Interim Management Statement

National Grid PLC
30 July 2007


30 July 2007



                 National Grid plc Interim Management Statement
                  for the period 1 April 2007 to 27 July 2007



HIGHLIGHTS

   • Acquisition of KeySpan close to completion
   • £530m of value returned to shareholders through share buy-back programme
   • Overall outlook ahead of expectations


STRATEGIC UPDATE

During the period National Grid has continued to make good progress in
implementing its strategy. We are close to completing the acquisition of
KeySpan. In June, the Long Island Power Authority Board of Trustees voted to
approve the renewal of contracts for the provision of electricity transmission
and distribution system management and operation services on Long Island. In
July, the New Hampshire Public Utilities Commission issued an order approving
the acquisition, and we reached agreement in principle with the New York Public
Service Commission (NYPSC) staff on the transaction. The latest procedural
schedule indicates that the merger approval may be before the NYPSC for a vote
on 22 August, and completion of the acquisition is expected shortly thereafter.

In May, Ofgem published initial proposals on the UK Gas Distribution Price
Control Review for the five years to March 2013. We continue to work closely
with Ofgem to reach a fair settlement that balances risk and reward, ensuring a
safe and reliable network for customers, and an appropriate return for
investors. Updated proposals are expected in September.

In April, we announced that we had sold our UK Wireless business and agreed the
sale of our US Wireless business generating total proceeds of £2.7bn. The sale
of Basslink, our interconnector in Australia, is well advanced and we expect to
announce a sale shortly.

During the period we repurchased 72.8m shares at a cost of £530m, completing the
return of around £150m of US stranded asset post-tax cash flows for 2007/08, and
making significant progress towards the return of £1.8bn following the sale of
our Wireless businesses.

The Board remains confident in National Grid's earnings growth prospects, which
we expect to be enhanced by the KeySpan acquisition. We will be announcing a
revised dividend policy later in the financial year, which will reflect the
strong outlook for the earnings of the enlarged business from this new base.


FINANCIAL UPDATE

National Grid's outlook for the year is ahead of our previous expectations.

In June and July, the UK has seen some of the wettest weather since records
began, and the resultant flooding has affected our Transmission and Gas
Distribution operations in many parts of the country. Initial assessments
suggest that the impact to date on operating profit* is not significant.

The earlier than anticipated completion of the sale of our UK Wireless business
is expected to result in an interest charge lower than we had previously
projected. During the period, the pound has continued to strengthen against the
dollar - this is expected to have only a small impact on earnings.

Both cash flow and capital expenditure remain broadly in line with our plans.
Our financial position remains strong, with around 80% of our net debt either at
fixed rates or index linked, and we have committed financing in place to
complete the acquisition of KeySpan.


BOARD CHANGES

On 12 July we announced the appointment of Tom King as an Executive Director
with effect from 13 August 2007. Tom will be based in the US and will have
responsibility for the Electricity Distribution and Generation business.

As announced in May, Paul Joskow, one of our Non-executive Directors, will step
down from the Board on 31 July 2007.


COMPARATIVE HALF-YEAR RESULTS (for the six months ended 30 September 2006)

On 15 November 2007 we will report our half-year results against our new lines
of business. The following table provides comparative results for the six months
ended 30 September 2006.

Operating profit for continuing operations* (£ million, at actual exchange rate)
--------------------------------------------------------------------------------
Transmission                                                               494
Gas Distribution                                                           100
Electricity Distribution (excluding US stranded costs)                     222
Non-regulated businesses and other                                          60
--------------------------------------------------------------------------------
Total operating profit (excluding US stranded costs)                       876
--------------------------------------------------------------------------------
US stranded cost recoveries                                                202
--------------------------------------------------------------------------------
Total operating profit                                                   1,078
--------------------------------------------------------------------------------

* Results are measured on a Business Performance basis. Business Performance
results are the primary financial performance measures that we use, being the
results for continuing operations before exceptional items and remeasurements.
Remeasurements are movements in the carrying value of financial instruments and
commodity contracts that arise from changes in mark-to-market values or in
exchange rates and are reflected in the income statement to the extent that
hedge accounting is not achieved or is not fully effective. £47m relating to
discontinued operations (comprising Wireless Infrastructure and Basslink) is
excluded from Business Performance.


CONTACTS

Investors

David Rees    [phone]  [phone] (m)
Richard Smith [phone]  [phone] (m)
James Waite   [phone]  [phone] (m)

Media

Clive Hawkins [phone]  [phone] (m)

Brunswick

Paul Scott    [phone]  [phone] (m)


CAUTIONARY STATEMENT

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements include information with respect to our financial
condition, our results of operations and businesses, strategy, plans and
objectives. Words such as 'anticipates', 'expects', 'intends', 'plans',
'believes', 'seeks', 'estimates', 'may', 'will', 'continue', 'project' and
similar expressions, as well as statements in the future tense, identify
forward-looking statements. These forward-looking statements are not guarantees
of our future performance and are subject to assumptions, risks and
uncertainties that could cause actual future results to differ materially from
those expressed in or implied by such forward-looking statements. Many of these
assumptions, risks and uncertainties relate to factors that are beyond our
ability to control or estimate precisely, such as delays in obtaining, or
adverse conditions contained in, regulatory approvals and contractual consents,
including those required to complete the proposed acquisition of KeySpan when or
as planned, unseasonable weather affecting the demand for electricity and gas,
competition and industry restructuring, changes in economic conditions, currency
fluctuations, changes in interest and tax rates, changes in energy market
prices, changes in historical weather patterns, changes in laws, regulations or
regulatory policies, developments in legal or public policy doctrines, the
impact of changes to accounting standards and technological developments. Other
factors that could cause actual results to differ materially from those
described in this announcement include the ability to integrate the businesses
relating to announced acquisitions with our existing business to realise the
expected synergies from such integration, the availability of new acquisition
opportunities and the timing and success of future acquisition opportunities,
the timing and success or other impact of the sales of our non-core businesses,
the failure for any reason to achieve reductions in costs or to achieve
operational efficiencies, the failure to retain key management, the behaviour of
UK electricity market participants on system balancing, the timing of amendments
in prices to shippers in the UK gas market, the performance of our pension
schemes and the regulatory treatment of pension costs, and any adverse
consequences arising from outages on or otherwise affecting energy networks,
including gas pipelines, which we own or operate. For a more detailed
description of some of these assumptions, risks and uncertainties, together with
any other risk factors, please see our filings with and submissions to the US
Securities and Exchange Commission (the 'SEC') (and in particular the 'Risk
Factors' and 'Operating and Financial Review' sections in our most recent Annual
Report on Form 20-F). Except as may be required by law or regulation, National
Grid undertakes no obligation to update any of its forward-looking statements.
The effects of these factors are difficult to predict. New factors emerge from
time to time and we cannot assess the potential impact of any such factor on our
activities or the extent to which any factor, or combination of factors, may
cause results to differ materially from those contained in any forward-looking
statement.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
   D
IMSLBLFXDDBZBBZ