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National Grid reported strong FY2026 financial results on May 14, 2026, with underlying earnings per share (EPS) growth of 8% at constant currency, underpinned by record capital investment of £11.6 billion. The company simultaneously unveiled an expanded five-year financial framework committing at least £70 billion in capital investment through 2030/31, designed to modernize energy infrastructure across the UK and northeastern United States. This substantial investment targets compound annual asset growth of around 10% and projected underlying EPS growth of 8-10% over the next five years, positioning the utility for sustained dividend growth alongside operational expansion.
🔥 Quick Facts
- Record capital investment of £11.6 billion in FY2026, up 18% from £9.8 billion prior year
- Statutory EPS rose 9% to 65.5 pence, with underlying EPS growth of 8% at constant currency
- Total dividend per share increased 3.8% to 48.49 pence, reflecting strong profitability
- £70 billion five-year investment plan extends through March 31, 2031, with expected 10% annual capex growth
- Expected 13-15% EPS growth for FY2026/27 baseline, driving investor returns and infrastructure modernization
Why This Investment Matters for Energy Infrastructure
National Grid‘s enlarged investment plan reflects accelerating demand for grid modernization across regulated energy markets. The £70 billion commitment represents one of the largest infrastructure initiatives in the European utility sector, addressing aging transmission networks and integrating renewable energy sources at scale. This follows years of regulatory endorsement from Ofgem and the Federal Energy Regulatory Commission (FERC), which have prioritized grid resilience, decarbonization, and system reliability.
The investment plan directly supports the UK government’s net-zero targets and US clean energy ambitions, targeting infrastructure capable of handling significantly higher renewable penetration. National Grid’s transmission networks now carry electric signals across millions of homes and businesses daily, making capital deployment both economically attractive and strategically essential. The scale of this multi-year program underscores growing investor confidence in regulated utility returns, particularly as central banks signal sustained interest rates that benefit fixed-income asset bases.
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Financial Performance Breakdown and Growth Drivers
National Grid’s FY2026 results demonstrate the financial resilience of its regulated business model. Underlying EPS growth of 8% at constant currency masked currency headwinds, indicating organic operational strength. Statutory EPS gained 9% to 65.5 pence, benefiting from favorable exchange rate movements and lower exceptional charges compared to prior periods. The dividend increase of 3.8% to 48.49 pence signals management confidence in sustainable cash flows from regulated monopoly operations.
Record capital investment of £11.6 billion—up 18% year-on-year—reflects an accelerated pace of deployment. This capital intensity, while elevated, remains supported by Ofgem’s RIIO-T3 regulatory framework and FERC’s incentive mechanisms in the US Northeast. Both regulators allow utilities to recover capital expenditures plus a permitted rate of return, meaning higher investment directly translates to higher allowed revenues and regulated profits. Going forward, management expects capital investment to grow approximately 10% annually, reaching nearly £13 billion in FY2026/27.
| Metric | FY2025/26 Result | Change / Outlook |
| Underlying EPS Growth (Constant Currency) | 8% | Organic expansion despite FX headwinds |
| Statutory EPS | 65.5 pence (+9%) | FX gains and lower exceptional items |
| Dividend Per Share | 48.49 pence (+3.8%) | Sustained shareholder returns policy |
| Capital Investment (FY2026) | £11.6 billion (+18%) | Record deployment pace |
| FY2026/27 Capex Outlook | Nearly £13 billion | ~10% annual growth trajectory |
| Five-Year Investment Framework | At least £70 billion | Through FY2030/31 (2026-2031) |
| Expected EPS Growth (Five Years) | 8-10% CAGR | FY2026/27 specifically: 13-15% |
| Expected Asset Growth (Five Years) | ~10% CAGR | Supports regulated base expansion |
CEO Zoë Yujnovich emphasized the strategic importance of this enlarged framework, noting that National Grid is uniquely positioned to capitalize on the energy transition while delivering reliable returns. The significant industry developments in capital-intensive infrastructure sectors reflect similar trends across global utilities seeking to modernize grids amid heightened renewable integration demands.
“National Grid is in the unique position of being able to deliver lower carbon energy while simultaneously driving shareholder value through the energy transition. Our expanded five-year framework demonstrates the substantial investment opportunities available in our regulated networks across both the UK and US Northeast.”
— Zoë Yujnovich, Chief Executive Officer, National Grid plc
What This Five-Year Plan Means for Energy Markets
The £70 billion investment program will primarily target electricity transmission and distribution infrastructure upgrades, alongside gas network maintenance in the UK. In the US Northeast, funds will modernize aging infrastructure and expand capacity to accommodate distributed solar, wind, and battery storage systems. Key projects include subsea electricity links connecting renewable-rich regions, replacement of aging cables, and installation of grid automation technology essential for managing variable renewable energy flows. This capital intensity drives compound annual asset base growth of approximately 10%, directly increasing the regulated asset base (RAB) upon which National Grid earns Ofgem-permitted and FERC-approved rate-of-return margins.
Investors gain several advantages from this deployment trajectory. First, National Grid’s regulated business model locks in cost recovery, meaning the utility passes capex through to consumers via tariffs approved by independent regulators. Second, 8-10% annual EPS growth over five years significantly outpaces typical inflation, creating real per-share value creation. Third, the dividend commitment—historically growing 3-4% annually—offers inflation-protected income for long-term holders. This combination of regulation-backed growth and steady dividends has historically attracted institutional investors seeking defensive, inflation-hedged exposures during periods of economic uncertainty.
Interest Rate Environment and Financing Implications
The £70 billion investment plan hinges on National Grid’s ability to refinance debt at manageable cost levels. Utility financing typically involves long-duration debt instruments matched to asset lives, meaning current interest rate levels significantly influence long-term cost structures. While central banks have begun exploring rate cuts, near-term borrowing costs remain elevated compared to 2020-2021 pandemic lows. National Grid has secured favorable capital access through investment-grade credit ratings and diversified funding sources, including direct utility revenue, securitization, and institutional bond issuance. Management’s confidence in the updated framework suggests that regulatory equity returns remain sufficiently attractive to justify capital deployment even at current financing costs.
Analysts have noted that Ofgem’s RIIO-T3 settlement, finalized in December 2025, provides greater certainty over regulatory returns through 2031. This visibility reduces refinancing risk and allows National Grid to commit to multi-year deployment plans with confidence. Similar capital intensity strategies across infrastructure-heavy sectors demonstrate the market’s appetite for long-duration growth assets that benefit from regulatory support and inflation linkages.
What Could Change This Trajectory?
Several factors could materially affect National Grid’s investment program and shareholder returns. A significant rise in bond yields or credit spread widening could increase financing costs, potentially compressing returns below regulatory minimums and slowing deployment. Regulatory pressure to reduce consumer energy prices—particularly if national governments intervene in energy cost controls—could challenge the cost-recovery model that underwrites capex growth. Additionally, geopolitical risks affecting supply chains for critical infrastructure components (cables, transformers, semiconductors) could inflate materials costs beyond inflationary assumptions built into regulatory projections.
Conversely, accelerated renewable deployment timelines or technology breakthroughs improving grid efficiency could expand investment opportunities beyond current plans. National Grid’s management maintains quarterly guidance and regularly updates market participants on plan progression, allowing investors to monitor execution against targets. The FY2026/27 outlook for 13-15% EPS growth represents a step-up from historical rates, signaling confidence in the near-term investment acceleration without sacrificing financial stability.
Sources
- National Grid plc (Official Results) – FY2025/26 financial results, May 14, 2026
- Markets.ft.com – FY2026 Full Year Results Statement, May 14, 2026
- Yahoo Finance UK – National Grid commits to £70bn five-year investment plan, May 13, 2026
- Morningstar Global – National Grid to invest £70 billion over five years, May 14, 2026
- Proactive Investors UK – National Grid commits at least £70bn to five-year investment plan, May 14, 2026
- The Globe and Mail – National Grid Unveils £70bn Investment Plan as FY2026 Profits and Payouts Rise, May 15, 2026
