National Grid Share Discussion Threads

[pander45] 26/5/2024 23:06

Lots of panic here, I don't see the reason. Yes, it is not an ideal way of raising funds and I am not a fan of dilution but, wise investment by the board will increase the profitability of the company and the share price will follow. It is bad news for short term traders but surely good news for long term investors. Can anyone seriously see this being below 12 quid in 3-4 years time? I can't. So I will be taking up the rights and buying more as close to the trough after ex dividend as possible. For me it is just a no brainer.

[gateside] 26/5/2024 22:11

The US markets are closed on Monday for Memorial Day

[bountyhunter] 26/5/2024 19:52

"calculating the future yield from future price and dividend will just return the original yield"

That is the point. For you it may be hypothetical but some others will have sold like myself, and it's relevant for future income investors in the shares.

[bountyhunter] 26/5/2024 17:37

58.52p total divi for 23/24
checking for the rebased value

"...a total DPS of 58.52p/share for 2023/24 which will then be rebased given the increased number of shares following the Rights Issue."

So the dividend per share will decline by 24/31 due to the dilution. For the same dividend return as at the Wed close for purchasers of the shares ex rights the share price would need to be 1126p*24/31 = 871p, not far off the share price now.

For me personally if I could buy back at 1025p * 24/31 = 793.5p then my dividend payment would be unscathed! :) ..as I sold at a 1025p average on Thursday. I'm not expecting the price to drop back that far but who knows. If I did that before the 6 June of course I would get the unrebased final dividend (although just for 23/24) on more shares, so 793.5p is too low as I haven't allowed for potentially buying back a few more shares (on which the unrebased final dividend would be paid) at the lower price. I give up, I didn't do advanced maths!

[bountyhunter] 26/5/2024 17:30

852p, that's pretty close to my valuation of 856p which I made in post 8934 on Thursday :)

Another way of attributing a value would be to multiply £11.26 (Wed close) by the rebased dividend per share divided by the current dividend per share, I've not tried that one but it may come out close to the figure we have posted, leaving the future yield roughly the same due to a lower share price?

[natasonline] 26/5/2024 14:38

Someone mentioned the other day about short selling prior to the announcement, do you have a link?

[gilesy911] 26/5/2024 14:36

Thank you Viscount1

[viscount1] 26/5/2024 14:24

Assuming you mean new NGPN shares you can:

1. Sell them in the market.

2. Participate in the rights issue via your broker. You will need 645p cash for each new share you buy.

3. Let them lapse and take a cash out when they are sold on your behalf.

You can also mix and match the above.

[gilesy911] 26/5/2024 14:20

Hi Never had a rights issue before. I've noticed 2916 shares in my broker account. What happens next ??Thanks in advance

[utyinv] 26/5/2024 14:18

Hi all,

I did a few calcs last night before travelling.

Total value of holding on Fri 17th May (closing price £11.39 x old holding) will require an eventual price of £10.27 to break even as we were as of Friday 17th May.

However, as the shares go ex divi on 6th June you cannot really say whether you have broke even or not until say for example next May when hype is inflated due to the imminent dividend.

[bountyhunter] 26/5/2024 14:09

I'm not sure about a bonus, it could be described as the only good point, imho :)
And all this before Starmer even gets in and him and his chancellor do whatever to support "Great British Energy".

[viscount1] 26/5/2024 14:05

24/5 is a date. The NGPN price on that date closing:

1 NGPN =~ 889 - 645 - 39
= 205

[berny3] 26/5/2024 14:05

BH - exactly my point the drop in price in the time is overdone imo. As stated I took up my rights as I see the investment plan as sound and I bought more shares ex rights just over £9

The new shares I bought yield 4.3% on next dividend alone and thereafter annually 5% based on this year dividend rebased for rights issue, which will be compounded by 6-8% per year based on the announcement. that's a bonus on top of continuing to invest in the company for the longer term.

[bountyhunter] 26/5/2024 13:56

The current price is the market's reaction to the rebased dividend together with future prospects for the new investments going forwards as well as political risk associated with the election being called, and the likely outcome (imv). It's yet to be seen if the current price is too low, Monday trading in New York may give some indication on that.
Given that the "total" dividend is to be kept the same the huge investment funded by the rights issue seems like dead money at least for many years to come. NG have effectively taken a massive interest free loan from shareholders with no obligation to pay it back, just on a wing and a prayer.

[berny3] 26/5/2024 13:50

Vis it is 24/7 not 24/5

The final dividend is based on the shares in issue at the announcement date. 9th November 2023

24 * 8.89 = £213.36
7 * 6.45 = £ 45.15

31 = £258.51 = £8.339

8.339 - 6.45 = £1.89 premium

There is a miss price as money flow was wrong footed with news in the week.

Price should be imo about £9.5

24 * 9.5 = £228
7 * 6.45 = £45.15

31 = £273.15 or £8.81 - 6.45 = £2.36 premium

Current price is too low imo

[bountyhunter] 26/5/2024 13:39

Post 9093 yesterday including my comments..

A 238p/share drop in two days in exchange for 200p (NGPN close on Friday) * 7/24 = 58p/share if you were to sell the NGPNs now. A 180p/share real loss in just two days, I make that a 180/1128 *100 = 16% loss over the two days in real terms based on the current share price and NGPN price, assuming you sell the NGPN rights at their current price. All with the icing on the cake of the rebased dividend.
I took the hit on Thursday selling out at an average price of ~£10.25, glad I did although still totally p*ssed off with this fiasco.

[bountyhunter] 26/5/2024 13:37

I'll repost my calculations below, just need to dig them out first!

[viscount1] 26/5/2024 13:36

The point is if you are going to do any share calcs to merge or sum the old and new shares then you need to take into account the foregone dividend. (To the extent that such calcs are useful.)


More importantly you need it to price the NGPN, e.g. for 24/5:

1 NGPN =~ 889 - 645 - 39
= 205

[bountyhunter] 26/5/2024 13:34

That's what I was thinking, the dilution will result in a ~7/24 i.e. a 29% decline in the dividend per share.

When they say "maintaining the total level of dividend following the Rights Issue" the key word is "total".

[berny3] 26/5/2024 13:29

Vis you are buying shares at £6.45 a significant discount to market price, that more than equates to the loss of one dividend.

BH - exactly very difficult to take in in such a short space of time, hence my thoughts the price is currently too low. And yes the new annual dividend will be the same as this year but adjusted for the increase in shares issued through the rights. i.e. there will be no change in total cash available for dividend just an increase in the number of shares it is dividend amongst and hence individual dividend per share will reduce by the adjusted number of shares.

[bountyhunter] 26/5/2024 13:22

>>maintaining the total level of dividend following the Rights Issue

Are you sure that equates to maintaining the dividend per share as there will be significantly more shares? It's difficult to take in everything that has happened with this company in such a short space of time. As it stands at the moment we have seen a 16% destruction of value since the close on Wednesday based on the current share price and current price of the nil paid rights (calculations are in an earlier post).

[viscount1] 26/5/2024 13:18

Re: share calcs

The new shares will not receive a final dividend which makes them worth 39p less.