NG · National Grid plc
This is a quantitative scorecard. The numbers below are read from National Grid plc’s ESEF annual report, in GBP. The narrative — what the business does, its risks, what changed this year — is not machine-read here, so we do not paraphrase it. The filed annual report →
The record
What the business has done across the cycle, read straight from the ESEF filing: the multi-year record, and the walk from reported profit to the cash an owner could take out.
The record, 2020–2026
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | |
|---|---|---|---|---|---|---|---|
| Income statement | |||||||
| £13.4B | £13.7B | £18.4B | £21.7B | £19.9B | £18.4B | £17.7B | RevenueRevenue |
| £2.3B | £2.4B | £4.4B | £4.9B | £4.5B | £4.9B | £5.4B | Operating incomeOp. inc. |
| 17.1% | 17.6% | 23.7% | 22.5% | 22.5% | 26.8% | 30.7% | Operating marginOp. mgn |
| £1.3B | £1.6B | £2.4B | £7.8B | £2.3B | £2.9B | £3.2B | Net incomeNet inc. |
| 23% | 18% | 35% | 10% | 27% | 22% | 22% | Effective tax rateTax rate |
| Cash flow & returns | |||||||
| £4.1B | £3.9B | £5.5B | £6.3B | £6.9B | £6.8B | £7.8B | Operating cash flowOp. cash |
| £2.9B | £2.2B | £3.1B | (£1.5B) | £4.6B | £3.9B | £4.6B | Working capital & otherWC & other |
| £4.3B | £4.2B | £5.1B | £6.3B | £6.9B | £8.8B | £10.0B | CapexCapex |
| 32.1% | 30.8% | 27.6% | 29.2% | 34.8% | 47.8% | 56.5% | Capex / revenueCapex/rev |
| (£143M) | (£333M) | £392M | £18M | £35M | (£2.0B) | (£2.2B) | Owner earningsOwner earn. |
| −1.1% | −2.4% | 2.1% | 0.1% | 0.2% | −10.7% | −12.2% | Owner earnings marginOE mgn |
| (£143M) | (£333M) | £392M | £18M | £35M | (£2.0B) | (£2.2B) | Free cash flowFCF |
| −1.1% | −2.4% | 2.1% | 0.1% | 0.2% | −10.7% | −12.2% | Free cash flow marginFCF mgn |
| £892M | £1.4B | £922M | £1.6B | £1.7B | £1.5B | £1.6B | Dividends paidDiv. paid |
| — | 4% | 4% | 6% | 4% | 5% | 5% | ROICROIC |
| 6% | 8% | 10% | 26% | 8% | 8% | 8% | Return on equityROE |
| 2% | 1% | 6% | 21% | 2% | 4% | 4% | Retained to equityRetained/eq |
| Balance sheet | |||||||
| — | £157M | £204M | £163M | £559M | £1.2B | £375M | Cash & investmentsCash+inv |
| — | £2.9B | £3.7B | £3.8B | £3.4B | £4.1B | £3.9B | ReceivablesReceiv. |
| — | £439M | £511M | £876M | £828M | £557M | £559M | InventoryInvent. |
| — | £3.4B | £4.2B | £4.7B | £4.2B | £4.6B | £4.4B | Operating working capitalOper. WC |
| — | £9.9B | £18.0B | £9.1B | £10.4B | £14.3B | £7.5B | Current assetsCur. assets |
| — | £9.4B | £24.8B | £9.1B | £11.4B | £10.6B | £9.8B | Current liabilitiesCur. liab. |
| — | 1.1× | 0.7× | 1.0× | 0.9× | 1.3× | 0.8× | Current ratioCurr. ratio |
| — | £47.0B | £57.5B | £64.4B | — | — | — | Net PP&ENet PP&E |
| — | £4.6B | £9.5B | £9.8B | £9.7B | £9.5B | £9.4B | GoodwillGoodwill |
| — | £67.2B | £94.9B | £92.7B | £98.3B | £106.7B | £108.3B | Total assetsAssets |
| — | £31.2B | £45.5B | £43.0B | £47.1B | £47.5B | £46.8B | Total debtDebt |
| — | £31.1B | £45.3B | £42.8B | £46.5B | £46.4B | £46.4B | Net debt / (cash)Net debt |
| 2.2× | 2.8× | 4.1× | 3.1× | 2.6× | 2.7× | 3.2× | Interest coverageInt. cov. |
| £19.8B | £19.9B | £23.9B | £29.6B | £29.9B | £37.8B | £39.3B | Shareholders’ equityEquity |
| Per share | |||||||
| 3.46B | 3.52B | 3.60B | 3.96B | 3.99B | 4.71B | 4.95B | Shares out (diluted)Shares |
| £3.86 | £3.88 | £5.13 | £5.48 | £4.98 | £3.90 | £3.57 | Revenue / shareRev/sh |
| £0.36 | £0.47 | £0.65 | £1.97 | £0.57 | £0.62 | £0.66 | EPS (diluted)EPS |
| £-0.04 | £-0.09 | £0.11 | £0.00 | £0.01 | £-0.42 | £-0.44 | Owner earnings / shareOE/sh |
| £-0.04 | £-0.09 | £0.11 | £0.00 | £0.01 | £-0.42 | £-0.44 | Free cash flow / shareFCF/sh |
| £0.26 | £0.40 | £0.26 | £0.41 | £0.43 | £0.32 | £0.33 | Dividends / shareDiv/sh |
| £1.24 | £1.20 | £1.42 | £1.60 | £1.73 | £1.86 | £2.02 | Cap. spending / shareCapex/sh |
| £5.72 | £5.64 | £6.63 | £7.47 | £7.49 | £8.02 | £7.94 | Book value / shareBVPS |
| 6-yr | 5-yr | |
|---|---|---|
| Revenue / share | −1.3%/yr | −1.6%/yr |
| EPS | +10.2%/yr | +7.0%/yr |
| Dividends / share | +4.1%/yr | −4.0%/yr |
| Capital spending / share | +8.5%/yr | +11.0%/yr |
| Book value / share | +5.6%/yr | +7.1%/yr |
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business reported £3.2B of profit but (£2.2B) of owner earnings: £5.4B less than the profit line, taken out by capital spending and the timing of cash.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Reported net income | £3.2B | £2.9B | £2.3B | £7.8B | £2.4B |
| Working capital & othertiming of cash in and out, other non-cash items | +£4.6B | +£3.9B | +£4.6B | −£1.5B | +£3.1B |
| Cash from operations | £7.8B | £6.8B | £6.9B | £6.3B | £5.5B |
| Capital expenditurecash put back in to keep running and to grow | −£10.0B | −£8.8B | −£6.9B | −£6.3B | −£5.1B |
| Owner earnings | (£2.2B) | (£2.0B) | £35M | £18M | £392M |
| Owner-earnings marginowner earnings ÷ revenue | -12% | -11% | 0% | 0% | 2% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, and stewardship. The same checks the US pages run, in the reporting currency.
Peers, Multi-Utilities
The same industry, side by side on owner economics. Each column names the period it is read over; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| NGNational Grid plc | $24.0B | — | 22.5% | 4% | -1% |
| NGGNATIONAL GRID PLC | $23.8B | — | 22.5% | 5% | 20% |
| GNEGenie Energy Ltd. | $502M | 30% | 5.8% | 29% | 7% |
| VIVOVivoPower PLC | $61K | 16% | -20.9% | -15% | -16% |
| Group median | — | — | 14.2% | 5% | 3% |
Owner’s Scorecard
Will it survive?
- AdequateOperating income £5.4B ÷ interest expense £1.7B
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? £46.4B · 8.5× operating profitHeavy net debtCash £375M − debt £46.8B
What this means
Netting £375M of cash and short-term investments against £46.8B of debt leaves £46.4B owed, about 8.5× a year's operating profit (8.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Below average through the cycle6-yr median, range 4%–6%; 5% latest = NOPAT £4.2B ÷ invested capital £85.7BIndustry peers: median 7%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 6 years (it ran 5% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cash through the cycle7-yr median margin, range -12%–2%; latest (£2.2B) = operating cash £7.8B − maintenance capex £10.0BIndustry peers: median 9%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -12% of revenue this year, a -1% median across 7 years.
- Cash-backedCash from ops £7.8B ÷ net income £3.2B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- No surplus to allocate
What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
Graham’s defensive tests · 3 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · £17.7B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity —Current ratio ≥ 2× (waived for utilities) · exempt
What this means
Graham exempted public utilities from this test: their working capital “takes care of itself” through the continuous bond-and-share financing of growth, so a thin current ratio is the industry's structure, not a warning. His substitute test — debt no more than twice book equity — is the next line.
- Conservative debt PassDebt ≤ 2× equity (Graham's utility test) · £46.8B vs £39.3B equity
What this means
Graham's own substitution for public utilities: debt not exceeding twice the stock equity at book value, in place of the working-capital tests an industrial faces. A utility finances its plant with bonds by design; the question is whether the borrowing stays inside the equity behind it.
- Earnings stability PassA profit every year (7-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 7 of 8 yrs
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +60%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are £0.57/share (latest year £0.66), the averaged base the calculator's gate runs on, and book value is £7.94/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 7 of 7
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 6 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 19% → 27% (3-yr avg ends)
What this means
Through the cycle the operating margin widened — about 19% early to 27% lately, median 23% — pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2020 · 17.1% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +6.1%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
All figures as filed; the source filing is linked above.
How the cash was used, 2020–2026
Over the record, the business generated £41.4B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested£45.6B · 110%
- Dividends£9.7B · 23%
- Returned to owners£9.7B
£9.7B as dividends and £0 as buybacks.
- Source of funding−£13.9B
Reinvestment and shareholder returns ran £13.9B beyond the operating cash the business generated, so the gap was financed off the balance sheet.
- Net change in share count42.9%
The diluted count rose from 3463M to 4948M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record£0.33/sh
Paid in 7 of the years on record, the per-share dividend growing about 4% a year. It was cut at least once along the way.
- Return on what it retained−11%
Of the earnings it kept rather than paid out (£11.8B over the span), annual owner earnings (first three years vs last three) fell £1.3B, so each retained £1 gave back about 0.11 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
The price
What a price would have to assume, set against the record above. You bring the price, in the reporting currency.
What the price implies
reverse-DCFNational Grid plc is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
Revenue, delivered3%/yr’21→’26
Enter a price to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.