National Grid Share Discussion Threads

[stevie blunder] 04/7/2016 16:09

Beg your pardon, senior moment there. Embarrassing....

Gas distribution business indeed. That made 878£M operating profit last year.

[gj2] 04/7/2016 11:03

The gas transmission side is being retained - it is the gas distribution side that is having majority stakes in them sold.

I for one have no idea how the proceeds will be returned to shareholders. However, when a return of capital was last held (circa 2005 - I don't know for sure as I threw the paperwork for it away about a year ago), this involved a share consolidation plus a special dividend or a "B" share alternative. If the "B" shares were held for their full term (2 years ?), they reverted back to an equivalent value in ordinary shares which meant there was no income/CGT tax to pay.

This will clearly be a return of a much larger sum of money, hence the company may restrict the options so as to keep it's borrowings within its target range.

Time will tell.

Geoff

[stevie blunder] 04/7/2016 09:27

I suspect there will be a share consolidation to go along with the special dividend.

Uk gas transmission produced operating profits of £486M last year. They are selling the majority of that. Overall operating profits will fall. Dividend cover is low. They would not (IMHO) be able to maintain the dividend on the same number of shares.

For an investor like me the special dividend is a bit of a non-event as I will have to reinvest it in NG to maintain my income.

I could be wrong of course :-)

[gbb483] 04/7/2016 08:54

My take is that 99.9% of what is posted on these BBs is either drivel, wishful thinking, posters thinking they can influence the share price by influencing the company or posters thinking they can influence the share price by influencing other posters.

[mirandaj] 04/7/2016 08:45

I realise that you are all aware of this but it does no harm to repeat it.

"Process for the sale of a majority stake in UK Gas Distribution, on track

In November 2015, National Grid announced the potential sale of a majority stake in the UK Gas Distribution business. As this business is fully integrated with the other UK businesses, it needs to be separated. Since November, the business has made good progress on the activity needed to create a standalone business that can operate efficiently, while maintaining its primary role as a provider of safe and reliable networks. The necessary consultations are underway with internal and external stakeholders to enable a smooth separation process.

The Board believes that following a sale, the Group's portfolio of businesses will deliver higher growth, while maintaining the strong balance sheet that allows the Group to continue to fund its investment programme and maintain the policy of increasing dividend per share by at least RPI for the foreseeable future. Following completion of any sale, the Board expects to return substantially all of the net proceeds to shareholders."

[keelstow] 04/7/2016 08:43

any special divi would just come off the share price to balance the asset loss so what's to gain?

[ianood] 04/7/2016 07:45

gbb483 - bit unfair, it is only a bulletin board and the guy is substantiating his thoughts. What is your take one it?

[redartbmud] 04/7/2016 07:43

Big share buy back programme on the cards then?

[gbb483] 04/7/2016 06:06

Nothing like starting a good rumour.

[utyinv] 03/7/2016 23:56

Neddo,

Yes I expect there will be a special Divi when the Distn networks are sold. That has been made very clear by initially Steve Holliday and now John Pettigrew his successor.

If a majority stake is sold in the £11 billion Distn network, say 51% then that would raise £5.61 Billion. Nat Grid has been rumoured to be looking at another acquisition in the US for approx £3 Billion (despite the promise that the majority of the sale proceeds will be returned to shareholders). So looking at the worst case scenario IMO if the sale is successful then £2.61 Billion will be returned to shareholders. With 3.7 Billion shares in circa, that will generate 70.5p / share, maybe more if there isn't an aquisition and Ofgem don't interfere!

John P has said he expects the sale to complete by the first quarter of 2017.

[neddo] 03/7/2016 15:13

will their be a special divi ?

[skinny] 02/7/2016 13:29

Here is the .

The energy element is @10minutes in.

[pg11111] 01/7/2016 21:47

mike24

A very good BBC Hard Talk program earlier with the French Minister for Energy and possible 'President elect'. She re-affirmed her country's commitment to the planned EDF investment in UK nuclear power, stating that it had nothing to do with the EU.

Interesting stuff and worth a watch.

[bountyhunter] 01/7/2016 10:21

one way of looking at the recent rise is that NG. was undervalued in the first place not factoring in the unexpected changes in the past week mentioned above which have worked in it's favour and are now a reality

[mike24] 01/7/2016 10:11

can't see energy commission recommendations been carried out,
more important is to find alterative to Hinkley point, which is
becoming a financial dinosaur to the UK

[utyinv] 01/7/2016 08:56

Skinny,

don't forget:

£ low, $ high, income from US

Defensive Play

Approx 80p special divi expected first quarter 2017 on sale of Distn networks

BofE expected to lower interest rates

[prewar] 01/7/2016 08:55

Seems a bit high to me but certainly more attractive than gilts which coupled with Dollar exposure may explain a lot of the rise. Not sure either of those factors likely to change in near term IMO.

[skinny] 01/7/2016 08:35

Looking a tad over bought?

[bountyhunter] 28/6/2016 22:18

Good point about the US revenue benefiting from a lower £ - great to see a FTSE 100 constituent which may benefit from the recent turmoil! Also I agree a defensive play at times of high volatility.

[utyinv] 28/6/2016 21:12

Skinny,

Didn't it get to £10.34p?

However, don't get too excited, isn't it because the £ is weak against the $?

If the £ has dropped 3% and the price has increased by 3%. The value of NG is still seen as the same so the rise is expected. Many would say it's down to defensive plays, but remember, a lot of Grid revenues are generated in the US.

[skinny] 28/6/2016 08:19

A new high this morning @1017.00.

[utyinv] 17/6/2016 09:07

If they (Gov)decided to take the System Operator off NG then it's not such a big deal! Out of the £2+billion profit NG makes, the SO element of the business accouns for only £70 million of that whole figure. That being the case, if the SO was taken off NG then the interference by the regulator and DECC in future would not be warranted. That leaves NG open to charge more for the use of system. Inter Connectors are part owned (50%) by NG and what John Pettigrew should spell out to the committee of MPs is that Grid is not a charity! The media and City are ignorant of what is involved so the fall in share price is typical ignorance and hype trying to manipulate the SP!