National Grid shareholders listening to its top brass recently might well be worried (Emily Gosden writes). The utility group has painted a dire picture of the “unacceptable” regulatory settlement it faces in the UK, in which Ofgem proposes steep curbs on both the amount it can invest at consumers’ expense, and the profits it can earn for doing so. National Grid claims that the proposals offer an “inadequate return for investors”. “The message to investors will be to invest overseas or in the UK water rather than energy sector,” it said. So are things as bad as the company claims — and if so, should investors indeed take fright? even in the worst case scenario for National Grid in the UK, in which Ofgem’s draft proposals stand, analysts at Bernstein research say that they expect it to be able to “comfortably maintain its dividend growth policy”.
Times 24th Sept 2020 read more »