LONDON, March 28 (Reuters) - National Grid, Britain’s biggest energy distributor, said it expects its earnings forecast to be “modestly” ahead of its previous expectations as it announced it will peg its dividend to inflation in the future.
In a trading update on Thursday ahead of its full year results on May 16, National Grid said it had a strong finish to the year, with its UK transmission business performing well, offset by costs related to U.S. superstorm Sandy and restoration work in February.
The company also unveiled a new dividend policy for the period from April 2013.
“Any dividend increases above inflation will need to be supported by sustained outperformance and to have no impact on long-term credit ratings,” the group said in a statement.
The company said the interim dividend for the year ending March 2014 is expected to be 14.49 pence, and after that would be 35 percent of the previous year’s total dividend. National Grid hiked its full-year dividend by 8 percent to 39.28 pence last year.
Last month, National Grid agreed proposals from the British regulator, setting out price controls which will give its UK businesses regulatory clarity for the next 8 years.
Shares in the firm rose 1.4 percent to 762 pence in early trade on Thursday.