National Grid plc (LON:NG) has issued a pre-close update ahead of announcing results for the year ending 31 March 2023 on 18 May 2023.
Overall, the Group’s performance is in line with our expectations. As set out at half year results, we continue to expect underlying EPS growth for FY2022/23 in the middle of our 6-8% CAGR growth range.
Though not expected to impact FY2022/23 results, the UK Government’s introduction of ‘full expensing’ tax relief for capital expenditure from 1 April 2023 to 31 March 2026, whilst economically neutral to National Grid, is expected to impact underlying earnings from FY2024-26.
Expected lower cash tax payable will result in reduced revenues in UK Electricity Transmission and UK Electricity Distribution, resulting in a broadly neutral cash position. However, these impacts, alongside a corresponding increase in IFRS deferred tax liabilities, will result in a net adverse impact to statutory and underlying earnings.
Taking this into account, the Group still expects to deliver underlying EPS growth of 6-8% CAGR across the five-year period from FY2022-26, but this is now expected to be towards the lower end of this range. Further updates will be provided with our detailed FY2023/24 guidance as part of full year results.
Finally, following the start of the RIIO-ED2 regulatory period on 1 April 2023, we will be hosting an investor event in London on 6 July 2023 showcasing our National Grid Electricity Distribution businesses.
