National Grid Interims

[idpickering]

Highlights
• Announcing today a new target to achieve net zero for own emissions by 2050
• Regulatory progress in US and UK:
o Multi-year agreement for Massachusetts Electric
o Draft RIIO-2 business plans submitted
o Welcomed Ofgem’s “minded-to” position on Hinkley-Seabank to move away from Competition Proxy Model
• Cost efficiency programme on track: £50m in the UK and $30m in the US in 2019/20
• Construction of three interconnectors on target
• Completed US Geronimo acquisition
• Received £2bn proceeds for sale of final Cadent stake
Financial performance
• Underlying operating profit up 1% to £1.3bn due to increase in US Regulated profits (statutory operating profit down 1% to £1.0bn reflecting adverse timing)
• Underlying EPS up 2% to 20.0p, due to a US tax settlement relating to prior periods
• Statutory EPS of 11.3p, down 11% reflecting adverse mark to market remeasurements
• Capital investment £2.7bn up 28% driven by increase in US capital spend and £0.2bn Geronimo acquisition
• Interim dividend 16.57p/share, in line with policy

And later;

Interim Dividend
The Board has approved an interim dividend of 16.57p per ordinary share ($1.0673 per American Depositary Share). This represents 35% of the total dividend per share of 47.34p in respect of the last financial year to 31 March 2019 and is in line with the Group’s dividend policy. The interim dividend is expected to be paid on 15 January 2020 to shareholders on the register as at 29 November 2019.
The Group’s dividend policy is to aim 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 scrip dividend alternative will again be offered in respect of the 2019/20 interim dividend. As previously announced, we do not expect to buy back the scrip shares issued during 2019/20 or 2020/21.

https://investors.nationalgrid.com/~/me ... 019-20.pdf

[kempiejon]

The Group’s dividend policy is to aim to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future.

Ta Ian,
I do like to see this sort of statement from my income machines. 5.3% historic yield, 5.5% forecast, 20 odd years of increasing dividends and a commitment to real increases for the foreseeable. Early days but they'll be on the short list for the new ISA season.

[idpickering]

The Group’s dividend policy is to aim to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future.

Ta Ian,
I do like to see this sort of statement from my income machines. 5.3% historic yield, 5.5% forecast, 20 odd years of increasing dividends and a commitment to real increases for the foreseeable. Early days but they'll be on the short list for the new ISA season.

You're welcome kempijon. I topped up not long ago, as I became a bit more relaxed about the Corbyn risk, as it appeared to be dwindling (hopefully). They're (NG.) a long term hold for me now. The market seems to like these results, with the share up over 1% in a weak overall market. Not that we care about such things here?

Ian.

[Arborbridge]

The Group’s dividend policy is to aim to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future.

Ta Ian,
I do like to see this sort of statement from my income machines. 5.3% historic yield, 5.5% forecast, 20 odd years of increasing dividends and a commitment to real increases for the foreseeable. Early days but they'll be on the short list for the new ISA season.

You're welcome kempijon. I topped up not long ago, as I became a bit more relaxed about the Corbyn risk, as it appeared to be dwindling (hopefully). They're (NG.) a long term hold for me now. The market seems to like these results, with the share up over 1% in a weak overall market. Not that we care about such things here?

Ian.

In fact, the share price has been generally perking up since the worst point in 2017 - which I took to mean that the market was more sanguine about the Corbyn risk (and other risks) for NG than for some other companies.

Arb.

[IanTHughes]

Within my HYP National Grid (NG) has behaved in a similar manner to Tate & Lyle Group PLC (TATE) as reported here: viewtopic.php?p=262712#p262712

In a similar vein, NG plods along with an apparently ever-increasing dividend, nothing spectacular but somewhat relentless: https://www.dividenddata.co.uk/dividend ... py?epic=NG.

Like TATE there is nothing particularly interesting about NG but, as I said about TATE, there are worse shares that one could have held over the years!

Here from my records is the dividend growth over a couple of decades (*):

Year End  | Dividend | 3 Years | 5 Years | 10 Years | 20 Years
31-Mar-20 | 48.6700  |   2.61% |   2.21% |    3.34% |    6.95%
31-Mar-19 | 47.3400  |   2.99% |   2.41% |    4.03% |    7.24%
31-Mar-18 | 45.9300  |   2.32% |   2.37% |    4.52% |    7.51%
31-Mar-17 | 44.2700  |   1.75% |   2.42% |    5.60% |    7.75%
31-Mar-16 | 43.3400  |   1.99% |   3.57% |    6.38% |         
31-Mar-15 | 42.8700  |   2.96% |   4.48% |    7.30% |         
31-Mar-14 | 42.0300  |   4.94% |   5.68% |    9.03% |         
31-Mar-13 | 40.8500  |   5.86% |   6.71% |   10.25% |         
31-Mar-12 | 39.2800  |   7.21% |   8.88% |   10.59% |         
31-Mar-11 | 36.3700  |   7.20% |   9.28% |   10.43% |         
31-Mar-10 | 34.4300  |  10.28% |  10.18% |   10.69% |         
31-Mar-09 | 31.8800  |  10.95% |  12.49% |   10.55% |         
31-Mar-08 | 29.5200  |  11.67% |  13.91% |   10.58% |         
31-Mar-07 | 25.6700  |  13.19% |  12.33% |    9.93% |         
31-Mar-06 | 23.3400  |  14.89% |  11.59% |          |         
31-Mar-05 | 21.2000  |  13.89% |  11.20% |          |         
31-Mar-04 | 17.7000  |   9.48% |   8.65% |          |         
31-Mar-03 | 15.3900  |   7.26% |   7.35% |          |         
31-Mar-02 | 14.3500  |   7.07% |   7.58% |          |         
31-Mar-01 | 13.4900  |   7.70% |         |          |         
31-Mar-00 | 12.4700  |   7.79% |         |          |         
31-Mar-99 | 11.6919  |         |         |          |         
31-Mar-98 | 10.7973  |         |         |          |         
31-Mar-97 |  9.9565  |         |         |          |         

* - Final for current year is assumed to increase by the same rate – 2.69% - as the now declared interim dividend.
* - Dividend totals for the years prior to 2011 have been adjusted for the 2 for 5 Rights Issue that was completed in 2010. Feel free to point out any errors
* - Two specials – 84.375p at 2017 Year End and 65p at 2006 Year End – both accompanied by a share consolidation, are not included

My HYP obtained NG in 3 tranches during 2015 for an average price of 891.4341p. So not much in the way of capital growth but an XIRR of 5.33% is a reasonable return in my view

As I said, nothing spectacular, especially over the past 6 or 7 years, but I like it!


Ian

[tjh290633]

I got NG. by virtue of having Lattice which I got because it split off from BG Group plc in 2000 and then merged with NG. in 2002.

Had I had no other transactions, the IRR would have been 10.2%. However I did add to Lattice to get it up to weight, and have topped up NG. on 4 occasions and trimmed it back on a further four occasions. My IRR for the holding is 13.9%. The effective original cost is 400p, adjusted from the 150p valuation at demerger of Lattice.

TJH

[Arborbridge]

Here's my yield chart for NG, also showing rolling dividends and my purchases. As has been said, the dividends increase rather well.

[Bouleversee]

"The Group’s dividend policy is to aim to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future."

Anyone know what the latest RPI figure is? I gather CPI has come down a lot this year, 1.5% to October.

[monabri]

RPI to Oct 2019........2.1%

https://www.ons.gov.uk/economy/inflationandpriceindices

[MDS1951]

RPI in October 2019 was 2.1%.

https://www.ons.gov.uk/economy/inflationandpriceindices

Hope that helps!

MDS1951

[MDS1951]

Errr................SNAP!

[monabri]

Both right or both wrong..in equal measure!

[Bouleversee]

Thanks, both. Glad my NS&I index linked certs. are still on RPI though not for much longer. I wonder if NG will follow suit and switch to CPI at some point. Sufficient unto the day.

[Gengulphus]

... as I became a bit more relaxed about the Corbyn risk, as it appeared to be dwindling (hopefully). ...

I'm not - especially after hearing about Labour's plans with regard to BT on this morning's news... It's a risk one basically has to take if one wants to live in the UK, as there are few UK companies for which one couldn't cobble together a political 'justification' for nationalisation, and restrictions on rights to own shares in foreign companies are also a danger. And even if one decides that one isn't that attached to living in the UK, emigrating just replaces the political risk involved in living in the UK with the political risk involved in living in another country...

That's not intended as an invitation for political debate on this board - such debate definitely belongs on Polite Discussions. What it is intended as is a suggestion that HYPers need to be realistic about the existence of political risk and that it's hard to assess which companies might be affected. Which doesn't mean that I'm going to sell National Grid (or BT for that matter) - just that I'm going to take extra care to be well diversified and not to be very overweight in any specific company or sector. Especially the former nationalised utilities - but I'm not going to avoid them entirely, because that involves going overweight in other sectors and that might well be an out-of-the-frying-pan-into-the-fire manoeuvre...

Gengulphus

[NeilW]

What it is intended as is a suggestion that HYPers need to be realistic about the existence of political risks

The political risk, because these people have pledged themselves to the EU corporatocracy and can't therefore just reallocate things via parliament, is that your shares will be swapped for Gilts at market price. Anything else would be struck down as illegal by the Courts using EU higher law.

[funduffer]

The political risk, because these people have pledged themselves to the EU corporatocracy and can't therefore just reallocate things via parliament, is that your shares will be swapped for Gilts at market price. Anything else would be struck down as illegal by the Courts using EU higher law.

I think I agree. There would be an outcry if people's pension funds were suddenly robbed. A fair price to shareholders would seem to be the only politically acceptable way of achieving these aims, even if it is the form of Gilts.

[TUK020]

Glass half full......
By the time Corbyn is done nationalising, gilts will be on a higher yield than NG