National Grid’s HY26 results show record £5.1bn spend as energy infrastructure ambitions scale under new CEO

How did National Grid plc’s earnings hold up in the first half of FY2026 amid record capex and regulatory change?

National Grid plc (LSE: NG) delivered a solid first-half performance for fiscal 2025/26, underscoring its strong operational execution and financial discipline. The company reported a 17 percent rise in statutory operating profit to £1.53 billion, reflecting robust earnings stability amid record capital investment and ongoing regulatory change. Additionally, underlying earnings per share increased by six percent to 29.8 pence, demonstrating the positive impact of its £5.1 billion spend and commitment to scaling energy infrastructure ambitions under new CEO leadership. The result came as the electric and gas infrastructure operator ramped up capital investment to an unprecedented £5.05 billion in the six months ended 30 September 2025. This spending figure, the highest first-half capex in the company’s history, reflects a broader strategic commitment to a £60 billion five-year investment program focused on building resilient, digitally integrated electricity networks across the United Kingdom and the United States.

Outgoing Chief Executive Officer John Pettigrew, who will step down on 16 November 2025 after nearly a decade in the role, described the results as a reflection of strong operational execution and financial discipline. Pettigrew’s successor, Zoë Yujnovich, who joined as Chief Executive Designate on 1 September, will inherit a portfolio at a critical inflection point as the company transitions from legacy assets toward grid-scale investment aligned with energy transition policy in both core markets.

Capital investment was particularly robust across National Grid Electricity Transmission and National Grid’s U.S. operations in New York and New England. While the company continues to experience cost pressures and exchange rate volatility, institutional investors are expected to interpret the performance as a positive signal of earnings stability and long-term growth visibility.

How did differences in regulatory frameworks, rate settlements, and capital deployment across the UK and US networks influence National Grid’s HY26 financial and operational performance outcomes?

National Grid Electricity Transmission posted a 17 percent year-on-year increase in underlying operating profit to £846 million, supported by a 31 percent increase in capital investment to £1.68 billion. This surge was attributed to higher regulatory allowances and returns on ASTI (Accelerated Strategic Transmission Investment) program spending, including both onshore and offshore infrastructure development under the RIIO-T2 framework.

In the United States, National Grid’s operations in New York delivered a standout 61 percent increase in underlying operating profit to £443 million. The uplift was driven by the implementation of new rate settlements across Niagara Mohawk, KeySpan Energy Delivery New York, and KeySpan Energy Delivery Long Island. In New England, profit rose 29 percent to £292 million, reflecting favorable regulatory outcomes and higher tracker revenues.

National Grid Electricity Distribution recorded a four percent decline in underlying operating profit to £551 million. Although capital expenditure in the segment grew to £756 million, Real Price Effects and elevated depreciation expenses weighed on earnings. The divestment of National Grid Electricity System Operator in October 2024 also reduced earnings contributions. Meanwhile, the held-for-sale accounting treatment for Grain LNG supported profit preservation, as depreciation was paused.

Underlying group profit before tax increased 15 percent to £1.65 billion. Despite higher net interest expenses and the share dilution from the 2024 rights issue, National Grid plc managed to offset these pressures through higher regulated returns and improved operational efficiencies.

How did National Grid’s major transmission upgrades, ASTI build‑outs, and U.S. grid modernization programs shape the strategic direction of the first half of FY2026?

The first half of the financial year saw a broad scale-up in grid infrastructure delivery on both sides of the Atlantic. In the United Kingdom, National Grid plc reported construction progress across all six Wave 1 ASTI projects, including Eastern Green Link 1 and Eastern Green Link 2. The company completed converter station platform installation and HVDC cable production ahead of schedule for Eastern Green Link 2 and successfully energised the Hurst-Crayford 275 kV circuit as part of the London Power Tunnels 2 project.

In parallel, National Grid plc ramped up pipeline replacements in its U.S. gas business, completing 159 miles of replacements in New York and 49 miles in Massachusetts. It also made significant strides in advanced metering infrastructure deployment, installing over 360,000 meters in New York and 220,000 in New England during the half-year period.

Smart Path Connect, one of the largest grid upgrade programs in New York, is on track for energisation in December 2025. The project includes 644 newly installed transmission towers and is viewed as a foundational piece in the state’s energy transition roadmap.

The company’s procurement and delivery framework also saw considerable development. Over 75 percent of the £60 billion investment plan now has secured delivery mechanisms. A £12 billion framework for HVDC civil works, a £21 billion cable supply framework with six suppliers, and a £25 billion converter station framework were all finalized. In July 2025, National Grid plc entered into an £8 billion Electricity Transmission Partnership with seven regional partners, enabling efficient substation deployment across England and Wales under the RIIO-T3 regulatory framework.

How are institutional investors responding to National Grid’s capital strategy and earnings guidance?

Institutional investors have continued to show confidence in National Grid plc’s long-term financial framework, which calls for six to eight percent underlying earnings per share compound annual growth through March 2029. This is anchored by a progressive dividend policy targeting annual growth in line with UK CPIH. For HY26, the company declared an interim dividend of 16.35 pence, in line with expectations and equivalent to 35 percent of the prior year’s full dividend.

Capital investment guidance for FY26 remains above £11 billion, driven by the ramp-up of ASTI projects, advanced metering infrastructure, and distribution network reinforcement. Underlying operating cash flow is expected to increase by 20 percent year-on-year, with net debt projected to rise by £1.5 billion to around £42.9 billion by the end of FY26.

Return on equity remains strong across regulated segments, with UK Electricity Transmission targeting 100 basis points of outperformance in the final year of RIIO-T2. U.S. operations are expected to see stable or improved returns as new rate cases come into force.

Analysts are likely to view the early achievement of £100 million in synergy savings from the 2021 UK Electricity Distribution acquisition as further evidence of financial discipline. The move to streamline the portfolio through the divestment of National Grid Renewables and the pending sale of Grain LNG also aligns with a strategy of focusing on core regulated infrastructure assets.

What regulatory updates and policy signals are shaping National Grid’s near-term trajectory?

Regulatory developments remain central to National Grid plc’s future earnings visibility. In the United Kingdom, the RIIO-T3 price control covering April 2026 through March 2031 is currently under final determination by Ofgem. National Grid plc submitted a £35 billion business plan targeting power flow capacity doubling, £12 billion in constraint cost avoidance, and 99.9999 percent system reliability. The company is awaiting Ofgem’s final decision in December 2025 and may appeal license modifications depending on the outcome.

The company is also actively participating in the UK Government’s AI Growth Zone initiative, which will add 1.1 GW of new demand connections by 2031. National Grid plc has assumed a leadership role in the Electricity Networks Sector Growth Plan, co-chaired with UK Government and industry bodies, aimed at scaling workforce, supply chains, and manufacturing capabilities for the energy sector.

In the United States, state-level regulatory approvals are supporting investment clarity. The Massachusetts Department of Public Utilities approved $600 million in cost recovery under the Electric Sector Modernization Plan. The New York Public Service Commission authorized a $5.6 billion capital plan for Niagara Mohawk and issued a favorable ruling on the long-term gas plan that includes the proposed Northeast Supply Enhancement pipeline.

National Grid plc is also preparing to file a new rate case for its Massachusetts Gas operations in January 2026, signaling continued regulatory engagement and investment alignment.

Key takeaways from National Grid’s HY26 results and strategic investment update

• National Grid plc reported a 17 percent increase in statutory operating profit to £1.53 billion and six percent growth in underlying earnings per share to 29.8 pence for the first half of FY2026.
• Capital investment reached a record £5.05 billion in the half-year, primarily driven by Accelerated Strategic Transmission Investment (ASTI) projects in the United Kingdom and network upgrades in the United States.
• Underlying profit before tax rose 15 percent to £1.65 billion, supported by strong returns from regulated networks in New York, New England, and UK Electricity Transmission.
• The company completed key construction milestones on all six Wave 1 ASTI projects and secured over 75 percent of its five-year £60 billion investment plan through long-term delivery frameworks.
• Segment-wise, New York led performance with a 61 percent increase in underlying operating profit, while UK Electricity Distribution saw a four percent decline due to inflation-linked regulatory adjustments and higher depreciation.
• An interim dividend of 16.35 pence per share was declared, in line with the company’s progressive dividend policy linked to UK CPIH.
• Outgoing CEO John Pettigrew will step down on 16 November 2025. Zoë Yujnovich will formally take over as Chief Executive Officer and lead the company into the next phase of its energy infrastructure expansion.
• The company reaffirmed guidance of six to eight percent compound annual growth in underlying EPS and expects to maintain regulatory gearing near 60 percent by year-end.
• Regulatory developments remain pivotal, with final RIIO-T3 determinations from Ofgem expected in December 2025 and new filings underway in Massachusetts and New York.
• Institutional sentiment remains constructive given early delivery of synergy savings, capex visibility, and stable returns across both UK and US jurisdictions.