-recovery), partly offset by £139 million lower major storms.
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 60.0p was 4.5p higher than the prior year.
Our 'adjusted' results exclude the impacts from exceptional items
and remeasurements as explained on page 75 (#Page75) . In 2024/25, adjusted
earnings from continuing operations were £2,615 million, down £485 million
(16%) from the prior year. Adjusted earnings in 2024/25 included a timing net
under-recovery after tax of £372 million (2024: £688 million net
over-recovery) and major storm costs (after tax) which are excluded from
underlying results, of £64 million (2024: £165 million). As a result,
adjusted operating profit of £4,765 million was down £697 million (2024:
£5,462 million). Adjusted net finance costs of £1,361 million were £118
million lower, benefiting from the Rights Issue proceeds received in June
2024. Share of profits from joint ventures and associates of £75 million
were down £26 million due to higher interconnector profits in the prior
year. Adjusted tax of £861 million was £122 million lower, driven by lower
profits, including in our UK Electricity System Operator business.
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 76 (#Page76) .
Underlying operating profit was up 12% driven by improved performance in: New
York (KEDNY and KEDLI and NIMO rate increases and lower environmental costs),
New England (higher rates and capital tracker revenues) along with higher
allowed revenues in UK Electricity Transmission and UK Electricity
Distribution. National Grid Ventures was down from 2023/24, driven by lower
revenues on our legacy interconnector fleet, partly offset by a full year of
our new Viking interconnector. Other activities were lower principally as
a result of fair value movements in NG Partners. Our joint ventures
and associates' contribution reduced primarily due to lower auction revenues
in BritNed compared with 2023/24. Regulated controllable costs were only 1%
higher, with inflation and workload increases being mostly offset by
efficiency savings. Depreciation and amortisation were higher than the prior
year due to our growing asset base. Net financing costs were lower, benefiting
from the Rights Issue proceeds in June 2024. Other interest was favourable
year on year driven by higher capitalised interest. Underlying profit after
tax increased by 20% and resulted in a 2% increase in underlying EPS to
73.3p.
Capital investment of £9,847 million was £1,612 million (20%) higher than
2023/24, driven by increased ASTI and customer connections investment in UK
Electricity Transmission, increased capital expenditure in New York,
New England and UK Electricity Distribution, partly offset by lower
investment in National Grid Ventures. Higher capital investment is
partly offset by reduced year-on-year RAV indexation from lower inflation
resulting in asset growth of 9.0% (2024: 9.7%).
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.
Reconciliation of profit and earnings from continuing operations
Operating profit Profit after tax Earnings per share (pence)(1)
(£ million) 2025 2024 2025 2024 2025 2024
Statutory results 4,934 4,475 2,829 2,217 60.0 55.5
Exceptional items (42) 1,011 (118) 852 (2.4) 21.4
Remeasurements (127) (24) (93) 32 (2.0) 0.8
Adjusted results 4,765 5,462 2,618 3,101 55.6 77.7
Timing 505 (915) 372 (688) 7.9 (18.2)
Major storm costs 87 226 64 165 1.3 4.4
Deferred tax on underlying results in NGET and NGED - - 401 302 8.5 8.2
Underlying results 5,357 4,773 3,455 2,880 73.3 72.1
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
Discontinued operations
On 26 September 2024, we completed the sale of our residual 20% interest in
National Gas Transmission for proceeds of £686 million, resulting in a gain
on disposal after transaction costs of £25 million. The Group has not
applied equity accounting in relation to this asset held for sale since
31 January 2023 (the date of sale of our 60% interest) resulting in
no profits being recognised from that date onwards.
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 2025 and 31 March 2024 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 2024/25 average
exchange rate of $1.266:£1.
Timing over/(under)-recoveries
(£ million) 2025 2024(1)
Balance at start of year (restated) 1,029 39
UK Electricity Transmission (151) 363
UK Electricity Distribution 407 (159)
UK Electricity System Operator (479) 800
New England 61 (69)
New York (343) (20)
In-year (under)/over-recovery - continuing operations (505) 915
Disposal of UK Electricity System Operator (462) -
Balance at end of year 62 954
1. March 2024 balances restated to correspond with 2023/24 regulatory
filings and calculations.
In 2024/25, we experienced timing under-recoveries of £151 million
in UK Electricity Transmission, over-recoveries of £407 million in UK
Electricity Distribution and the return of prior period over-recoveries of
£479 million in UK Electricity System Operator (up to 1 October 2024, the
disposal date of that business). During 2023/24, BSUoS collected revenues in
UK Electricity System Operator were significantly more than system balancing
costs, resulting in a £800 million over-recovery in that year. In our US
regulated businesses we experienced over-recoveries of £61 million in New
England, and under-recoveries of £343 million in New York. In calculating
the post-tax effect of these 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 2024/25, we incurred deferrable storm costs, which are eligible
for future recovery of $110 million (2024: $285 million).
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 2024/25, we excluded £401
million (2024: £302 million) of deferred tax charges from our underlying
results.
Segmental income statement
Statutory results Underlying results
(£ million) 2025 2024 change % 2025 2024 change %
UK Electricity Transmission 1,277 1,674 (24) 1,428 1,314 9
UK Electricity Distribution 1,598 975 64 1,203 1,152 4
UK Electricity System Operator (213) 382 (156) 115 80 44
New England 1,008 641 57 924 802 15
New York 1,269 362 250 1,450 1,016 43
National Grid Ventures 5 558 (99) 380 469 (19)
Other activities (10) (117) (92) (143) (60) 138
Total operating profit - continuing 4,934 4,475 10 5,357 4,773 12
Net finance costs (1,357) (1,464) (7) (1,361) (1,479) (8)
Share of post-tax results of joint ventures and associates 73 37 97 75 101 (26)
Profit before tax - continuing 3,650 3,048 20 4,071 3,395 20
Tax - continuing (821) (831) (1) (616) (515) 20
Profit after tax - continuing 2,829 2,217 28 3,455 2,880 20
EPS (pence) - continuing 60.0 55.5 8 73.3 72.1 2
Statutory operating profit increased in the year, primarily as a result
of the non-recurrence of exceptional net charges of £1,011 million
in 2023/24 compared with exceptional net gains of £42 million in 2024/25.
For details on exceptional items refer to note 4. This was partly offset by
£1,420 million adverse year-on-year movements in timing
net over-recoveries, £154 million favourable year‑on-year movements
in commodity derivative remeasurements, improved underlying performance in UK
Electricity Transmission, New York and New England, partially offset by a
shorter period of ownership of UK Electricity System Operator, along with
lower profits in National Grid Ventures and 'Other activities' than 2023/24.
Underlying operating profit increased by £584 million (12%). Major storm
costs (net of in-year allowances) were $110 million (£87 million) in 2024/25
and above our $100 million threshold to be excluded from our underlying
results, however these were £139 million lower than the equivalent amount
excluded in the prior year. The reasons for the movements in underlying
operating profit are described in the Business Review.
Financing costs, share of post-tax joint ventures and associates and taxation
- continuing
Net finance costs
Statutory net finance costs of £1,357 million were down from £1,464 million
in 2023/24 and included derivative remeasurement gains of £4 million (2024:
£15 million gains). Underlying net finance costs for the year were 8% lower
than last year at £1,361 million. The Rights Issue raised net proceeds of
£6.8 billion in June 2024, resulting in lower average net debt than the prior
year. The beneficial impact of this was partly offset by outflows for higher
levels of capital investment and higher interest rates on new borrowings
resulting in a net £80 million reduction in net debt related finance costs.
Other interest was favourable year on year reflecting higher capitalised
interest partly offset by higher discount unwind on provisions. The effective
interest rate for continuing operations of 4.1% is 10bps lower than the prior
year rate.
Joint ventures and associates
The Group's share of net profits from joint ventures and associates
on a statutory basis increased to £73 million (2024: £37 million). This
was net of derivative remeasurement losses of £2 million (2024: £64 million)
in our NG Renewables joint venture. This investment was reclassified to held
for sale on 30 September 2024, with no profits being recognised from that date
onwards. On an adjusted basis, the share of net profits from joint ventures
and associates decreased by £26 million compared with 2023/24, mostly
reflecting lower BritNed revenues driven by lower auction prices.
Tax
The statutory tax charge for continuing operations was £821 million (2024:
£831 million) including the impact of tax on exceptional items
and remeasurements of £40 million credit (2024: £152 million credit). The
adjusted tax charge for continuing operations was £861 million (2024: £983
million), resulting in an adjusted effective tax rate for continuing
operations (excluding profits from joint ventures and associates) of 25.3%
(2024: 24.7%).
The underlying tax charge for the year (a non-GAAP measure) was £616 million
(2024: £515 million).
The underlying effective tax rate (excluding joint ventures and associates) of
15.4% was 20bps lower than last year (2024: 15.6%). This is mainly due to
increased investment in NGET leading to a lower underlying tax charge, partly
offset by the change in geographic profit mix.
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 81. 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) 2025 2024 change %
Cash generated from continuing operations 6,991 7,281 (4)
Purchase of intangibles, PP&E, investments in JVs and acquisition of (9,713) (7,588) (28)
financial investments (net of disposals)(1)
Dividends from JVs and associates 126 176 (28)
Business net cash outflow from continuing operations (2,596) (131) n/m
Net interest paid (1,588) (1,479) (7)
Net tax paid (183) (342) 46
Cash dividends paid (1,529) (1,718) 11
Other cash movements 11 16 (31)
Net cash outflow (continuing) (5,885) (3,654) (61)
Disposals of subsidiaries and associates(2) 1,263 681 85
Discontinued operations 22 102 (78)
Rights Issue (net of costs) 6,839 - n/m
Other, including net financing raised/(repaid) in year (1,474) 3,298 n/m
Increase/(decrease) in cash and cash equivalents 765 427 79
Reconciliation to movement in net debt
Increase/(decrease) in cash and cash equivalents 765 427 79
Less: other net cash flows from investing and financing transactions 1,474 (3,298) n/m
Net debt reclassified to held for sale (55) (23) n/m
Impact of foreign exchange movements on opening net debt 528 466 13
Other non-cash movements (476) (206) n/m
(Increase)/decrease in net debt 2,236 (2,634) n/m
Net debt at start of year (43,607) (40,973) (6)
Net debt at end of year (41,371) (43,607) 5
1. Net of disposals and also net of £143 million exceptional insurance
recoveries in 2023/24.
2. Cash proceeds of £577 million for ESO (which is net of the balance of
cash and cash equivalents disposed) and £686 million (2024: £681 million)
for our 20% remaining interest in National Gas Transmission. The total
consideration received for the disposal of ESO was £673 million.
Cash flow generated from continuing operations was £7.0 billion, £0.3
billion lower than last year, mainly due to adverse timing movements
(primarily in UK Electricity System Operator related to the return of BSUoS
revenue over-recoveries which occurred in 2023/24). This impact was
substantially offset by higher revenues in our retained regulated businesses
compared with 2023/24, along with lower provisions and exceptional outflows.
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 £1.0 billion
higher than the prior year, along with higher investment in New York, New
England and UK Electricity Distribution. The £9.7 billion
outflow in 2024/25 includes ongoing cash investment in Grain LNG,
UK Electricity System Operator and National Grid Renewables, subsequent to
these businesses being reclassified as held for sale. The prior year £7.6
billion outflow is net of insurance recoveries related to the rebuild of the
IFA1 interconnector in the UK.
Net interest paid increased mainly as a result of the timing of cash
interest payments (accrued interest movements), partly offset by a lower
average level of net debt which benefited from a net £6.8 billion inflow from
the Rights Issue proceeds (net of transaction costs). The Group made net
tax payments of £183 million (2024: £342 million) for continuing
operations during 2024/25. This decrease mainly related to lower taxable
profits driven by over-recovered revenues in the prior year in the UK
Electricity System Operator business.
The lower cash dividend reflected the higher weighted average scrip uptake of
31% in the current year (2024: 18%), partly offset by the annual inflationary
increase on a dividend per share basis (after rebasing for the impact of the
Rights Issue).
In 2024/25, we completed the sale of our UK Electricity System Operator
business to the UK Government for proceeds of £673 million (including £45
million from completion adjustments received after 31 March 2025). We
also sold our final 20% interest in National Gas Transmission for proceeds of
£686 million. In 2023/24 we reduced our interest in National Gas
Transmission from 40% to 20% interest for proceeds of £681 million and
received a dividend payment of £102 million in discontinued operations.
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 net £6.8 billion (net of transaction costs)
of equity financing by means of a Rights Issue. This helped reduce overall
Group regulatory gearing and will help finance capital investment across the
Group during future years. In addition, we also raised £3.2 billion of new
long-term senior debt to refinance maturing debt and to fund a portion of our
significant capital programme.
As at 14 May 2025, we have £7.8 billion of undrawn committed facilities
available for general corporate purposes, all of which have expiry dates
beyond May 2026. 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, measured as net debt as a proportion of total regulatory
asset value and other business invested capital, reduced in the year to 61% as
at 31 March 2025. This was lower than the previous year end level of 69%,
with the primary benefit coming from the Rights Issue, along with benefits
from £0.7 billion proceeds from the sale of our final 20% stake in National
Gas Transmission and £0.6 billion proceeds from the disposal of our UK
Electricity System Operator business. Taking into account the benefit of our
hybrid debt, adjusted gearing as at 31 March 2025 was 60% (2024: 67%).
Retained cash flow as a proportion of adjusted net debt was 9.8%. 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 optimise 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 FFO/adjusted net debt,
and 7% for Moody's RCF/adjusted net debt.
Dividend increase of 3.21% compared to 'rebased' dividend per share for
2024/25
The Board has recommended a final dividend to 30.88p per ordinary share
($2.0545 per American Depository Share), which will be paid on 17 July 2025 to
shareholders on the register of members as at 30 May 2025. If approved, this
will bring the full-year dividend to 46.72p per ordinary share, representing
an increase of 3.21% to the 45.26p 'rebased' dividend per share (as explained
below) for 2023/24. This is in line with the increase in average UK CPIH
inflation for the year ended 31 March 2025 as set out in our dividend policy.
As part of the Rights Issue, the Board announced that the overall
cash dividend level would be maintained, with the additional shares from
the Rights Issue resulting in a reduction to calculated dividend per share.
The total dividend to shareholders (cash plus scrip) in respect of the
financial year to 31 March 2024 was £2,167 million (58.52p per share). This
total dividend of £2,167 million spread across a higher number of shares
adjusted for the Rights Issue equated to a 'rebased' dividend per share in
respect of 2023/24 of 45.26p (see calculation on page 8 (#Page89) 9 (#Page89)
).
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 2025, National Grid plc had £18.0 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
£1,512 million of shareholders' funds. The 2024/25 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 2024/25
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 2024/25, we achieved asset growth of 9.0% 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 2025/26, we expect Group capital investment to be around £11 billion for
continuing operations.
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.
£9.8 billion of capital investment for continuing operations in 2024/25, 20%
higher at actual exchanges rates (20% higher at constant currency)
We continued to make significant investments in critical energy infrastructure
during 2024/25. Total capital investment for continuing operations across the
Group was £9,847 million, an increase of £1,612 million, 20% compared to the
prior year.
Capital investment
Year ended 31 March (£ million) At actual exchange rates At constant currency
2025 2024 % change 2025 2024 % change
UK Electricity Transmission 2,999 1,912 57% 2,999 1,912 57%
UK Electricity Distribution 1,426 1,247 14% 1,426 1,247 14%
UK Electricity System Operator - 85 (100%) - 85 (100%)
New England 1,751 1,673 5% 1,751 1,668 5%
New York 3,289 2,654 24% 3,289 2,645 24%
National Grid Ventures 378 662 (43%) 378 661 (43%)
Other¹ 4 2 100% 4 2 100%
Total capital investment - continuing 9,847 8,235 20% 9,847 8,220 20%
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 increased by £1,087 million compared
with 2023/24 due to increased expenditure on ASTI projects (including EGL1,
EGL2, Yorkshire GREEN and North London reinforcement projects) and additional
spend in customer connections, increased overhead line work, asset operations
investment and IT‑related capital projects.
UK Electricity Distribution increased by £179 million primarily due to
additional asset replacement and refurbishment, growth in connections and
higher reinforcement works.
New England, capital investment increased by £78 million primarily due to
higher electric capital investment driven by asset conditioning and Advanced
Metering Infrastructure (AMI) spend.
New York, capital investment was £635 million higher primarily due
to a step up in gas capital investment in KEDNY and KEDLI following
increases approved in the rate case (mains replacement and other mandated
works) and along with higher electric investment in NIMO driven by the Climate
Leadership and Community Protection Act programme spend, in addition to higher
AMI investment.
Capital investment in National Grid Ventures was £284 million lower after
completing the build of Viking Link in 2023/24 and with lower contributions
from NG Renewables and Grain LNG (spend post reclassification to 'held for
sale' is not included within capital investment).
Achieved asset growth of 9.0% and regulated asset growth of 10.5%
During 2024/25, UK RAV increased by 9.8% (2024: 7.3%) including the impact of
CPIH inflation on RAV indexation, partly offset by RAV depreciation. The US
rate base grew strongly by 11.5% during the year (2024: 11.5%). This resulted
in an overall 'regulated asset growth' (i.e. UK RAV and US rate base) of 10.5%
(2024: 9.1%). This is partly offset by 2.1% negative asset growth in NGV and
Other primarily as a result of recognising an impairment of our Community
Offshore Wind investment.
For 2024/25, asset growth and regulated asset growth are calculated excluding
the reduction in RAV as a result of the sale of the UK Electricity System
Operator business, based on an estimated RAV value as at 1 October 2024 (the
date of disposal).
For detailed calculations of asset growth and regulated asset growth see page
88 (#Page88) .
Assets
Year ended 31 March (£ million at constant currency) 2025 Sale of ESO 2024 increase % change
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 ('regulated asset growth') 60,150 (469) 54,837 5,782 10.5%
NGV and Other businesses 7,352 - 7,509 (157) (2.1%)
Total assets ('asset growth') 67,502 (469) 62,346 5,625 9.0%
Business review
In addition to IFRS based profit measures, National Grid calculates a number
of additional regulatory performance metrics to aid understanding of the
performance of the regulated businesses. These metrics aim to reflect the
impact of performance in the current year on future regulatory revenue
allowances. This includes the creation of future regulatory revenue adjustment
balances and the impact of current year performance on the regulated asset
base. These metrics also seek to remove the impacts on current year revenues
relating to 'catch up' or 'sharing' of elements of prior year performance,
for example the sharing of prior year efficiencies with customers.
These metrics include Return on Equity, Regulated Financial Performance and
Regulated Asset Value or Regulated Rate Base. Further detail on these is
provided on pages 82 (#Page82) to 88 (#Page88) .
Year ended 31 March Regulatory Debt: Achieved Base or Allowed
% Equity assumption Return on Equity Return on Equity
2025 2024 2025 2024
UK Electricity Transmission 55/45 8.3 8.0 7.3 7.0
UK Electricity Distribution 60/40 7.9 8.5 7.7 7.4
New England Avg. 45/55 9.1 9.2 9.9 9.9
New York Avg. 52/48 8.7 8.5 9.2 8.9
Group Return on Equity(1) 9.0 10.5 n/a n/a
As at 31 March RAV, Rate Base or other business assets Total regulated and other balances(2)
(£ million, at constant currency)
2025 2024 2025 2024
UK Electricity Transmission 20,570 18,388 20,290 17,886
UK Electricity Distribution 12,235 11,497 11,954 11,633
UK Electricity System Operator - 425 - (466)
New England 9,422 8,512 11,329 10,325
New York 17,923 16,015 19,752 17,029
Total regulated 60,150 54,837 63,325 56,407
NGV and Other balances 7,352 7,509 5,942 6,533
Group regulated and other balances 67,502 62,346 69,267 62,940
1. Our calculation methodology for Group RoE changed in 2024/25. Comparative
amounts have been restated accordingly. See page 86 (#Page86) for details,
2. March 2024 balances restated for opening balance adjustments to
correspond with 2023/24 regulatory filings and calculations.
UK Electricity Transmission
Overview
The UK Electricity Transmission (UK ET) segment is a critical component of
National Grid's operations, responsible for the high voltage electricity
transmission network in England and Wales.
Financial performance
■ Statutory operating profit decreased to £1,277 million, down 24% from
the prior year. This was primarily due to an adverse timing impact through the
return of prior period balances, including lower recovery of inflation
true-up, and a lower recovery on volumes, versus the prior year. Underlying
operating profit reached £1,428 million, a 9% increase on the prior year,
reflecting higher totex allowances and RAV indexation, partially offset by
lower tax allowances than the prior year.
■ Achieved RoE for the year was 8.3% (including 100bps of totex
outperformance), compared to 8.0% in the prior year. This was driven by
improved performance on our capital programmes.
■ Capital investment reached £2,999 million across our UK ET network, up
57% from the prior year. This reflects the ramp up in the first wave of ASTI
projects, further customer connections during the year, and early spend on
future connections.
Operational performance
■ In 2024/25, we achieved a network reliability of 99.99983%. On 8 May
2025 the NESO issued its interim review report investigating the outage
following the fire at our North Hyde electrical substation in March 2025. We
welcome the report which establishes the timeline and sequence of events, and
outlines further steps required ahead of the NESO delivering their final
report, expected in June 2025.
■ On safety, our LTIFR in the year was 0.08, compared to 0.16 in the
prior year. This is a notable improvement and follows a concerted effort in
this area, including embedding minimum contractor training standards
in contracts.
■ The first six Wave 1 ASTI projects are under construction, including
EGL 1 and EGL 2 comprising 700 kilometres of HVDC subsea cables. We have now
secured primary delivery partners for the remaining 11 Wave 2 ASTI projects,
with construction to commence once public consultations have completed and
consents granted. We also successfully energised the Hurst-Littlebrook circuit
on the London Power Tunnels, the first of three circuits being delivered on
this project.
■ During 2024/25 we completed works to facilitate 4.0 GW of transmission
connections, 2.7 GW of which related to renewables. In total, 2.5 GW of
customer projects connected to the transmission network within the year, of
which 1.6 GW were renewables.
Regulatory highlights
■ In December, we submitted our business plan for the RIIO T3 price
control period, which will run for five years from April 2026. The plan
includes up to £35 billion of totex over the five years to March 2031, a 2.5
times increase from the previous control. Amongst other outcomes, it will
enable us to nearly double the capacity of the current system to flow
electricity, connect new demand customers with the capacity of one third of
the current Great Britain peak demand and twice the amount of new generation
capacity as in the previous price control, and support a 50% reduction in our
scope 1 and 2 emissions from a 2018/19 baseline.
■ We were also pleased to see Ofgem's decision on the Advanced
Procurement Mechanism. This will provide funding for transmission owners to
secure supply chain capacity covering items, including switchgear and
transformers, building on the approach Ofgem adopted under the ASTI regime. We
plan to utilise the framework from the middle of this year.
Policy developments
■ During the year, we welcomed policy progress across a number of
critical areas including publication of the UK Government's Clean Power Action
Plan, which reaffirmed the need for our 17 ASTI projects to address current
system constraints and enable the connection of Offshore Wind projects.
■ The publication of the Planning and Infrastructure Bill includes
proposals that could both reduce the risk of delays and potentially accelerate
energy infrastructure projects.
■ We were also pleased to see Ofgem's decision on connections reform
published in April which embeds 'ready' and 'needed' criteria into the
connections process. This will deliver a rationalised queue of projects
aligned with the clean power plan, providing clarity on the specific locations
where our connections spend will be deployed.
Operating profit in 2024/25
UK Electricity Transmission statutory operating profit was £397 million lower
in the year. Timing under-recoveries were £151 million in 2024/25 compared
with £363 million over-recoveries in 2023/24. This year-on-year swing is
mainly the return 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 2023/24. In the prior year, there were £2 million
of exceptional costs related to our cost-efficiency programme and
integration costs of £1 million.
UK Electricity Transmission underlying operating profit increased by 9%.
Underlying net revenues were £168 million (9%) higher principally from
higher totex allowances (including fast money on ASTI spend) and inflationary
increases and the non-repeat of the beneficial tax allowance true-up in
2023/24.
Regulated controllable costs including pensions were £7 million (3%) higher
from the impact of inflationary and workload increases mostly offset by
efficiency savings. Other costs were higher, mainly relating to increased
provision for project delivery risk and increased network innovation allowance
costs.
The higher depreciation and amortisation principally reflects a higher asset
base as a result of continued investment.
UK Electricity Transmission
(£ million) 2025 2024 % change
Revenue 2,619 2,735 (4)
Operating costs (1,342) (1,061) 26
Statutory operating profit 1,277 1,674 (24)
Exceptional items - 3 (100)
Adjusted operating profit 1,277 1,677 (24)
Timing 151 (363) n/m
Underlying operating profit 1,428 1,314 9
Underlying net revenue 2,315 2,147 8
Regulated controllable costs (238) (248) (4)
Pensions (55) (38) 45
Other operating costs (54) (26) 108
Depreciation and amortisation (540) (521) 4
Underlying operating profit 1,428 1,314 9
Timing (151) 363 n/m
Adjusted operating profit 1,277 1,677 (24)
Return on Equity
RoE for the year was 8.3%, up 30bps on the prior year. The RoE includes 100bps
of totex outperformance, principally reflecting delivery of capital projects
in RIIO-T2. The principal components of RoE are shown in the table below:
Year ended 31 March 2025 2024
Base return (including avg. 2% long-run inflation)(1) 7.3 7.0
Totex incentive mechanism(2) 1.1 1.1
Other revenue incentives (0.1) (0.1)
Return on Equity 8.3 8.0
1. Assuming regulatory gearing at 55%.
2. Excludes impact of exceptional restructuring costs (post sharing)
For Regulated Financial Performance, please refer to page 82 (#Page82) .
Regulated Financial Position up 13%
In the year, RAV grew by 12% driven by increased investment and RAV indexation
of 3.4% (2024: 3.8%).
2025 2024
Opening Regulated Asset Value (RAV)(1) 18,388 17,150
Asset additions (slow money) - actual 2,586 1,660
Performance RAV or assets created 65 68
Inflation adjustment (actual CPIH) 646 658
Depreciation and amortisation (1,115) (1,074)
Closing RAV 20,570 18,462
Opening balance of other regulated assets and (liabilities)(1) (536) (159)
Movement 256 (363)
Closing balance (280) (522)
Closing Regulated Financial Position 20,290 17,940
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.
UK Electricity Distribution
Overview
The UK Electricity Distribution (UK ED) segment is a key component of National
Grid's UK operations, responsible for distribution networks in the South-West,
South Wales, and the Midlands.
Financial performance
■ Statutory operating profit increased to £1,598 million, up 64% from
the prior year. This was primarily due to favourable timing impact through a
higher inflation true-up. Underlying operating profit was £1,203 million, a
4% increase on the prior year, primarily reflecting higher RAV indexation.
■ Achieved RoE for the year was 7.9% (compared to 8.5% in the prior
year), outperforming our allowance by 20 basis points, which is lower than our
aim to achieve 100-125 basis points of outperformance. This reflects the
one-off impact from Storm Darragh and impacts from the ED2 Real Price Effects
(RPE) mechanism, where lower than anticipated allowances due to reductions in
commodity indices since the start of the RIIO-ED2 period have not tracked
actual costs incurred.
■ Capital investment reached £1,426 million in our UK Electricity
Distribution network, up 14% from the prior year. This increase was driven
principally by planned increases in spend on asset health, network
reinforcement and our connections workload (enabling a 59% increase in heat
pump connections and a 70% increase in EV charging point connections in the
year).
■ We have delivered £88 million of UK ED integration synergy totex
benefits to date, keeping us on track to deliver our £100 million target over
three years. These synergies have come through procurement strategy and
management, reviewing how we run and operate the 48 sites shared by UK ET and
UK ED, operational delivery, and aligning with wider Group functions
(including IT, insurance and pensions).
Operational performance
■ In 2024/25, we achieved an excellent network reliability of 99.98294%,
this despite eight named storms across the network compared to an average of
five in a normal year. This included Storm Darragh which affected all our
service territories in December. Whilst our teams responded quickly to each
incident, the higher volume of storms meant we missed our customer minutes
lost target this year.
■ Our LTIFR increased to 0.18 against the Group target of less than 0.10,
but the proportion of severe specified injuries as defined by UK Health and
Safety legislation (RIDDOR) has fallen.
■ We have also progressed our DSO capability on the development of
flexibility markets, now operating the largest market across all DSOs with
over 160,000 registered assets. This allows us to optimise network planning
and operations avoiding over 200 GWh of renewable generation curtailment and
lower costs for consumers.
■ During the year, we connected around 100,000 new low carbon technology
connections, 208 large scale demand projects, and 595 MW of renewable
generation connections.
■ We have supported vulnerable customers with over £22 million of
benefits delivered in support of 21,000 fuel poverty customers, and maintained
a high level of customer satisfaction with a score of 9/10.
Regulatory highlights
■ Following the publication of our first DSO report and panel assessment
as part of the new DSO Incentive for RIIO-ED2, Ofgem announced that UK ED
scored 8.24/10, the second highest score of all UK DNOs. This places UK ED in
reward for the first year of the DSO Incentive.
■ In April 2025, we welcomed Ofgem's decision on the framework for the
ED3 price control, which will run for five years from April 2028. Ofgem has
been clear on the critical role electricity distribution networks, like
UK ED, will play in achieving regional growth, resilient networks, and a
clean power system. We agree with Ofgem that there is need for a longer-term,
proactive approach to network planning whilst balancing resilience and
capacity with affordability. We will continue to work closely with Ofgem and
engage meaningfully with our customers and stakeholders as we develop our ED3
plan.
Policy developments
■ Our Connections team has been a leading voice in connections reform,
forming strategic partnerships with customers, including Octopus Energy, GTC
and RWE. We held our first ever 'Connections Hackathon' event (in partnership
with Octopus Energy), to facilitate collaboration in the development of
solutions to enhance the overall connections process. We championed the phrase
"first ready, first needed, first connected" which has been adopted by NESO
and now used widely in industry materials.
Operating profit in 2024/25
UK Electricity Distribution statutory operating profit was £623 million
higher in the year, reflecting the impact of £566 million favourable
year-on-year timing movements. Timing over-recoveries of £407 million in
2024/25 were mainly due to inflation true-ups and the recovery of prior period
balances. This compares with a timing under-recovery of £159 million in the
prior year.
In 2024/25 there were £12 million of exceptional costs related to our major
transformation programme compared with £18 million of exceptional integration
costs in 2023/24.
UK Electricity Distribution underlying operating profit increased by
£51 million (4%). Underlying net revenues were £111 million higher
than the prior year due to the impact of higher inflation and higher
engineering recharges and incentive revenues.
Regulated controllable costs including pensions were £12 million (4%) higher
than the prior year from the impact of workload increases, combined with
investment in capability build and inflationary increases, partly offset by
efficiencies achieved. Other costs were £22 million higher as a result of the
disruption from Storm Darragh (categorised as a 1 in 20 years storm event)
and increased engineering recharges.
Depreciation and amortisation increased compared with the prior year due to
the increasing asset base.
UK Electricity Distribution
(£ million) 2025 2024 % change
Revenue 2,424 1,795 35
Operating costs (826) (820) 1
Statutory operating profit 1,598 975 64
Exceptional items 12 18 (33)
Adjusted operating profit 1,610 993 62
Timing (407) 159 n/m
Underlying operating profit 1,203 1,152 4
Underlying net revenue 1,832 1,721 6
Regulated controllable costs (281) (270) 4
Pensions (21) (20) 5
Other operating costs (78) (56) 39
Depreciation and amortisation (249) (223) 12
Underlying operating profit 1,203 1,152 4
Timing 407 (159) n/m
Adjusted operating profit 1,610 993 62
Return on Equity above base levels
In 2024/25, the second year of RIIO-ED2, RoE was 7.9%, including 20bps
outperformance, mostly consisting of non-totex performance incentives, partly
offset by the adverse impact of Storm Darragh and the impact of the RIIO-ED2
Real Price Effects (RPE) mechanism, where lower than anticipated allowances
due to reductions in commodity indices have not tracked actual costs incurred.
We are working hard to mitigate this headwind and improve performance. We
expect outperformance to improve towards 100bps over the remainder of
RIIO-ED2.
The principal components of the performance are shown in the table below:
For the year ended 31 March 2025 2024
Base return (including avg. 2% long-run inflation) 7.7 7.4
Totex incentive mechanism - 1.1
Other revenue incentives 0.2 -
Return on Equity 7.9 8.5
For Regulated Financial Performance, please refer to page 82 (#Page82) .
Regulated Financial Position up 3%
In the year, RAV grew by 6% driven by ongoing investment coupled with RAV
indexation of 3.4% (2024: 3.8%).
2025 2024
Opening Regulated Asset Value (RAV)(1) 11,497 10,787
Asset additions (slow money) - actual 1,137 979
Performance RAV or assets created (1) 51
Inflation adjustment (actual CPIH) 398 430
Depreciation and amortisation (796) (778)
Closing RAV 12,235 11,469
Opening balance of other regulated assets and (liabilities)(1) 136 (32)
Movement (417) 174
Closing balance (281) 142
Closing Regulated Financial Position 11,954 11,611
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.
UK Electricity System Operator (ESO)
Overview
The UK Electricity System Operator (ESO) was responsible for system balancing
across the electricity transmission network in Great Britain. The ESO was
transferred out of National Grid on 1 October 2024 to the UK Government and
became part of the newly created National Energy System Operator (NESO). The
following results and commentary relate to the period of the financial year up
to the date of transfer.
Financial performance
■ Operating profit: Statutory operating loss for the year was £213
million (2024: £382 million profit) principally as a result of the return of
prior period timing over-recoveries related to BSUoS revenues. Underlying
operating profit increased to £115 million (2024: £80 million) driven by
cessation of depreciation following classification of this business as held
for sale, partly offset by a shorter period of ownership in 2024/25.
Other key highlights
■ Capital investment: Capital investment has not been recognised in this
business following reclassification to held for sale.
■ Regulatory developments: The ESO has continued to work at pace and
cross-industry towards long-term reforms to the connections process, to
unblock the queue and pave the way for investment, ensuring the grid is ready
to help deliver the energy transition.
Operating profit in 2024/25
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. The year-on-year
performance is driven by two significant factors: (i) a net £800 million
over-collection of revenues during 2023/24 (and the consequential partial
return of these over-recovered balances during 2024/25); and (ii) a shorter
ownership period, with only six months' contribution in 2024/25.
UK Electricity System Operator statutory operating profit decreased
by £595 million in the year as a result of adverse year-on-year timing
swings (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 in the current year. 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 balances (2024: £800
million net over-recovery). The 2023/24 over-recovery was the result of higher
revenues collected through the BSUoS fixed price charges compared with total
system balancing costs incurred during that year. 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 increased
by £35 million. Underlying net revenue was £92 million lower, partly
offset by lower costs mainly driven by the shorter ownership period
in 2024/25. Depreciation and amortisation was £61 million lower,
representing depreciation being charged for only the first seven months of the
prior year, prior to classification as 'held for sale'.
UK Electricity System Operator
(£ million) 2025 2024 % change
Revenue 1,029 3,788 (73)
Operating costs (1,242) (3,406) (64)
Statutory operating profit (213) 382 (156)
Exceptional items (151) 498 n/m
Adjusted operating profit (364) 880 (141)
Timing 479 (800) (160)
Underlying operating profit 115 80 44
Underlying net revenue 291 383 (24)
Controllable costs (159) (212) (25)
Post-retirement benefits (10) (21) (52)
Other operating costs (7) (9) (22)
Depreciation and amortisation - (61) (100)
Underlying operating profit 115 80 44
Timing (479) 800 (160)
Adjusted operating profit (364) 880 (141)
New England
Overview
The New England segment is a key part of National Grid's US operations,
responsible for electricity and gas distribution networks in Massachusetts. We
also own and operate high voltage electric transmission lines across
Massachusetts, New Hampshire and Vermont.
Financial performance
■ New England's statutory operating profit increased to £1,008 million,
up 57% on the prior year, principally through timing from previously under
recovered balances, lower major storm costs, and stronger underlying
performance. Underlying operating profit increased to £924 million
principally driven by refreshed rates from our MECO rate order, and higher
capital tracker revenue from our leak-prone pipe replacement programme.
■ Achieved RoE for the year was 9.1%, compared to 9.2% in the prior year.
Excluding 0.5% of non-recurring benefits reported last year, the increase was
driven principally by six months of the new rate agreement in our
MECO business.
■ Capital investment grew by 5% to £1,751 million at constant currency.
This increase was principally driven by increases in asset condition spend in
electric distribution, the roll-out of Advanced Metering Infrastructure (AMI),
investments in grid modernisation, and installation of EV charging points.
Operational performance
■ In 2024/25, we achieved electric distribution network reliability of
99.97724% and an electric transmission reliability of 99.98544%. In our
Massachusetts Gas business, we achieved a 99.27% response time to leaks within
60 minutes and replaced a further 134 miles of leak-prone pipe (LPP).
■ On safety, we recorded a LTIFR of 0.08 for New England in 2024/25, in
line with the prior year.
■ We saw 25 recognised storms across our networks, with 5 qualifying for
recovery through the Storm Fund, during the year. Our New England Emergency
Response Organization was activated for 15 of these events, mobilising
external resources to complement our internal workforce responding to storms.
This included an ice storm in February that impacted more than 67,000
customers and resulted in 594 outages. We also continued to expand our Fault
Location, Isolation and Service Restoration (FLISR) capability that allows
electricity to be re-routed to disconnected networks and improve reliability.
During the year, New England had 61 successful FLISR operations, which
restored power to more than 77,000 customers within one minute, avoiding
longer outages.
■ We connected 197 MW of distributed energy resources in 2024/25. In
October, we made our 'Mass Save' energy efficiency filing (with other
utilities), a three-year plan outlining energy efficiency, heat
electrification and demand response programmes across our gas and electric
customer bases between 2025 and 2027.
■ In the face of affordability challenges, we have continued to support
our customers through assistance funding and bill relief, enrolling more
customers in the discount rate and implementing the new multi-level tier low
and moderate discount rate over the Spring and Summer. We also helped
customers by reducing gas bills by 10% in March and April, which will instead
be recovered in the summer period to help smooth bills.
Regulatory highlights
■ We received a new rate order for MECO in October, with rates set for a
5-year period, an allowed RoE of 9.35% a new mechanism that enables timely
recovery of growing capital investment needs up to a cap, and an increase in
storm cost recovery of around $60 million per annum.
■ The DPU issued a decision on our Electric Sector Modernization Plan
(ESMP) in August, approving the plan as a 'strategic roadmap' with minimal
modifications. The ESMP outlines the critical investments of around
$2 billion needed over five years in the local electric distribution system
to meet Massachusetts' climate goals. The proceeding to determine cost
recovery and metrics is expected to conclude by July 2025.
Policy developments
■ In November, Governor Healey approved legislation to reform the
permitting process for utility infrastructure and clean energy projects. This
new approach sets maximum timeframes for approvals, supporting the delivery of
capital projects in the State.
■ In April 2025, we submitted our Climate Compliance Plan setting out the
strategic roadmap required in our Massachusetts gas network to advance state
decarbonisation goals, whilst maintaining safe, reliable and cost-effective
service for our customers. The filing details our efforts to reduce greenhouse
gas emissions from our existing gas distribution network.
Return on Equity
RoE decreased 10bps to 9.1%, principally due to the non-recurrence of 50bps of
benefit in the prior year (related to the recovery of historical property
tax), mostly offset by improvements from six months of higher revenues from
the new rate agreement in our MECO business.
Return on Equity Rate Base ($m) as at 31 March
Regulated Entity FY25 FY24 FY23 Allowed 2025 2024 % change
most recent
(%)
Massachusetts Gas 8.6 9.2 8.6 9.7 5,408 4,759 14
Massachusetts Electric 8.1 7.6 5.9 9.5 3,766 3,541 6
Total Massachusetts 8.4 8.6 7.4 9.6 9,174 8,300 11
New England Power 11.1 11.1 11.1 10.6 2,938 2,646 11
Canadian Interconnector & Other 11.1 11.1 11.1 11.1 58 48 21
Total FERC 11.1 11.1 11.1 10.6 2,996 2,694 11
Total New England 9.1 9.2 8.3 9.9 12,170 10,994 11
Regulated Financial Position
Overall, the New England rate base increased by $1.2 billion (11%) to $12.2
billion driven by continued investment into networks.
New England Regulated Assets
($ billion as at 31 March) 2025 2024 % change
Rate Base excluding working capital 11.9 10.7 11
Working capital in Rate Base 0.3 0.3 (3)
Total Rate Base 12.2 11.0 11
Regulated assets outside Rate Base excluding working capital 2.5 2.5 -
Working capital outside Rate Base (0.1) (0.2) (71)
Total regulated assets outside Rate Base 2.4 2.3 6
Total New England Regulated Assets 14.6 13.3 10
£ billion as at 31 March 2025 2024 % change
Total New England Regulated Assets at actual currency 11.3 10.6 7
Total New England Regulated Assets at constant currency 11.3 10.3 10
Operating profit in 2024/25
New England
(£ million) 2025 2024 2024 at constant currency % change at actual currency
Revenue 4,306 3,948 3,935 9
Operating costs (3,298) (3,307) (3,295) -
Statutory operating profit 1,008 641 640 57
Exceptional items 3 17 17 n/m
Remeasurements (29) (15) (15) n/m
Adjusted operating profit 982 643 642 53
Timing (61) 69 69 n/m
Major storm costs 3 90 89 (97)
Underlying operating profit 924 802 800 15
Underlying net revenue 2,587 2,364 2,357 9
Regulated controllable costs (706) (701) (699) 1
Post-retirement benefits (21) (7) (6) 200
Bad debt expense (62) (79) (79) (22)
Other operating costs (405) (355) (354) 14
Depreciation and amortisation (469) (420) (419) 12
Underlying operating profit 924 802 800 15
Timing 61 (69) (69) n/m
Major storm costs (3) (90) (89) (97)
Adjusted operating profit 982 643 642 53
New England's statutory operating profit increased by £367 million,
principally as a result of improved underlying operating profit and lower
major storm costs, along with the impact of £130 million favourable
year-on-year timing movements. Timing over-recoveries of £61 million in
2024/25 are mainly due to phasing of energy efficiency programme spend and the
collection of previous under-recovery of commodity costs. This compares with a
timing under-recovery of £69 million in the prior year. Exceptional items
included £7 million of charges related to our major transformation
programme and a £4 million gain related to environmental provision movements.
In 2023/24, there were £11 million of exceptional items related to
the disposal of the Narragansett Electric Company and £6 million related to
our cost efficiency programme. Commodity remeasurements were £14 million
favourable to the prior year.
New England's underlying operating profit increased by £122 million (15%) or
£124 million (16%) on a constant currency basis. Underlying net revenue was
£223 million higher driven by the benefits of rate case increases in
Massachusetts Gas and Massachusetts Electric, higher capital tracker revenue
and higher wholesale network revenues. New England controllable costs
increased by £5 million as a result of additional workload and inflation,
which were largely offset by efficiency savings. Bad debt expense decreased by
£17 million as a result of higher accounts receivable cash recoveries.
Depreciation and amortisation increased as a result of higher investment.
Other costs (on an underlying basis) were higher due to higher
investment-related expenses and higher property taxes, both driven by the
growth in asset base.
New York
Overview
New York is a key part of National Grid's US operations, with electricity and
gas distribution networks in upstate New York (Niagara Mohawk, NIMO), and gas
distribution in Brooklyn and Long Island (KEDNY and KEDLI).
Financial performance
■ New York's statutory operating profit increased to £1,269 million,
principally from year-on-year exceptional provision movements (£496 million
charge in 2023/24 compared with a £142 million credit in 2024/25). Underlying
operating profit increased to £1,450 million (up 43%) principally through
refreshed rates from the first-full year of our updated KEDNY and KEDLI rate
agreement.
■ Achieved RoE for the year was 8.7%, compared to 8.5% in the prior year,
reflecting a strong performance in our downstate gas businesses, KEDNY and
KEDLI, in the first year of the updated rate plan.
■ Capital investment in our networks continued during the year with
capital spend increasing year-on-year by 24% to £3,289 million. This increase
was principally through continued investment in leak-prone pipe replacement
under our refreshed KEDNY and KEDLI rate plans, and our electric
infrastructure where the focus has been on reinforcing our distribution and
transmission networks.
Operational performance
■ In 2024/25, we achieved an excellent operational performance across our
New York regulated business with an electric distribution network availability
of 99.94077% and an electric transmission network availability of 99.84345%.
We have now hit our key reliability targets continuously for 17 years in New
York.
■ Across our New York business, we continued with gas safety and
reliability investments including the replacement of a further 218 miles of
leak-prone pipe.
■ On safety, we recorded a LTIFR of 0.11 in 2024/25, compared to 0.06 in
the prior year.
■ Where our service territories were impacted by storm activity in
2024/25, we restored electricity to 95% of affected customers from the peak
within 10 hours, an improvement on 2023/24 where the average time to reconnect
95% of customers was 12 hours. Around 1.4 million customers had interruptions
from storms or severe weather in 2024/25.
■ We have continued to progress our Upstate Upgrade, a collection of more
than 70 transmission enhancement projects through 2030, where we have
awarded contracts for the whole of the first phase as well as engineering
items in the second phase. The upgrade includes: Smart Path Connect - the
rebuild and upgrade of approximately 55 miles of our Adirondack-Porter 230
kV transmission circuits to 345 kV in upstate New York; CLCPA Phase 1 -
$800 million for distribution and local transmission upgrades; and CLCPA
Phase 2 - $2.1 billion to expand transmission capacity and modernise the
electric network.
Regulatory highlights
■ In August, the PSC adopted the terms of the Joint Proposal for KEDNY
and KEDLI for a three-year rate plan with 9.35% allowed RoE and around $5
billion capital allowances to modernise infrastructure. The plan also helps
customers manage their energy usage by providing approximately $75 million
annually for energy efficiency.
■ In April, we reached a Joint Proposal on new rates for our NIMO
business. This includes an improved return on equity of 9.5% that supports an
increase in investment to upgrade our transmission network, storm hardening
across the network, expansion of EV charging and leak-prone pipe replacement
work, and early connections work for large industrial customers. It also
includes provisions to mitigate bill impacts for customers including spreading
the bill increases over the three years of the plan, and bill assistance
programmes for low-income households.
Policy development
■ We await a draft of the updated State Energy Plan, New York's roadmap
to building a clean, resilient, and affordable energy system. We expect
public hearings on the plan, and an opportunity to engage, over the summer.
Return on Equity
During the year, we achieved an RoE of 8.7%, 20bps above the 8.5% delivered in
2023/24. This was principally driven by higher allowed returns in KEDNY and
KEDLI reflected in the new rate case, partly offset by lower achieved returns
in NIMO.
Return on Equity Rate Base ($m) as at 31 March
Regulated Entity FY25 FY24 FY23 Allowed 2025 2024 % change
most recent
(%)
KEDNY 10.5 9.0 9.2 9.4 7,212 6,454 12
KEDLI 10.6 9.7 9.2 9.4 4,439 4,149 7
NMPC Gas 4.6 6.0 7.1 9.0 2,266 1,765 28
NMPC Electric 7.2 8.1 8.1 9.0 9,232 8,317 11
Total New York 8.7 8.5 8.6 9.2 23,149 20,685 12
Regulated Financial Position
Overall, the New York rate base increased by $2.4 billion (12%) to $23.1
billion driven by continued investment into networks.
New York Regulated Assets
($ billion as at 31 March) 2025 2024 % change
Rate Base excluding working capital 22.7 20.3 12
Working capital in Rate Base 0.4 0.4 11
Total Rate Base 23.1 20.7 12
Regulated assets outside Rate Base excluding working capital 2.2 1.7 29
Working capital outside Rate Base 0.2 (0.4) n/m
Total regulated assets outside Rate Base 2.4 1.3 82
Total New York Regulated Assets 25.5 22.0 16
£ billion as at 31 March 2025 2024 % change
Total New York Regulated Assets at actual currency 19.8 17.4 13
Total New York Regulated Assets at constant currency 19.8 17.0 16
Operating profit in 2024/25
New York
(£ million) 2025 2024 2024 at constant currency % change at actual currency
Revenue 6,689 6,094 6,076 10
Operating costs (5,420) (5,732) (5,716) (5)
Statutory operating profit 1,269 362 360 251
Exceptional items (133) 506 505 n/m
Remeasurements (113) (8) (8) n/m
Adjusted operating profit 1,023 860 857 19
Timing 343 20 20 n/m
Major storm costs 84 136 136 (38)
Underlying operating profit 1,450 1,016 1,013 43
Underlying net revenue 4,545 4,057 4,044 12
Regulated controllable costs (1,049) (1,057) (1,054) (1)
Post-retirement benefits (33) (21) (21) 1
Bad debt expense (141) (96) (96) 47
Other operating costs (1,141) (1,209) (1,204) (6)
Depreciation and amortisation (731) (658) (656) 11
Underlying operating profit 1,450 1,016 1,013 43
Timing (343) (20) (20) n/m
Major storm costs (84) (136) (136) (38)
Adjusted operating profit 1,023 860 857 19
New York statutory operating profit increased by £907 million, principally as
a result of £434 million higher underlying operating profit, £52 million
lower major storms costs, £105 million higher commodity remeasurements gains
and £639 million lower exceptional charges. Exceptional items included
£9 million of charges related to our major transformation programme and a
£142 million credit related to environmental provision movements (2024:
£496 million cost). In 2023/24 we incurred £10 million of exceptional
charges as part of our cost efficiency programme. These factors were partly
offset by timing under-recoveries of £343 million in 2024/25 compared with
timing under-recoveries of £20 million in 2023/24. The change in timing was
primarily driven by lower auction sale prices on transmission wheeling, the
return of prior period transmission wheeling over-collections, greater
commodity under-recovery due to weather-driven gas bill volumes and KEDNY and
KEDLI rates levelisation relating to new rates in 2024/25. These were partly
offset by an over-recovery of energy efficiency programme costs in 2024/25.
New York underlying operating profit increased by £434 million (43%), driven
by higher net underlying revenues which increased by £488 million (12%)
principally driven by increased rates in KEDNY and KEDLI under the new rate
plan along with higher NIMO revenues related to a capex tracker for
incremental investment. Regulated controllable costs were £8 million lower
year-on-year, with increased workload and the impact of inflation being
offset by efficiency savings. Bad debt expense increased by £45 million
driven by increased receivables, in line with revenue increases. Depreciation
and amortisation increased due to the growth in assets. Other costs (on an
underlying basis) decreased due to lower environmental costs (net benefit in
2024/25 compared with net charge in 2023/24 related to inflation impacts
across multiple sites), partially offset by higher property taxes, driven
by increasing asset base.
National Grid Ventures (NGV)
Overview
NGV is focused on competitive markets and operates a broad mix of energy
assets and businesses in the UK and US. Its portfolio includes electricity
interconnectors, competitive transmission, wind and solar power generation,
LNG storage and regasification, battery storage, and conventional generation.
The businesses continued to perform well in 2024/25, with good operational
availability.
Financial performance
■ NGV statutory operating profit decreased to £5 million versus the
prior year, primarily due to exceptional charges in the current year compared
with exceptional credits in 2023/24 (see note 4 for details). Underlying
operating profit decreased to £380 million at constant currency. This was
driven primarily by lower interconnector revenues as market spreads returned
to more historically normal conditions. Underlying interconnector performance
remained strong, delivering above regulated returns, with three of the
interconnectors performing above the cap, generating additional returns for UK
consumers.
■ Capital investment, which includes investment in joint ventures and
associates was £378 million, £284 million lower than the prior year (£283
million lower at constant currency). This decrease followed completion of the
Viking Link to Denmark. In addition, the investments made in our National Grid
Renewables and Grain LNG businesses have been excluded from reported capital
expenditure following the held for sale treatment of these business for
accounting purposes from October this year.
Operational performance
During the year, we have seen good operational performance across the National
Grid Ventures portfolio.
■ Interconnectors: We have seen good availability across our
interconnector fleet, with Viking Link reaching 92% availability, a strong
performance for a new asset. IFA2 experienced unplanned outages during the
year which, together with outages at BritNed, contributed to an overall
interconnector availability of 86% across the year. The continued strong
performance of our interconnector portfolio enabled the return of a further
£89 million to UK consumers this year, part of a total of £277 million
returned to reduce customer bills in the last two years, with a further £149
million to be returned over the next two years resulting in a total benefit to
customers of £426 million.
■ Offshore Hybrid Assets (OHAs): We continued to work on our LionLink
project development with our partner TenneT, and in November 2024 the project
was awarded regulatory approval to the OHA pilot scheme with Ofgem confirming
benefits to UK consumers. We also continued the early development of the next
generation of interconnectors, including work with Ofgem to establish the
regulatory regime for OHAs which was approved by the regulator in April 2025.
■ Grain LNG: We have completed the preparation and launched the
divestment process of the Grain LNG terminal. We expect to announce a
transaction later this year. Operationally, we have continued to make good
progress on the CAP 25 expansion project at Grain LNG. The project reached
several important milestones, including a successful hydrotest of the new CAP
25 tank, for which commercial operations remain on track to commence in the
second half of calendar year 2025.
■ National Grid Renewables: In February, we agreed the sale of the
National Grid Renewables onshore business to Brookfield Asset Management for
an enterprise value of $1.735 billion. Completion of the transaction is
subject to certain consents and regulatory approvals. Subject to these
clearances, we expect the transaction will complete in the first half of the
financial year ending 31 March 2026. Operationally, we reached a Final
Investment Decision (FID) on 772 MW of new projects. The total portfolio now
stands at 2.7 GW, which includes 1.3 GW operational assets under offtake
contract, 0.3 GW uncontracted, and 1.1 GW under construction.
■ Community Offshore Wind: Given current market conditions and increased
uncertainty on the development timeline of Community Offshore Wind, during the
year in coordination with our joint venture partner, we have reduced the
scope of our development activities until there is greater certainty. Our
focus remains on delivering efficient and required energy infrastructure that
will lead to affordable, reliable energy for our customers. Given the
subsequent expected development delays, we have recognised a £303 million
impairment in the current year.
■ New York Transmission: We continue to progress the Propel New York
transmission project with partners in NY Transco and the New York Power
Authority (NYPA). Propel will carry energy from Long Island to the rest of New
York state, and was selected by the New York ISO to add six high voltage
transmission lines and associated substation upgrades to the transmission
system on Long Island and in New York City. The project is expected to
complete in 2030.
National Grid Ventures
(£ million) 2025 2024 2024 at constant currency % change at actual currency
Revenue 1,397 1,389 1,389 1
Operating costs (1,392) (831) (831) 68
Statutory operating profit 5 558 558 (99)
Exceptional items 360 (89) (89) n/m
Remeasurements 15 - - n/m
Underlying/adjusted operating profit 380 469 469 (19)
Statutory post-tax share of JVs and associates 73 38 38 92
Remeasurements 2 64 64 (97)
Adjusted post-tax share of JVs and associates 75 102 102 (26)
Analysed by business:
Interconnectors 253 306 306 (17)
Grain LNG 150 149 149 1
NG Generation 26 29 29 (10)
Other (49) (15) (15) 227
Adjusted operating profit 380 469 469 (19)
Interconnectors 49 69 69 (29)
NG Renewables 17 22 22 (23)
Other 9 11 11 (18)
Adjusted post-tax share of JVs and associates 75 102 102 (26)
Total NGV contribution (adjusted/underlying) 455 571 571 (20)
Interconnectors 74 192 192 (61)
NG Renewables 174 271 270 (36)
Grain LNG 47 104 104 (55)
NG Generation 36 24 24 50
Other 47 71 71 (34)
Capital investment 378 662 661 (43)
National Grid Ventures' statutory operating profit reduced by £553 million,
principally as a result of a £303 million impairment of Community Offshore
Wind (COSW) investment, along with £57 million of exceptional transaction and
separation costs for the planned disposal of National Grid Renewables and
£15 million of commodity remeasurement losses all recognised in 2024/25.
This compared with £89 million of net exceptional gains in 2023/24,
consisting of £92 million of property damage insurance proceeds for the IFA1
fire, net of £3 million of exceptional charges related to our prior cost
efficiency programme. Our underlying and adjusted results exclude the impact
of these exceptional items and remeasurements.
National Grid Ventures' underlying operating profit was £89 million lower
than 2023/24. In the UK, interconnector profits decreased versus the prior
year primarily as a result of lower interconnector revenues as market spreads
returned to more historically normal conditions. On 30 September 2024, our
Grain LNG business in the UK and our National Grid Renewables business in the
US were reclassified as 'held for sale' with depreciation ceasing from that
date onwards. In the US, profit was lower, primarily as a consequence of fewer
renewable projects being sold to our Emerald joint venture.
Other activities
Highlights
Other activities primarily relate to UK property, insurance and corporate
activities, as well as National Grid Partners, the corporate investment and
innovation arm of National Grid. In UK Land and Property, we continue to make
good progress with the divestment of the surplus property portfolio. In this
fiscal year, we completed on the sale of 35 sites, realising approximately
£54 million profit.
Other
(£ million) 2025 2024 2024 at constant currency % change at actual currency
Revenue 122 244 240 (50)
Operating costs (132) (361) (357) (63)
Statutory operating loss (10) (117) (117) (91)
Exceptional items 133 (57) (57) n/m
Underlying/adjusted operating loss (143) (60) (60) 138
Analysed by business:
Property 54 30 30 80
NG Partners (82) (13) (13) 531
Corporate and other activities (115) (77) (77) 49
Adjusted operating loss (143) (60) (60) 138
Other activities' statutory operating loss of £10 million (2024:
£117 million loss) includes a net exceptional gain of £133 million,
consisting of a £187 million exceptional gain on disposal of the
UK Electricity System Operator, net of £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. The prior year included £11
million of exceptional transaction, separation and integration costs related
to the separation and disposal of UK Gas Transmission and the integration of
National Grid Electricity Distribution and £46 million of exceptional
charges as part of our cost efficiency programme.
Other activities' underlying operating loss was £143 million (including
corporate costs) in 2024/25 compared with £60 million loss in 2023/24.
This increase mainly relates to £69 million higher fair value losses within
our NG Partners portfolio, £24 million lower insurance captive profits
combined with £12 million higher corporate centre costs, partially offset by
higher UK property sales in the year.
Provisional 2024/25 financial timetable
Date Event
15 May 2025 2024/25 Full Year Results
29 May 2025 Ex-dividend date for 2024/25 final dividend
30 May 2025 Record date for 2024/25 final dividend
5 June 2025 Scrip reference price announced for 2024/25 final dividend
19 June 2025 (5pm London time) Scrip election date for 2024/25 final dividend
9 July 2025 2025 Annual General Meeting
17 July 2025 2024/25 final dividend paid to qualifying shareholders
6 November 2025 2025/26 Half Year Results
20 November 2025 Ex-dividend date for 2025/26 interim dividend
21 November 2025 Record date for 2025/26 interim dividend
27 November 2025 Scrip reference price announced for 2025/26 interim dividend
11 December 2025 (5pm London time) Scrip election date for 2025/26 interim dividend
13 January 2026 2025/26 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 2024/25 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 document also references 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, 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; 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; 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 the proposed sale of
certain of its businesses, its strategic infrastructure projects and joint
ventures. 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 226 to 231 of National Grid's Annual
Report and Accounts for the year ended 31 March 2024 as updated by National
Grid's unaudited half-year financial information for the six months ended 30
September 2024, published on 7 November 2024. 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. This announcement is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to buy any
securities. The securities mentioned herein have not been, and will not be,
registered under the Securities Act or the securities laws of any state or
other jurisdiction, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. No
public offering of securities is being made in the United States.
Glossary
Term Meaning
ASTI Accelerated Strategic Transmission Investment
CAGR Compound Annual Growth Rate
CPIH UK Consumer Prices Index including Owner Occupiers' Housing Costs
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
ESMP Electric Sector Modernization Plan
FERC Federal Energy Regulatory Commission
FFO Funds from Operations
HVDC High Voltage Direct Current
KEDNY and KEDLI KeySpan Energy Delivery New York (KEDNY) and KeySpan Energy Delivery Long
Island (KEDLI)
LTIFR Lost Time Injury Frequency Rate
MADPU Massachusetts Department of Public Utilities (state energy regulator)
MECO Massachusetts Electric Company
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 Services Commission (state energy regulator)
RAV Regulated Asset Value
RIIO "Revenue = Incentives + Innovation + Outputs" a Price control Framework used
by the
UK regulator OFGEM
RIDDOR The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
2013, UK Health and Safety legislation.
Consolidated income statement
for the years ended 31 March
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
Provision for bad and doubtful debts (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 (continuing and discontinued) 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
2024 Notes Before Exceptional Total
exceptional items and remeasurements £m
items and remeasurements (see note 4)
£m £m
Continuing operations
Revenue 2(a),3 19,850 - 19,850
Provision for bad and doubtful debts (179) - (179)
Other operating costs 4 (14,221) (987) (15,208)
Other operating income 12 - 12
Operating profit 2(b) 5,462 (987) 4,475
Finance income 4,5 244 4 248
Finance costs 4,5 (1,723) 11 (1,712)
Share of post-tax results of joint ventures and associates 101 (64) 37
Profit before tax 2(b) 4,084 (1,036) 3,048
Tax 4,6 (983) 152 (831)
Profit after tax from continuing operations 3,101 (884) 2,217
Profit after tax from discontinued operations 9 13 61 74
Total profit for the year (continuing and discontinued) 3,114 (823) 2,291
Attributable to:
Equity shareholders of the parent 3,113 (823) 2,290
Non-controlling interests 1 - 1
Earnings per share (pence)¹
Basic earnings per share (continuing) 7 55.5
Diluted earnings per share (continuing) 7 55.3
Basic earnings per share (continuing and discontinued) 7 57.4
Diluted earnings per share (continuing and discontinued) 7 57.1
1. Restated to reflect the impact of the bonus element of the Rights Issue.
Consolidated statement of comprehensive income
for the years ended 31 March
2025 2024
Notes £m £m
Profit after tax from continuing operations 2,829 2,217
Profit after tax from discontinued operations 76 74
Other comprehensive income from continuing operations
Items from continuing operations that will never be reclassified to profit or
loss:
Remeasurement losses on pension assets and post-retirement benefit obligations (106) (218)
Net losses in respect of cash flow hedging of capital expenditure (16) (37)
Tax on items that will never be reclassified to profit or loss 27 59
Total items from continuing operations that will never be reclassified (95) (196)
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 (352) (335)
Net gains in respect of cash flow hedges 218 240
Net (losses)/gains in respect of cost of hedging (52) 26
Net gains on investment in debt instruments measured at fair value through 1 21
other comprehensive income
Tax on items that may be reclassified subsequently to profit or loss 6 (40) (66)
Total items from continuing operations that may be reclassified subsequently (225) (114)
to profit or loss
Other comprehensive loss (320) (310)
Other comprehensive (loss)/income for the year, net of tax from discontinued 9 (10) 10
operations
Other comprehensive loss (330) (300)
Total comprehensive income for the year from continuing operations 2,509 1,907
Total comprehensive income for the year from discontinued operations 9 66 84
Total comprehensive income for the year 2,575 1,991
Attributable to:
Equity shareholders of the parent
From continuing operations 2,508 1,906
From discontinued operations 66 84
2,574 1,990
Non-controlling interests
From continuing operations 1 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 2023 488 1,302 31,608 (3,860) 29,538 24 29,562
Profit for the year - - 2,290 - 2,290 1 2,291
Other comprehensive loss for the year - - (168) (132) (300) - (300)
Total comprehensive income/(loss) for the year - - 2,122 (132) 1,990 1 1,991
Equity dividends - - (1,718) - (1,718) - (1,718)
Scrip dividend-related share issue(1) 5 (6) - - (1) - (1)
Issue of treasury shares - - 21 - 21 - 21
Transactions in own shares - 2 (6) - (4) - (4)
Share-based payments - - 37 - 37 - 37
Tax on share-based payments - - 2 - 2 - 2
Cash flow hedges transferred to the statement of financial position, net of - - - 2 2 - 2
tax
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
At 31 March 2025 638 1,292 40,106 (4,233) 37,803 23 37,826
1. Included within the share premium account are costs associated with scrip
dividends.
Consolidated statement of financial position
as at 31 March
2025 2024
Notes £m £m
Non-current assets
Goodwill 9,532 9,729
Other intangible assets 3,564 3,431
Property, plant and equipment 74,091 68,907
Other non-current assets 959 848
Pension assets 10 2,489 2,407
Financial and other investments 798 880
Investments in joint ventures and associates 608 1,420
Derivative financial assets 369 324
Total non-current assets 92,410 87,946
Current assets
Inventories 557 828
Trade and other receivables 4,092 3,415
Current tax assets 11 11
Financial and other investments 5,753 3,699
Derivative financial assets 113 44
Cash and cash equivalents 1,178 559
Assets held for sale 9 2,628 1,823
Total current assets 14,332 10,379
Total assets 106,742 98,325
Current liabilities
Borrowings (4,662) (4,859)
Derivative financial liabilities (381) (335)
Trade and other payables (4,472) (4,076)
Contract liabilities (96) (127)
Current tax liabilities (219) (220)
Provisions (357) (298)
Liabilities held for sale 9 (434) (1,474)
Total current liabilities (10,621) (11,389)
Non-current liabilities
Borrowings (42,877) (42,213)
Derivative financial liabilities (821) (909)
Other non-current liabilities (876) (880)
Contract liabilities (2,418) (2,119)
Deferred tax liabilities (8,038) (7,519)
Pensions and other post-retirement benefit obligations 10 (573) (593)
Provisions (2,692) (2,811)
Total non-current liabilities (58,295) (57,044)
Total liabilities (68,916) (68,433)
Net assets 37,826 29,892
Equity
Share capital 638 493
Share premium account 1,292 1,298
Retained earnings 40,106 32,066
Other equity reserves (4,233) (3,990)
Total shareholders' equity 37,803 29,867
Non-controlling interests 23 25
Total equity 37,826 29,892
Consolidated cash flow statement
for the years ended 31 March
2025 2024
Notes £m £m
Cash flows from operating activities
Total operating profit from continuing operations 2(b) 4,934 4,475
Adjustments for:
Exceptional items and remeasurements 4 (169) 987
Other fair value movements 66 (16)
Depreciation, amortisation and impairment 2,175 2,061
Share-based payments 37 37
Changes in working capital 104 (49)
Changes in provisions 10 (154)
Changes in pensions and other post-retirement benefit obligations (90) 31
Cash flows relating to exceptional items (76) (91)
Cash generated from operations - continuing operations 6,991 7,281
Tax paid (183) (342)
Net cash inflow from operating activities - continuing operations 6,808 6,939
Cash flows from investing activities
Purchases of intangible assets (526) (549)
Purchases of property, plant and equipment (8,780) (6,904)
Disposals of property, plant and equipment 26 52
Investments in joint ventures and associates (396) (332)
Dividends received from joint ventures, associates and other investments 126 176
Disposal of interest in the UK Electricity System Operator(1) 9 577 -
Disposal of interest in the UK Gas Transmission business(1) 9 686 681
Disposal of financial and other investments 85 102
Acquisition of financial investments (122) (81)
Contributions to National Grid Renewables and Emerald Energy Venture LLC - (19)
Net movements in short-term financial investments (2,606) (1,141)
Interest received 332 148
Cash inflows on derivatives 11 123
Cash outflows on derivatives (6) -
Cash flows relating to exceptional items - 143
Net cash flow used in investing activities - continuing operations (10,593) (7,601)
Net cash flow from investing activities - discontinued operations 22 102
Cash flows from financing activities
Proceeds of Rights Issue 7,001 -
Transaction fees related to Rights Issue (162) -
Proceeds from issue of treasury shares 18 20
Transactions in own shares (7) (4)
Proceeds received from loans 3,237 5,563
Repayment of loans (2,861) (1,701)
Payments of lease liabilities (130) (118)
Net movements in short-term borrowings 925 544
Cash inflows on derivatives 62 86
Cash outflows on derivatives (106) (58)
Interest paid (1,920) (1,627)
Dividends paid to shareholders (1,529) (1,718)
Net cash flow from financing activities - continuing operations 4,528 987
Net increase in cash and cash equivalents 765 427
Reclassification to held for sale (123) (30)
Exchange movements (23) (1)
Cash and cash equivalents at start of year 559 163
Cash and cash equivalents at end of year 1,178 559
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 2025, which will be filed with the Registrar of Companies in due course.
Statutory accounts for the year ended 31 March 2024 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 2025 which are
consistent with those applied in the preparation of our Annual Report and
Accounts for the year ended 31 March 2024, 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;
• the judgement that it is appropriate to classify our liquefied natural
gas storage business at the Isle of Grain in the UK (Grain LNG) and National
Grid Renewables Development LLC (NG Renewables), our US onshore renewables
business, as held for sale, as detailed in note 9; 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 key sources 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 cash flows and real discount rates applied in determining the US
environmental provisions, in particular relating to three Superfund sites and
certain other legacy Manufacturing Gas Plant (MGP) sites (see note 4);
• 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; and
• the valuation of liabilities for pensions and other post-retirement
benefits (see note 10).
1. Basis of preparation and recent accounting developments continued
Disposal of the UK Electricity System Operator (ESO)
In October 2023, legislation required to enable the separation of the ESO and
the formation of the National Energy System Operator (NESO), which is now
responsible across both the electricity and gas systems, was passed through
Parliament (see note 9. On 1 October 2024, the Group completed the disposal
for consideration of £673 million, recognising a gain on disposal of
£187 million which has been classified as exceptional (see note 4). The ESO
did not meet the criteria for classification as a discontinued operation and
therefore its results have not been separately disclosed on the face of the
income statement, and are instead included within the results from continuing
operations.
Disposal of the UK Gas Transmission business
As described in note 9, on 26 September 2024 the Group completed the disposal
of its final 20% interest in the UK Gas Transmission business (held through
its associate GasT TopCo Limited) that was classified as held for sale. The
gain on disposal of GasT TopCo Limited has been recorded within discontinued
operations. As an associate held for sale, the Group did not recognise any
share of results in the period prior to disposal.
New accounting standards and interpretations effective for the year ended 31
March 2025
The Group adopted the following new standards and amendments to standards
which have had no material impact on the Group's results or financial
statement disclosures:
• amendments to IAS 1 'Non-current Liabilities with Covenants' and
'Classification of Liabilities as Current or Non-current';
• amendments to IFRS 16 'Lease Liability in a Sale and Leaseback'; and
• amendments to IAS 7 and IFRS 7 'Supplier Finance Arrangements'.
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:
• amendments to IAS 21 'Lack of exchangeability';
• 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 requires that companies classify all income and
expenses into five categories in the statement of profit or loss, namely the
operating, investing, financing, discontinued operations and income tax
categories. Management-defined performance measures are disclosed in a single
note and enhanced guidance is provided on the aggregation and disaggregation
of information presented in the financial statements. 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 in future periods.
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 14 May 2025.
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 six 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.
UK Electricity System Operator The Great Britain system operator. The Group completed the disposal of the ESO
to the UK Government on 1 October 2024 (see note 9).
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 all commercial operations in LNG at the Isle of Grain in the UK and
Providence, Rhode Island in the US, our electricity generation business in
the US, our electricity interconnectors 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. NG Renewables and Grain LNG were classified as held for sale in the
year (see note 9).
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.
2025 2024
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 2,619 (135) 2,484 2,735 (40) 2,695
UK Electricity Distribution 2,424 (3) 2,421 1,795 (5) 1,790
UK Electricity System Operator 1,029 (17) 1,012 3,788 (35) 3,753
New England 4,306 - 4,306 3,948 - 3,948
New York 6,689 - 6,689 6,094 - 6,094
National Grid Ventures 1,397 (47) 1,350 1,389 (57) 1,332
Other 122 (6) 116 244 (6) 238
Total revenue from continuing operations 18,586 (208) 18,378 19,993 (143) 19,850
Split by geographical areas - continuing operations:
UK 6,707 9,063
US 11,671 10,787
Total revenue from continuing operations 18,378 19,850
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.
Before exceptional items and remeasurements Exceptional items and remeasurements After exceptional items and remeasurements
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
Operating segments - continuing operations:
UK Electricity Transmission 1,277 1,677 - (3) 1,277 1,674
UK Electricity Distribution 1,610 993 (12) (18) 1,598 975
UK Electricity System Operator (364) 880 151 (498) (213) 382
New England 982 643 26 (2) 1,008 641
New York 1,023 860 246 (498) 1,269 362
National Grid Ventures 380 469 (375) 89 5 558
Other (143) (60) 133 (57) (10) (117)
Total operating profit from continuing operations 4,765 5,462 169 (987) 4,934 4,475
Split by geographical area - continuing operations:
UK 2,775 3,923 257 (487) 3,032 3,436
US 1,990 1,539 (88) (500) 1,902 1,039
Total operating profit from continuing operations 4,765 5,462 169 (987) 4,934 4,475
Before exceptional items and remeasurements Exceptional items and remeasurements After exceptional items and remeasurements
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
Reconciliation to profit before tax:
Operating profit from continuing operations 4,765 5,462 169 (987) 4,934 4,475
Share of post-tax results of joint ventures and associates 75 101 (2) (64) 73 37
Finance income 449 244 1 4 450 248
Finance costs (1,810) (1,723) 3 11 (1,807) (1,712)
Profit before tax from continuing operations 3,479 4,084 171 (1,036) 3,650 3,048
The following items are included in the total operating profit by segment:
Depreciation, amortisation and impairment(1) 2025 2024
£m £m
Operating segments:
UK Electricity Transmission (540) (521)
UK Electricity Distribution (249) (223)
UK Electricity System Operator - (61)
New England (469) (420)
New York (731) (658)
National Grid Ventures (173) (166)
Other (13) (12)
Total (2,175) (2,061)
Asset type:
Property, plant and equipment (1,878) (1,769)
Non-current intangible assets (297) (292)
Total (2,175) (2,061)
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.
2025 2024
£m £m
Operating segments:
UK Electricity Transmission 2,999 1,912
UK Electricity Distribution 1,426 1,247
UK Electricity System Operator - 85
New England 1,751 1,673
New York 3,289 2,654
National Grid Ventures 378 662
Other 4 2
Total 9,847 8,235
Asset type:
Property, plant and equipment 8,894 7,124
Non-current intangible assets 478 481
Equity investments in joint ventures and associates 116 332
Capital expenditure prepayments 359 298
Total 9,847 8,235
(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.
2025 2024
£m £m
Split by geographical area:
UK 42,623 40,065
US 46,131 44,270
88,754 84,335
Reconciliation to total non-current assets:
Pension assets 2,489 2,407
Financial and other investments 798 880
Derivative financial assets 369 324
Non-current assets 92,410 87,946
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) UK Electricity System Operator
The Group disposed of the UK Electricity System Operator on 1 October 2024.
Prior to its disposal and the formation of the NESO, the UK Electricity System
Operator earned revenue for balancing supply and demand of electricity on
Great Britain's electricity transmission system, where it acted as principal.
Balancing services are regulated by Ofgem and revenue payable by generators
and suppliers of electricity was recognised as the service was provided.
The UK Electricity System Operator also collected revenues on behalf of
transmission operators, principally National Grid Electricity
Transmission plc and the Scottish and Offshore transmission operators, from
users (electricity suppliers) who connect to or use the transmission system.
As the UK Electricity System Operator acted as an agent in this capacity,
transmission network revenues were recorded net of payments to transmission
operators.
(d) 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.
(e) 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
(f) 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. Grain LNG was
classified as held for sale in the year (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 is
jointly controlled by National Grid and Washington State Investment Board
(WSIB). NG Renewables develops wind and solar generation assets in the US,
while Emerald has a right of first refusal to buy, build and operate those
assets. Revenue is recognised as it is earned. NG Renewables, together with
Emerald, was classified as held for sale in the year (see note 9).
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.
(g) 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
(h) 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 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 represents 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 which was classified as held
for sale in the year (see note 10).
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 ended 31 March 2025 UK Electricity Transmission UK Electricity Distribution UK Electricity System Operator New New National Grid Ventures Other Total
£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
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 2024 £m £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
Transmission(1) 2,591 - (10) 73 493 869 - 4,016
Distribution - 1,712 - 3,786 5,500 - - 10,998
System Operator - - 3,763 - - - - 3,763
Other(2) 25 73 - 8 15 168 4 293
Total IFRS 15 revenue 2,616 1,785 3,753 3,867 6,008 1,037 4 19,070
Other revenue
Generation - - - - - 360 - 360
Other(3) 79 5 - 81 86 (65) 234 420
Total other revenue 79 5 - 81 86 295 234 780
Total revenue from continuing operations 2,695 1,790 3,753 3,948 6,094 1,332 238 19,850
1. The UK Electricity System Operator transmission revenue generated in the
year represents transmission revenues collected, net of payments made to
transmission owners.
2. The UK Electricity Transmission and 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 and the UK Gas Transmission business,
and a provision and 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 ended 31 March 2024 UK Electricity Transmission UK Electricity Distribution UK Electricity System Operator New New National Grid Ventures Other Total
£m £m £m England York £m £m £m
£m £m
Revenue under IFRS 15
UK 2,616 1,785 3,753 - - 878 1 9,033
US - - - 3,867 6,008 159 3 10,037
Total IFRS 15 revenue 2,616 1,785 3,753 3,867 6,008 1,037 4 19,070
Other revenue
UK 79 5 - - - (76) 22 30
US - - - 81 86 371 212 750
Total other revenue 79 5 - 81 86 295 234 780
Total revenue from continuing operations 2,695 1,790 3,753 3,948 6,094 1,332 238 19,850
Contract liabilities represent revenue to be recognised in future periods
relating to contributions in aid of construction of £2,514 million (2024:
£2,246 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, 50 years
and 50 years respectively. The weighted average amortisation period over which
revenue for contract liabilities is recognised is 22 years.
Future revenues in relation to unfulfilled performance obligations amount to
£1.5 billion (2024: £6.1 billion). £1.5 billion (2024: £1.9 billion)
relates to connection contracts in UK Electricity Transmission which will be
recognised as revenue over a weighted average of 26 years. The comparative
balances include revenues to be earned under contracts held by Grain LNG,
which was classified as held for sale in the year.
The amount of revenue recognised for the year ended 31 March 2025 from
performance obligations satisfied (or partially satisfied) in previous
periods, mainly due to changes in the estimate of the stage of completion, is
£nil (2024: £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.
2025 2024
£m £m
Included within operating profit
Exceptional items:
Provision for UK electricity balancing costs 151 (498)
Net gain on the sale of the ESO 187 -
Major transformation programme (74) -
Changes in environmental provisions 146 (496)
Transaction, separation and integration costs(1) (65) (44)
Impairment of joint venture (303) -
Cost efficiency programme - (65)
IFA fire - 92
42 (1,011)
Remeasurements - commodity contract derivatives 127 24
169 (987)
Included within finance income and costs
Remeasurements:
Net gains/(losses) on financial assets at fair value through profit and loss 1 4
Net gains on financing derivatives 3 11
4 15
Included within share of post-tax results of joint ventures and associates
Remeasurements:
Net losses on financial instruments (2) (64)
Total included within profit before tax 171 (1,036)
Included within tax
Tax on exceptional items 76 159
Tax on remeasurements (36) (7)
40 152
Total exceptional items and remeasurements after tax 211 (884)
Analysis of total exceptional items and remeasurements after tax
Exceptional items after tax 118 (852)
Remeasurements after tax 93 (32)
Total exceptional items and remeasurements after tax 211 (884)
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.
2025
Provision for UK electricity balancing costs
During the prior year, the ESO's operating profit increased due to a
substantial over-recovery of allowed revenues received under its regulatory
framework. As described in note 3, 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 year ended 31 March 2025 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
(see note 9).
Net gain on sale of the ESO
On 1 October 2024, the Group completed the disposal of the ESO to the UK
Government for consideration of £673 million (see note 9). As a result, the
Group derecognised net assets of £486 million, resulting in a gain of
£187 million. The receipt of cash has been recognised within net cash used
in investing activities within the consolidated cash flow statement.
Major transformation programme
Following the announcement of our new 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 period, the Group incurred £74 million of costs in
relation to the programme. The costs recognised primarily relate to technology
implementation costs, employee costs and professional fees incurred in
delivering the programme. While the costs incurred since the commencement of
the programme do 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 have 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.
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. During the period, 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 have 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.
The real discount rate applied to the Group's environmental provisions was
also revised in the year to 2.0% (2024: 1.5%) 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 is now
around 10 years.
4. Exceptional items and remeasurements continued
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.
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 has also recognised a £31 million impairment loss (see note 9). These
costs have been classified as exceptional in accordance with our exceptional
items policy. While the costs incurred in the current year in isolation are
not sufficiently material to warrant classification as an exceptional item,
when taken in aggregate with the respective disposals which are anticipated
in the year ended 31 March 2026, the impact to the consolidated income
statement incurred over both years will be sufficiently material to be
classified as exceptional in line with our policy. The total cash outflow for
the year was £6 million.
Impairment of joint venture
In the 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 has determined that the investment currently has
negligible value and an impairment of £303 million has been recognised.
2024
Provision for UK electricity balancing costs
As described above, during the prior year the ESO's operating profit increased
due to a substantial over-recovery of allowed revenues received under its
regulatory framework. The Group recognised a liability for the over-recovered
revenues which were forecasted to transfer through the sales process.
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 increased
our US environmental provision by £496 million. Under the terms of our rate
plans, we are entitled to recovery of environmental clean-up costs from rate
payers in future reporting periods.
Transaction, separation and integration costs
Separation costs of £11 million were incurred in relation to the disposal of
NECO, £6 million in relation to the disposal of the UK Gas Transmission
business and £27 million in connection with the integration of NGED. The
costs incurred primarily related to professional fees, relocation costs and
employee costs. The costs were classified as exceptional in accordance with
our exceptional items policy. While the transaction, separation and
integration costs incurred during the prior year did not meet the quantitative
threshold to be classified as exceptional on a standalone basis, when taken in
aggregate with the £340 million of costs in previous periods, the costs
qualified for exceptional treatment in line with our exceptional items policy.
The total cash outflow for the period was £33 million. The Group is entitled
to cost recovery in relation to the separation of the ESO. Accordingly, these
costs were not classified as exceptional.
Cost efficiency programme
During the prior year, the Group incurred £65 million of costs in relation to
the major cost efficiency programme announced in November 2021, that targeted
at least £400 million savings per annum across the Group by the end of three
years. The costs recognised in the period primarily related to redundancy
provisions, employee costs and professional fees incurred in delivering the
programme. While the costs incurred during the year did not meet the
quantitative threshold to be classified as exceptional on a standalone basis,
when taken in aggregate with the £142 million of costs incurred since the
announcement of the programme, the costs qualified for exceptional treatment
in line with our exceptional items policy. The total cash outflow for the year
was £53 million. The cost efficiency programme completed in the prior year.
Fire at IFA converter station
In September 2021, a fire at the IFA1 converter station in Sellindge, Kent
caused significant damage to infrastructure on site. In the period, the Group
recognised net insurance claims of £92 million, which were recognised as
exceptional in line with our exceptional items policy and consistent with
related claims in the prior year. The total cash inflow in the period in
relation to the insurance proceeds was £92 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;
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; and
iv. Unrealised net gains/(losses) on derivatives and other financial
instruments within our joint ventures and associates.
5. Finance income and costs
2025 2024
£m £m
Finance income (excluding remeasurements)
Net interest income on pensions and other post-retirement benefit obligations 98 100
Interest income on financial instruments:
Bank deposits and other financial assets 341 139
Dividends received on equities held at fair value through other comprehensive 1 1
income (FVOCI)
Other income 9 4
449 244
Finance costs (excluding remeasurements)
Interest expense on financial liabilities held at amortised cost:
Bank loans and overdrafts (110) (140)
Other borrowings(1) (1,553) (1,424)
Interest on derivatives (285) (277)
Unwinding of discount on provisions and other payables (130) (102)
Other interest (26) (31)
Less: interest capitalised(2) 294 251
(1,810) (1,723)
Remeasurements - Finance income
Net gains/(losses) on FVTPL financial assets 1 4
1 4
Remeasurements - Finance costs
Net gains on financing derivatives³
Derivatives designated as hedges for hedge accounting 4 13
Derivatives not designated as hedges for hedge accounting (1) (2)
3 11
Total remeasurements - Finance income and costs 4 15
Finance income 450 248
Finance costs(4) (1,807) (1,712)
Net finance costs from continuing operations (1,357) (1,464)
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 4.3% (2024: 4.7%). In the UK,
capitalised interest qualifies for a current year tax deduction with tax
relief claimed of £39 million (2024: £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 gain on borrowing and investment
activities of £241 million (2024: £271 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 £152 million (2024: £208 million).
6. Tax
Tax charged to the consolidated income statement - continuing operations
2025 2024
£m £m
Tax before exceptional items and remeasurements 861 983
Total tax reported within exceptional items and remeasurements (40) (152)
Total tax charge from continuing operations 821 831
Tax as a percentage of profit before tax
2025 2024
% %
Before exceptional items and remeasurements - continuing operations 24.7 24.1
After exceptional items and remeasurements - continuing operations 22.5 27.3
2025 2024
£m £m
Current tax:
UK corporation tax at 25% (2024: 25%) 66 410
UK corporation tax adjustment in respect of prior years (36) (36)
30 374
Overseas corporation tax 47 82
Overseas corporation tax adjustment in respect of prior years (39) (90)
8 (8)
Total current tax from continuing operations 38 366
Deferred tax:
UK deferred tax 524 388
UK deferred tax adjustment in respect of prior years 25 43
549 431
Overseas deferred tax 195 (40)
Overseas deferred tax adjustment in respect of prior years 39 74
234 34
Total deferred tax from continuing operations 783 465
Total tax charge from continuing operations 821 831
The mandatory exception to recognising and disclosing information about the
deferred tax assets and liabilities related to Pillar Two income taxes has
been applied as required by IAS 12. The Pillar Two global minimum corporation
tax rate of 15% introduced by the Organisation for Economic Co-operation and
Development (OECD) was enacted into UK law on 11 July 2023 and was applicable
to National Grid from 1 April 2024. Exposure to additional taxation under
Pillar Two is immaterial to the Group.
Factors that may affect future tax charges
The main UK corporation tax rate is 25% and deferred tax balances as at 31
March 2025 have been calculated at 25%.
In light of the US Government's desire to extend certain provisions of the
2017 Tax Cuts and Jobs Act (TCJA) expiring at the end of 2025, the
US Congress and the US Administration are considering changes to federal tax
legislation that could impact National Grid. However, since no changes have
been substantively enacted at the balance sheet date, the income tax balances
as at 31 March 2025 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
2025 2025 2024 2024(1)
£m pence £m pence
Adjusted earnings from continuing operations 2,615 55.6 3,100 77.7
Exceptional items and remeasurements after tax from continuing operations 211 4.4 (884) (22.2)
(see note 4)
Earnings from continuing operations 2,826 60.0 2,216 55.5
Adjusted earnings from discontinued operations (see note 9) 4 - 13 0.3
Exceptional items and remeasurements after tax from discontinued operations 72 1.6 61 1.6
Earnings from discontinued operations 76 1.6 74 1.9
Total adjusted earnings 2,619 55.6 3,113 78.0
Total exceptional items and remeasurements after tax 283 6.0 (823) (20.6)
(including discontinued operations)
Total earnings 2,902 61.6 2,290 57.4
2025 2024(1)
millions millions
Weighted average number of ordinary shares - basic 4,707 3,991
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
(b) Diluted EPS
Earnings EPS Earnings EPS
2025 2025 2024 2024(1)
£m pence £m pence
Adjusted earnings from continuing operations 2,615 55.4 3,100 77.3
Exceptional items and remeasurements after tax from continuing operations 211 4.4 (884) (22.0)
(see note 4)
Earnings from continuing operations 2,826 59.8 2,216 55.3
Adjusted earnings from discontinued operations 4 - 13 0.3
Exceptional items and remeasurements after tax from discontinued operations 72 1.6 61 1.5
(see note 9)
Earnings from discontinued operations 76 1.6 74 1.8
Total adjusted earnings 2,619 55.4 3,113 77.6
Total exceptional items and remeasurements after tax 283 6.0 (823) (20.5)
(including discontinued operations)
Total earnings 2,902 61.4 2,290 57.1
2025 2024(1)
millions millions
Weighted average number of ordinary shares - diluted 4,729 4,008
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
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.
2025 2024
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 39.12 811 643 37.60 1,325 56
Interim dividend in respect of the current year 15.84 718 59 19.40 393 320
54.96 1,529 702 57.00 1,718 376
For comparability purposes the table below presents dividends per share
adjusted for a factor of 1.0811 to reflect the bonus element of the
Rights Issue:
2025 2024
Pence Impact of Rights Issue Pence Pence Impact of Rights Issue Pence
per share (actual) per share (adjusted) per share (actual) per share (adjusted)
Final dividend in respect of the prior year 39.12 (2.93) 36.19 37.60 (2.82) 34.78
Interim dividend in respect of the current year 15.84 - 15.84 19.40 (1.46) 17.94
54.96 (2.93) 52.03 57.00 (4.28) 52.72
The Directors are proposing a final dividend for the year ended 31 March 2025
of 30.88p per share that would absorb approximately £1,512 million
of shareholders' equity (assuming all amounts are settled in cash). It will
be paid on 17 July 2025 to shareholders who are on the register of members
at 30 May 2025 (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.
The following assets and liabilities were classified as held for sale:
2025 2024
Total Total liabilities held for sale Net assets/(liabilities) held for sale Total Total liabilities held for Net assets/(liabilities) held for
assets £m £m assets sale sale
held for sale held for £m £m
£m sale
£m
UK Electricity System Operator - - - 1,134 (1,427) (293)
National Grid Renewables 1,528 (108) 1,420 - - -
Grain LNG 1,100 (326) 774 - - -
Investment in GasT TopCo Limited - - - 689 - 689
RAA - - - - (47) (47)
Net assets/(liabilities) held for sale 2,628 (434) 2,194 1,823 (1,474) 349
Gain on disposal of the ESO
In October 2023, legislation required to enable the separation of the ESO and
the formation of the NESO, which will undertake responsibilities across both
the electricity and gas systems, was passed through Parliament. The assets and
liabilities of the ESO were consequently presented as held for sale in the
consolidated financial statements in the year ended 31 March 2024. The
disposal subsequently completed on 1 October 2024 for consideration of
£673 million.
Based on the scale and pass-through nature of the ESO, it is not considered a
separate major line of business or geographic operation under IFRS 5 for
treatment as a discontinued operation, and its disposal is not part of a
single coordinated plan being undertaken by the Group. Accordingly, the
results have not been separately disclosed on the face of the income
statement, and are instead included within the results from continuing
operations. Financial information relating to the gain arising on disposal
of the ESO is set out below:
£m
Intangible assets 485
Property, plant and equipment 121
Trade and other receivables 375
Pension asset 16
Cash and cash equivalents 51
Financial investments 501
Total assets on disposal 1,549
Borrowings (13)
Other liabilities (703)
Provision for UK electricity balancing costs (note 4) (347)
Total liabilities on disposal (1,063)
Net assets on disposal 486
Total consideration received¹ 673
Gain on sale 187
1. Included within total consideration is deferred proceeds of £45 million
which were settled after 31 March 2025.
Up until its disposal, the ESO generated profit after tax of £103 million
for the year ended 31 March 2025 (2024: £178 million profit; 2023:
£182 million profit).
9. Assets held for sale and discontinued operations continued
NG Renewables and Grain LNG
On 24 February 2025, the Group agreed to sell NG Renewables, its US onshore
renewables business, to Brookfield Asset Management. Completion of the
transaction will be subject to certain consents and regulatory approvals and
is expected to complete in the first half of the year ending 31 March 2026.
The Group has also previously announced its intention to sell Grain LNG, its
UK LNG asset. As both sales are considered to be highly probable and
expected to complete within a year, the associated assets and liabilities have
been presented as held for sale in the consolidated statement
of financial position at 31 March 2025. However, as NG Renewables and Grain
LNG do not represent separate major lines of business or geographical
operations, they have not met the criteria for classification as discontinued
operations and therefore their results for the period are not separately
disclosed on the face of the income statement.
The following assets and liabilities were classified as held for sale at 31
March 2025.
National Grid Renewables Grain LNG
£m £m
Goodwill 53 -
Other intangible assets - 25
Property, plant and equipment 340 898
Investments in joint ventures and associates 873 -
Trade and other receivables 51 31
Cash and cash equivalents 30 123
Financial investments 40 -
Other assets 141 23
Total assets 1,528 1,100
Borrowings (2) (132)
Other liabilities (106) (194)
Total liabilities (108) (326)
Net assets 1,420 774
The Group has recognised a £31 million impairment loss on remeasuring the NG
Renewables disposal group to fair value less costs to sell, with the loss
allocated to goodwill. No impairment losses were recognised following
reclassification of the Grain LNG assets and liabilities classified to held
for sale. The aggregate profit after tax for NG Renewables and Grain LNG for
the period ended 31 March 2025 was £60 million (2024: £49 million).
The UK Gas Transmission business
On 31 January 2023, the Group disposed of 100% of the UK Gas Transmission
business for cash consideration of £4.0 billion and a 40% interest in a
newly incorporated UK limited company, GasT TopCo Limited. The other 60% was
purchased by Macquarie Infrastructure and Real Assets (MIRA) and British
Columbia Investment Management Corporation (BCI) (together, the 'Consortium').
The Group also entered into a Further Acquisition Agreement (the FAA option)
with the Consortium over its remaining 40% interest. Both the investment in
GasT TopCo Limited and the FAA option were immediately classified as held for
sale and so the Group has not applied equity accounting in relation to its
investment in GasT TopCo Limited.
The FAA was partially exercised by the Consortium on 11 March 2024 and the
Group disposed of 20% of the 40% interest in GasT TopCo Limited, as detailed
in the Annual Report and Accounts for the year ended 31 March 2024. As part of
the transaction, the Group also entered into a new agreement with the
Consortium, the Remaining Acquisition Agreement (the 'RAA'), to replace the
FAA option for the potential sale of all or part of the remaining 20% equity
interest in GasT TopCo Limited.
On 26 July 2024, the Consortium exercised its option under the RAA and the
disposal of the Group's remaining interest in GasT TopCo Limited completed on
26 September 2024. 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 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.
9. Assets held for sale and discontinued operations continued
The summary income statements for the years ended 31 March 2025 and 2024 are
as follows:
Before exceptional items Exceptional items Total
and remeasurements and remeasurements
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
Operating profit - - - - - -
Finance income 5 17 - - 5 17
Finance costs(1) - - 47 62 47 62
Profit before tax 5 17 47 62 52 79
Tax (1) (4) - 3 (1) (1)
Profit after tax from 4 13 47 65 51 78
discontinued operations
Gain/(loss) on disposal - - 25 (4) 25 (4)
Total profit after tax from 4 13 72 61 76 74
discontinued operations
1. Exceptional finance costs include the remeasurement of the FAA option and
the RAA.
The summary statements of comprehensive income for the years ended 31 March
2025 and 2024 are as follows:
2025 2024
£m £m
Profit after tax from discontinued operations 76 74
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) 13
through other comprehensive income
Tax on items that may be reclassified subsequently to profit or loss 3 (3)
Total (losses)/gains from discontinued operations that may be reclassified (10) 10
subsequently to profit or loss
Other comprehensive (loss)/income for the year, net of tax from discontinued (10) 10
operations
Total comprehensive income for the year from discontinued operations 66 84
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
2025 2024
£m £m
Present value of funded obligations (16,154) (17,601)
Fair value of plan assets 18,441 19,733
2,287 2,132
Present value of unfunded obligations (247) (266)
Other post-employment liabilities (47) (52)
1,993 1,814
Restrictions on asset recognised (77) -
Net defined benefit asset 1,916 1,814
Represented by:
Liabilities (573) (593)
Assets 2,489 2,407
1,916 1,814
The net pensions and other post-retirement benefit obligations position, as
recorded under IAS 19, at 31 March 2025 was a net asset of £1,916 million
compared to a net asset of £1,814 million at 31 March 2024. The movement of
£102 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
2025 2024 2025 2024 2025 2024
% % % % % %
Discount rate - past service 5.73 4.87 5.50 5.15 5.50 5.15
Discount rate - future service 5.95 4.92 5.50 5.15 5.50 5.15
Rate of increase in RPI - past service 2.99 3.05 n/a n/a n/a n/a
Rate of increase in RPI - future service 2.85 2.92 n/a n/a n/a n/a
Salary increases 3.08 3.10 4.50 4.50 4.50 4.50
Initial healthcare cost trend rate n/a n/a n/a n/a 7.80 7.10
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:
2025 2024
£m £m
Cash and cash equivalents 1,178 559
Current financial investments 5,753 3,699
Borrowings (47,539) (47,072)
Financing derivatives(1) (763) (793)
(41,371) (43,607)
1. The derivatives balance included in net debt excludes the commodity
derivative liabilities of £43 million (2024: assets of £83 million).
12. Reconciliation of net cash flow to movement in net debt
2025 2024
£m £m
Increase/(decrease) in cash and cash equivalents 765 427
Increase/(decrease) in financial investments 2,274 993
(Increase)/decrease in borrowings 429 (2,976)
Increase in related derivatives(1) 352 140
Change in debt resulting from cash flows 3,820 (1,416)
Changes in fair value of financial assets and liabilities and exchange 756 703
movements
Net interest charge on the components of net debt (1,610) (1,689)
Other non-cash movements (207) (209)
Movement in net debt (net of related derivative financial instruments) in the 2,759 (2,611)
year
Net debt (net of related derivative financial instruments) at start of year (43,607) (40,973)
Reclassification to held for sale (523) (23)
Net debt (net of related derivative financial instruments) at end of year (41,371) (43,607)
1. The derivatives balance included in net debt excludes the commodity
derivative liabilities of £43 million (2024: assets of £83 million).
2025 2024
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 3,237 - 5,563 -
Repayment of loans (2,861) - (1,701) -
Payments of lease liabilities (130) - (118) -
Net movements in short-term borrowings 925 - 544 -
Cash inflows on derivatives - 62 - 86
Cash outflows on derivatives - (106) - (58)
Interest paid (1,608) (312) (1,330) (297)
Cash flows per financing activities section of cash flow statement (437) (356) 2,958 (269)
Adjustments:
Non-net debt-related items 8 - 18 -
Derivative cash (outflow)/inflow in relation to capital expenditure - (9) - (5)
Derivative cash (outflow)/inflow included in revenue - 8 - 11
Derivative cash inflows per investing section of cash flow statement - 11 - 123
Derivative cash outflows per investing section of cash flow statement - (6) - -
Cash flows relating to financing liabilities within net debt (429) (352) 2,976 (140)
Analysis of changes in net debt:
Borrowings (429) - 2,976 -
Financing derivatives - (352) - (140)
Cash flow movements relating to financing liabilities within net debt (429) (352) 2,976 (140)
13. Post balance sheet events
On 6 May 2025, NGG Finance plc issued an irrevocable notice of redemption for
the £1 billion 5.625% fixed rate resettable capital securities. This was to
redeem all outstanding securities on the first optional redemption date of 8
June 2025. The maturity of the securities as at the reporting date was 18 June
2073. In light of this information, the Group estimates that the financial
effect of the settlement of this liability for cash in full is the face value
of the borrowing as well as the interest accrued, which amounted to
£1,044 million as at 31 March 2025.
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.
Following the Rights Issue and the restatement of prior year earnings per
share to reflect the impact of the bonus element within the IFRS results, the
same restatement has been applied to all our earnings per share APM metric
comparatives. We have also changed the methodology used to calculate our Group
RoE metric, as noted in the detailed calculation. Comparative amounts have
been restated accordingly.
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.
In previous years, we additionally used Value Added and Value Growth APMs to
monitor the performance of the Group. These metrics were linked to Executive
LTPP incentive awards that fully vested in 2023/24. On the basis that the
Group no longer uses these measures, the disclosure of these additional Group
APMs has been discontinued in 2024/25.
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 Annual Performance Plan
(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 separate
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 and adjustments).
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 - continuing operations 18,378 (6,002) 12,376 505 12,881
Discontinued operations - - - - -
Total 18,378 (6,002) 12,376 505 12,881
Year ended 31 March 2024 Gross Pass- Net revenue Timing Underlying
revenue through £m £m net revenue
£m costs £m
£m
UK Electricity Transmission 2,735 (225) 2,510 (363) 2,147
UK Electricity Distribution 1,795 (233) 1,562 159 1,721
UK Electricity System Operator 3,788 (2,605) 1,183 (800) 383
New England 3,948 (1,653) 2,295 69 2,364
New York 6,094 (2,057) 4,037 20 4,057
National Grid Ventures 1,389 - 1,389 - 1,389
Other 244 - 244 - 244
Sales between segments (143) - (143) - (143)
Total - continuing operations 19,850 (6,773) 13,077 (915) 12,162
Discontinued operations - - - - -
Total 19,850 (6,773) 13,077 (915) 12,162
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 12 (#Page12) to 19
(#Page19) 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 2024/25, as highlighted below, our underlying results
exclude £505 million (2023/24: £915 million) of timing differences
as well as £87 million (2023/24: £226 million) of major storm costs (as
costs, net of in-year allowances and deductibles exceeded our $100 million
threshold in both years). We expect to recover major storm costs incurred
through regulatory mechanisms in the US. Underlying results also exclude
deferred tax in our UK regulated business (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 2025,
which was $1.27 to £1.00. The average rate for the year ended 31 March 2024,
was $1.26 to £1.00. Assets and liabilities as at 31 March 2024 have been
retranslated at the closing rate at 31 March 2025 of $1.29 to £1.00. The
closing rate for the reporting date 31 March 2024 was $1.26 to £1.00.
Reconciliation of statutory, adjusted and underlying profits from continuing
operations at actual exchange rates
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
Year ended 31 March 2024 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 1,674 3 1,677 (363) - - 1,314
UK Electricity Distribution 975 18 993 159 - - 1,152
UK Electricity System Operator 382 498 880 (800) - - 80
New England 641 2 643 69 90 - 802
New York 362 498 860 20 136 - 1,016
National Grid Ventures 558 (89) 469 - - - 469
Other (117) 57 (60) - - - (60)
Total operating profit 4,475 987 5,462 (915) 226 - 4,773
Net finance costs (1,464) (15) (1,479) - - - (1,479)
Share of post-tax results of joint ventures and associates 37 64 101 - - - 101
Profit before tax 3,048 1,036 4,084 (915) 226 - 3,395
Tax (831) (152) (983) 227 (61) 302 (515)
Profit after tax 2,217 884 3,101 (688) 165 302 2,880
Operating profit exceptional items and remeasurements split by segment
Year ended 31 March 2025 ESO BSUoS provision Environmental provision Gain on disposal of UK ESO 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 151 146 187 (74) (65) (303) 127 169
Year ended 31 March 2024 ESO BSuoS provision Environmental provision IFA fire Cost efficiency programme Transaction, separation and integration costs Commodity remeasurements Exceptionals and remeasurements
UK Electricity Transmission - - - (2) (1) - (3)
UK Electricity Distribution - - - - (18) - (18)
UK Electricity System Operator (498) - - - - - (498)
New England - - - (6) (11) 15 (2)
New York - (496) - (10) - 8 (498)
National Grid Ventures - - 92 (3) - - 89
Other - - - (44) (14) 1 (57)
Total operating profit exceptional items and remeasurements (498) (496) 92 (65) (44) 24 (987)
Reconciliation of adjusted and underlying earnings from continuing operations
at constant currency
At constant currency
Year ended 31 March 2024 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 1,677 - 1,677 (363) - - 1,314
UK Electricity Distribution 993 - 993 159 - - 1,152
UK Electricity System Operator 880 - 880 (800) - - 80
New England 643 (2) 641 69 90 - 800
New York 860 (3) 857 20 136 - 1,013
National Grid Ventures 469 - 469 - - - 469
Other (60) (60) - - - (60)
Total operating profit 5,462 (5) 5,457 (915) 226 - 4,768
Net finance costs (1,479) 2 (1,477) - - - (1,477)
Share of post-tax results of joint ventures and associates 101 - 101 - - - 101
Profit before tax 4,084 (3) 4,081 (915) 226 - 3,392
Tax (983) 1 (982) 227 (61) 302 (514)
Profit after tax 3,101 (2) 3,099 (688) 165 302 2,878
Attributable to non-controlling interests (1) - (1) - - - (1)
Earnings 3,100 (2) 3,098 (688) 165 302 2,877
Earnings per share (pence)(1) 77.7 (0.1) 77.6 (17.2) 4.1 7.6 72.1
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
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 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
Year ended 31 March 2024 Profit after tax Non-controlling interest Profit after tax attributable to the parent Weighted Earnings
£m £m £m average per share
number of pence(1)
shares
millions(1)
Statutory 2,217 (1) 2,216 3,991 55.5
Adjusted 3,101 (1) 3,100 3,991 77.7
Underlying 2,880 (1) 2,879 3,991 72.1
Underlying at constant currency 2,878 (1) 2,877 3,991 72.1
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
Reconciliation of total Group statutory operating profit to adjusted earnings
(including and excluding the impact of timing, major storm costs and
deferred tax on underlying profits in NGET and NGED)
Adjusted Underlying
2025 2024 2025 2024
£m £m £m £m
Continuing operations
Adjusted operating profit 4,765 5,462 5,357 4,773
Adjusted net finance costs (1,361) (1,479) (1,361) (1,479)
Share of post-tax results of joint ventures and associates 75 101 75 101
Adjusted profit before tax 3,479 4,084 4,071 3,395
Adjusted tax (861) (983) (616) (515)
Adjusted profit after tax 2,618 3,101 3,455 2,880
Attributable to non-controlling interests (3) (1) (3) (1)
Adjusted earnings from continuing operations 2,615 3,100 3,452 2,879
Exceptional items after tax 118 (852) 118 (852)
Remeasurements after tax 93 (32) 93 (32)
Earnings from continuing operations 2,826 2,216 3,663 1,995
Reconciliation of adjusted EPS to statutory earnings (including and excluding
the impact of timing, major storm costs and deferred tax on underlying profits
in NGET and NGED)
Including timing, major storm costs and deferred tax on underlying profits in Excluding timing, major storm costs and deferred tax on underlying profits in
NGET and NGED NGET and NGED
2025 2024(1) 2025 2024(1)
Year ended 31 March pence pence pence pence
Adjusted EPS from continuing operations 55.6 77.7 73.3 72.1
Exceptional items and remeasurements after tax from continuing operations 4.4 (22.2) 4.4 (22.2)
EPS from continuing operations 60.0 55.5 77.7 49.9
Adjusted EPS from discontinued operations - 0.3 - 0.3
Exceptional items and remeasurements after tax from discontinued operations 1.6 1.6 1.6 1.6
EPS from discontinued operations 1.6 1.9 1.6 1.9
Total adjusted EPS from continuing and discontinued operations 55.6 78.0 73.3 72.4
Total exceptional items and remeasurements after tax from continuing 6.0 (20.6) 6.0 (20.6)
and discontinued operations
Total Group EPS from continuing and discontinued operations 61.6 57.4 79.3 51.8
1. Comparative amounts have been restated to reflect the impact of the bonus
element of the Rights Issue.
Timing impacts
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 $1.26 for the year ended
31 March 2025.
UK UK UK New New Continuing Discontinued Total
Electricity Transmission Electricity Distribution Electricity System Operator England York £m £m £m
£m £m £m £m £m
1 April 2024 opening balance(1) 160 (282) 941 (452) 662 1,029 - 1,029
(Under)/over-recovery (151) 407 (479) 61 (343) (505) - (505)
Disposal - - (462) - - (462) - (462)
31 March 2025 closing balance to (recover)/return(2) 9 125 - (391) 319 62 - 62
UK UK UK New New Continuing Discontinued Total
Electricity Transmission Electricity Distribution Electricity System Operator England York £m £m £m
£m £m £m £m £m
1 April 2023 opening balance(1) (213) (124) 77 (383) 682 39 - 39
(Under)/over-recovery 363 (159) 800 (69) (20) 915 - 915
31 March 2024 closing balance to (recover)/return(2) 150 (283) 877 (452) 662 954 - 954
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 2025 was £65 million over-recovered
(translated at the closing rate of $1.29:£1). 31 March 2024 was £954 million
over-recovered (including discontinued operations and translated at the
closing rate of $1.26:£1).
Capital investment
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 2025 2024 % 2025 2024 %
£m £m change £m £m change
UK Electricity Transmission 2,999 1,912 57 2,999 1,912 57
UK Electricity Distribution 1,426 1,247 14 1,426 1,247 14
UK Electricity System Operator - 85 (100) - 85 (100)
New England 1,751 1,673 5 1,751 1,668 5
New York 3,289 2,654 24 3,289 2,645 24
Capital investment (regulated networks) 9,465 7,571 25 9,465 7,557 25
National Grid Ventures 378 662 (43) 378 661 (43)
Other 4 2 100 4 2 100
Group capital investment - continuing 9,847 8,235 20 9,847 8,220 20
Discontinued operations - - - - - -
Group capital investment - total 9,847 8,235 20 9,847 8,220 20
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.
2025 2024
£m £m
Asset type:
Property, plant and equipment 8,894 7,124
Non-current intangible assets 478 481
Transfers from prepayments 87 43
Group capital expenditure - continuing 9,459 7,648
Equity investments in joint ventures and associates 116 332
Capital expenditure prepayments 359 298
Transfers to capital expenditure additions (87) (43)
Group capital investment - continuing 9,847 8,235
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 2025 2024¹
£m £m
Interest expense (income statement) 1,810 1,723
Hybrid interest reclassified as dividend (37) (38)
Capitalised interest 294 251
Pensions interest adjustment 13 9
Unwinding of discount on provisions (130) (102)
Pension interest - 94
Adjusted interest expense 1,950 1,937
Net cash inflow from operating activities 6,808 6,939
Interest received on financial instruments 332 148
Interest paid on financial instruments (1,920) (1,627)
Dividends received 126 176
Working capital adjustment (104) 49
Excess employer pension contributions 26 27
Hybrid interest reclassified as dividend 37 38
Add back accretions 152 208
Difference in net interest expense in income statement to cash flow (45) (253)
Difference in current tax in income statement to cash flow 145 (24)
Cash flow from discontinued operations - -
Funds from operations (FFO) 5,557 5,681
FFO interest cover ((FFO + adjusted interest expense)/adjusted interest 3.8x 3.9x
expense)
1. Numbers for 2024 reflect the calculations for the total Group as based on
the published accounts for that year.
Retained cash flow/adjusted net debt
RCF/adjusted net debt is one of two 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. We
calculate RCF/adjusted net debt applying the methodology used by Moody's,
as this is one of the most constrained calculations of credit worthiness.
The net debt denominator includes adjustments to take account of the equity
component of hybrid debt.
Year ended 31 March 2025 2024(1)
£m £m
Funds from operations (FFO) 5,557 5,681
Hybrid interest reclassified as dividend (37) (38)
Ordinary dividends paid to shareholders (1,529) (1,718)
RCF 3,991 3,925
Borrowings 47,539 47,072
Less:
50% hybrid debt (814) (1,034)
Cash and cash equivalents (1,178) (578)
Financial and other investments (5,156) (3,084)
Underfunded pension obligations 247 266
Borrowings in held for sale - 13
Adjusted net debt (includes pension deficit) 40,638 42,655
RCF/adjusted net debt 9.8% 9.2%
1. Numbers for 2024 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 through 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 2025 2024
£m £m
Adjusted operating profit 1,277 1,677
Movement in regulatory 'IOUs' 256 (363)
UK regulatory notional deferred taxation adjustment 238 219
RAV indexation - 2% CPIH long-run inflation 368 343
Regulatory vs IFRS depreciation difference (575) (553)
Fast money/other (261) (119)
Pensions - (2)
Performance RAV created 65 68
Regulated financial performance 1,368 1,270
UK Electricity Distribution
Year ended 31 March 2025 2024
£m £m
Adjusted operating profit 1,610 993
Less non-regulated profits (7) (8)
Movement in regulatory 'IOUs' (417) 158
UK regulatory notional deferred taxation adjustment 15 38
RAV indexation - 2% CPIH (2023: 3% RPI) long-run inflation 230 216
Regulatory vs IFRS depreciation difference (547) (555)
Fast money/other (46) (36)
Pensions - -
Performance RAV created (1) 50
Regulated financial performance 837 856
UK Electricity System Operator
Year ended 31 March 2025 2024
£m £m
Adjusted operating profit (364) 880
Movement in regulatory 'IOUs' 479 (800)
UK regulatory notional deferred taxation adjustment 3 2
RAV indexation - 2% CPIH long-run inflation 9 7
Regulatory vs IFRS depreciation difference (50) (19)
Fast money/other (44) (29)
Regulated financial performance 33 41
Regulated financial performance - US
New England
Year ended 31 March 2025 2024
£m £m
Adjusted operating profit 982 643
Major storm costs 3 90
Timing (61) 69
US GAAP pension adjustment and other(1) 60 29
Regulated financial performance 984 831
1. £2 million unfavourable COVID-19 bad debt provision adjustment included
in 2025 other.
New York
Year ended 31 March 2025 2024
£m £m
Adjusted operating profit 1,023 860
Provision for bad and doubtful debts (COVID-19), net of recoveries(1) (47) (34)
Major storm costs 84 136
Timing 343 20
US GAAP pension adjustment 48 42
Regulated financial performance 1,451 1,024
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 2025 2024
£m £m
UK Electricity Transmission 1,368 1,270
UK Electricity Distribution 837 856
UK Electricity System Operator 33 41
New England 984 831
New York 1,451 1,024
Total regulated financial performance 4,673 4,022
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.
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 costs as 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. However,
we include the calculation below.
'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.
RAV, rate base or Total regulated
other business assets (for asset growth) and other balances
As at 31 March 2025 2024¹ 2025(2,3) 2024(1,2,3)
(£m at constant currency)
UK Electricity Transmission 20,570 18,388 20,290 17,886
UK Electricity Distribution 12,235 11,497 11,954 11,633
UK Electricity System Operator - 425 - (466)
New England 9,422 8,512 11,329 10,325
New York 17,923 16,015 19,752 17,029
Total regulated 60,150 54,837 63,325 56,407
National Grid Ventures and other business balances 7,352 7,509 5,942 6,533
Total Group regulated and other balances 67,502 62,346 69,267 62,940
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 £250 million (2024: £514
million) and over-recovered timing balances of £63 million (2024: £744
million over-recovered).
3. Includes assets for construction work-in-progress of £2,528 million
(2024: £2,021 million), other regulatory assets related to timing and other
cost deferrals of £1,113 million (2024: £1,250 million) and net working
capital assets of £95 million (2024: £445 million net working capital
liabilities).
New England and New York rate base and other total regulated and other
balances for 31 March 2024 have been re-presented in the table above
at constant currency. At actual currency the values were £10.6 billion and
£17.4 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. This year, to improve how the
metric reflects business performance, we updated our calculation to 'amortise'
goodwill and indefinite-lived intangible assets 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 2025 2024
£m £m
Regulated financial performance 4,673 4,022
Operating profit of other activities - continuing and discontinued operations 275 467
Group financial performance 4,948 4,489
Share of post-tax results of joint ventures and associates(1) 100 174
Non-controlling interests (3) (1)
Adjusted total Group interest charge (including discontinued) (1,590) (1,613)
Total Group tax charge (including discontinued) (861) (983)
Tax on adjustments 8 270
Total Group financial performance after interest and tax 2,602 2,336
Opening rate base/RAV 55,326 50,806
Opening other balances 8,223 7,973
Opening RAV, rate base and other balances 63,549 58,779
Opening goodwill 11,430 11,444
Opening goodwill adjustment (realisation of value over 20 years)(2) (4,441) (4,053)
Opening strategic pivot (asset swap) adjustment(3) (3,450) (3,464)
Opening capital employed 67,088 62,706
Opening net debt (43,509) (40,505)
Rights Issue adjustment (£6.8 billion net proceeds pro-rated from June 2024) 5,471 -
Opening equity 29,050 22,201
Group RoE 9.0% 10.5%
1. 2025 includes £25 million (2024: £73 million; 2023: £12 million) in
respect of the Group's minority interest in National Gas Transmission, which
was fully divested during 2024/25.
2. Calculation methodology updated in 2024/25 to 'amortise' goodwill and
intangibles on a straight-line basis over 20 years, resulting in an increase
of 120bps in 2024/25 (2024: 160bps; 2023: 240bps) in the Group RoE metric.
3. 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
2025 2024 2025 2024
% % % %
UK Electricity Transmission 55/45 8.3 8.0 7.3 7.0
UK Electricity Distribution 60/40 7.9 8.5 7.7 7.4
New England Avg. 45/55 9.1 9.2 9.9 9.9
New York Avg. 52/48 8.7 8.5 9.2 8.9
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 3% RPI
under RIIO-1 and 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.
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 2023/24, 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 2024/25,
this measure represents our current estimate, since local financial
statements have yet to be prepared.
2025 2024
£m £m
Underlying IFRS operating profit for New England segment 924 802
Underlying IFRS operating profit for New York segment 1,450 1,016
Weighted average £/$ exchange rate $1.266 $1.262
New England New York
2025 2024 2025 2024
$m $m $m $m
Underlying IFRS operating profit for US segments 1,170 1,013 1,836 1,283
Adjustments to convert to US GAAP as applied in our US OpCo entities
Adjustment in respect of customer contributions (30) (29) (51) (37)
Pension accounting differences(1) 78 43 61 63
Environmental charges recorded under US GAAP 5 10 (144) 21
Storm costs and recoveries recorded under US GAAP (59) (56) (7) 6
Other regulatory deferrals, amortisation and other items (314) (139) (518) (155)
Results for US regulated OpCo entities, aggregated under US GAAP(2) 850 842 1,177 1,181
Adjustments to determine regulatory operating profit used in US RoE
Adjustment for COVID-19-related provision for bad and doubtful debts(3) - - - -
Net other 96 14 374 151
Regulatory operating profit 946 856 1,551 1,332
Pensions(1) 70 60 169 159
Regulatory interest charge (219) (199) (459) (374)
Regulatory tax charge (218) (196) (351) (305)
Regulatory earnings used to determine US RoE 579 521 910 812
1. Following a change in US GAAP accounting rules, an element of the
pensions charge is reported outside operating profit with effect from 2019.
2. Based on US GAAP accounting policies as applied by our US regulated OpCo
entities.
3. US RoE included an adjustment reflecting our expectation for future
recovery of COVID-19-related bad and doubtful debt costs in 2020/21. The
adjustment is being unwound as regulated assets are recognised in respect of
the same debts in our US GAAP accounts.
New England New York
2025 2024 2025 2024
$m $m $m $m
US equity base (average for the year) 6,352 5,645 10,512 9,517
US jurisdiction RoE 9.1% 9.2% 8.7% 8.5%
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.
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%
For 2024/25, asset growth and regulated asset growth are calculated excluding
the reduction in RAV as a result of the sale of the UK Electricity System
Operator business, based on an estimated RAV value as at 1 October 2024 (the
date of disposal).
2023/24
£m constant currency 31 March 2024 31 March 2023 Increase Asset growth
UK RAV 30,356 28,292 2,064 7.3%
US rate base 25,097 22,517 2,580 11.5%
Total RAV and rate base (used to calculate regulated asset growth) 55,453 50,809 4,644 9.1%
National Grid Ventures and other 7,593 6,639 954 14.4%
Total assets (used to calculate asset growth) 63,046 57,448 5,598 9.7%
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 2024 are presented at historical
exchange rates and have not been restated for opening balance adjustments.
As at 31 March 2025 2024
£m £m
UK RAV 32,805 30,356
US rate base 27,345 25,097
Other invested capital included in gearing calculation 7,352 7,593
Total assets included in gearing calculation 67,502 63,046
Net debt (including 100% of hybrid debt and held for sale) (41,316) (43,584) change
Group gearing (based on 100% of net debt including held for sale) 61% 69% (8)% pts
Group gearing (excluding 50% of hybrid debt from net debt) including held for 60% 67% (7)% pts
sale
Rebased dividend per share
The table below reconciles the actual dividend per share paid with a 'rebased
dividend per share' calculated using a hypothetical assumption that all of the
additional shares from the Rights Issue existed for previous reporting
periods. Using this methodology the 'rebased dividend per share' equates to
45.264p per share.
Total Number of shares Actual dividend per share Rights Issue additional shares Total number of shares (rebased) Rebased
dividend millions pence millions millions dividend
£m per share
pence
Final dividend in respect of the year ended 31 March 2024 1,454 3,717 39.12p 1,085 4,802 30.28p
Interim dividend in respect of the year ended 31 March 2024 713 3,676 19.40p 1,085 4,761 14.98p
Total dividend for the year ended 31 March 2024 2,167 n/a 58.52p 1,085 n/a 45.26p
1 (#_ftnref1) Employee and contractor lost time injury frequency rate per
100,000 hours worked.
2 (#_ftnref2) Calculation methodology updated in 2024/25 to 'amortise'
acquisition-related goodwill and indefinite-lived intangibles on a
straight-line basis over 20 years. Comparatives have been restated
accordingly.
3 (#_ftnref3) KPI relates to capital expenditure as defined in Article 8 of
the EU Taxonomy regulation. It does not include 'equity investments to joint
ventures and associates' or 'capital expenditure prepayments'.
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