National Grid Share Discussion Threads

[bargainsniper] 10/6/2024 15:25

Labour will revert ban on petrol and diesel-powered car sales to 2030, if elected

[kryss] 10/6/2024 13:42

Its not ahead of everyone else, ICU production is being limited until then. You can still buy until 2035, but manufacterers are supposed to have 100% of their production EV by 2030 or face big fines.

[bargainsniper] 10/6/2024 11:16

Labour 2030 ban on petrol/diesel cars ahead of everyone else will only serve to make the UK poorer. Increasing wind fall tax will kill off North sea investment. Their green energy won't be cheaper. Their 'Great British Energy Company' isn't a company, it won't make bills cheaper. It's fairytale politics

[pierre oreilly] 10/6/2024 10:48

Fedd, the speculation was extrapolated from the info we had. In the docs, an estimate of 15% was mentioned and latched onto, but a more accurate figure for the divi adjustment was the ratio of shares pre issue to shares post issue (which was close to the 15% mentioned). As you say, it doesn't matter at all, and once ng. published the likely 45.3p + cpih divi, then that will almost certainly be what they pay because they control it. If cpi is at the gov 2.5% target, that implies a 46.4 divi next year.

[pierre oreilly] 10/6/2024 10:41

There's no direct link between the divi and earnings.

Pettigrew said he expected earnings next year to grow roughly in proportion to the number of shares, therefore eps being about the same. After that istr he expect earnings (and eps) to grow at 10% pa for the following 6 or 7 years (as you say, mainly due to asset growth). The constant (in real terms) high, relative to the risk, divi (almost whatever cpi does) combined with share price growth proportional to eps growth is the investment case the directors put forward.

A sort of safe indexed linked income with very likely share price growth (of around 10%pa ? if relative to eps) is probably what the City likes.

[kibes] 09/6/2024 13:08

The rebased 45.3p dividend would assume that the earnings are not going to increase as a result of investment of the rights issue cash raised in new infrastructure. But NG's earnings are regulated and the return allowed is based on the regulated asset value. Since this is going to go up the earnings should go up as well based on the higher asset value. So it should be higher than 45.3p.

[anhar] 08/6/2024 13:01

Indeed, thanks for that. It is the theoretical FY24 divi that has been rebased to 45.3p. This means that the current year FY25 payment will be 45.3p plus CPIH growth.

[feddie] 08/6/2024 08:37

Why so much speculation about the dividend?

It has already been announced that the dividend per share will be rebased from 58.52p to 45.3p in the FY24 Results, slide 41

[bountyhunter] 08/6/2024 08:26

I sold at an average of ~£10.25 on the day of the rights announcement, so as I didn't receive the dividend, so long as I buy back at below
£10.25 - 39p(missed divi) - 65p(the current NGPN value per share ie 224*7/24) = £9.21
then I will be better off than if I hadn't sold the day that the rights issue was announced. I still lost out on the day of the announcement of course as all holders did. It's a nice interest free loan for NG which may or may not contribute to dividends and capital value. It should do in the end but that will take years.

[viscount1] 08/6/2024 07:08

So, as I said, you save on stamp duty on taking up a rights issue.

[davius] 07/6/2024 21:21

I calculated value at 922p on the day they went ex-rights, and although you could sell a tad above that level initially, by the end of the day it was under 890p I think.

Cum-div closing price today is effectively 908.3p so unless someone sold shares early doors ex-rights day, they are better off if they held until today.

[davius] 07/6/2024 21:15

STSM072040 - Companies and shareholders: rights issues: Stamp Duty implications

Stamp Duty is charged on instruments (documents) that transfer on sale a beneficial interest in stock or marketable securities (FA99/SCH13(1)). There is no ‘transfer on sale…’ on the issue of a Provisional Allotment Letter (PAL) or Renounceable Letter of Allotment (RLA), as the letters simply document an offer. There is therefore no stamp duty charge on the issue of a PAL or RLA.

Once the offer is taken up and the shares are issued, there is no transfer of beneficial interest, as this is an issue of new shares out of the company’s authorised share capital, rather than a transfer of a pre-existing interest. There is therefore no liability to stamp duty on the issue of shares under the terms of a rights issue.

[viscount1] 07/6/2024 21:00

You also save stamp duty on taking up a rights issue.

[typo56] 07/6/2024 20:55

You are correct. I'd overlooked the ex-div. How about 930p?

Rights issues are my pet hate. I consider them a financial con trick. Any benefit you may think you gain in buying 'discounted' rights is offset by the loss in value of your existing holding when the shares go ex-rights. You don't really get a better deal than anyone else buying in the market (apart from saving dealing costs). I think they're a blag to get you to buy more shares.

For a given sized fund raise I think the rights price is irrelevant (unless you're an underwriter). Yet somehow the greater the 'discount' the more tempting they seem to be to PIs.

Often it's better to wait and simply buy the shares on the dip when the rump gets placed.

I'm not speculating on where the shares will be trading a year or two from now, just pointing out taking up the rights often isn't the cheapest way of increasing your holding.

[laurence llewelyn binliner] 07/6/2024 20:55

Each to their own strategy, taking up the rights at 645 pence made sense to me after 5 years holding here and added the rest from the market to double down overall..See where we are in 6/12 months before we can call it the right/wrong decision.. :o)

[davius] 07/6/2024 19:40

Your numbers are well out there, as you don't appear to have taken into account the 39.12p final dividend which applied to the shares but not the rights. Thus the 645p is a discount against the ex-div price and not the price at the time of the announcement.

[typo56] 07/6/2024 17:01

Often it's best to avoid the rights issue and sell your shares on the rights announcement and buy back on the morning the rights are fully paid and the rump gets placed. That will be the case here if NG. are trading below 950p on 12th June, which seems likely.

[laurence llewelyn binliner] 07/6/2024 16:19

Rights exercised, funds taken, now we just need the new shares on the 12th.. :o)

[anhar] 07/6/2024 08:10

#Anhar, I have a 12.5/32.5 (45p) pencilled in +CPIH going forward, fine by me, see where the share price ends up in 6/12 months time.. :o)

Yes agreed, 45p seems approx the most likely 25 divi far as I can tell at this stage. As an income player, that's the figure I'd use to estimate forward yield at present if I was to add to my holding. Imo it's attractive at 5% or higher yield implying a max price of 900ish under current conditions of interest rates etc.

Just my view, others may see it differently.

[laurence llewelyn binliner] 07/6/2024 08:00

#Anhar, I have a 12.5/32.5 (45p) pencilled in +CPIH going forward, fine by me, see where the share price ends up in 6/12 months time.. :o)

ECB rate cut is the 1st of them, June 12th for the FED decision, 19th June CPI inflation data, BOE decision 20th June then 1st August, IF we get a cut in June ahead of the GE then that would be very well received by the equity markets, but I expect August for our 1st one..

[davius] 07/6/2024 07:59

First ECB interest rate cut, UK likely to follow, then the FED (world's gone crazy, I know it's the wrong way round, haha).

We've had a bumper couple of years with our ISAs shelling out thousands in tax free interest, but all the rates are dropping now. The 5.89% fixed rate I'm getting from Ford Bank which expires in February won't be seen again for a long time.

I can see my holding in NG becoming a long term investment for income.

[utyinv] 07/6/2024 07:58

Hi guys, (guys and gals), lot of chat about divis but as we all concur there are too many variables to draw a definitive.

I think the first real indication will come in Nov when the interims paid in early Jan might shed some qualifying light on the subject.

However, and I am not getting political, but if Labour do win the GE then the positive backing from Labour to what NG are doing may wane if the dividends are not conservative. Just my thoughts fwiw.

At least the final, which is usually paid in Aug will now be paid in July.

The AGM is early too, instead of it being in late July its on the 10th and back in the Midlands ie Scarman House, part of Warwick University. Spent many a course / meeting at Radcliffe House ( nearby and here they do MBA’s etc), whilst at NG😂

I suppose all eyes will be on the open next Wednesday. Good luck all👍

[anhar] 07/6/2024 07:28

PO: Istr pettigrew saying the divi pot will remain the same next year, before rising with cpi after that.

So the pot divided by 3.7billion is (19.4+39.12) = 59p (23/24)

Next year the same pot divided by 4.7 bill shares is 59*3.7/4.7 = 46.5pish...

I don't agree Pierre. See my figures above where I show that the 25 divi is likely to be about 45p based on their stated predictions in the rights docs. Not a huge difference from your estimate but I think my figure will be more accurate as far as we can know at this stage.

Divis are never guaranteed so in practice it could be anything but I'd be much more inclined to trust the rights doc calcs, it's there for a good reason imo, making a predicted yield of about 5.2% at 868p which aint bad I think, from an income player's pov.

[goldgeezer] 07/6/2024 07:17

In summary - long term hold

[goldgeezer] 07/6/2024 07:16

I suspect the slow rise to 1100p will now begin. Greater rises in dividends also expected later to maintain the attractive yield as the funding goes to work.