NATIONAL GRID PLC (NYSE:NGG) Q1 2019 Earnings Conference Call Transcript
May 16, 2019 • 04:15 am ET
Welcome to our full year results presentation and a special welcome also to everybody who's watching this online. As always, we're going to start with safety. There are no planned fire alarm tests this morning, so if you hear an alarm, we do need to leave the building through these doors and then out from reception. And I would also like to draw your attention to the cautionary statement that's included in your packs. And as always, there will be a Q&A at the end of this presentation.
So with that, I'd like to hand over to John Pettigrew.
So thank you, Aarti, and good morning, everyone. I'm joined this morning by Andy Agg, our CFO. And as usual, Nicola Shaw and Dean Seavers are also here to assist with any questions at the end of the presentation.
So let me begin with the financial highlights from last year. On an underlying basis, that is excluding the impact of timing, major storms and exceptional items, operating profit of GBP3.4 billion was down 4%. This reflects the expected reduction in U.K. gas transmission allowances as well as the impact of U.S. tax reform and slightly higher-than-anticipated costs.
Underlying earnings per share was up 5% to 58.9 pence. This was driven by a lower share count and good performance from our other businesses. We also incurred some significant exceptional charges in the last year that are excluded from our underlying results, and I'll expand on these shortly. We achieved a group return on equity of 11.8%, delivering ongoing sustainable returns for our shareholders. We invested heavily in network safety, reliability and modernization with our CapEx increasing to GBP4.5 billion, driving asset growth of 7.2%.
And in accordance with our policy, we proposed a final dividend of 31.26 pence, taking the total dividend for the year to 47.34 pence. This represents a 3.1% increase on last year, in line with U.K. inflation. So as you can see, it's been a solid year of financial performance.
As you know, our safety, reliability and customer performance are key to our success. During the year, we continued our campaign to make safe working second nature for all our employees and contractors. And as a result of our efforts, we've maintained an injury frequency rate of 0.1, which is comparable to world-class safety performance. We also maintained excellent reliability across our networks despite significant winter storms in the U.S. Customer performance has also been a major priority, and I'm pleased that our customer satisfaction has increased for both our U.K. and our U.S. businesses.
Now, before I turn to the detail, let me outline the strategic highlights for the year, starting with capital investment. As I just mentioned, we had another strong year of organic growth, investing GBP4.5 billion and delivering asset growth of 7.2%. As I announced last November, we exercised our option over our final stake in Cadent with GBP2 billion of cash proceeds expected in June. In addition, we made good regulated progress in the