Our strategy

National Grid is focused on the ownership and operation of gas and electricity transmission and distribution infrastructure in and around the UK and north eastern US.

Portfolio evolution

The Group’s focus remains on managing a portfolio of assets that have a sustainable mix of cash generation, growth and risk to deliver an overall balance between long-term capital growth and cash generation to the benefit of shareholders.

The current portfolio of businesses:

  • delivers appropriate balance of yield and growth
  • maintains strong balance sheet with minimal scrip financing
  • supports growing dividend

Strategy discussions focus on evaluating the future portfolio, ensuring we have the right assets to deliver this sustainable, dividend-led investment proposition.

Total shareholder return

The core regulated asset growth, devidend and A- credit ratings represent priorities for allocation of capital.

Capital allocation decisions enhance TSR through:

 

  • Investment in additional growth opportunities
  • Share repurchase
  • Scrip dividend
  • Hybrid debt
  • Portfolio evolution

Total shareholder return = dividend yield + growth in the per share value of shareholders' equity

National Grid delivers shareholder returns through a mixture of growth, driven by investment and dividend yield. This added value is underpinned by efficiency against regulatory cost targets and incentives. Combining this with high standards of customer service and the efficient and safe operation enables consistent delivery of attractive regulatory returns. These returns allow the Company to continue to provide a strong cash dividend at the same time as financing organic growth at attractive rates.

Our 2015/16 strategic priorities are:

  • UK Electricity Transmission: Deliver efficient investment programme
  • UK Gas Transmission: Further important upgrades required
  • UK Gas Distribution: Priority to improve customer service
  • US Regulated: Sustain returns and growth, deliver new filings on time