OV9

V8Granite wrote: Mon Feb 03, 2025 11:16 am If they remove the dividends the company will be buggered as many many people will sell.

It’s how the dividends got that high in the first place I find co fusing, Thames water has been an in-efficient mess for decades.

Dave!

Why would investors expect dividends from a failing company? Surely that’s the “your investment could go up or down” part of the game?

It amazes me how many people see any drop in investment as terrible, they jump ship before the next dividend date for another company.

Shares go up 10%…..

Well this is fair, normal, as expected.

Shares drop 0.2%

This is bullshit, they can’t be trusted, I’m out.

Some see it as a chance to buy in low and reduce your average share price, others see it as a time to bail out.

Dave!

V8Granite wrote: Mon Feb 03, 2025 11:16 am If they remove the dividends the company will be buggered as many many people will sell.

It’s how the dividends got that high in the first place I find co fusing, Thames water has been an in-efficient mess for decades.

Dave!

So you’re ok with the government bailing out a company because they’re too greedy to stay solvent running a monopoly?

Not at all, I think it should have been stopped internally well before such a big mess happened.

I also think not bailing them out would be a mess as it’s a water board, it only takes 3 pumps failing due to bad maintenance to stop water for the whole of South Staffordshire. It’s possibly why these companies fly a bit loose with their numbers as they know they are an essential service and will get rescued.

It’s one of the few things I’d rather be state run but I don’t think the state would ever be more efficient.

Dave!

Why would it have been stopped internally? They were all getting rich.

You expect a level of self control from capitalists that they’ve never exhibited at any point.

Giving them more money now is giving an alcoholic vodka.

Water companies are the one thing I cannot understand being privatised. There’s zero competition, any other business sector would be getting hammered by competition watchdogs- BT was forced to separate openreach to an individual company to make broadband more open to competition

ZedLeg wrote: Mon Feb 03, 2025 11:39 am Why would it have been stopped internally? They were all getting rich.

You expect a level of self control from capitalists that they’ve never exhibited at any point.

Giving them more money now is giving an alcoholic vodka.

Business isn’t rich people laughing at the poor and smoking cigars. It’s up to them now to fix their problems, if they can do that will remain to be seen.

Dave!

jamcg wrote: Mon Feb 03, 2025 11:51 am Water companies are the one thing I cannot understand being privatised. There’s zero competition, any other business sector would be getting hammered by competition watchdogs- BT was forced to separate openreach to an individual company to make broadband more open to competition

It’s weird isn’t it, they have a fixed amount of profit they can make so they sold their maintenance companies and now the maintenance companies can make much more profit to make up for it. It’s a strange beast.

Dave!

Rich people who break the mechanism that supplies 16mil people with clean water so they could get more rich are definitely laughing at us.

V8Granite wrote: Mon Feb 03, 2025 11:16 am If they remove the dividends the company will be buggered as many many people will sell.

It’s how the dividends got that high in the first place I find co fusing, Thames water has been an in-efficient mess for decades.

Dave!

They levered the business up to pay dividends so it was never funded from profits ultimately.

As someone who had a nice 20 minute walk to start their Monday commute on account of one of the main roads near us being closed for a burst water main, I can confirm they're absolutely up shit creek without a paddle. The state of the (largely Victorian) infrastructure is rapidly deteriorating and, much like the roads, their approach of patch it and hope is not going to be viable much longer.

Ultimately its uninvestible and will need to be let go insolvent and then nationalised for £1. It will mean government funding in the medium term to get it back on an even keel as quadrupling everyone's water bills for the next 30 years isn't going to be viable. That government investment won't be lining the pockets of the former owners though as the debt will be written off - basically those banks that lent to fund the dividends have lost a dangerous bet.

As someone that works in a related industry, these examples really don't portray its infra and PE firm owners in a good light at all. In reality, these key utilities need to be much more closely regulated to make it not viable to lever them and have them go bust in this way. I understand the rationale of lowering regulation - most likely to make them attractive enough for private investors but as we've seen, these companies aren't (or shouldn't be) attractive given the massive investment they need to make to maintain the ageing infrastructure.

ZedLeg wrote: Mon Feb 03, 2025 12:08 pm Rich people who break the mechanism that supplies 16mil people with clean water so they could get more rich are definitely laughing at us.

The owner of my water company- Northumbrian water- definitely isn’t laughing at me, he’s too far away in hong kong to laugh at me

Thames Water is a rotten company full of rotten employees IME. I agree that it needs renationalising but changing their approach is going to be a decades long behavioral adjustment, not sure whether changing that will be something the government will have the stomach for. It really needs ripping up and starting again, but that isn't really possible due to the importance of the infrastructure.

I suppose anything is better than what it is now.

Nothing will happen just now. Starmer’s Labour has no stomach for a renationalisation project (or anything if the latest inparty bitching is to be believed).

Given how shite "The Government" has been at being "The Government" - you know, their day Job - over the past 20 odd years, I'm not sure I'd like them running my Water or Electricity supply...

ZedLeg wrote: Mon Feb 03, 2025 12:23 pm Nothing will happen just now. Starmer’s Labour has no stomach for a renationalisation project (or anything if the latest inparty bitching is to be believed).

It may not really end up being a "choice" with something like a water utility. You can't liquidate, sell off the assets and wind up a company which needs to continue operating (which is what would normally happen if no willing/appropriate buyer can be found).

I assume that’s why they’re softening us up to the expect another bailout for the current owners.

dinny_g wrote: Mon Feb 03, 2025 12:28 pm Given how shite "The Government" has been at being "The Government" - you know, their day Job - over the past 20 odd years, I'm not sure I'd like them running my Water or Electricity supply...

What’s your solution then?

Also who did you vote for over the last 20 years

ZedLeg wrote: Mon Feb 03, 2025 12:32 pm I assume that’s why they’re softening us up to the expect another bailout for the current owners.

I've just taken the time to read further into exactly what is happening here and in short, there is no government funded bailout on the cards. What is being proposed is taking on a further 3bn of short term loans to stop a liquidity crunch which is only weeks away. That additional debt funding needs court approval and without it it would tip into a Special Administration Regime - basically a form of admin where the administrators have to sell the business rather than having options to break up or liquidate.

Not really clear what the end game is her if they do take on the additional debt... would be interesting to see what their restructuring plan looks like.

ETA: bit more detail here: https://www.morningstar.co.uk/uk/news/A ... 0available.

Rich B wrote: Mon Feb 03, 2025 11:22 am

V8Granite wrote: Mon Feb 03, 2025 11:16 am If they remove the dividends the company will be buggered as many many people will sell.

It’s how the dividends got that high in the first place I find co fusing, Thames water has been an in-efficient mess for decades.

Dave!

Why would investors expect dividends from a failing company? Surely that’s the “your investment could go up or down” part of the game?

Shareholders get the last call on any funds from an insolvent company, so Dave probably ought to sell his shares now - the alternative is to wait until the shares themselves are totally worthless.

ZedLeg wrote: Mon Feb 03, 2025 12:35 pm

dinny_g wrote: Mon Feb 03, 2025 12:28 pm Given how shite "The Government" has been at being "The Government" - you know, their day Job - over the past 20 odd years, I'm not sure I'd like them running my Water or Electricity supply...

What’s your solution then?

Also who did you vote for over the last 20 years

Given that other water companies can turn a profit, my initial thought would "find out what specifically is wrong with this particular water company and fix it".