National Grid Share Discussion Threads

[wad collector] 04/9/2013 15:06

Miata , I can't believe how many BBs you appear on - I suspect you are a professional BB poster or possibly a group of people!#

Haven't held these for yrs but sniffing around at these high yielding utilities - might be buy time.

[haughtonhoney] 29/8/2013 09:08

Bounced off the 200 MA

[arja] 29/8/2013 08:54

wow- suddenly took off aftera long period of stagnation! No news out as far as i can see but maybe yields have suddenly become a thought again !

[miata] 26/8/2013 12:00

The reason companies often buy up shares to prevent dilution is that Directors Long Term Bonuses (which can be up to 250% of salary) are often linked to improvements in Earnings Per Share. Obviously more shares means it is more difficult to improve EPS.

National Grid has an LTPP partly linked to EPS.

[gj2] 24/8/2013 15:16

In agreement with the above. AFAIK, the old DRIP (dividend reinvestment plan) used to buy up existing shares for those not wanting the dividend in cash - so no dilution. This scheme ended after the January 2009 dividend payment.

The SCRIP scheme started with the August 2009 dividend and does indeed involve dilution - NG saved about 400M pounds in August 2013 dividend payments, with dilution being the ongoing cost. I can imagine them dearly wanting to continue with the current scheme. Interesting to note that the SCRIP scheme was introduced less that a year before the rights issue .....

[miata] 21/8/2013 08:37

2801, new, correct.

National Grid confirms that application has been made to the Financial Services Authority for 59,763,686 ordinary shares to be admitted to the Official List, and to the London Stock Exchange for the shares to be admitted to trading, in relation to the operation of the Scrip Dividend Scheme for the 2012/13 final dividend, payable on 21 August 2013.

[utyinv] 21/8/2013 08:30

Watch these rise today as Isa managers reinvest the dividend to buy shares for those that want to increase their holdings. Ideally they should stay low till the shares are bought but supply and demand...

[lennonsalive] 21/8/2013 08:22

NG should never had sold the UK Gas network so cheaply and bought Keyspan in the US.

[utyinv] 21/8/2013 08:18

Does anyone know if NG's scrip dividend are shares purchased by the company from those already in circ or are they generating new shares? If its new shares than surely this is a dilution of value of current shares in circ?

[redartbmud] 19/8/2013 14:31

Darias

Spot on with the Board. They would struggle to run a school tuck shop properly IMHO.

red

[darias] 19/8/2013 14:25

We bought in because the value of the company had fallen on an irrational basis since we last sold. The company is was paying a good dividend and therefore as an investment the purchase was quite rational. We bought at £7:40p

We did not buy the shares as a vote of confidence in the board which, quite frankly, I think is amongst the worst in the ftse 100.

We certainly did not take up the rights issue and would not take up a rights issue in this company without major changes at board level.

[darias] 19/8/2013 14:18

"The Board believes that raising £3.2 billion through the Rights Issue will give it the scope and appropriate financial flexibility to deliver the Group's strategy. In particular, the Board believes it will allow the Group to fund a significant increase in capital investment and continue to deliver attractive
returns to shareholders, whilst maintaining single A credit ratings for National Grid's UK operating companies in a more volatile economic environment. The Board also believes that raising equity today will strengthen the Company's long-term competitive position to take advantage of an appropriate share of UK growth opportunities."

I would draw your attention to "In particular, the Board believes it will ........continue to deliver attractive returns to shareholders."

Now ok the phraseology doesn't exactly say that they will use the money to maintain increase dividends but that is the implication. You should also remember that cash was being used in the years prior to the announcement to buy back shares like there was no tomorrow rather than to draw down debt!

[pierre oreilly] 19/8/2013 13:34

Has Ng. said in any official information in the rights issues that the money is being raised in order to pay dividends? Have they stated other uses for the cash raised, like building infrastructure and the like? Does the concept of a rights for divis come entirely from yourself with no evidence?

Would company law be breached is, for example, cash were raised in a rights issue and then used for something other than what the prospectus said it would be used for? Would analysts look upon the directors as untrustworthy if that happened? Would anyone, including yourself Darius who said you rebought recently, buy into a company who raised cash to pay divis?

Nowt as strange as folk, especially trading folk who's opinion changes after every trade

[darias] 19/8/2013 11:31

Since cash is cash and only accountants differentiate money according to where it has come from I took a look at the annual accounts.

The share premium account stood at 1,335m at 31st March 2012
Retained earnings stood at 12,297m with other equity reserves standing at (4,835m)So I calculate that there are 7467m "distributable" reserves which can be used to sustain the dividend.

There are 3670.14m shares in issue (ADVFN Figures) which suggests that there is £2 for every share available for dividend cover.

Since current share price is £7.36 it suggests that a 6% dividend can be maintained for at least 4 years even if they don't make a profit for each of those 4 years. They can also maintain cover by using that "other equity reserves" for buying back shares a policy that they have adopted in the past. I.E. using a rights issue to maintain dividend.

[redartbmud] 19/8/2013 10:42

Darias

That is the embryo for a Ponzi Scheme.

Pierre

Quite correct. Dividends can only be paid out of distributable reserves. IE Profits after Tax.

red

[pierre oreilly] 19/8/2013 08:18

Darias, I hope you give your thoughts to every other thread on every other quoted company, the vast majority of which have also had rights issues and also paid dividends.

It really is a nonsense view I'm afraid, as I explained a few weeks ago. I'm not an accountant, but afaiia, companies can't even pay out divis unless they have past profits from which to pay them anyhow. So, as well as being nonsense, your views would be against company law too if there weren't profits from which to pay them (and if my understanding is incorrect I'd appreciate an accountant to clarify the issue), and in the case of NGC, the regulator certainly wouldn't allow it even if it were lawful.

[darias] 19/8/2013 07:10

It is certainly sustainable. After all that they have to do is to do a rights issue to maintain it.

Clever or what.

[arja] 18/8/2013 16:50

adelwire- div is about 6% which is good if it is sustainable .

[arja] 17/8/2013 09:58

newbank - thanks for that and probably the reson for the sell off. I will cut my loss on monday I think as only sold half recently ! Bet it bounces after I sell ! Thanks again for info .

[newbank] 16/8/2013 18:30

arja,

Regulators have already done their work - for eight years with a review after four years. National Grid knows what numbers they have to work with. However, do not underestimate the amount of money spent on giving severance payments as a result of the extensive reorganisations taking place as part of an efficiency drive. The reductions are; Managers by 20% and a cut in Engineers and staff by 10%. The costs associated with these redundancies are quite extraordinary - short term. The efficiency savings though will show within two years.

In the short term these payments will make a big hole in the Company's cash reserves but will soon show savings in operating costs.

[adelwire2] 16/8/2013 17:07

I just cant see what's pulled price down in past week but divi not that great me thinks

[arja] 16/8/2013 11:10

that is what I thought but it shows no sign of turning and , as an earlier post mentioned , the dividend might not be sustainable when the regulators do their work !

[moving up] 16/8/2013 10:20

solid divi get in now. this will not be this cheep for long..