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Huge Half Year Profits At National Grid

Friday, November 7, 2014

Half Year Huge Profits For National Grid With No Commitment To UK Supply Chain While Their Sub- Contracting Undermines Safety Says GMB

Household bill payers will be aghast that as they struggle to heat their homes and the country faces blackouts this winter as National Grid enjoys huge and growing greater profits says GMB

GMB, the union for energy workers, commented on the half year results from National Grid. See notes to editors for copy of National Grid statement to employees.

Gary Smith, GMB National Secretary for energy, said “GMB has raised concern at shareholders and executives being allowed to line their pockets with another significant rise in profits for the energy giant.

Household bill payers will be aghast that as they struggle to heat their homes and the country faces blackouts this winter as National Grid enjoys huge and growing profits.

We can assure the public this money isn't going in the pockets of workers in the industry, far from it. Wages have actually fallen in many areas of the country.

Mr Holiday celebrates the company great safety record but doesn't tell the full story. Amongst sub-contractors accidents are up and the company's own stats tell us contractors are more likely to injure members of the public. We have brought this to the attention of the HSE only this week.

The situation is set to get worse as the crisis ridden Gas Distribution Strategic Partnership, overseen by Balfour Beatty has fallen massively behind on gas mains replacement work in the west side of England from West Midlands up past Manchester and Liverpool. The fact old cast iron mains aren't being replaced on time is worrying. However GMB has been told in the hurry to catch up safety and standards could be compromised as there is now huge pressure on workers to get jobs done.

Despite having a monopoly of billions of pounds of investment going into our energy infrastructure, National Grid has no commitment to the UK manufacturing supply chain. This is a point we have raised with government.  National Grid boast that they use money from UK household to buy their components and cables in China and elsewhere. It is a scandal.”

End

Contact: Gary Smith 07710 618 909 or 0207 391 6700 or GMB press office 07921 289880 or 07974 251 823

See notes to editors

Statement by National Grid to employees dated 7th November:

 Today we announced our 2014/2015 half year financial results.

Thank you for your hard work. We are on track to deliver another year of growth and strong overall returns for our shareholders. We also continue to provide excellent value for customers, both in terms of keeping our element of the bill as low as possible and through the many contributions we make to the communities in which we operate.

This focus on performance is reflected in our financial headlines for the six months ended 30 September 2014 (£1:$1.68):

? Operating profit up 2% to £1,611m / $2,706m

? Profit before tax up 16% to £1,137m / $1,910m

? Earnings per share up 16% to 23.4p

? Capital investment down 6% to £1,579m / $2,653m

? Interim dividend 14.71p in line with policy

Some key achievements helped us deliver these results. In the UK, we are finding better ways to streamline processes in design, contracting and procurement. As a result, the year has started well with the UK businesses on track to deliver improved returns on equity. In the US, we finally completed the installation of our US SAP systems with a successful upgrade in July. This is an important milestone and the new system must support future performance improvements and in particular simplify our future rate filings in Massachusetts and New York, where we need to increase our returns.

Despite good operational progress and efficiency improvements in the US, most North Eastern energy businesses experienced an unexpected growth in operating costs. Demands on gas systems during last year’s very cold winter and heightened awareness of gas escapes in New York following a high profile gas explosion in ConEd’s service territory meant that we incurred around $16m higher costs from gas leakages and repair activities. Unfortunately, we expect this to impact US returns for the full year results next May, so we must continue to manage our costs without impacting the vital services we provide our customers.

Across the business, safety remains an important priority. In the UK, we continue to deliver world class safety performance for employees. However, we need to improve on keeping our contractors safe. In the US, safety performance is really improving. Training and awareness programmes in the US will continue to ensure we all get home safely.

It has been a special year for us in terms of our broader contribution. In July, we were named Responsible Business of the Year by Business in the Community. This award recognises our efforts to operate responsibly in everything we do in both the UK and the US and how we positively contribute to our communities, customers and society. We achieved this because of what you do every day and how you do it and I am extremely proud. Let’s keep it up.

I wish you all a safe winter and thank you for your contributions toward these results.

Steve Holliday

 

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