Severn Trent Share Discussion Threads

[miata] 07/10/2009 13:09

New gold is in Randgold resources.

[scotty1973] 07/10/2009 12:24

be careful LOL

[careful] 07/10/2009 08:27

up today.
sewage is the new gold.

[scotty1973] 06/10/2009 22:05

IMO this lot simply got massively over indebted in the credit boom.

[careful] 06/10/2009 17:31

the gross gearing is quoted as 87%.
the net debt to total asset ratio is important as the regulator allows a return on assets.
we hope for 5%, she may offer only 4.5%.

if the settlement is too tight debt cannot be raised, infrastructure projects cancelled.

[scotty1973] 06/10/2009 10:17

2003 they had net assets of 2218 and net debt of 2506 for 113% gearing.

2009 they had net assets of 952 and net debt of 3797 for 399% gearing.

to get back to 2003 they would need nearly 1.3bn in new equity

so add 1275 to 2009 net assets and subtract 1275 from 2009 net debt

they would then have net assets of 2227 and net debt of 2522 for 113% gearing. virtually the same numbers as 2003

[scotty1973] 06/10/2009 10:10

they have got big problems

[miata] 05/10/2009 10:28

No (but consider GKP). Severn Trent, United Utilities and ICAP represent the only three Footsie stocks to fall in the third quarter.

[betman] 05/10/2009 10:26

Hi Maita, would you care to share your thoughts on the best opportunity in the market.

[careful] 02/10/2009 16:01

unemployment is political.
the utiliies upgrading infrastructure is job creating, similar to the stunt obama is trying and FDR in the past.

[miata] 02/10/2009 15:55

Above 900p, I don't consider the risk/reward, considering the above, is the best opportunity in the market.

[betman] 02/10/2009 15:34

Thinking of buying these
Risks
- OFWAT decision in Nov is obviously key and well discussed

- rights issue well publicised

- what about post general election. Who ever wins will be keen to raise taxes. Cannot see Tories doing a windfall tax but serious risk from Labour. How else could Tories extract more tax from utilities ?

- will OFWAT have a political dimension ? Will they want to reduce consumer costs much more to compensate for extra taxes. will they be mindful of who might win election

[scotty1973] 01/10/2009 14:27

to return the gearing to 2003 level, is seems they would need to raise nearly £1.3bn

[scotty1973] 30/9/2009 12:13

in the 2003 reults they said -

Net debt at 31 March 2003 was #2,505.6m (#2,411.7m). Gearing, reflecting the
provision for deferred tax, was 113% (105%). The Group's net interest charge was covered 4.4 times (4.4 times) by profit before interest, tax, depreciation,
goodwill amortisation and exceptional items.

on the same basis in 2009 it is 399%!!!

they have now changed the calculation to make it look more respectable -

Balance sheet gearing (net debt/net debt plus equity) at the year end is 80.0%
(74.0%). Economic net debt (excluding fair value adjustments), expressed as a
percentage of 31 March 2009 Regulatory Capital Value (RCV) was 57.3% (57.2%),
based on RCV at 31 March 2009 of GBP 6,198 million (GBP5,922 million). The
group's net interest charge, excluding gains/losses on financial instruments,
was covered 3.7 times (3.7 times) by profit before interest, tax,
depreciation and exceptional items, and 2.4 times (2.5 times) by underlying
PBIT.

[miata] 30/9/2009 11:45

I am not sure if you are trying to assess gearing or actually to assess solvency.

At 31/03/09
Gearing
Assets...7,555
Liabs....6,603
Equity.....952
Gross gearing 87%

Solvency
Enterprise value...7,422 *
Debt...............6,603


* (market capitalisation + creditors long + creditors,other + subordinated loans + insurance funds + preference, minorities) - cash & equivalents

[scotty1973] 30/9/2009 10:42

i think i have this correct. in 2003 they had net assets of 2218 and net debt of 2506 for 113% gearing. in 2009 they had net assets of 952 and net debt of 3797 for 399% gearing.

[miata] 29/9/2009 13:20

Labour promise to extend 'rain tax' concessions.

Rules introduced Ofwat last year meant exemptions would have expired in April 2010.

Benn said he would legislate to allow water companies to run concessionary schemes for the affected organisations.

[miata] 29/9/2009 13:11

Obviously the asset base has to be financed. It is of course the return allowed on the RCV that matters.

[scotty1973] 29/9/2009 13:04

net assets are only 952m. ...after you take out all the debts

[miata] 29/9/2009 12:55

OFWAT ascribed an RCV (they use this interchangeably with RAB) of £5,474m for Severn Trent for 2006-2007. Their latest review will be published in November.

[scotty1973] 29/9/2009 12:05

what is the repulatory asset base

[scotty1973] 28/9/2009 15:25

do you work for the company

[miata] 28/9/2009 15:08

There will be an interim results announcement on the 24th November 2009, but almost irrelevant - what matters is what OFWAT decide for the next five years (also in November).

[scotty1973] 28/9/2009 13:55

is there a trading statement coming up