Natwest Share Discussion Threads

[leadersoffice] 21/5/2007 10:52

Yeah there was. And ere it is:

The Sunday Times

Northumbrian Water shares are cheap, at 324¾p, for a firm operating in a sector that has real potential over the coming years. The Competition Commission's decision to approve the merger of Mid Kent Water and South East Water gave hope for a raft of similar mergers, with water firms and water and sewage groups the most likely contenders. The high price tags achievable by these groups is also an exciting prospect, with the 25% premium to assets paid for Anglian Water Group indicative of the cash that infrastructure funds are willing to pay.

Northumbrian Water could attract some equally flush suitors, not least because of its financial performance - a 17% rise in interim profits and solid full year figures forecast when the group reports next month. The group has also an often overlooked jewel in its crown, having secured a Government contract to run Kielder Water, which is the largest reservoir in Britain. Regardless of any takeovers or mergers, the company's prospects speak for themselves.

[killieboy] 21/5/2007 10:49

Buy rec in Sunday Times I am told.

[leadersoffice] 21/5/2007 10:24

Nice tick up this morning

[bountyhunter] 20/5/2007 18:27

from the last results re divi policy:

Dividend
The Board has declared an interim dividend for the period of 3.75 pence per share (2005: 3.52 pence). This dividend will be paid on 2 February 2007 to shareholders on the register at the close of business on 22 December 2006. The dividend cover for the period is 2.9x, and 3.1x excluding deferred tax and the amortisation of debt fair value.
The dividend is consistent with the policy announced by the Board in June 2005 to maintain a progressive dividend policy with real increases of around 3% p.a. during the current regulatory period.

I interpret that as dividend growth of 3% p.a. over and above whatever is necessary to keep pace with inflation.

[spob] 20/5/2007 18:18

What's the projected EPS and Yield for next year on this ?

[spob] 20/5/2007 18:17

From The Sunday TimesMay 20, 2007

Northumbrian may make a bigger splash
Inside the CityGrant Ringshaw
IT IS easy to see why investors like water companies. Regulated cashflows and assets that do not go out of fashion routinely lead to decent profit rises.

Take Northumbrian Water. It posted a 17% rise in interim profits in December and is expected to announce equally solid full-year figures next month.

Water has lost its dull status. The sector became exciting when infrastructure funds decided to pay astonishing prices for dependable cashflows and load up the businesses with debt. Anglian Water Group was snapped up for a 25% premium to its regulatory asset base, the value put on the assets by regulator Ofwat. The story was similar with Thames.

So the fact that Northumbrian is trading on just a 12% premium to its regulated assets looks curious – especially when you consider that the £1.7 billion company is one of the best-run in the sector and could yet be a juicy takeover target. Investors also appear to be underestimating the value of a government contract to run Kielder Water, Britain's largest reservoir.

The big fear is that Ofwat will be tough in the next price review – due in 2009 and implemented in 2010 – and that allowed returns will fall sharply from the current 5.1% in order to lower prices. Certainly, utilities have benefited from a lower rate of borrowing than forecast in the current regulatory period. But research by Morgan Stanley indicates that the market may be too pessimistic. The bank argues that allowed returns must be at least 4.5% if companies are to pay for the huge infrastructure investment needed. By most measures the market is betting on just 3.25%.

John Cuthbert, Northumbrian's managing director, is pretty pragmatic, admitting last year that the enormous interest of infrastructure funds meant any water company could be taken over. Northumbrian has some protection in the Ontario Teachers' Pension Plan, which holds a 25% stake and has indicated it is a long-term investor, but everyone has a price. But it may not just be infrastructure funds that are on the prowl. The Competition Commission's decision to approve the merger of Mid Kent Water and South East Water has raised the prospect of a new wave of mergers, probably between water firms and water and sewage groups.

Even if Northumbrian is not involved, the shares look cheap for a well-run business on track to deliver the lowest water bills by 2010.

[bountyhunter] 20/5/2007 16:48

excellent - I don't see why Kelda should get all the attention! :)

[alansmith23] 20/5/2007 15:22

tipped in the sunday papers, can't remember which one offhand.

[sllab101] 08/5/2007 17:40

Thanks bh.

[bountyhunter] 08/5/2007 17:31

try it now :) it does seem a bit temperamental!

[sllab101] 08/5/2007 17:27

Link not working.

[bountyhunter] 08/5/2007 17:22

Can't live without water :) and with the exception of 'Dee Valley Group' which I know nothing about this has the best fundamentals in the sector (imho):

[sllab101] 08/5/2007 15:52

I am back in the water.

[aspers] 08/5/2007 14:22

BH...dont think you can fail with this......Rock solid and on a steady roll up with the very odd fall in a day....cannot be many better shares around especially with the M and A prospects. Good luck

[bountyhunter] 08/5/2007 13:16

Hi slab, that shadow trader stuff is certainly very well put together - doesn't seem to come out until latish on Sundays though and I've ignored it at my peril with my small scale venture into Dow trading - still lots to learn there.
xd here in August and a dip in the price today along with the defensive qualities / strong fundamentals and takeover potential are the reasons why I got back in here today - also felt like dumping BIFF and so that released some funds!

[sllab101] 08/5/2007 12:48

Hi bh.Sold out of this last week.Great share have made loads on it.I will wait a bit longer then I shall dive in.
regards.


ps- like the shadow trader bits you have posted.

[bountyhunter] 08/5/2007 12:45

back in here after too long away - switched from Biffa,
although both have takeover potential NWG is far better on fundamentals

[aspers] 30/4/2007 20:53

Think this will continue to tick slowly up for the next month or so........rock solid share this with the advantage of m and A activity in the not too distant future!!

[sllab101] 30/4/2007 17:44

Enami-Seems to be always quiet on here.does not stop that share price keep moving up.Sold 5000 today but I do think there is a nice spike up coming.

[enami] 30/4/2007 17:30

Very quiet here. The highest EOD ever I think. 5 weeks to Preliminary results announcement 6 June.

[zeppo] 11/4/2007 09:22

Looking much firmer so far today than my other water holdings.

Good Stuff!

z

[alan@bj] 11/4/2007 08:47

Not heard anything Gateside. I see Kelda's down 14p and Severn Trent's up 18p. However, NWG always seems to be a favourite for a takeover rumour. We can only hope.

[stable] 11/4/2007 08:45

Gateside
Morgan Stanley have rerated NWG, suggest looking for 370.