The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I dont get the logic of selling a high growth business
which they knew inside out and then going and buying something else
My preference was for Virdor ro be separately listed with Pennon
retaining a majority stake.
Well the SP is lookimg a tad ill atm.
Addeds few before the close.
If it's an acquisition, let's hope they don't overpay.
The pension has been offloaded to L&G now.
There is a company wide conference call due on 20th October with some sort of announcement due. Rumour is aquisition.
I severely hope they are reading the potential return to shareholders into the SP, otherwise its gonna drop like a brick if/when they do.. Back to £11 and im out i think
They are swapping a £4.2bn asset for £4.2bn cash, well sort of its £3.7bn but getting rid of some debt too.
So they plan to reduce debt, up the pension and return some to shareholders. The latter two I see as potential share price fallers, albeit the company will be stronger and the pension will be less of a worry and drag going forward. The return to investors for an amount not yet specified, should be similar to a dividend. The share price should fall by the same amount as the payout as that money is walking out the door.
As others have mentioned the SP rose on the news so is being marked in. The consideration going forward is how to maintain the same income from the investment in future. Does this mean using your payout to add more shares? How will the performance be without Viridor but less debt
Why would they go up today due to being ex div on Thursday?
I assume this will already be built in to the price so it will have no impact.
So when the sale is complete will PNN shares go up or down??
Profits down, notice of future dividends decreasing and likely negative impact of Covid19 as businesses use less water and expected customer credit risk. So plenty of reasons, but I remain positive that this is still a good 'safe' investment.
The deal no doubt predicted rising business based on waste volumes and since the deal of course good waste is in short supply and with peoples habits changing as to the waste they and businesses/offices produce then all companies in the waste markets could see permanent reductions. It is an enviro dream not to produce the waste in the first place with longer term impacts to the likes of Veolia, Suez and Pennon/Viridor?
true buy backs would save us having to pay the dividend tax, im not fully sure on buybacks, period, at these kinds of prices we would not be getting maximum value for money given that the shares are still up around 40% on a few months back. Sometimes it kind of feel like value destruction buying back shares at high prices, often it seems earnings slip in such companies and the buy back seems to have little effect on the share price... haven't really thought of the effect on eps, with a buyback and if share holders would benefit. Paying down debt good to pay down some no doubt. But at low interest rates best to keep a good chunk of it, or refinance at lower rates...
Your guess is as good as mine, personally i would prefer to write off debt and but back shares
hi, i was wondering what % of funds might be returned to shareholders? If it was 2B£ this could be near £4.70,
what are your thoughts on the figure to be returned?
thanks
Viridor sold at 4.2b...ho hum
Yep found a story over the bid for Viridor. I suppose we might keep getting bumps as the story unfolds.
"It expects to get first-round offers in the next few weeks"
Might be down to other interested parties coming forward to the affray, Veolia and Suez have expressed interest and some other norwegian company.
Lunchtime Spike yesterday. Any reason why cant see a broker upgrade or any news. Fat fingers ???
Just came for a look as they are my personal water co. fat, I don't entirely like the looks of Pennon balance sheet for a start but anyway, you have to ask why would a US outfit want to take Viridor (Haul Waste as I know them)? Maybe it has to be because they can see inefficiences which Pen have not sorted. Not hugely surprising to me, Pen is the most expensive water co in the UK by far and that has to smack of inefficiency in my book.
I have invested here based on positive momentum. Up 8% in 1 month, 22% in 2 months, 23% in 3 months and 52% in 6 months. Usually a good sign.
I think this type of old news snippets are to raise the share price by interested parties.
PNN remains high in long term debt and their earnings cover just over 10% of this, funded in the main from Viridor.
Whilst PNN can currently borrow at low rates, it is highly leveraged and funding increased dividends for it's predominant Pension Fund shareholders.
If Viridor was sold (most likely private) much of the sale would have to reduce overall debt levels but whoever had Viridor earnings would have to rise through operational efficiencies even though it has growing assets .
Pennon without Viridor does not look attractive? I sold out here and invested it in Renew Holdings, only buying back into PNN in the 700's if it occurs as there could be many months to finalise any sale.
Apologies - £1.5 billion (plus debt) for South West Water - that should have read.
What's a billion, eh ).
£4b has more or less been turned down by the us equity company...personally i can see a huge bidding war..wont go for less than £12 pop...probs slot more
This looks very interesting imv.
Viridor carries about £1 billion worth of debt from memory.
So if Viridor was sold for an enterprise value of £4 billion ( £3 billion plus £1 billion debt).
That leaves the UK water business valued at circa £500 million (plus debt).
That leaves ample room for upside - IF that £4 billion figure is anywhere near accurate IMV
What do others think??...
ref my post of 13th november
Many thanks. Whilst I suspected that the rise must have something to do with Viridor I had not picked up that news at all.