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Doesnt bode to well, Ofwat taking an interest
Im guessing they see lots of 'return' in the Bristol Water deal, lots of synergies and cost savings aka Bournemouth water, close it down and absorb.
I remember Severn Trent doing that with East Worcester Water years back, they ended up spending gazillions on upgrading the 'iffy' infrastructure that they eventully became owners of and liable for, was a real bum deal for SVT.
Im guessing, given its a fairly affluent city, Bristol isnt so bad, and is likely better than the sww operation, but either way the management time this will take up to 'absorb' will lead to a loss of focus on both businesses for a good length of time, which most certainly wont be helpful.
Thank you. Have to agree that it is hard to see how SWW can get themselves out of the downward spiral they are in. Deteriorating assets, leading to higher reactive spend on short term papering over cracks leaving to less money for long term fixes. Unless OFWAT agreed a step change in AMP8 spend, looks like things are going to be quite painful for the foreseeable future which must eventually start to harm shareholders capital and return!
Not as acurrate as your post May 2018 InsiderDeal. First rate call that was, excellent sir.
Had a Pennon produced booklet put through my door by royal mail the other day, they are very much on the environmental bandwagon in theory. It seems they support dozens and dozens of community initiatives, from waterbutt subsidies through dormice protection to tree planting and 100% electric fleet by 2030. Really bang on about it as its the current 'thing'.
Now having seen there ovweloaded operational vans, and knowing more than a little about the industry, there can surely be no way on earth any of the operational vehicles can ever be green. i.e electric. There is simply not a suitable vehicle on the market that can carry the equipment needed to excavate the streets that can in addition carry its batteries. So whilst a meter reader, with minimal equipment, could easily i just dont buy the argument for the suitability of operational vehicles of such a "plan".
Currently they would need to send two separate electric vans out, to do the job done now by one.
Imagine the costs of doubling those costs up. vehicle purchase, charging, driver training, logistics of taking all equipment when shared out etc etc. Bill payers wont stand for rises to cover this.
In the meantime, hardly any of their sites that you see when driving around the county have even the most basic of green credentials, such as solar panels, on their vast acerage of land.
No excuse whatsoever for that ommision, apart from hair brained schemes and overpaid but under competent top and middle level management.
Your assessment of Pennon is very accurate. Wonder how they will react to becoming 1* EPA (appears inevitable) and whether some of the more environmentally minded funds might drop them quick!
Daytradenovice, Thanks for the insight into both companies. I didnt know about the water in the Scillys, I might be more careful next time Im visiting.
Unfortunately, Im already invested. Partly because I was a holder previously and did very well until I sold. The drop has brought me back.
I have worked for them both over extensive time periods. The companies themselves are chalk and cheese. SVT very progressive, encouraging inclusive and well managed, all plant equipment and operations well managed maintained and run. PNN the opposite, stiffles innovation, very 'clicky' dictorial management style based on control and fear, workforce full of apathy rather than effort, moral quite poor and operational assets are in the main knackered and needing extensive capex. Its a place for a disinterested robot waiting out for its pension and it performs as such.
As for selling off parts, SVT sold Biffa a good number of years ago, but that was long enough back to have no current bearing on sp. PNN fancy themselves as an aquisition business, took over Bournemouth (supposedly to integrate but effectively closed it down), recently took over Bristol Water, suggest same strategy will play out. Return of cash/share consolidation occured because they couldnt find anything else to buy with it apparantly, but they did give quite a bit away on spurious schemes, such as free shares for customers, 1 in 16 took the offer up.
Viluntarily took over the water supply to Isles of Scilly as pr exercise.No other company wanted it or expressed an interest. The water on Scilys is all from contaminated formally private groundwater sources or rainfall (DWI give an exception to mainland water legal standards there currently as it is so bad). A HUGE Capex spend programme is needed to bring the island upto the legal standards elsewhere in the UK, and the DWI are now looking very very closely at enforcing this, now they have suckered PNN to 'step up' and take it over the responsability.
Well theres a bit to chew on i suppose, i expect unclue didnt factor in the return of capital into his analogy, but for the only time ever in history, i would agree with him that SVT os by far the better bet, even if his figures are dubious as usual.
Well I was hoping Uncle Doug would come back to explain how he got to his conclusions just to make sure we are not talking apples and pears. Did he take into account PNNs return of capital? Maybe SVT did the same or more as I wasnt following them.
Even the 2 year 60% metric is difficult to align. SVT up approx. 15% PNN down just over 5% excluding divis Even so PNN had been above SVT in this time period so need to clarify exactly where things start and what it includes . Maybe the 60% difference excludes PNN selling half itself which then puts it into better context.
Without Uncle coming back to explain, the figures dont mean much, well to me anyway.
Im not sure about an agenda, then again I wasnt following him or looking out for it. Ive seen the name on this site and I think we follow a couple of the same shares so will allow him to defend himself or at least place his comments into his context.
PNN picking up a bit
"Gerry557
Posts: 4,526
Price: 1,006.00
No Opinion
RE: Severn Trent27 May '22
Hi Uncle Doug. where did you get your figures from?
I did a quick look and apart from the period from Nov PNN was holding its own or faired much better. PNN sold half of itself so that might account for some of the difference. I used HL charts and over 5 years PNN was ahead most of the time."
Uncle isnt very good with figures Gerry im afraid, he's been challenged on his numbers ability by quite a few people many multiple times over years. He has an agenda, and lots of BOO that he posted was worth £4.50, amongst others, best ignored.
Well I have added a few more this morning. I'm still note totally convinced but it should keep ticking over and bump the divi every year.
Profit down 99.1% I doubt will be the main headline at the meeting this morning.
This was my steady eddy but now after selling out and then rebuying a few back I'm wondering about where to go with this. The yield is still on the low side but will increase over time. There seems to be more difficulties ahead, costs increasing at a time of heavier regulation.
If the yield was higher I think I would probably be buying back the rest. I was comparing this to ULVR. Same yield, both with added input costs but maybe more scope to increase over time. Pity its just jumped 7%
Hi Uncle Doug. where did you get your figures from?
I did a quick look and apart from the period from Nov PNN was holding its own or faired much better. PNN sold half of itself so that might account for some of the difference. I used HL charts and over 5 years PNN was ahead most of the time.
Still when I sold PNN, if I switched into SVT it might have worked.
SVT far better investment than PNN over 3m, 6m, YTD, 1 Yr, 2Yr, 5Yr.
Over 2 years you'd be 60% better off if you'd invested in SVT.
PNN management need to be kicked out.
I know where I'd rather have my money.
As expected but with a few clouds on the horizon.
Costs rising as power is high usage added to the expected interest rate rises.
So I have rebought some of the sold shares. Main reasons :-
Its cheaper than I sold
I know it fairly well having previously held.
The buybacks should improve things in the longer term
Inflation dividends
It didn't fall too much when the market did.
It not all positives though. Its never going to shoot the lights out, the yield is still relatively low. I would have preferred more special than buybacks. Another concern is the downward trend hence the foothold rather than a total rebuy. I still think the market might take some big hits so want to keep options open.
Another buyback. Well at least the share price it 2 quid lower so makes a bit more sense they spent £150m previously but now the SP has dropped there spending less just £50m.
Buy high, sell low!
Still might push up the SP for a bit. I was off the ball yesterday. I meant to buy a couple of shares on open at ex divi but was busy elsewhere. Still there will be other opportunities. This was the second share on the list but it would have been a foothold not a full repurchase.
So the £12.67 buyback doesn't look too good right at this moment with the SP dropping to 1060s. Still its only shareholders money and the board might be good at running a water company just not so good as share dealers. Anyway wots a couple of quid between friends?
The good news is the yield has now risen to a more respectable 3.36% and goes ex divi this week. So another 11.7 to come out of the price. Its starting to get a bit more interesting and the markets are spooked too, do we wait for the bombs?
I thought Id moved on from PNN but just added it back to my watch list
A buddy sent me the announcement pasted below being sent around internally by the ceo. Makes the situation sound a tad brighter than the rns.
"As you will all be aware, as part of our acquisition of Bristol Water in June 2021, the Competition and Markets Authority (CMA) has been undertaking a review of the proposed merger.
Today, we have been advised that Phase 1 is now complete and we are getting closer to concluding the review. As a next step, Pennon has been asked to consider providing further information to help ensure we can comply with Ofwat’s Regulatory requirements.
Throughout this process, we have worked transparently and collaboratively with both Ofwat and the CMA, and we intend to submit our additional response by 31 December 2021, outlining how the acquisition of Bristol Water delivers for customers, communities and the environment.
Together, Ofwat and the CMA will review the additional information and once agreed, we can expect to gain full clearance in early March 2022.
We remain confident that by bringing together the best of the best across the Greater South West, drawing on the experience, talent and commitment of the c2,500 people who work for Pennon Group that we will be able to deliver improved services for the things that matter most to our 3.2 million customers.
Thank you for your continued support, and everything you do day in, day out for our customers, local communities and one another.
Susan
Susan Davy
Chief Executive Officer
Pennon Group
I know Pennon were overpaying for Bristol but it's not going smoothly.
I'm not sure if this is good news. It might stop them wasting shareholders dosh and eventually do some sort of return.
The more likely scenario is Pennon giving ground and coming to some sort of arrangement otherwise how do they grow or why even sell Viridor.
I'm still not back in and increasingly looking less so. A santa rally and covid probably dissuading me adding to the interest rate rise concerns. Sods Law say whatever I do, the opposite was correct.
Well I got back in and am happy with the outcome in terms of selling out before restructure and returning though the ride wasn't as easy as I anticipated. I hope the price moves somewhere now! They are busy buying and, all else being equal, as they buy and delete shares, the value of remaining shares should rise. We (or is it I?) will see if petrol, bog rolls and pasta would have been a better investment in due course!
Best to all.
Old, Well you have a couple of days before the buyback restarts and yes Im still watching.
Day, still low yielding IMV the oil price helping other divis (that were cut).
Maybe I should panic buy a tanker or twos worth of petrol as I was too busy getting toilet rolls and pasta
'safe' low divi paying money here being recycled into booming oillies coal gas etc maybe pulling the price down?
Hello Gerry,
Still watching? Down to £11.20 now which is beginning to look a little more sensible, certainly better than £13!! I'm still sitting on my hands.
So the price has gone sub £12 and I wonder if it will finish the day below.
This was very high but now just high so going back on the watch list. Yield still quite low but at least its a tad safer than Ever grande atm. I'll have to check to see how the buyback has faired, autocorrect said failed haha.