Dean’s Field Notes: Driving Customer and Shareholder Value
Editor’s note: From time to time, Dean Seavers will tear a page from his notebook and share what he’s learned from customers, stakeholders, and employees across National Grid’s U.S. footprint.
November 2015: Driving Customer and Shareholder Value In the past year, I’ve been crisscrossing our operational footprint, getting to know you and our gas and electricity business from Brooklyn to Boston to Buffalo. I’ve seen a number of constants. An impressive work ethic by our gas workers, line workers, engineers, and everyone who supports them and our many customer touchpoints. Equally impressed by everyone’s commitment to getting it right. A culture of continuous improvement and integrity. Frankly, that makes me so very proud to be part of this community.
I’m also energized by the number of colleagues asking questions about our company’s financial performance. The fact that so many of you are interested in how we’re viewed by Wall Street (US) and the City (UK) tells me that we’re moving the dial on fiduciary strength, accountability, and financial literacy.
Perfect timing. As most of you know, we recently posted our mid-year financial results, which highlighted good news of improved U.S. performance. Immediately after, for the first time in three years, members of our US leadership – Marcy, Tim, Ken, Rudy, and Peggy – participated in several investor relations events overseas. We eagerly told our story to large institutional investors and analysts in a number of cities, including Frankfurt, Madrid, Copenhagen, Dublin, and Zurich. You can hear the story for yourself at a regional Financial Results Town Hall.
It’s a story about resilience. We’ve had our share of challenges in recent years, but we are embracing process excellence and emerging stronger. We’re well-positioned to grow and increase profitability. In the first half of the 2015-16 fiscal year, our operating profit in the U.S. was approximately $541M. Over the next few years, we expect asset growth of 7 percent, and target ROEs at 95 percent of allowed returns following the next set of rate plans. Our shares, with their consistent performance and steady dividends, continue to be attractive to investors of many stripes, including those valuing total-return and dependable income.
It’s a story about hitting our targets. Every day starts and ends with working safely, and greater situational awareness at all work sites. New infrastructure projects in line for each of our jurisdictions have us meeting rising customer expectations. And careful spending on everyone’s part is helping us stick to our budgets.
It’s a story about trust. We’ve promised to meet the energy needs of our customers in New England and New York and these stats show we mean what we say: top ten in energy efficiency in all three states, number five in the nation for solar interconnections, and number one green utility in the U.S. On the gas side of the house, we continue making investments to provide safe, reliable gas service at a fair price. And, the rate case we’ve just filed in MA, along with the two we’re working on in downstate NY, will help us continuously invest in our electricity systems to meet the growing demands of a 21st century digital economy.
Ultimately, ours is a story about driving customer and shareholder value. The timing couldn’t be better, as there are big changes on the horizon for the U.S. energy supply chain. We’ll be that utility of the future, as long as we continue to grow as a great operating company.
Our story makes it clear to investors that we have a significant business with a favorable environment. Thank you for your part in keeping us on track.