Pennon Share Discussion Threads

[wet your knot] 07/2/2020 08:48

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.

[rimau1] 24/1/2020 22:06

What a strange time to sell, i have been adding, one if us is wrong!

[chc15] 24/1/2020 18:29

Interesting you sold, I was hovering, but then thought I don't have anything else to put into, so holding and accumulating. Viridor news soon too.

[essentialinvestor] 24/1/2020 15:52

That's me out, luck to those holding.

[gateside] 23/1/2020 08:49

Ex Div today13.66p

[essentialinvestor] 17/1/2020 16:12

Sold some, just in case we retrace a bit.

[essentialinvestor] 15/1/2020 12:23

Added a small amount at the open.

Would expect at least a re-test of the Monday high.

[essentialinvestor] 14/1/2020 11:47

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.

[poikka] 14/1/2020 10:02

Waking up from a weekend of over indulgence, stretching into Monday, I'm thinking more calmly.

Viridor would have been Pennon's road to growth, obviously, and we'd be ditching that growth, leaving us with the steady Eddie. As said, just hope that they have plans to grow the steady part of the business with some of the proceeds.

[essentialinvestor] 13/1/2020 23:10

That rumoured £4 billion may have included Viridor debt
at around £1 billion. So £3 billion + £1 billion in net debt.

We might see around £12 here if and it is an IF, Viridor attracts that type of offer.

I'm usually too cautious on price targets though.

[poikka] 13/1/2020 23:03

I'm assuming/hoping that they've got the good sense to determine what's best for us shareholders: returning cash; reducing debt; share buy-backs and/or investing in related businesses.

With a present market capitalisation of some £4bn, another £4bn would do wonders for the sp, when water makes up 2/3 of ptp.

[gateside] 13/1/2020 15:43

And the sector will stay on fire too! Renewable energy is not going away. Agree listing it rather than selling it might be a better option.

[essentialinvestor] 13/1/2020 11:12

If you look at some of the Green/renewable investment funds they are trading
at 20% plus NAV figures atm.

The sector is on fire - no pun intended.

[essentialinvestor] 13/1/2020 11:08

About £1 billion of their net debt is with Viridor.

Would think it will be sold inclusive of that debt.

[essentialinvestor] 13/1/2020 10:08

They should list it rather than sell.

[drectly] 12/1/2020 11:22

could make Monday interesting, even if already partly built into the price. Leaves as a question, how much of the £4bn would be used to reduce debt and how much returned to shareholders.

[chc15] 16/12/2019 13:45

Not even the bad news today can stop this going up.

[essentialinvestor] 13/12/2019 17:54

Just hoping we get a few grabbing some profit next week.

[essentialinvestor] 13/12/2019 09:40

It's going to bounce around a lot over the next week or so, should be opportunities.

[chc15] 13/12/2019 09:35

Yeh i may add again before it goes ex div in Jan, will see if I get an opportunity..

[essentialinvestor] 13/12/2019 08:55

Added at 9.677.

[chc15] 13/12/2019 08:06

Yep up big, oh well, I still hold big on this.

[chc15] 12/12/2019 16:25

Sold a touch ealier at 9.22, down now, let's see what tomorrow brings!

[essentialinvestor] 11/12/2019 14:56

If people are uneasy about tomorrow, you can always consider selling(or selling a %) and
buying back. However, if it's a decent sized Tory majority you may be buying
back quite a bit higher up.

I would tend to view that as an insurance premium cost.

No advice intended obviously.