National Grid 2009 Annual Report Download - page 8

06 National Grid plc Annual Review 2008/09
Business overview
Chief Executive’s review
I am pleased to be reporting to you on our 2008/09 results. In a
very difficult economic climate, the robust nature of our strategy
has been demonstrated by a very successful year for National
Grid, reflected in a strong set of results. It is because of this
performance that I am delighted to report that we have met
our target to deliver 8% dividend growth.
At National Grid, we delivered on all fronts in 2008/09 – safety,
reliability and financial – and ensured that we are well positioned
for the future. The outlook for 2009/10 is very positive.
Financials
We have delivered another strong financial and operational
performance this year. Cash generated from operations was
more than £3.5 billion, revenue was more than £15.6 billion while
adjusted operating profit and adjusted earnings per share (on
a pro forma basis) were higher by 12% and 14% respectively.
Our continuing objective is to deliver 8% per annum growth in
our dividend until 2012 for our shareholders while also delivering
gas and electricity to our customers in a safe, reliable and
efficient manner.
When we acquired KeySpan in 2007, we promised a $100 million
run rate in synergy savings by the end of this fiscal year. I am
delighted to report that we have exceeded our promise. We have
also issued £6 billion of debt between 1 January 2008 and
31 March 2009 and our overall effective interest rate has fallen.
Investing for growth
As I told you last year, a major part of our plans is to invest by
growing our asset value at what is a record rate for National Grid.
These investments, necessary for society, communities and
customers are made in response to the changing energy
requirements in our operating territories and the need to replace
end of life assets. The returns on our investments are underpinned
by our regulatory arrangements or by long-term contracts. During
the last year, £3.2 billion has been invested across the Company.
Going forward, we plan a similar level of investment each year
until 2012.
Strategy
We continue to create a more focused business and to run it in a
more integrated way. This year, we have re-articulated our strategy
to give better clarity to our employees on the direction of our
business. Our eight Company objectives provide the framework
for the first step in achieving this clarity (see pages 10 to 15).
Our strategy sets out what we plan to achieve in the next three to
five years; we want to build on our core UK and US, electricity and
gas, regulated business base to deliver sustainable growth and
superior financial performance. This year, we have also introduced
a line of sight concept that should connect each employee with
the strategic vision and overall objectives of our Company, allowing
everyone to see how what they do contributes to the success of
their team, their line of business and the Company.
“ We continue to create a more focused
business and to run it in a more
integrated way.”
Planned investment
in 2009/10
Response rate to our
employee survey
£3.4bn 91.8%
In a very difficult economic climate, the robust nature of our strategy
has been demonstrated by a very successful year for National Grid,
reflected in a strong set of results.