National Grid Share Discussion Threads

[grahamite2] 24/3/2014 23:42

The sell off? Plummeting? Are we looking at the same share?

What I see, as an income-seeker looking at the longer term, is a share that has had a modest pullback in the course of a long term uptrend.

[tonio] 24/3/2014 18:26

Again though looking at the graphs at top of site it does look like US holders selling down but then after our close buying back?

[tonio] 24/3/2014 18:24

Hi I have no idea why this share is plummeting so rapidly - or indeed why it rose so strongly. Maybe it's all just MM activity. I have seen nothing explicit about the US being especially harsh with NG - it is what it is. It is amazing though that there is so little discussion on what seems an excellent income and to some extent growth share.
Maybe it's just lack of any news - BT for instance have their TV stuff to get heated about, RMG have a lot of staff who spread news- google lse rmg. NG staff don't seem to say much either here or at iii share site or lse ng. Neither does anybody else. It's weird - maybe paid bbs have info. Or maybe the people holding the shares are not regular traders in it - quien sabe.

[newbank] 20/3/2014 09:45

Anyone know the reason for the sell off?

Is it the USA, as the Fed spooked the market yesterday by saying interest rates might go up in spring 2015? As the US appear to be punishing foreign companies, ie, BP, NG etc and whenever NG try to reclaim money actually spent on infrastructure they are short changed by the regulator out there.

Maybe it is time to evaluate whether or not to exit the US as it doesn't appear to operate on a level playing field for foreign companies. The land of opportunity appears to apply to only the indigenous few.

This share is currently vastly undervalued IMO.

[pierre oreilly] 14/3/2014 09:26

Just moving with the market isn't it? When Putin speaks, just about everything is either up or down. We take market risk, and individual company risk relative to the market.

[newbank] 13/3/2014 11:24

Quiet on this thread, surprising considering the price dip today.

[veryniceperson] 07/3/2014 19:17

Quote - U S treating foreign companies as Q E. You bet they are. Easy money for them. I am a BP Share holder.

[newbank] 07/3/2014 17:36

What happened there?

Does anyone know of any reason for the sell off after 14:00 hrs? Coincides with the Yanks opening. Is it the Yanks up to their old tricks again?

I would have thought that NG was a secure investment for all the spare cash that Vodafone's Investors wanted to re-invest from the sale of Verizon.

It's interesting to note that the US Courts are not allowing BP to stop fraudulent claims from the compensation fund BP set up to compensate those effected by the oil spill. US treating foreign companies as a form of QE?

[tonio] 26/2/2014 19:33

Considering the strong performance of this share recently, including today's markdown, I am a bit surprised there are no postings here. Any ideas on how the recent storms are likely to impact on NG? As a discussion point it looks like NG is behaving a bit like a growth share rather than a utility, maybe with the progress of its US arm or are we just seeing a repeat pattern of 1913?

[bountyhunter] 20/2/2014 20:46

Thanks for posting that link SimonGn, it's certainly an interesting read. I've added it to the end of the header for future reference.

[dgo] 20/2/2014 18:20

Are we getting over heated here again ?

[neddo] 20/2/2014 18:08

quiet here?

[simongn] 13/2/2014 10:43

"Why National Grid plc Should Be A Winner This Year"

[tonio] 11/2/2014 18:24

Well NG has certainly moved forward since feb 4th outpacing the rising general market substantially the last two days - maybe this will be the star performer envisaged on Feb 6:

[tonio] 04/2/2014 18:06

you may have wondered why NG fell this afternoon as the US markets opened.Maybe this is the reason:

Updated: Monday, February 3 2014, 08:10 PM EST ALBANY --
National Grid says there was a billing error that has impacted 40,000 people in the Capital Region. The Utility says the customers were undercharged on the natural gas side of their bills. It has decided the best way to deal with the error is to cancel the bills, recalculate them, and re-bill the customers. They say the bills were off by variable amounts depending on customer usage but most residential customers were under-billed by about $10. Customers who have already paid the lower amount will have their account credited. If they have not already paid, they will get re-billed but there will be no late fees. National Grid says that everyone who was impacted should have received this letter, explaining the issue: hxxp://www.cbs6albany.com/images/2014-01-27 NMPC Gas Error Letter.pdf

Read More at: hxxp://www.cbs6albany.com/news/features/top-story/stories/nat-grid-says-billing-error-hit-40000-customers-13813.shtml

[newbank] 04/2/2014 18:00

Vastly oversold IMHO.

Its about time Steve Holliday gives out some news that will burn all the Shorters!

With Nick Windser in the ENTSO-E Presidents seat surely we should see some benefit to National Grid.

[skinny] 30/1/2014 11:07

A perspective from "over there"!

[skinny] 30/1/2014 07:03

HIGHLIGHTS

Further progress in line with expectations towards a good full year result
· UK - good outcome expected both from efficiencies against regulatory "totex" cost allowances and from other incentivised performance
· US - separation of Long Island Power Authority (LIPA) management service activities completed on time on 31 December 2013 - over 2,000 employees transferred to new operator
· Strong network performance across all businesses in challenging winter conditions
· Capital investment of around £3.5bn expected to drive continued healthy growth in regulated asset value this year

Steve Holliday, Chief Executive, said:

"Our businesses made further progress through to the end of January toward achieving our priorities for the year. We are investing in our networks for the benefit of customers and maintaining a strong focus on efficiency and incentive performance.

Our networks performed well, demonstrating strong resilience during some difficult weather conditions in both the US and UK. I believe that this shows the benefits of our investment in process development and infrastructure and the continued dedication of our front line colleagues.

We reconfirm our positive outlook for 2013/14 - overall, we are well positioned to deliver another year of good operating performance and sustainable dividend growth."

BUSINESS UPDATE

To date National Grid has delivered good network performance for customers despite adverse winter weather conditions in both the UK and US.

In the UK recent investment in flood defences for critical sites over the past few years has helped to minimise any cost or reliability impact on National Grid's operations from recent bad weather.

In the US, there has been some extremely cold weather in recent weeks along with an ice storm in upstate New York and Massachusetts in December. The ice storm resulted in around 150,000 National Grid customers being temporarily without power due to damage to the local electricity distribution systems. National Grid's workforce responded well to these challenges, rapidly restoring power to customers. Disruption and costs related to extreme weather to date have been much lower than in the previous two years.

In December, the US business successfully separated its Long Island electricity transmission and distribution activities, where National Grid previously managed LIPA's assets under a management services contract. As a result over 2,000 National Grid employees transferred on 31 December 2013 to the new business operators, together with associated financial systems and other equipment.

Completing the financial systems aspects of the LIPA separation now allows a full focus on concluding the new US systems and financial processes projects. Work is now focused on implementing further system improvements and reducing ongoing costs including those associated with manual processes in the production of regulatory and statutory financial information. Expected costs remain in line with previous guidance and completion is still expected in 2014.

Business environment

Key elements of the UK electricity generation environment are largely consistent with those discussed in National Grid's half year results statement published in November 2013. Expected generation connections to, and disconnections from, the transmission grid over the next twelve months are largely unchanged, although further updates are possible before the year end. Consultation on new balancing services arrangements has made good progress, with Ofgem having approved two new mechanisms to be introduced ready, if required, for the winter of 2014/15. With continued tightening of plant margins expected into next winter and into 2015/16, these new services could provide additional tools to support the operation of the system.

In the US, environmental and economic advantages remain key drivers of growth in demand for new distribution infrastructure and connections. National Grid continues to make progress on developing new transmission and generation infrastructure that should deliver attractive medium to long term growth.

FINANCIAL UPDATE

There have been no material changes to the financial position of the Company. National Grid's balance sheet remains strong, underpinning the stable credit ratings and the continued ability to raise funding in debt markets at competitive rates.

OUTLOOK

Outlook is unchanged from that stated in National Grid's half year results statement published in November 2013. The Group is well positioned to deliver another year of good operating performance and sustainable dividend growth.

TECHNICAL GUIDANCE

National Grid is making no updates to the technical guidance published in the half year results statement of 21 November 2013.

[utyinv] 27/1/2014 22:43

Pierre,

That's right, the ultimate return will benefit shareholders so the Regulator said that some of the pain must be experienced by the shareholders. The rate of return though is slower than previous Cap Ex that had been recovered via customers. However if you look at Mkt Cap of approx £29 billion (3.6 billion shares in circ) and with the extra investment increasing the asset base including a depreciation of existing assets, I can see by 2020 the asset base being £55 billion devided by 3.6 billion shares in circ should make a share price of £15/ share.

I do not worry about Debt as the regulator has also advised Grid that a high Debt is recommended for a Company which has an almost monopoly. By taking that stance they are hoping some of the financial costs the customers will have to stump up may be delayed by Grid securing Debt at fantastic rates. However, there is a mechanism to guard against Grid being exposed to higher rates of interest and RIIO will be revisited to make any amendments 4 years into the 8 year term.

As for millipede, he says he is going to do this and that and realistically very little of his talk will come to fruition even if he get in. If he does get in he may change some terms for some energy suppliers but he needs Grid (the good boys) to advise the government on energy security policy, so even if he does get in and does become an extreme maverick, Grid will be left alone, IMO.:)

[gj2] 27/1/2014 19:07

As a lurker but long time investor here (was in sharesave 1, matured in 1996), have been interested in the various discussions here over the last year or so. My two pence worth - or should I say two points - are :

1. Having listened to the webcast on the day the rights issue was announced, rather than OFGEM telling NG., it was NG.'s decision to tap shareholders in order to keep a single "A" credit rating. NG.' s calculation : either fund the increased CAPEX via further debt and hence risk losing the single "A" rating, with the resultant increase in borrowing costs (and the resulting spiral...), or get shareholders to inject some capital. The supergrid system required this investment - either NG. supplied it or NG. would lose its monopoly. Trying to judge the optimum debt/equity funding split against an uncertain future is key. And yes, I considered the dividend policy prior to the rights issue unduly aggressive. They pitched the amount raised (3.2BN GBP from memory) so that the single "A" rating would be maintained through the next 8 years against a range of assumptions on (increasing) CAPEX e.g. how many windfarms would connect at supergrid voltage, how many nuclear stations would start to connect.... etc. OFGEM often point out that although they set NG's income - it is up to NG. to decide how to allocate that income between staff, management, shareholders etc & how best to seek funding - via debt or shareholder's funds. Contrary to post 3031, the rights issue was to fund numerous new projects - why else would the CAPEX rate increase ?

2. Cost of debt - with the size of the debt, this is of great importance. However, this is broadly an allowable expense - if the cost of servicing debt rises, so should OFGEM's allowance for it. However I am unsure of the lag in cost/recovery equation here.

3. Well – I did say two points but here is my third : Milliband/Balls etc : dangerous. However, they seem entirely focussed on companies that consumers pay their bills to VS. how much profit those companies report (=popular in the constituency/on TV). Luckily NG. is a step away from consumers in the U.K. Electricity sector. However with the windfall tax on the sector still fresh in the memory , their axe could fall anywhere....

4. Well - lastly, OFGEM have no say on the returns from the USA.

Good Luck

GJ2

[redartbmud] 27/1/2014 16:15

Pierre

You are quite right, but when the Red Millipede and "Flat" Ed Balls take the reins in 2015 they will change the goal posts - because they can.

red

[pierre oreilly] 27/1/2014 11:22

utyinv - that's mainly my understanding too.

I'm not sure of the final bit though - are you saying ng won't now benefit from the capex made? (partly at the cost of customers, and partly by shareholders).

My understanding is the government (i.e. the regulator) regulate to give the company a certain % return on assets. Since the assets have/will increase, the return in absolute terms (the same in percentage terms) will increase. Since the public, via costs passed on via uplift to suppliers who could also then pass it on in bills, paid/are paying the majority of the infrastructure upgrades, ng will benefit (at no investment costs themselves for that tranch) for zero cost. That's why the regulator said ng shareholders had to stump up some cash, to help a little to redress the balance.

Unless soemthing has changed recently, ng will benefit, probably unfairly, by investments partially paid for by the public. Is that your understanding, or something different?

[redartbmud] 27/1/2014 08:44

Uty

Point taken but it does mean that the balance sheet has been,and is being loaded, with more and more debt. Debt attracts interest payments. At present the cost of debt is lower than the income generated, but it may not always be the case.


red