Pennon Share Discussion Threads

[sllab101] 22/7/2021 16:26

I totally agree this deal was no benefit to pnn shareholders.

[glenowen] 22/7/2021 15:09

Correct me if I am wrong, but has this consolidation/special dividend not seen ordinary shareholders lose out badly? My holding was reduced by one-third, because of the 2 for 3 consolidation. I have, of course, received the special dividend a few days ago. But my calculations indicate that I have been forced, effectively,to dispose of one-third of my holding at a price of £10.65 per share (which, I assume, was the share price at the time of the announcement). In the meantime, the share price has increased by nearly 20%.

It seems to me that this was a forced sale of my one-third holding, which has turned out very well for the company - cancelling shares at a good price - but not so well for ordinary shareholders.

A “dividend̶1; suggests something which shareholders are being rewarded with. In this case, the exact opposite has happened. Why did the BOD of Pennon decide on this arrangement, when a more straightforward share consolidation - without this “special dividend” - would have more effectively achieved the desired “return of capital”.

Seems to me that shareholders have lost out - or am I missing something?

[oapknob1] 21/7/2021 12:48

Can we look forward to PNN buying their own shares as soon as this goes ex div.Pennon is also proposing an on-market share buy-back programme of up to GBP0.4 billion expected to be conducted through to September 2022

[dartboard1] 16/7/2021 08:12

Waiting for my divi to land... although no rush, not sure I have any great buy ideas right now...

[oapknob1] 16/7/2021 07:04

Is anyone able to say why trades are going through with 0 volume please?

[mercury123] 12/7/2021 21:21

I was wondering the same thing. So a nice bonus on Friday then

[gabsterx] 08/7/2021 11:01

My bad, I misread the below sentence, seems like 2 July is the Record date.. Better withdraw the complaint to my broker :D

"As detailed in the Acquisition, Special Dividend and Share Consolidation Announcement, Pennon is proposing a special dividend of c.£1.5 billion in aggregate, representing £3.55 per Existing Ordinary Share (the Special Dividend). The Board is proposing to pay the Special Dividend to shareholders on the register of members of the Company as at 6.00 p.m. on 2 July 2021."

[nerja] 08/7/2021 08:19

Paid date is the 16th july

[taylor20] 08/7/2021 08:19

2 July is the Ex-div/consolidation date. 16th July is expected payment date.

"Subject to (i) shareholder approval of the Special Dividend and the Share Consolidation and (ii) admission in respect of the New Ordinary Shares, the Special Dividend is expected to be paid to shareholders on 16 July 2021. "

[gabsterx] 08/7/2021 08:06

Has anyone received the special dividend of 3.55 GBP per share yet? It was supposed to be paid on July 2nd but still nothing on my account.

[oapknob1] 29/6/2021 15:41

Just a £1,223,972.25 trade to finish the day.

[holts] 09/6/2021 17:06

Zangdook , Thanks for reply and suggestion

[zangdook] 09/6/2021 10:38

I suspect not, but I'm not an expert. From research I did a couple of years ago, it seems that if they call it a dividend, it's a dividend even if on the facts it's obviously a return of capital. But don't take my word for it...

If you don't know it, I strongly recommend the CGT thread (Gengulphus edition) for all CGT questions.

[holts] 09/6/2021 09:59

For tax purposes although this payout is called a special divi ie covered by your 2000 yearly tax free allowance , does the fact it is as a result of a consolidation shift it into CGT territory?

[pierre oreilly] 05/6/2021 20:57

samewe, The price won't drop going xd the special - the special will effectively come from the 2 for 3 consolidation (the 3.55 divi is about 1/3rd of the 1070 ish shareprice). So holders could look at the situation as selling 1/3 of their holding.

Re the divi, it'll be rebased to allow for the loss of profit from the Viridor sale. So the 43.77p paid last year will be rebased to 21.11p, and this they hope to increase by cpi+2% iirc.

So if you got say £1000 ord divi last year, it looks like you'll get about £350 this year (plus the cash from the one off special divi of course) if my maths is correct (i.e. 50% of 2/3 of £1000 plus cpih+2%).

[whackford] 04/6/2021 08:57

Just got this over the wires. Reasonable in my view:

DEUTSCHE BANK RAISES PENNON GROUP PRICE TARGET TO 1,180 (1,070) PENCE - 'BUY'

[samewe] 03/6/2021 16:40

In theory, share price drops by the same amount of special dividend, therefore the idea of share consolidation of 3 to 2 is to assume that the share price ex share price div should be the share price on 2 June of 1070p. If not the projected share price on ex divi day should be 1070 less 355p. We hope that with reduced share capital of 30%, EPS should go up and in turns delivers higher divi and high share price in the long term.

[kipper999] 03/6/2021 14:36

So the consolidation wipes out the 355p divi?....in effect?

[samewe] 03/6/2021 12:29

Total share capital will be consolidated from 422 million to 278 million shares after ex dividend date by 3 to 2. Therefore if you own 3 shares, you will receive the special divi but you lose 1 share

With reduced number of share capital, Pennon will be able to maintain its divi of around 30p a share, giving a annual divi yield of around 3% assuming share price of 1000p.

[dartboard1] 03/6/2021 12:14

Bristol water revenue 125m 16%PNN revenue 645m 84%PNN market cap - 4.56b less 2b dividend and buy back less 0.4b for acquisition gives 2.1bPNN MC 2.1b 84%Bristol water acquisition 0.4b 16%So not an unreasonable price, see if they can lower costs and what the capex plan is for Bristol

[whackford] 03/6/2021 11:52

The current price 0f 1077 looks good value to me.

[kipper999] 03/6/2021 11:30

Interesting reading re; special divi & share consolidation

Any views?

hxxps://www.pennon-group.co.uk/sites/default/files/attachments/pdf/pennon-special-dividend-and-share-consilidation-overview.pdf

[sllab101] 03/6/2021 08:37

kipper thanks very much.

[kipper999] 03/6/2021 08:35

Ex divi Final @ 14.97p 22/July
Paid on 2/Sept

Special XD 5/July 355p Paid on 16/July

From DividendMax