National Grid Share Discussion Threads

[skinny] 19/5/2014 09:08

The 2010 Rights Issue was one of the most profitable I've ever taken up.

[sco77harris] 19/5/2014 09:05

Prospect of negative savings rates in Europe will push this higher.

[norry2] 17/5/2014 15:26

Yes but they are often in prime city centre locations.

[septimus quaid] 17/5/2014 15:22

Before everyone gets carried away with the "land bank" a lot of it is contaminated former gasworks which will require expensive remediation measures before sale or to be given away.

[spacecake] 17/5/2014 13:05

The land bank was questioned in the results presentation, very large land owner, maybe 3rd or 4th in the country. As land prices recover interest in flogging some off seems to come up. I wonder if they have some in "the desolate north" with fracking rights !

[1carus] 16/5/2014 17:48

Thanks for the above feedback. It seems a fairly safe haven for now.

[sco77harris] 16/5/2014 16:31

I read they are looking at selling their 500mln property portfolio.

[sco77harris] 16/5/2014 15:16

Barclays lifted their price target on shares of National Grid plc (LON:NG) from GBX 875 ($14.74) to GBX 885 ($14.91) in a research report issued to clients and investors on Friday, Analyst Ratings News reports. The firm currently has an "overweight" rating on the stock. Barclays' target price suggests a potential upside of 2.49% from the company's current price.

[unastubbs] 16/5/2014 14:05

Questor - hold

[utyinv] 15/5/2014 23:10

1carus,

Over time this stock will increase in value especially when you realise the Cap expenditure being spent on new connections and building a more robust and up to date system. Rough guess: if NG are to spend £25 Billion over the next five years (NG are good at making £1 of asset return £1+)and the approx. current market value of NG is £8.62 x 3.7 billion shares in circ = £31 Billion. Then lets say current assets depreciate by 25% over the next five years this would leave a system worth £30Bill x 75% = £22Bill + £25 Bill of new build = £47 Bill and with 3.7 Bill shares in Circ IMHO I can see the share price in 5 Years being £12.70p / share.

Working on the understanding that the divi will rise by RPI / Year for the next 5 years (and working on an estimated RPI of 3% / year), I can see a full year divi in 5 years' time being 49p – 50p / share. Just guess work now as any future takeover could upset the applecart.

[lord gnome] 15/5/2014 21:04

I think you have it spot on Icarus. A safe stock to hold which won't give you any sleepless nights. It throws up the odd trading opportunity, such as the dive from 850 all the way down to 720 in the middle of last year, but other than that it currently looks to be one way traffic (famous last words).

[1carus] 15/5/2014 19:28

I'm kinda new to NG and bought a small amount of shares at the end of March, mainly attracted by the dividend. The share price seems to have risen fairly steeply for some time, which probably isn't sustainable, but what I am wondering is what is the general consensus on here in terms of total return over time. I agree with much of the above posts referring to this as a government gilt etc, it certainly looks that way. Assuming the divided is 4% and it seems that a 4% rise in share value is pretty much guaranteed for a number of years, this looks like a safe 8% for me for the foreseeable future with very limited risk - or am I missing something?

[gj2] 15/5/2014 19:26

I believe that a possible reason for holding the interim dividend earlier this year was the move from a fixed % rise (8% over 5 years, then 4(?)% in the run up to the RIIO price review)to rises linked to RPI. If they had assumed X% annaul RPI when deciding the interim payout, and the inflation rate at the end of the year was X-2%, they would have to raise the final by a far lower % than the interim. It is always better to raise the interim less than the final when the outcome/promise for the whole year is unknown. Presumably this is the idea behind (generally) having much smaller interim dividends than finals ?

[lord gnome] 15/5/2014 17:43

Newbank, whichever way you cut the numbers, over time the dividend will increase by RPI.

[newbank] 15/5/2014 15:28

Pierre,

I notice that NG are doing the accountants trick.

With full year divi being 42.03p, NG stated that come next Nov they anticipate announcing an Interim divi for Jan '15 of 35% of the previous years Full Divi, ie 42.03 x .35 = 14.71p. Now NG have stated that Divi's will be paid based on RPI but the last Interim was 14.49p which equates to an increase of only 1.5% (RPI being on Ave 2.5%).

However, I expect that NG will make next years Final Divi in Aug '15 higher ie, 42.03 x 1.025 (assuming RPI is 2.5%) = 43.08p - 14.71p (anticipated interim Divi) = 28.37p. Nice when the final divi is paid next year but this can be construded as NG withholding divi's for as long as practicably possible whilst still maintaining it's pledge to increase Divi's by RPI.

As I said nice accountants trick whilst the PR men say NG are increasing divi's by RPI

[lord gnome] 15/5/2014 14:09

Exactly Pierre. Why buy government stocks when you can buy NG.?

[pierre oreilly] 15/5/2014 12:53

Sept, ng. is nationalised in all but name. It is the arm of the government which implements government energy policy. Everything it does (talking about the regulated business here) is overseen by the regulator, who dictates the game. NG. is central to the security of much of the UK, so is naturally highly regulated. It is told how much to spend on infrastructure (do you think it would connect all those out at sea windmills if these were engineering decisions?), how to raise the billions, including how much debt to hold. It's returns are purely at the whim of the government - however, they naturally allow for decent returns for shareholders, inflation linked. You might as well treat this as having the safety of a gilt. Any threat to ng. - including rising interest rates (which I aggree are a concern for all other companies) and the regulator will adjust returns (via the uplift to traded electricity prices) in order to enable ng. to continue to implement government energy policy, including having the resources to build the dictated infrastructure to the dictated quality, to maintain the dictted level of service to all customers and to maintain decent shareholder returns. It's the only company on the stock exchange which is guaranteed not to go belly up whatever the circumstances imv.

[septimus quaid] 15/5/2014 11:56

Not sure about the BTL analogy, other than to say any significant rise in interest rates and it is game over

[careful] 15/5/2014 10:22

all of the utilities have large debt.
they borrow to buy billions of infrastructure.
they are allowed a total return on their assets by the regulator.
safe and solid.
80% gearing is normal.

think buy to let.
large mortgage debt, much larger asset value, steady rental income.
80% gearing is equal to £1m of property with .550k debt.

this is how utilities work.

[veryniceperson] 15/5/2014 10:17

? 21 billion is hefty. What percentage is that to its overall worth?

[unastubbs] 15/5/2014 08:42

webcast 9.15 today (need to register)

debt £21b...I'm a recent investor in this share. That seems pretty eye-watering to me!

[skinny] 15/5/2014 07:32

National Grid today announces that Nick Winser, Executive Director UK, will step down from the Board after the 2014 Annual General Meeting in July. Nick will continue with his roles as President of the European Network of Transmission System Operators for Electricity (ENTSO-E) and as chairman of National Grid Electricity Transmission plc and National Grid Gas plc, the two principal regulated operating subsidiaries of National Grid in the UK, through to July 2015 before retiring from the Company. In respect of these responsibilities, he will continue to report to Steve Holliday, Chief Executive of National Grid.

Nick joined the Central Electricity Generating Board in 1983, becoming National Grid's Director of Engineering in 2001. He was appointed to the Board in April 2003.

[lord gnome] 15/5/2014 07:30

Nothing there to scare the horses. Everything seems in line. Future divi growth assured. This is a government stock in disguise. Happy to hold, but might like to trade if I sense a top.

[skinny] 15/5/2014 07:08

Steve Holliday, Chief Executive, said: "National Grid delivered a solid year of financial performance, led by a good start to our eight year price controls in the UK and consolidation of underlying operational improvements in our US operations. During the year we invested over £3.4bn in essential infrastructure while delivering one of our best years ever in terms of network reliability and resilience. At the same time, we delivered strong cost efficiencies, particularly in the UK where around £70m of the savings will benefit customer bills starting in 2015/16."

Good operational and strategic progress led by efficiencies and investment
UK: Early preparation helped to deliver a strong first year under new RIIO price controls
· Total expenditure ("totex") efficiencies earned in 2013/14 contributed 120 bps to overall UK Return on Equity outperformance of 260 bps
· Around £70m customer share of efficiencies will help to reduce future bills
· Regulated investment of £2.0bn contributed to 5% UK RAV growth; up £1.1bn to £24.9bn

US: Benefits from new rate plans in New York and Rhode Island and focused cost control helped to offset general inflationary pressures on underlying costs
· Return on Equity 9.0% (2012: 9.2%)
· Capital investment of $2.0bn contributed to 9% US Rate Base growth of $1.3bn to $16.3bn (5% growth excluding working capital increases)

Solid overall financial performance maintaining strong financial position
· Group Return on Equity 11.4% (2012/13: 11.7%)
· Value Added1 of £2.1bn or 57.2p per share

· Adjusted operating profit up 1%, profit before tax up 2%
· Adjusted earnings per share up 5% to 54.0p
· Recommended final dividend of 27.54p/share (2012/13: 26.36p); full year dividend expected to be up 2.9% to 42.03p (2012/13: 40.85p), in line with inflation
· Good cash flow metrics, sustained A- credit ratings and stable gearing

[veryniceperson] 14/5/2014 18:32

Just be grateful for today!