Pennon Investors - PNN

Pennon Investors - PNN

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Stock Name Stock Symbol Market Stock Type
Pennon Group Plc PNN London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
16.00 1.25% 1,300.00 16:35:26
Open Price Low Price High Price Close Price Previous Close
1,290.00 1,276.00 1,297.00 1,300.00 1,284.00
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Industry Sector

Top Investor Posts

whackford: I find it difficult to believe that the large institutional investors are in the dark about what is happening re. another water company takeover or cash return. They simply would not put up with it. To get a level playing field ordinary investors should be given an indication now about what Pennon's intentions are and how matters are progressing.
masurenguy: Brought to my attention as one of the 5 shares for 2021 tipped in The Times today. Pennon South West Water enjoys a stellar £4bn rating in the FTSE 100......Pennon, its parent company, is sitting on £2.7bn of cash after the sale of Viridor. That cash pile is worth about 640p of Pennon’s 940p-a-share valuation and leaves a water business with expected annual earnings of about 30p a share trading on a low multiple of only 10 x earnings. One of three things will happen to the cash: all of it it will go on a big deal, some of it on buying a smaller regional or local player, with the unspent balance returned to shareholders; or the entire 640p a share will go back to investors. By the end of the year Pennon shareholders could be invested in a more highly rated company and/or be receiving a large return of cash, plus a pretty much guaranteed ordinary dividend of about 22p. Complete article:
rogsim: The problem for PNN is that any possible takeover target knows the size of their "pot". It appears that the search is confined to water companies, or similar, and all Boards of companies in the sector will be on their guard as a result. It will need hard bargaining and there is the prospect of over-paying: I hope that PNN's advisors are on the ball. Giving a cash dividend, while attractive to some investors, would now be a sign of weakness.
essentialinvestor: They now want to use some of the proceeds to reduce their pension deficit . So now that's reducing net debt, reducing the pension deficit and keeping some cash for future opportunities, all before a yet undisclosed amount returned to investors. Excluding lease liabilities and Virdor, Pennon net debt is £3 Billion. As mentioned earlier this week, the amount returned may be lower than some expect.
discodave4: The average total dividend yield in 2019 across the sector was 4.6%.In 2018 Ofwat mentioned a nominal 5% dividend yield as the base level. And in line with this the average total dividend yield in 2019 across the sector was 4.6%, However, the new OFWAT CEO (Johnson Cox) re-set that for their PR19 period (2020-2025) to 2.96%. That said South West Water we're fast-tracked and I believe their blended average equity return is 3.9% for the 5 year period (Https:// which isn't too far off their historic yield of 3.5%-3.8%. Guess time will tell what they actually do now due to the impacts of Covid-19.
wet your knot: I'm in a healthy profit position on these (don't ask me what went wrong!!) and considering my options. My simplistic view from the last numbers (ignoring waster services as its currently loss making: Total rev. £712m Total PBT £143m SWW rev £292m i.e 41% On which it makes PBT of £96m so 67% of total PBT Viridor rev £388 i.e. 55% On which it makes PBT of £42m so 29% of total PBT Yes I know the % don't quite add up, just using the data sent out. My question to those with much more experience than me in this area is: At £11/share is the value of the remaining SWW business going to be worth around £7.40/share i.e. in line with the 67% of PBT? And would we be likely to get something like the £3.63 difference (i.e. the Viridor share of PBT) as a return to shareholders? That would be a huge amount of value to return, do these things transpire in that way normally or does some of that value not get realised by investors (private like me or otherwise)? Appreciate there's lots of potential outcomes but views would be welcome.
essentialinvestor: I don't think the market is factoring in the potential upside yet. In fairness these things take time. And some investors may want to cash in at the current price.
bluemango: Is a break-up for utilities group Pennon on the cards? ...asks AJ Bell's Russ Mould 'The company has announced a strategic review of the group which one can assume will include a potential demerger of waste recycling business Viridor. The growing investor interest in all things ESG-related could see Viridor achieve a much higher valuation as a standalone business. It would provide investors with an alternative way to play the UK recycling industry than simply buying shares in Biffa. Viridor works for more than 150 local authorities and major corporate clients as well as over 32,000 customers across the country. It has a network of more than 300 recycling, energy recovery and waste management facilities. There is a growing trend for companies to spin off ‘hidden gems’ or underappreciated operations in the hope of creating more value for shareholders. Prudential is about to spin off M&G, Ferguson is going to separate its UK business from the group, and Smiths Group is going to demerge its medical arm.'
ohisay: From HL today... The prospective yield is 6.6% and the plan is to increase the payout by RPI inflation plus 4 percentage points each year. Pennon's continued delivery of double digit return on regulated equity supports these goals. However, tougher regulatory conditions from 2020 mean we'll be reading the outlook statement in May's upcoming results with interest. There's a couple of other clouds on the horizon too. The political climate is far from welcoming, with the nationalisation debate resurfacing for the first time in decades. In addition, UK interest rates now look like rising quicker than expected, which has also impacted the shares. Not only would higher rates mean the interest on parts of Pennon's debt becomes more of a burden, but the relative appeal of bonds, traditionally the preserve of income-seeking investors, would rise. It's reassuring that underneath these external factors, Pennon continues to deliver a solid operating performance. This should help support the dividend, at least in the short-term.
chc15: ftse up, still getting battered, not making much sense now, must be value, bottom-up investors to buy in now..
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