Kelda Share Discussion Threads

[tomrob] 01/3/2002 09:02

Kelda is forced to abandon plan to refinance Yorkshire Water assets
By Michael Harrison, Business Editor
01 March 2002
Kelda, the owner of Yorkshire Water, has abandoned a second restructuring plan that would have involved selling the regulated water assets to a group of bondholders and returning at least £1bn to shareholders.

The plan, developed in secret over the past three months by the Kelda chairman, John Napier, and a small team of executives, was ditched after it became clear there was insufficient appetite in the bond markets.

Mr Napier's first attempt at restructuring Yorkshire Water by selling the business to its customers and returning the proceeds to shareholders was blocked by the water regulator Ofwat 18 months ago. Ofwat decided the plan was too risky for consumers and would not deliver sufficient cost savings because Kelda would have continued to manage the network.

The second restructuring attempt differed in that Yorkshire Water would have been sold to bondholders, leaving Kelda with just its US water business Aquarion and a share in a UK waste business.

The plan looked at by Mr Napier and his team initially involved selling 90 per cent of Yorkshire Water to bond investors, enabling Kelda shareholders to retain a 10 per cent minority stake. However, as the plan developed, it was decided that 100 per cent of Yorkshire Water should be disposed of, at or close to its regulatory asset value of £1.4bn. Shareholders would have received between 250p and 350p a share.

Mr Napier is understood to have sounded out Prudential, the UK's biggest holder of water bonds, about the proposals. Hugh Jones, the head of Prudential's UK investments, is an old friend of Mr Napier and was a contemporary of his at Cambridge. The restructuring plan is understood to have been abandoned earlier this month after Mr Napier decided that the numbers would not stack up. Soundings taken among bond investors also indicated there was unlikely to be a rush of interest.

During an analysts' visit to the company's Leeds headquarters earlier this week, Mr Napier stressed that the emphasis would now be on driving down Yorkshire Water's costs to meet the tough new price controls imposed by Ofwat two years ago.

The failure of the Kelda plan means that, so far, only Welsh Water has been successfully restructured. Welsh Water was bought by Glas Cymru, a company limited by guarantee which is funded entirely with debt and chaired by the former Treasury mandarin Lord Burns.

ScottishPower, the owner of Southern Water, is in the process of refinancing the business with £1.9bn of debt and AWG is working on a similar debt-financing plan with Anglian Water, which will result in a cash payout to shareholders of between £400m and £600m.

[zzaxx99] 17/1/2002 16:13

No comment on these recently, but they've been having a good old run over the last few days, after barely staying above my stoploss.




(Wish the sods would restructure though)

[gulliverr] 27/12/2001 10:16

Thank you.

[sinso] 27/12/2001 10:14

Normally once settled down for the day at about a penny.

[gulliverr] 27/12/2001 09:53

Just started looking at Kelda. Can holders tell me if the spread is always as large as today?

[zzaxx99] 19/12/2001 16:35

ESH has had a pretty impressive run, and so has BTW. Looked at both of them before plumping for KEL in the hope of the restructuring which didn't materialise.

[rflwater] 19/12/2001 16:34

I STILL BELIEVE THAT THE SMALL WATER ONLY PLCS CAN TEACH THE LARGE WATER COMPANYS A LESSON OR TWO .
AS A INVESTMENT E/SURREY .BRISTOL WATER . DEE VALLEY .WOULD MAKE A MORE INTERESTING INVESTMENT . MORE SO SINCE THE M/KENT .CAMBRIDGE WATER AND NOW THE BROCKHAMPTON . T/O

[rufusredcut] 05/12/2001 10:23

Kelda beats estimates
By Matthew Browne
Wed 5 Dec 2001


LONDON (SHARECAST) - Water utility firm Kelda unveiled better than expected first-half results this morning. It said it had improved efficiency and service standards and cut back overheads.KEL - Kelda Grp

Pre-tax profit for the six months ended September rose 12.8% to £91.4m, beating analysts' expectations of between £79m and £88m. Group turnover on continuing operations rose 4.6% to £329.8m.

Operating costs at Yorkshire Water, the largest of its businesses, were cut by 1% from a year ago. Turnover in the regulated business increased 3.4% to £282.5m, reflecting the allowed increase in tariffs. Operating profits were up 5.6% to £119.3m despite a fall in consumption from industrial and commercial clients.

Turnover at Aquarion, its US business, rose 10.4% to £42.5m with operating profits up 8.3% to £17.0m, aided by favorable exchange rates which accounted for about 5% of the gain. It said the regulatory review of four recent acquisitions were "proceeding satisfactorily" and should be completed by mid-2002.

The performance of its non-water businesses, which include Loop, its call centre firm, and KeyLand its property development firm, were a little less impressive.
The business stripped £1.4m from group operating profits against a small profit of £1.9m a year ago. Kelda said this was partly due to delayed contract at KeyLand.

Kelda has yet to shed its non-core renewable energy business, First Renewables, now promised for completion by March of next year.

Kelda's 45.75% owned Waste Recycling Group contributed £59.4m to turnover, up from £40m. Operating profits rose to £9.1m from £7.3m a year ago.

While competitors have begun to load up debt and return cash to shareholders, Kelda's group chairman John Napier told reporters on a conference call that the company was keeping its options open regarding future financing. Last year Kelda attempted to take itself private but was blocked by regulators.

Kelda upped its dividend to 7.7p from 7.5p a year ago, and reduced net debt to £1.35bn from £1.4bn at the start of the period, and a similar figure in the year ago period. Gearing narrowed to 44% from 46%.

The shares fell 1.5p to 355.25p, having made solid gains over the past two sessions. At the current price the company is valued at £1.4bn, or ten times forecast earnings for the current year

[sinso] 05/12/2001 08:01

FD John O`Kane on Bloomberg at 08.20

[mzj71852] 04/12/2001 14:43

what can we expect from the results?

[sinso] 04/12/2001 09:16

Apologies if u have already seen this but i missed it yesterday and suspect others may have done as well.


LONDON (AFX) - Severn Trent PLC, Kelda Group PLC, and South Staffordshire
Group PLC will announce interim results this week with the industry focus
remaining firmly on financial restructuring.
Pennon, AWG, and Scottish Power's Southern Water have all indicated in
recent weeks that they are prepared to undertake restructuring based around
'ringfencing' their regulated assets.
Severn Trent, the largest of the three companies, announces results for the
six months to end Sept tomorrow.
"We have already seen refinancing proposals from Scottish Power and AWG
which gear up the regulatory asset base. The pressure will be on Severn Trent to
respond to these moves, either by following or explaining why not," says
Deutsche Bank analyst Iain Turner.
The group is expected to report a pretax profit of 121-133 mln stg, up from
117 mln stg.
It should provide an update on the troubled systems business and a maiden
first half contribution from last year's UK Waste acquisition.
The group has signalled that it has been having problems with its IT
business that supplies billing systems for other utilities.
"We expect extra losses here plus an update on action to resolve this issue
once and for all," says Turner.
Kelda announces results for the six months to end Sept on Wednesday.
It has adopted a policy of 'wait and see' over restructuring until now, but
the recent developments may prompt the group to unveil firm plans.
"We expect Kelda to reveal its attitude to this type of gearing-up exercise
in these results," says Turner.
Kelda is expected to report a pretax profit for the six months to end Sept
of 84-94 mln stg, up from 82 mln stg.
South Staffordshire Group PLC, the smallest of the three companies, is
expected to report a pretax profit of 13-14 mln stg, against 13 mln stg the
previous year, when it announces results for the same period on Thursday.
mps/mkp

[capitalist14] 01/12/2001 19:04

Sharp drop in price caused by Kelda entering Morgan Stanley Capital International index and traders profit taking in the end-of-day auction.
From telegraph

The first phase in the reweighting of the Morgan Stanley Capital International index - considered to be the key benchmark for fund managers - took place after the bell. During the end-of-day auction, which lasted 18 minutes, a record 5,343 trades were carried out, worth an estimated £811m.

Some equity salesmen said the reweighting had been overhyped and investors had reversed out of positions, sending new entrants into the index much lower.

New entrants to close lower included Scottish & Newcastle, the biggest blue-chip loser of the day, down 30 to 505p. Daily Mail & General Trust lost 15 to 640p, while First Group, which yesterday bought back 50,000 shares at 275p each, fell back 20 to 265p. AB Ports dropped 15 to 395.75, while Kelda, formerly Yorkshire Water, sacrificed 13.5 to 342.5p.

[mzj71852] 30/11/2001 16:18

Yeah but the price is still dropping, nearly out of normal trading range it hit 3.37 today

[mzj71852] 29/11/2001 16:39

The Price dropped today any ideas why? When will we moved into a higher trading range? I think the interims are due shortly

[denny] 29/11/2001 09:58

Money Flow index, OBV & Accumalation/Distribution are looking healthy by moving in the right direction. This indicates the move out of the triangle could be upwards.
No means certain though.

[zzaxx99] 26/11/2001 15:01

AWG has jumped straight back down again - under 590 now.

[capitalist14] 26/11/2001 14:39

From citywire.co.uk

Water utilities also did well under the lead of Severn Trent at 746p, up 19p, and United Utilities, 10p better at 635p. AWG jumped 27p to 610p in anticipation of restructuring moves and a return of capital to shareholders later this week.

Looks like there all at it now!!

[zzaxx99] 26/11/2001 14:31

It does look to be heading into a wedge - like you say, hopefully a nice substantial move up out of that.

Which indicators are you looking at, as a matter of interest? I see RSI as pretty neutral, MACD & Stochastics as whipsaw hell; OBV looks pretty good.

[denny] 26/11/2001 13:59

Looks good in theory however it depends on the credibility given to the proposals and the managements ability to carry them out. I have been into KEL for some time and they have been oscillating in a trading range between 340 and 400 for 28 months.
Looks to be a very well defined triangle forming at the moment which suggests there will be movement soon, but which way ????? Up I hope.
Many other TA indicators (especially volume based ones) are quite positive.

[florence] 26/11/2001 00:34

Another Kelda fan here. Thanks for info. please keep it coming.

[zzaxx99] 24/11/2001 20:22

Oh, I agree - sorry, looking back I didn't really express myself very well there - provided there is a special dividend of 360p or so, as trailed in the papers, this really is a no-lose deal.

If the new deal is anything like the last one, you'd buy at (say) 370p, and in return get 360p special dividend plus normal 24p dividend (?) plus the resale value of your capital-reduced share at say 100p (or whatever) - gives a return of +30%. Very nice for a pretty low risk investment.

[mdg11] 24/11/2001 12:54

That still makes a good deal zzaxx99 if you only pay up to 400p a share.
ie Net worth is still 450p a share even if it drops 75% (360p divi 90p+ +share value}

[mdg11] 24/11/2001 01:27

Credit Lyonnais, in a review of the water sector, has raised its rating on AWG to buy from add with a target price of 715p, on Kelda to buy from add with a 460p price target and on Pennon Group to buy from add with a 776p price target.

AWG shares (AWG) are up 3p at 573p, Kelda (KEL) are up a penny at 375p and Pennon (PNN) are 2p ahead at 631.5p.

The broker reiterates its add ratings for Severn Trent (SVT) with an 845p price target and for United Utilities (UU.) with a 665p price target. Severn are off 5p at 740p, United are down 4p at 612p.

It has a reduce rating for Canary Wharf on valuation grounds but has a buy rating and 610p price target on Amec. Amec shares (AMEC) are 0.5p down at 379.5p

13th Sept 2001

[zzaxx99] 23/11/2001 18:09

The last Kelda restructuring plan involves a huge divestment of capital in return for a large one-off dividend - presumably something similar intended here. So, the share price will get hammered - really, really hammered, like 50-75% down - and you get a dividend of (say) 360p to compensate.