National Grid Share Discussion Threads

[utyinv] 09/5/2017 08:54

It's always the same from the ignorant media and BBC. News this morning about curbing energy prices from the big six energy providers (providers to consumers), the BBC, in order to sensationalise its story on television it decides to show footage of the National Grid Elect Control Room!

What happens to the big six will effect NG but NG is not the focus. They could have shown a sign for SSE, BG, NPower, ScottishPower,E.On and EDF Energy with a photo of their energy offices!

[2350220] 09/5/2017 08:32

Also, if like me you've got thees in a spreadbet, you don't need to declare any profits on your tax form.
John

[dr biotech] 09/5/2017 06:44

I could well be wrong, but I don't think CGT would appply. My loose understanding is that there has to be a period of 30 days between selling and buying for it to count as you selling. Stops people selling/ buying at the end of the tax year. CGT bed and breakfast I think it was called.

All mine are in an ISA so it makes little difference.

[billy5] 08/5/2017 23:32

Thanks for the reply to earlier question.
It seems in monetary terms we get, following 22nd, 11/12th of our holding times the 84.375p.
Tax will be what it is or how how you play it.
Sit back and wait for the rewards.

[pierre oreilly] 08/5/2017 19:57

When you sell on the 21st, you'll potentially be liable for cgt (but most pis in practice won't be). You wont get the divi, so won't have any income tax to pay on the divi which you won't get. You can then buy the shares back on the 22nd, and you'll roughly (less costs) be in the same situation as the 21st - same number of shares, same price. If you want some cash like those who hold over the 21st, then just buy back 11/12 of what you had before, then, like everyone else, you'll have 11/12 of the shares you had before, and a 1/12 the value in cash. Only you'll be possibly be subject to cgt, and not income tax (like those who got the divi).

I'm not qualified in this stuff, but i think that's all the situation, it's not too difficult.

[misanthropeterence] 08/5/2017 18:54

Hi Pierre,
Interesting point you made regarding income vs CGT. Correct me if I'm wrong here, but the whole idea of the company is to maintain the share price before and after D day through the consolidation (ignoring normal market forces).
So not sure of the benefit of selling on 21st and buying back on 22nd at the same price.
Can't be bothered to think - had a hard day and knackered.

[utyinv] 08/5/2017 18:35

dogdays,

you are right you never get something for nothing! So with the part sale of the Gas Distn business the Company (you) receive money for that sale. However, a share price is based on market value for the Company and if NG were just to hand the Special Dividend back to you without any consolidation and/or share buyback the share price will be worth that amount (the value of that part of the Company sold) less.

Now you ask why sell it? As expressed in previous posts, the Gas Distribution is profitable but not that dynamic. Its costly, very labour intensive, pension costs are high (look and the number of beneficiaries of the scheme, the liabilities are gigantic) and political interference is putting a tremendous amount of pressure on OFGEM to squeeze profits from NG so that they (Ofgem and Government) can be seen to be the Customers friend!

NG has a historic reputation of making money which benefits Customers, Employees and of course Shareholders. By focusing on areas where the playing field is more friendly to business, where profit is not such a dirty word but essential to promoting growth and a healthy business, is a shrewd move.

As an example, NG bought the UK and EU part of Crown Castle (they provide amongst other services the masts that transmit BBC ) for £1Billion. NG improved it, using existing infrastructure they had and technological know-how and then sold it on for £4billion a couple of years later.

Sometimes they get it wrong as in the case of not selling out completely in Energis before it (Energis) collapsed. You may recall Energis was founded by NG and the company was floated where the share price went from £2.20 to £42 / share before it afterwards collapsed with NG still holding stock in the Company.

You ask who would buy the Gas Distn business? The business is profitable but shows little sign of growth. It is stable, boring, heavily regulated but steady, just what pension funds need to manage their liabilities. Pension Funds go into consortiums to jointly own income businesses. They have to invest their cash to mitigate the liabilities of the scheme (pensioners, dependants, future pensioners etc) with minimum risk. They are not in the business of risking pension contributions.

There is a saying you need to speculate to accumulate, NG is using its intellectual know-how, monetary power and knowledge of a business they know well to grow, but growth does not come without risk.IMO!

[rbcrbc] 08/5/2017 18:07

dog - They are NOT maintaining the share VALUE they are maintaining the share PRICE.

[dogdays] 08/5/2017 17:13

I still do not understand how they can sell off the gas supply part of the business yet maintain the share value if they hand back the proceeds of the sale as a special dividend,unless the gas supply part is a dead financial loss. If this was true why is anyone wanting to buy it? I have also learnt in life that if something seems too good to be true it probably is. I don't think we should be blinded by share support and consolidations either, nor am I happy about selling of strategic to foreign consortiums.I say this as the purchasing company owned Thames Water during the time they released raw sewage into the Thames and were fined £20.2 Million for doing it.

[pierre oreilly] 08/5/2017 13:38

Billy, The record date is largely irrelevant, so forget about it.

Then it's simply the xd for the special is the same time as the consolidation, the 22nd. (i.e. you have to hold the shares at close on the 21st in order for the special divi and consolidation).

Anyone who wants to effectively shift the divi away from income can simply sell before close on the 21st, and buy back on the 22nd, which may mean capital gains tax which may be better overall than the income tax on the divi. I'm sure most pis won't be affected whatever due to the divi income allowance.

[redartbmud] 08/5/2017 13:13

Agreed.

PI's with a large holding will lose out under the new dividend tax rules.
A sensible boards would have carried out a straight capital reorganization, with A or B shares that could be sold over a couple of years to mitigate CGT.

Just MHO.

[billy5] 08/5/2017 12:18

The Record date for the Special Divi is the 19th but the Ex date is the 22nd.

When is the consolidation of the shares taking place?

It cant be before the 19th. If you hold 12k shares on the 19th then that is what the divi is based on at 22nd, not 11k.

I don't think that the info is that clear.

[utyinv] 08/5/2017 09:20

Employees will benefit from a 20% reduction in price ( option price for sharesaves are 80% of the share price at time of allocation). Whilst saving there are no rights, no dividends because they (Employees) don't own the shares until the scheme matures and they exercise their right. As for Sip savers NG Employees can buy £125 with of shares from their monthly salary at the current share price. The benefit to employees is that the £125 is from gross pay ie before Tax. However, as the Company is squeezed by OFGEM to reduce Use of System charges, pressure will come down on employee pay. However, this pressure obviously doesn't apply to the Directors but as a shareholder you can voice your opinion on the whole remuneration package but that's another subject!!

[utyinv] 08/5/2017 09:05

Mike24,

Why do you say that? If the consolidation and the special divi matches itself out, and if it works out that way the share price should stay stable as well as earnings per share.

If you're bothered about the number of shares you hold being reduced, use your special divi to buy back the shares???

With what lies ahead, politically, this looks like a positive deal. With Teresa May promising to cut energy prices from the big six don't you think that will effect NG? How does NG get its revenue? If the big six are being squeezed that will put more pressure on OFGEM to cut use of system charges - both elect and gas. With the Gas Disn business being very costly, a squeeze on future earnings will make the business less profitable. That's the reason for exiting and concentrating its time in more profitable areas. All political parties in the U.K. are out to put pressure on the utilities. The general populous want something for nothing and at election time along with the Brexit excuse the Gov will be happy to hit utilities.

[mike24] 08/5/2017 08:37

the real winners are the employees
in the share save scheme, plus their 6% return

[septimus quaid] 05/5/2017 08:58

Re share consolidation, and other shenanigans, the real winners in all this are the hangers-on and fee collectors.

[utyinv] 04/5/2017 09:56

possible reason for fall: downgrade today by RBC Capital Markets!

[bountyhunter] 02/5/2017 20:11

...they have £4 billion cash to distribute from the gas distribution unit sale; I guess they could have repaid some debt instead but may have upset some ratios ;-)

[spacecake] 02/5/2017 18:56

After years of issuing scrip dividends - a consolidation ?

This special dividend is all smoke and mirrors, after the consolidation and special divi the holding value is the same. So why bother ?

[1olddog] 30/4/2017 19:00

Thanks both. A lot of sense in what you say. I too will continue to hold for yield but may look elsewhere for safe income with a chance of growth....Lloyds maybe, unless we hear something exciting at AGM.

[utyinv] 30/4/2017 13:20

1olddog,

I am hopeful of future growth. However, like bounty has said, there is too much political uncertainty that will keep volatility at an all-time high. There are many politicians that will not accept what the people voted for...so why give us the referendum? I voted to remain but accept that in a democracy it doesn't always go the way you want it to, so let us make the best deal possible with the EU asap.

Politics and politicians will keep uncertainty and volatility high for a couple of years.

If John Pettigrew and his 'Board' are right in letting go of a low growth, costly, increasingly highly regulated Gas Distn business, changing direction to concentrate instead on areas where there is more potential then yes we should see more growth.

I recon we will see the direction of how its going ready to question the Board at the AGM. The Special Divi and the final divi will have been sorted (Final paid in Aug but shareholders will know at the end of July what the situation is). By then we should get a feel for how things are expected to unfold along with a clearer indication of the expected future. IMO

[bountyhunter] 29/4/2017 21:39

Good question, we have been oscillating around 10 quid for around a year now. I can't see any end to the current volatility here for a while - at least a couple of months and maybe a couple of years for obvious reasons given the political situation. As long as it stays around the £10 level on average over that time that's fine by me given the yield. That's my view anyway but others may well disagree.

[1olddog] 28/4/2017 18:20

Have held these for a while. Bought for income and then got a handy bit of growth as a bonus. Do we see any future growth, or are we just holding for income now? Any thoughts appreciated.