The National Grid has announced a £7bn capital raise as it seeks to double its capital spending over the next five years.
It made the announcement alongside its full-year results, which showed a decline in operating profit and earnings per share for 2023.
The company said the fully underwritten rights issue at 645p per share is a “defining moment” and would help fund a major round of capital investment in its energy infrastructure – ultimately expected to cost £60bn.
The rights issue price is a 34.7 per cent discount to the theoretical ex-rights price based on the closing price on 22 May, the National Grid said.
It said the capital investment – which would go into the firm’s infrastructure on both sides of the Atlantic – would take place over the next five years.
The massive sum will help National Grid meet the UK’s energy goals.
Last year, the government’s electricity networks czar warned that tens of billions of pounds of new grid infrastructure would need to be laid by 2030 in order for the UK to hit its climate goals.
John Pettigrew, National Grid’s chief executive, said: “Today is a defining moment for National Grid as we announce a significant increase in investment that cements our position as a leader in the energy transition on both sides of the Atlantic.
“This is an unprecedented time for our industry that is creating significant opportunities for National Grid today, over the next five years and for decades to come.”
The rights issue was declared alongside a set of full-year results in which the firm declared operating profit dipped eight per cent to £4.5bn, which it attributed to “non-cash exceptional charges.”
Statutory earnings per share for continuing operations also slid down 19 per cent to 60p from 74.2p.
However, underlying EPS rose five per cent (six per cent at constant currency). The board recommended a final dividend of 39.12p. This brought the full-year dividend to 58.5p, a 5.5 per cent rise on 2023.
Capital investment over the financial year was also up eight per cent.
Pettigrew continued: “Our new five-year investment plan will deliver long-term value and returns for our shareholders, support over 60,000 more jobs, and accelerate the decarbonisation of the energy system for the digital, electrified economies of the future.”