National Grid Half Yearly Report

[idpickering]

Operational Highlights

· Good progress against key priorities

· Continued strong momentum in the US

· Niagara Mohawk rate case filing at settlement stage

· Massachusetts Gas and Rhode Island filings imminent

· Continued solid performance in the UK Regulated business

· Electricity System Operator separation framework agreed

· UK Interconnector projects to Norway, Belgium and France progressing well

Financial Highlights

· Adjusted[1] operating profit, excluding timing up 4% to £1.4bn (statutory operating profit at £1.3bn)

· Adjusted EPS of 18.5p, including adverse timing of 1.9p (statutory EPS of 19.5p)

· Capital investment of £2.0bn, up 7% (4% at constant currency)

· Interim dividend of 15.49p per share, up 2.1%, in line with policy

· £3.6bn from Gas Distribution sale returned via special dividend and ongoing share buybacks

· Strong balance sheet maintained

· Full year outlook reiterated; financial performance weighted to the second half due to US seasonality

And later;

Interim dividend of 15.49p, increased in line with policy

The Board has approved an interim dividend of 15.49p per ordinary share ($1.02 per American Depositary Share). This represents 35% of the total dividend per share of 44.27p in respect of the last financial year to 31 March 2017 and is in line with the Group's dividend policy. The interim dividend is expected to be paid on 10 January 2018 to shareholders on the register as at 24 November 2017.



The Group's dividend policy is to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future. The 2017/18 interim dividend of 15.49p represents a 0.32p (2.1%) increase over the interim dividend for the year ended 31 March 2017 of 15.17p.

https://www.investegate.co.uk/national- ... 00089912V/

[Dod101]

All of which seems fine to me. No fireworks and pretty much as the doctor ordered.

Thanks Ian

Dod

[idpickering]

All of which seems fine to me. No fireworks and pretty much as the doctor ordered.

Thanks Ian

Dod

You're welcome Dod. I did mention in another thread that I wish sometimes that I'd just kept it simple and stuck with just NG., rather than the Centrica's and the like in the utility world.

Ian.

[tjh290633]

It is ironic that BG. first spun off CNA, which I sold, and then Lattice, which got taken over by NG. I sold the remaining BG. when the yield fell to a very low level, 0.87% I recorded. My other domestic energy share, SSE, came about because Hanson spun off the Energy Company, soon to be taken over and replaced by Scottich Power, also taken over and replaced by SSE.

It's a funny old world.

TJH

[idpickering]

Here's an item from TMF released today on National Grid;

Why National Grid plc stock looks expensive to me

Half-year results for the six months to September released this morning have done nothing to stop the recent sell-off in shares of National Grid (LSE: NG) as their price is down nearly 3% at the time of writing. But before bargain-hunting investors pounce, I think the network transmitter’s stock is still looking too expensive at 17.9 times trailing earnings and 15.6 times forward earnings given political pressures, weak forecasts for the sector and relatively low growth prospects.

http://www.fool.co.uk/investing/2017/11 ... ive-to-me/

[richfool]

I spotted this article in the Telegraph, though it is a premium article behind a paywall. What I could view free petered out just after a "but..... "! Thus I wonder what the bottom line recommendation was?

Questor: National Grid is in politically choppy waters, but its index-linked income is precious

http://www.telegraph.co.uk/investing/sh ... ed-income/

[monabri]

The article discusses NG's half year results

"National Grid's half-year results are reassuring in that the dividend promise – maintaining payouts that rise in line with inflation (as measured by RPI) – was reaffirmed."

And it is perceived as being "Well-run" with rising divi payments

It states that although the business is committed to index linked (RPI) for the forseeable future but there are risks from political interference
and Questor offers the suggestion that the fall in share price is down to both Con and Lab governments having energy firms "in their sights".

Questor states that Labour reckon that households are being ripped off (their words!) to pay out dividends (billions of pounds of divis).

However, NG was keen to stress that US growth – which, with profits up 13pc was a highlight of the results – demonstrates a diversifying business and a reduction in domestic political risk. The Questor article points out that US dollars are ok but would be better if sterling were to weaken further.


Questor states
"British electricity transmission makes up 40pc of profits. Together with gas transmission, half the group's profits originate here".
My thoughts - then surely half of the profits are from elsewhere ?

The market is "generally unimpressed with NG".

Summary - not cheap enough to make it a "Buy" but it is a "Hold".


I topped up on Friday to 4.2% HYP by value !

[RossP]

I'm really confused as to why the "market is underwhelmed" with NG? It has a long track record of dividend payments / growth, it acts somewhat as an inflation hedge, has a unique defensive moat in terms of its transmission monopoly and an American business giving a growth element to the mix. In the uncertainty caused by Brexit and rising inflation, is the political risk of government interference really enough to warrant to a SP below 900?

Have I missed something else? It feels like the market knows something else or considers another risk that I haven't considered - any thoughts?

[richfool]

I'm really confused as to why the "market is underwhelmed" with NG? It has a long track record of dividend payments / growth, it acts somewhat as an inflation hedge, has a unique defensive moat in terms of its transmission monopoly and an American business giving a growth element to the mix. In the uncertainty caused by Brexit and rising inflation, is the political risk of government interference really enough to warrant to a SP below 900?

Have I missed something else? It feels like the market knows something else or considers another risk that I haven't considered - any thoughts?

Is it not, as a defensive utility, it is subject to regulation and more significantly, as a popular destination for bond investors and those seeking higher yields in the current low-interest world, it would be susceptible to rising interest rates.

I am a holder, but am currently resisting the temptation to top up.

[monabri]

as a popular destination for bond investors and those seeking higher yields in the current low-interest world, it would be susceptible to rising interest rates.

I saw recent share price weakening in NG as a possible buying (well, top up) opportunity.

I see Unilever is "up" today (maybe because of share buy backs?) but NG has a better yield and a "promise". You would imagine that investors would be selling out of defensive ULVR with it's comparatively low yield (to NG) and looking for higher yields as inflation rates rise.

As the share price reduces the yield on NG becomes more and more attractive ....and then add in the RPI element for the divi. It will find it's level.

[richfool]

I saw recent share price weakening in NG as a possible buying (well, top up) opportunity.

I see Unilever is "up" today (maybe because of share buy backs?) but NG has a better yield and a "promise". You would imagine that investors would be selling out of defensive ULVR with it's comparatively low yield (to NG) and looking for higher yields as inflation rates rise.

As the share price reduces the yield on NG becomes more and more attractive ....and then add in the RPI element for the divi. It will find it's level.

Well I succumbed. I was top-slicing a non-HYP stock for another purpose, so used some of the residual proceeds to top up NG.