||ORD 11 17/43P
||EPS - Basic
||Market Cap (m)
|Gas Water & Utilities
National Grid Share Discussion Threads
Showing 4501 to 4523 of 4525 messages
|to-days press, capita asset services
the fall in sterling has provided a £2.5bn dividend boost
to owners of London listed shares, the boost from currency
changes, means divi's rose to £24.9bn in third qtr 2016|
|Winter Outlook Report 2016/17 pdf
These are a long term hold and the interim dividend paid just after the New Year should give 15pxRPI so my guess is 15.15p. Thereafter a Special divi paid due to the Distn sale in the Spring of approx 65 - 75p and a final divi in Aug of about 26.5p x RPI less slightly reduced earning from the part sale of the Distn business. IMO income from these shares for next year 2017 should bring in £1.18p / share. With the promise of an increasing dividend strategy and the view that for every £1 spent on capex Grid always wants back £1+ ie, they expect to make a premium on every £1 spent, thus the market cap and Company share price should grow. Again IMO only|
NG are always re-evaluating their debt, re-visiting current debt and swapping it with better rates. They don't just furnish their debt in GBP or US$. Bonfield the CFO advised that NG were quite smart in going to the currency markets to get better deals on their current Debt. In a world of uncertainty 'Lenders' need to ballance their risk and reward and NG being a safe bet command very low rates of interest. I also believe, from inference, that Grid like any major Co. do hedge on currencies, so it wouldn't surprise me to learn Grid have options on the GBP.
Bonfield is quite a bright guy and was in the running to succeed Steve Holliday pipped at the post by John Pettigrew an Ecconomist and an Engineer.
Either way the fall in NG is not supported by fundamentals just rhetoric and spin from Hedgies that do not know the business and are after opportunities to close short positions or to buy a very lucrative stock at a fire sale price. Unfortunately though, the 'City' sometimes listens to these idiots who put 2 and 2 together and try and make it look like -2.
My only criticism regarding NG is that they do not update the 'City' on issues as often as I would like. However, the interim results are out in just over 4 weeks and the Company are still going through the RIIO half term re-evaluation (tweaking permissable spending and revenue due to eg. changes / delays to future generation build etc). Upshot is that if they (NG) stated how well they were doing now Ofgem might try and squeeze more out of Grid and anyway I imagine there would be a limit on what they could say due to the 'Close Period'. After the half stage re-visit of the eight year contract Grid will have a clear four years before having to negotiate the next eight year RIIO. All IMO only!|
|Failing to keep up even on good days for the market. Momentum and RSI both trending down. Sterling depreciation may or may not benefit earnings but sterling depreciation won't be reflected in dividends above those already projected by NG.|
I think I agree with most of that, however wasn't sure what you meant by:
"NG hedge their debt on currency fluntuation, but I am led to believe income from US is as it is."
"and the regulator also promotes NG to hedge against the debt in their favour which in turn keeps customer bills down"
Don't NG just issue US debt (and equity) to reduce their exposure to $ fluctuations, their net investment (after debt) they would then hedge by fwd contracts. I think this is referred to as a Balance sheet hedge.|
Sorry misunderstood what you were getting at. NG hedge their debt on currency fluntuation, but I am led to believe income from US is as it is. Also, last week NG were granted the permission for a rate rise to recoup money spent. Unlike the UK where the Regulator dictates revenue against pre-agreed capex, in the US NG spend not knowing how much they can get back from customer's bills (bit of a gamble).
Also, on debt (which is taken out across GBP, Euros, Dollars etc), the UK Regulator actively encourages NG to be geared quite high (to keep customer bills down)in comparison to other Co's that are not guaranteed an income from customers bills recouping capex spend(monopoly). Like it or not when NG was privatised money spent on Capex on increasing assets needed to reinforce the system is paid for by customers at both ends,ie Use of system for Gens to connect and Use of system by customers to recieve the energy transported; so to speak.
That is why NG debt is always at a very competitive rate ( extremely low risk) and the regulator also promotes NG to hedge against the debt in their favour which in turn keeps customer bills down.
NG is unique in that there aren't many companies who can spend money on infrastructure and in law (if agreed within RIIO)get it back from customers bills. A double benefit is that the increase in asset value makes the Company's Market Cap higher.|
|Uty not sure you understood my post or maybe I haven't understood yours. My understanding is NG hedge their investment in US assets with fwd contracts. So whilst a stronger dollar would mean better £ cashflows this is offset by adverse mvmt on hedged position.|
From the events of the last three days that's obvious but hopefully as sometimes happens Hedge Funds incur large losses before they can close their 'Shorts'. Similar thing happened with Porsche and a lot of Hedgies lost big time! One can only dream :)|
|Uty, I think you'll find a lot of dollar strengthening benefit is offset by hedged investment position.|
|Artist = a crust.|
|Strange old world isn't it. To earn a crust, most people have to do something of value to society, like perhaps trying to ensure the very intellectually demanding facility to allow tens of millions of people to plug in their kettle and make a cup of tea when they want. Others can earn not so much artist, more a bakery full of bread, by having a chat over lunch and disclosing through Chinese walls various share positions and whether it's likely to be beneficial whether to increase or decrease them by a few hundred million.|
|credit suisse is a disgrace! obviously trying to get these shares on the cheap.
They have a track record of being dishonest, hence the massive fines imposed on them over the years by the US.
For reasons already mentioned, these shares should be pushing £13 / share (30% of revenue from $, increased asset base [£5billion/ year just in Elect], imminent sale with a 70p special divi in the Spring).|
|I think Barclays are nearer the mark.I cannot see a retrace to 840.CS must be shorted NG.for clients.|
"Barclays PLC reissued their overweight rating on shares of National Grid plc (LON:NG) in a research note released on Tuesday. The brokerage currently has a GBX 1,175 ($15.34) price target on the stock"|
|mike24, please elaborate why falling £ gives higher value to gas division?
Future cashflows regulated in £, shouldn't change value in £. Obviously cheaper when thought of in different currency but then future £ cashflows won't be worth as much?|
|They are consistent!
They've had an "under perform" on these going back until at least last November.|
|National Grid plc 21% Potential Decrease Indicated by Credit SuissePosted by: Amilia Stone 7th October 2016National Grid plc using EPIC/TICKER code LON:NG had its stock rating noted as 'Reiterates' with the recommendation being set at 'UNDERPERFORM' today by analysts at Credit Suisse. National Grid plc are listed in the Utilities sector within UK Main Market. Credit Suisse have set their target price at 840 GBX on its stock. This would indicate that the analyst believes there is a downside of 21% from today's opening price of 1063 GBX. Over the last 30 and 90 trading days the company share price has decreased 4 points and decreased 52 points respectively.|
|Bit of a retrace from 1125|
|falling £, gas division should be going
up in value, every day,
foreign cash buying NG shares could push divi return
over 7% if pound slides any more,
looking for spike off 1050|
|Uty - I think Ofgem are saying that there will be no uplift in RAV at acquisition due to the premium any bidder may have paid. Investment post acquisition will be added to the RAV as per normal IMO, irrespective of whether the RAV increases or not over time.|
Ofgem, are being politically motivated as they always are! They cannot stop the sale but obviously will play down a good RIIO review when next up 2021. By warning the potential buyers that they will not get above the regulatory asset value when the review next occurs is basically OFGEM trying to use the sale for their own benefit in reducing costs in the future.
Eg, Lets say Asset value is £5.6 Billion (for the 51% stake in the four Distn networks).
On bidding, like an auction for houses, a reserve price will be set at X, in this case what National Grid values the 51% stake as a minimum i.e. (£11 billion x .51 = £5.61billion). So say Company 'China X' buys all four networks (to make it easy), for £6billion, out bidding others. Ofgem are saying do not expect in the 2021 review that they will tolerate an asset value in excess of £5.61Billion x index. That then spoils the party for a keen 'China X' company wanting to invest further money in the network to improve returns, because OFGEM are saying they will not enter into negotiations years down the line regarding asset value, which is used to determine revenue. i.e trying to impose an unofficial 'crude derivative type' contract.That way it makes it easier for OFGEM to screw the new company in the next review and they (OFGEM) get a pat on the back for being clever in curbing the new owners future revenues. I hope my basic explanation makes sense?
Ofgem should not make such future statements and what they are doing is trying to illegally set a future negotiation benchmark for any potential new company to settle a new review in OFGEM's favour(illegal because no one knows what will or not happen in five years time and IMO OFGEM are over-stepping the boundaries).
As for the sale and possible return to shareholders:
51% stake will raise £5.61billion. National Grid has said it will not sell if it doesn't raise the min value of what they value the business at, i.e. they don't have to sell! So let's assume £5.61billion. Approx £2.6billion will be used to write off the pro-rata debt for the part business that National Grid currently owns, leaving approx £3.01billion for shareholders. Now there are two schools of thought:
1) all the proceeds are returned to share holders £3billion divided by 3.72 billion shares in circa = approx 80p/share. or scenario 2 (intimated at the AGM)
2) some will be returned and some will be used to buy back shares to try and maintain a reasonable value on the remaining share price, post distribution of the special divi (otherwise as the business is smaller then the remaining shares must be reduced pro-rata to reflect the new Capitalisation Value of NG). So we may get National Grid buying back some shares reducing the number of shares in circ (trying to maintain share price)and the rest distributed to shareholders. IMO if this scenario was to be undertaken 'we shareholders' may get 50- 60p back as a special dividend and the new shares value will not be drastically reduced.
However, let's not forget why NG want to sell the Distn networks. They believe they have taken the business as far as they can with the effort and overhead costs they are willing to sacrifice. They believe they can improve the 'rate of return' per share if moving out of UK Gas Distn. A further clue would be what they do with the remaining 49% of the Distn Networks and where they spend that money (when the remaining holding is sold off in the future). My guess is that the proceeds of which will be used to purchase further acquisitions, with potential growth.
All this IMO only!|
|thanks, but just read one for free without registering based on scotches method :)
...although registration would be simpler long term|