National Grid's Profit Jumps 22% on UK Grid Investment

National Grid’s underlying earnings per share (EPS) rose 22% year-over-year, reaching 36.5p, as increased revenues from its UK Electricity Transmission business boosted performance. This improvement is directly linked to the start of the RIIO-T3 price control, which allows for higher revenue to finance a significant step-up in investment.

The company is embarking on a substantial £70 billion capital investment plan over the next five years, with £40 billion earmarked for the UK, focused on upgrading its grid infrastructure and facilitating the integration of renewable energy sources. This investment is projected to drive a 9% return on equity in the fiscal year 2026/27, suggesting management is confident in the profitability of these projects. Underlying operating profit increased by 13% to £2,591 million, mirroring the positive impact of the RIIO-T3 framework.

Beyond the headline figures, National Grid is actively leveraging technology to enhance efficiency and delivery. Initiatives such as the Capital Control Tower, generative scheduling, and the deployment of 3D-printed concrete foundations are aimed at accelerating project timelines and reducing costs. The company also highlighted successful deployment of digital twins and AI-enabled tools to improve project management and asset optimization. These technological advancements are strategically aligned with the need to improve capital program execution as investment accelerates.

Looking ahead, National Grid anticipates continued growth, forecasting a roughly 9% increase in underlying EPS for 2026/27, driven by the ongoing rollout of its investment program and increased allowed revenues. The company is also preparing for the implementation of new accounting standards, IFRS 18 and IFRS 20, which will impact the presentation of its financial statements but are not expected to materially alter its underlying financial performance.