National Grid Plc Evaluation

Yield Curve: A yield curve is a simple representation of the relationship between the interest rate that a bond pays and when that bond matures. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth. Shape of the yield curve is closely watched as it is considered to be an indicator of future interest rate change and economic activity. There are three types of yield curves namely normal, inverted and flat.

Debt Structure of the Company:

Description              Maturity Date Amt Outstanding (USD) Issued Amt(USD)
NGUSA / NG 25-Nov-14 25-Nov-2014 0 0
NGUSA / NG 21-Nov-14 21-Nov-2014 0 0
NGUSA / NG 20-Nov-14 20-Nov-2014 0 0
NGUSA / NG 05-Nov-14 05-Nov-2014 0 0
NGUSA / NG 07-Nov-14 07-Nov-2014 0 0
NGUSA / NG 04-Dec-14 04-Dec-2014 0 0
NGUSA / NG 03-Nov-14 03-Nov-2014 0 0
NGUSA / NG 12-Nov-14 12-Nov-2014 0 0
NG 20-Nov-14 20-Nov-2014 41,265,250 41,265,250
NG 18-Dec-14 18-Dec-2014 190,455,000 190,455,000
NGNRN / NG 12-Nov-14 12-Nov-2014 0 0
NGUSA / NG 06-Nov-14 06-Nov-2014 0 0
NGUSA / NG 24-Nov-14 24-Nov-2014 0 0
NGNAT / NG 0.9590 04-Nov-14 FRN MTN 04-Nov-2014 126,970,000 126,970,000
Description Maturity Date Amt Outstanding (USD) Issued Amt(USD)
NGUSA / NG 22-Jan-15 22-Jan-2015 0 0
NGUSA / NG 05-Jan-15 05-Jan-2015 0 0
NGUSA / NG 28-Jan-15 28-Jan-2015 0 0
NG 23-Apr-15 23-Apr-2015 19,045,500 19,045,500
NG 27-Apr-15 27-Apr-2015 63,485,000 63,485,000
NG 27-Jan-15 27-Jan-2015 25,394,000 25,394,000
NG 4.5650 30-Jun-15 MTN 30-Jun-2015 75,000,000 75,000,000
NGUSA / NG 3.2500 03-Jun-15 MTN 03-Jun-2015 634,850,000 634,850,000
NG 4.5650 30-Jun-15 MTN 30-Jun-2015 75,000,000 75,000,000
Description Maturity Date Amt Outstanding (USD) Issued Amt(USD)
NGUSA / NG 1.2200 13-Jan-16 FRN MTN 13-Jan-2016 50,000,000 50,000,000
NG 6.3000 01-Aug-16 01-Aug-2016 940,230,000 1,000,000,000
NGNRN / NG 0.5030 21-Jan-16 FRN MTN 21-Jan-2016 190,455,000 190,455,000
NGNRN / NG 0.5010 21-Jan-16 FRN MTN 21-Jan-2016 31,742,500 31,742,500
NGNRN / NG 0.6190 29-Jan-16 FRN MTN 29-Jan-2016 38,091,000 38,091,000
NGNRN / NG 0.4610 17-Jun-16 FRN MTN 17-Jun-2016 380,910,000 380,910,000

Share Price Estimation of the Company

  Historical Forecast (Mean)
FY Mar-10 FY Mar-11 FY Mar-12 FY Mar-13 FY Mar-14 FY Mar-15 FY Mar-16 FY Mar-17 FY Mar-18
INCOME STATEMENT
Revenue

13,988

14,343

13,832

14,359

14,809

15,007

15,629

16,453

17,336

Growth % vs. Prior Yr.

-10.50%

2.50%

-3.60%

3.80%

3.10%

1.30%

4.10%

5.30%

5.40%

Actual/Predicted Surprise

-6.90%

-5.10%

-4.30%

0.00%

1.70%

-0.10%

-0.20%

-1.00%

2.20%

Guidance

T

T

T

T

Gross Margin

26.10%

68.50%

62.50%

36.50%

Yr/Yr Change

-0.43

-5.92

-26.03

Actual/Predicted Surprise

25.30%

-34.00%

-27.10%

0.00%

EBITDA

4,309

4,845

4,777

4,133

5,081

5,378

5,685

5,922

5,963

Margin%

30.80%

33.80%

34.50%

28.80%

34.30%

35.80%

36.40%

36.00%

34.40%

Actual/Predicted Surprise

-3.00%

0.20%

-2.40%

-18.00%

-2.20%

0.60%

1.00%

1.90%

1.80%

EBIT

3,121

3,600

3,495

3,644

3,664

3,899

4,134

4,286

4,331

Margin%

22.30%

25.10%

25.30%

25.40%

24.70%

26.00%

26.50%

26.00%

25.00%

Actual/Predicted Surprise

-3.80%

0.60%

-1.90%

-1.90%

-3.10%

0.20%

0.80%

1.20%

0.50%

Operating Profit

3,121

3,600

3,495

3,644

3,664

3,827

4,040

4,107

4,216

Margin%

22.30%

25.10%

25.30%

25.40%

24.70%

25.50%

25.90%

25.00%

24.30%

Actual/Predicted Surprise

-4.50%

-1.10%

-6.10%

-0.90%

-3.90%

-1.10%

1.90%

Guidance

T

T

T

T

Pre-tax Profit

1,974

2,473

2,585

2,742

2,584

2,788

2,974

3,083

3,088

Margin%

14.10%

17.20%

18.70%

19.10%

17.40%

18.60%

19.00%

18.70%

17.80%

Actual/Predicted Surprise

-3.90%

-0.90%

1.40%

-0.50%

-1.40%

0.40%

1.30%

2.90%

3.10%

Net Income

1,418

1,747

1,828

2,055

2,015

2,077

2,214

2,290

2,289

Margin%

10.10%

12.20%

13.20%

14.30%

13.60%

13.80%

14.20%

13.90%

13.20%

Actual/Predicted Surprise

-3.30%

1.40%

2.20%

2.90%

4.70%

0.70%

1.00%

1.40%

3.50%

Guidance

T

EPS

50.62

51.4

51

55.8

53.8

55.03

58.1

59.35

60.1

Growth % vs. Prior Yr.

12.20%

1.50%

-0.80%

9.40%

-3.60%

2.30%

5.60%

2.20%

1.30%

Actual/Predicted Surprise

-0.80%

4.40%

3.30%

2.30%

3.80%

0.40%

-0.30%

0.40%

4.80%

Guidance

0.5

T

EPS – Fully Reported

49.46

63.6

56.8

62.3

66.1

54.47

57.36

58.6

Growth % vs. Prior Yr.

44.90%

28.60%

-10.70%

9.70%

6.10%

-17.60%

5.30%

2.20%

Actual/Predicted Surprise

-11.60%

22.20%

9.30%

13.90%

24.70%

0.20%

0.00%

1.90%

Dividend per Share

34.12

36.37

37.4

40.85

42.03

43.3

44.68

45.94

47.57

Growth % vs. Prior Yr.

8.00%

6.60%

2.80%

9.20%

2.90%

3.00%

3.20%

2.80%

3.50%

Actual/Predicted Surprise

-0.20%

0.30%

-4.10%

0.00%

-0.20%

0.00%

-0.10%

0.50%

0.40%

Guidance

8

T

8

4

CASH FLOW STATEMENT
Capital Expenditure

3,007

2,958

3,147

3,214

2,944

3,569

3,831

4,127

4,946

Actual/Predicted Surprise

-6.40%

-19.00%

-4.80%

-7.60%

-16.00%

-1.10%

1.60%

1.00%

-11.40%

Guidance

3,400

3,600

3,200 : 3,300

3,600

Cash Flow per Share

161.17

143.01

117.97

101.85

107.78

100.61

104.84

107.79

Growth % vs. Prior Yr.

30.80%

-11.30%

-17.50%

-13.70%

5.80%

-6.60%

4.20%

2.80%

Actual/Predicted Surprise

24.10%

29.20%

18.80%

6.60%

10.30%

1.60%

4.90%

5.80%

BALANCE SHEET
Net Debt

22,139

22,814

19,600

21,429

21,190

22,878

24,109

25,399

26,085

Actual/Predicted Surprise

-5.30%

13.90%

-3.90%

1.10%

-5.70%

1.50%

1.10%

1.00%

-0.90%

Net Asset Value

4,199

9,060

9,239

10,228

11,919

12,543

13,451

14,261

14,722

Actual/Predicted Surprise

-25.10%

3.10%

-6.50%

29.30%

5.00%

0.80%

2.60%

-0.70%

Book Value per Share

149.85

248.36

249.64

269.51

309.06

331.12

344.57

356.4

Actual/Predicted Surprise

-21.00%

-4.50%

-10.90%

-2.70%

2.80%

0.30%

-0.80%

-1.20%

PROFITABILITY RATIOS
ROE

33.80%

26.40%

20.00%

21.10%

18.20%

17.20%

17.20%

16.90%

16.00%

Actual/Predicted Surprise

5.00%

1.90%

1.70%

1.40%

0.00%

0.20%

0.40%

0.60%

Guidance

T

T

ROA

3.30%

3.90%

3.90%

4.00%

3.80%

5.40%

5.50%

5.20%

Actual/Predicted Surprise

-2.60%

-1.80%

-11.70%

-10.50%

-1.40%

-1.40%

-1.40%

 

Ratio Analysis of the Company

 

Industry Median

2002

2001

2000

1999

1998

Profitability  

Gross Margin

34.3%

22.0%

35.9%

38.3%

29.6%

EBITDA Margin

44.3%

32.0%

45.7%

47.1%

43.5%

Operating Margin

(2.9%)

16.0%

33.8%

34.7%

33.6%

Pretax Margin

(10.5%)

16.3%

93.4%

85.7%

37.7%

Effective Tax Rate

(8.6%)

25.4%

21.8%

23.3%

Net Margin

(11.1%)

17.7%

69.7%

67.0%

27.3%

DuPont/Earning Power  

Asset Turnover

0.32

0.40

0.23

0.36

x Pretax Margin

(10.5%)

16.3%

93.4%

85.7%

37.7%

Pretax ROA

(3.3%)

6.5%

21.8%

30.5%

x Leverage (Assets/Equity)

5.45

3.82

3.01

2.61

3.68

Pretax ROE

(15.7%)

22.1%

62.0%

90.1%

x Tax Complement

1.08

0.74

0.78

0.77

ROE

(16.8%)

23.8%

46.2%

70.4%

x Earnings Retention

0.66

0.82

0.81

(1.18)

Reinvestment Rate

(25.8%)

15.8%

37.7%

57.1%

Liquidity  

Quick Ratio

1.96

1.00

1.31

1.23

0.34

Current Ratio

1.98

1.02

1.32

1.23

0.35

Times Interest Earned

Cash Cycle (Days)

(16.9)

(23.8)

69.0

67.1

Leverage  

Assets/Equity

5.45

3.82

3.01

2.61

3.68

Debt/Equity

3.03

1.82

1.45

1.16

1.42

% LT Debt to Total Capital

62.6%

49.5%

48.9%

39.8%

58.7%

(Total Debt – Cash) / EBITDA

3.61

3.21

2.67

1.41

Operating  

A/R Turnover

5.4

8.1

5.9

5.9

Avg. A/R Days

67.2

45.0

61.5

62.1

Inv Turnover

64.1

93.5

49.3

74.2

Avg. Inventory Days

5.7

3.9

7.4

4.9

Avg. A/P Days

89.9

72.7

Fixed Asset Turnover

0.60

0.72

WC / Sales Growth

25.1%

(20.5%)

41.6%

Bad Debt Allowance (% of A/R)

ROIC

(4.4%)

9.1%

21.3%

33.8%

Revenue per Employee ($)

$424,008.90

$670,555.00

$430,644.10

$410,463.50

 

Balance Sheet

 

2002

2001

2000

1999

1998

Period End Date

31-Mar-2002

31-Mar-2001

31-Mar-2000

31-Mar-1999

31-Mar-1998

Assets (£ Millions)          
Cash and Short Term Investments

213

271

1,012

1,525

50

Cash & Equivalents

213

271

1,012

1,525

50

Accounts Receivable – Trade, Net

707

380

247

193

322

Total Receivables, Net

1,032

585

351

193

322

Receivables – Other

324

205

104

Total Inventory

56

34

29

13

13

Prepaid Expenses

137

116

102

Other Current Assets, Total

4,446

1,251

972

17

0

Other Current Assets

4,446

1,251

972

17

0

Total Current Assets

5,883

2,256

2,465

1,746

384

Property/Plant/Equipment, Total – Gross

14,188

8,892

8,073

Land/Improvements – Gross

787

447

492

Machinery/Equipment – Gross

12,767

8,036

7,271

Construction in Progress – Gross

634

410

311

Property/Plant/Equipment, Total – Net

9,122

5,617

4,938

2,711

Accumulated Depreciation, Total

(5,066)

(3,275)

(3,135)

Goodwill, Net

2,113

1,386

845

15

0

Intangibles, Net

Long Term Investments

298

946

519

3,333

327

LT Investment – Affiliate Companies

57

801

412

222

LT Investments – Other

241

145

107

3,110

327

Note Receivable – Long Term

Other Long Term Assets, Total

Total Assets

17,416

10,206

8,767

5,094

3,422

Liabilities (£ Millions)          
Accounts Payable

770

649

530

1,097

Payable/Accrued

Accrued Expenses

Notes Payable/Short Term Debt

0

0

0

0

0

Current Port. of LT Debt/Capital Leases

1,554

1,114

716

591

Other Current liabilities, Total

645

451

616

824

Dividends Payable

169

134

123

Income Taxes Payable

30

16

378

Other Payables

421

287

89

824

Other Current Liabilities

26

14

25

Total Current Liabilities

2,969

2,214

1,861

1,415

1,097

Total Long Term Debt

8,118

3,756

3,500

1,681

1,321

Long Term Debt

8,118

3,756

3,118

1,681

1,321

Capital Lease Obligations

382

Total Debt

9,672

4,869

4,216

2,272

1,321

Deferred Income Tax

Minority Interest

98

42

35

0

Other Liabilities, Total

3,034

1,521

461

46

75

Reserves

3,034

1,521

461

46

75

Total Liabilities

14,219

7,532

5,858

3,141

2,493

Shareholders Equity (£ Millions)          
Redeemable Preferred Stock, Total

Preferred Stock – Non Redeemable, Net

Common Stock, Total

178

149

175

174

174

Common Stock

178

149

175

174

174

Additional Paid-In Capital

1,243

0

275

247

233

Retained Earnings (Accumulated Deficit)

1,776

2,525

2,460

1,532

523

Treasury Stock – Common

ESOP Debt Guarantee

Unrealized Gain (Loss)

Other Equity, Total

Total Equity

3,197

2,674

2,909

1,953

929

Total Liabilities & Shareholders’ Equity

17,416

10,206

8,767

5,094

3,422

Supplemental (£ Millions)          
Shares Outstanding – Common Issue 2

Shares Outstanding – Common Issue 3

Shares Outstanding – Common Issue 4

Total Common Shares Outstanding

1,777

1,485

1,485

1,467

1,683

Shares Outs – Common Stock Primary Issue

1,777

1,485

1,485

1,467

1,683

Cash Flow Metrics

 

2002

2001

2000

1999

1998

Period End Date

31-Mar-2002

31-Mar-2001

31-Mar-2000

31-Mar-1999

31-Mar-1998

Cash Flow-Operating Activities (£ Millions)          
Net Income/Starting Line

507.4

705.5

571.8

576.7

540.0

Depreciation/Depletion

436.9

380.0

158.6

134.0

159.6

Depreciation

436.9

380.0

158.6

134.0

159.6

Amortization

Deferred Taxes

Non-Cash Items

215.5

(1.6)

(9.3)

(28.3)

(85.8)

Unusual Items

0.0

(6.6)

(4.3)

(2.5)

(4.1)

Equity in Net Earnings (Loss)

198.8

20.3

4.5

3.1

0.0

Other Non-Cash Items

16.7

(15.3)

(9.5)

(28.9)

(81.7)

Changes in Working Capital

101.1

(390.2)

(308.9)

(228.3)

(156.1)

Accounts Receivable

203.0

(189.8)

(22.7)

(13.0)

(35.2)

Inventories

14.0

(7.9)

(0.4)

0.2

(3.4)

Accounts Payable

(108.6)

(55.3)

(11.5)

(60.6)

20.7

Other Operating Cash Flow

(7.3)

(137.2)

(274.3)

(154.9)

(138.2)

Cash from Operating Activities

1,260.9

693.7

412.2

454.1

457.7

Cash Flow-Investing Activities (£ Millions)          
Capital Expenditures

(500.0)

(471.6)

(292.2)

(329.7)

(286.4)

Purchase of Fixed Assets

(500.0)

(471.6)

(292.2)

(329.7)

(286.4)

Other Investing Cash Flow Items, Total

(911.1)

(568.2)

(1,223.7)

951.3

157.8

Acquisition of Business

(933.5)

(440.9)

(2,045.1)

(12.1)

Sale of Business

36.5

195.9

0.0

0.0

157.8

Sale of Fixed Assets

27.8

11.8

5.4

5.3

Sale/Maturity of Investment

0.0

952.9

959.3

Purchase of Investments

(49.7)

(337.2)

(144.5)

(13.1)

Other Investing Cash Flow

7.8

2.2

7.6

11.9

Cash from Investing Activities

(1,411.1)

(1,039.8)

(1,515.9)

621.6

(128.6)

Cash Flow-Financing Activities (£ Millions)          
Financing Cash Flow Items

(21.3)

468.3

554.1

(1,602.0)

Other Financing Cash Flow

(21.3)

468.3

554.1

(1,602.0)

Total Cash Dividends Paid

(229.5)

(212.5)

(197.6)

(183.1)

(966.3)

Cash Dividends Paid – Common

(229.5)

(212.5)

(197.6)

(183.1)

(966.3)

Issuance (Retirement) of Stock, Net

12.2

7.0

4.4

5.4

Sale/Issuance of Common

12.2

7.0

5.5

5.4

Common Stock, Net

12.2

7.0

5.5

5.4

Repurch./Retirement of Common/Preferred

0.0

0.0

(1.1)

0.0

Issuance (Retirement) of Debt, Net

442.4

81.4

769.2

682.2

Long Term Debt Reduction

(2,972.0)

(934.0)

(260.1)

(35.5)

Long Term Debt, Net

442.4

81.4

769.2

682.2

Cash from Financing Activities

203.8

344.2

1,130.1

(1,097.5)

(966.3)

Foreign Exchange Effects

Net Change in Cash

53.6

(1.9)

26.4

(21.8)

(637.2)

Net Cash – Beginning Balance

Net Cash – Ending Balance

Cash Interest Paid

405.3

398.2

156.7

137.9

Cash Taxes Paid

7.3

137.2

274.3

154.9

138.2

 


 

References:

  • Waterhouse, J., & Lewis, D. (2004). Communicating culture change: HRM implications of public sector organizations [Electronic Version]. Public Management Review6(3), 353-376. Retrieved from http://www.informaworld.com/openurl?genre=article&doi=10.1080/1471903042000256538&magic=crossref
  • Leitch S. (2002). Strategic ambiguity in communicating public sector change.Journal of Public communication Management7(2), 129-139.
  • Schraeder, M., Tears, R. S., & Jordan, M. H. (2005). Organizational culture in public sector organizations : Promoting change throu … Inform.
  • Mazutis, D., & Slawinski, N. (2008). Leading Organizational Learning Through Authentic Dialogue. Management Learning39(4), 437-456. John Wiley & Sons. Retrieved from http://mlq.sagepub.com/cgi/doi/10.1177/1350507608093713
  • Gupta, J. (2011). Communicating climate change to the wider public. Climate Policy11(1), 834-835. Retrieved from http://www.tandfonline.com/doi/abs/10.3763/cpol.2009.0686
  • Gransberg, D. D., Asce, M., & Windel, E. (2008). Communicating Design Quality Requirements for Public Sector Design / Build Projects. Journal of Management in Engineering24(April), 105. Retrieved from http://link.aip.org/link/?JMENEA/24/105/1
  • Caple, L. (1995). Change management in the public sector. Health Manpower Management21(3), 34-38.
  • Mathis, R. L., & Jackson, J. H. (2002). Human Resource Management. (M. Edwards & A. Fowler, Eds.)Workforce (Vol. 46, p. 672). South-Western College Pub. Retrieved from http://www.amazon.com/dp/0324542755
  • Česynienė, R. (2008). GLOBALIZATION AND HUMAN RESOURCE MANAGEMENT. EKONOMIKA82, 41-56. Retrieved from http://www.leidykla.vu.lt/fileadmin/Ekonomika/82/41-56.pdf
  • Fulk, J., & DeSanctis, G. (1995). Electronic Public communication and Changing Organizational Forms. Organization Science6(4), 337-349. INFORMS. Retrieved from http://www.jstor.org/stable/2634992
  • Hawley, C., Panda, P., & Holm, J. (1997). Meeting the challenge of electronic Public communication. Professional Public communication Conference 1997 IPCC 97 Proceedings Crossroads in Public communication 1997 IEEE International (pp. 145-148).
  • El-ghayoury, A., Harriman, A., Khatyr, A., & Ziessel, R. (2000). Controlling Electronic Public communication in. Angewandte Chemie International Edition39, 185-189.
  • Šmahel, D. (2001). Electronic Public communication and its specifics. Specifika elektronické komunikace45(3), 252-258. Retrieved from http://www.scopus.com/inward/record.url?eid=2-s2.0-23044525680&partnerID=40&md5=5ad3c2a3bdd7a4a5511354eaf6a3b0c1
  • Levine, E., Carr, N., Schools, C.-mecklenburg, & Carolina, N. (2006). Building Blocks to Electronic Public communication. New York, (March), 1-6.