London, May 15, 2026, 09:06 BST
- National Grid plc dropped 2.79% to 1,254.50 pence during early London hours, giving back gains from its results day rally.
- The utility stuck to its 13% to 15% EPS growth goal for 2026/27, holding firm on guidance even after profits fell short. U.S. storm costs played a role in the miss.
- Management is targeting a minimum of £70 billion in investment through 2030/31, marking its largest-ever programme across networks in the UK and the U.S. Northeast.
National Grid plc shares slipped early Friday, erasing some of Thursday’s post-earnings rally. Investors digested an annual profit miss alongside a fresh £70 billion grid upgrade plan. The stock was down 2.79% at 1,254.50 pence as of 08:51 BST, according to LSEG figures cited by Investors’ Chronicle.
The British electricity and gas network operator reported underlying operating profit at £5.68 billion for the year to March 31, missing a company-compiled consensus forecast of £5.75 billion, according to Reuters. The result, which strips out specified one-off and timing items, triggered the move.
But the miss isn’t the only thing weighing on National Grid. The company’s ramping up capital spending just as regulators are eyeing costs more closely, borrowing remains expensive, and customers face higher bills. National Grid plans to invest at least £70 billion between 2026/27 and 2030/31, aiming for roughly 10% annual asset growth and 8% to 10% yearly growth in underlying EPS.
Central to the plan is RIIO-3, the five-year regime set by Ofgem that dictates revenue and investment limits for the UK’s monopoly energy networks. The regulator’s final determination covers April 2026 through March 2031, aiming—according to Ofgem—to balance sufficient investment revenue for network companies with the services customers expect.
Storm expenses delivered the immediate hit—U.S. storm-related costs climbed 7.4% to £636 million. Chief Executive Zoë Yujnovich told Reuters that despite ongoing geopolitical issues and U.S. tariffs, the impact has been muted, largely thanks to roughly 90% of the company’s procurement taking place locally in its U.S. division.
Calling it the “largest investment programme in our history,” Yujnovich said the company intends to update networks across the UK and the U.S. Northeast. The group logged record capital investment of £11.6 billion for 2025/26—an 18% jump on the prior year. Total dividend? Now at 48.49 pence per share.
National Grid said it has supply-chain and delivery structures lined up for roughly 75% of its £70 billion plan, with about two-thirds locked in under regulatory deals. The company also wrapped up sales of National Grid Renewables and Grain LNG, moves that mark its pivot toward regulated networks.
The portfolio cleanup delivered a cash boost, but debt kept climbing. As of March 31, net debt was £44.2 billion—£2.8 billion higher than a year ago. The two disposals generated £2.8 billion in net cash, which helped offset the increase, according to a filing.
Other players are in this UK grid revamp, too. ScottishPower’s SP Energy Networks kicked off its £12 billion, five-year overhaul back in April, targeting rewiring projects across central and southern Scotland. SSE’s SSEN Transmission flagged Ofgem’s RIIO-T3 ruling as pivotal—calling it essential to ease grid congestion, shore up energy security and lock in supply-chain investment.
Funding pressure is still a concern for a utility relying on heavy debt. Polymarket traders have priced in an 89% chance the Bank of England leaves rates untouched at its June meeting, but see a 58% probability of a rate increase happening in the UK during 2026—raising the stakes for anyone planning to tap the market if conditions tighten.
Still, plenty could trip up execution. Harsher U.S. weather, unfavorable rate-case rulings, supply-chain hiccups, or a more stubborn interest-rate backdrop would all threaten returns. And with customer affordability already a hot topic among both regulators and politicians, rising network costs keep showing up on bills.
Management isn’t budging for now. National Grid stuck with its forecast for 13% to 15% underlying EPS growth by 2026/27, arguing that higher allowed revenue should materialize as it shifts from RIIO-T2 to RIIO-T3. Judging by Friday’s share action, investors aren’t fully convinced—many want to see evidence the £70 billion plan won’t run into another round of unexpected storm costs.
