Gore Street Energy Storage Share Discussion Threads

[hindsight] 27/10/2023 14:51

MM size quotes are 10k vs 1.57m so think we can deduce the seller today is not retail

[brucie5] 27/10/2023 14:44

Thanks for that. Is there any recent and credible 3rd party coverage of the shares?

[chubby chandler] 27/10/2023 14:34

Brucie, management came out with this statement on 12 October, not sure what else they can do in the face of the current market madness?

"The Board continues to monitor the current GSF share price volatility. The Board and the Investment Manager confirm that they are not aware of any portfolio-specific factors that have led to the recent sharp decline in the share price. The Board believes that the discount to Net Asset Value at which the Company's share price currently trades materially undervalues the Company and its portfolio. The Board maintains confidence in the quality of the assets across the five international energy markets, which continue to perform strongly, underpinning the dividend"

Question then is do you believe management that the NAV discount "materially undervalues" the company, or do you believe the market which says the discount needs to be even bigger....

[mirandaj] 27/10/2023 14:22

Thank you Brucie5.
I guess the selling is from funds after GSF's presentation and/or retail pulling out of funds or selling private holdings. I understand about the over supply in GB but we don't know how this Winter will treat us. I note that storage is used most days at the moment but v small percentage.

[brucie5] 27/10/2023 14:08

Well UKW have managed it, apparently, so I'm sure it's not beyond the wit of management to explain or otherwise show why the market has this wrong. It's also their job to uphold shareholders' interests.

[kensington gore] 27/10/2023 13:59

@Brucie5 The board have made several attempts recently to address market nerves, but none have had the desired effect. It remains to be seen whether the market's response is rational or not.

[brucie5] 27/10/2023 13:39

Thanks Miranda. On the face of it, yes, a great business in a huge growth sector. But 11% dividend is screaming a certain anxiety on behalf of the market, which I imagine is not helped by likes of DGi9 reassuring one day only to cut the dividend the next. Plus the entire infrastructure sector is is in the doldrums with rise in bond yields.

I hope GORE will continue to address market nerves, or risk deepening the discount.

(Nice to see you here, btw!)

[mirandaj] 27/10/2023 12:58

I have not looked to see if this Transcript of an interview has been posted but I found it extremely interesting:

[brucie5] 27/10/2023 12:27

So either they need to offer conclusive evidence that this current level of payout is sustainable or inform the market what is affordable. The daily declines here suggests BoD is either in denial or extremely complacent.

[waterloo01] 27/10/2023 12:23

Currently 42% discount to recent NAV and paying close to 12% divi

[waterloo01] 27/10/2023 12:06

Can sell a touch higher than you can buy at 63.23

[waterloo01] 27/10/2023 08:49

Still down it goes. Leapold, re your 2. Yes but surely there should be more distinction between those with assets paid for out of cash (GORE) rather than based on bank loans etc.

[leopoldalcox] 26/10/2023 19:31

All asset based funds are selling off for 2 reasons. 1. They're mainly seen as a source of income and there are governments bonds that can now do this job with less risk. 2. The economics are worse in a higher interest rate environment. Double whammy. I bought recently though. Expect yields to fall in medium term and this will do well. If they maintain the divi in the meantime then that's perfect

[rogerrail] 25/10/2023 12:43

Very surprised a the share price performance here given drive to install renewables across Europe, this is one share I thought would be fairy resilient to the current political turmoil.

[marksp2011] 25/10/2023 12:01

The BoE is doing QT
There are continuing withdrawals from open ended equity funds that need to sell in the market to meet redemptions
Bonds are yielding a decent return

So, there is a significant liquidity reduction and a portfolio rotation under way. Expecting a UK small cap to swim against that tide is a forlorn hope

[waterloo01] 25/10/2023 11:43

I seem to recall Sunak at the conference suggested they would speed up connection on projects ready to roll. Not that it means it will happen!!

[carterit] 25/10/2023 11:42

Bit more info....
New report shows queue for new energy projects is blocked by developers that may not even have land rights and haven’t applied for planning consents
Estimated size of these power projects in the queue is 62GW, roughly one fifth of all power in the queue
Centrica CEO argues such ‘phantom’; projects should have Construction Agreements terminated if developers miss key milestones - and urges Ofgem to give National Grid ESO the power to remove projects from the existing grid queue
"In recent years energy security has rightly moved up the agenda as countries look to secure supplies and drive the transition to net zero. That’s why it defies belief that the queue for new, green energy connections is blocked by ‘phantom’; power projects. Not only do these ‘developers217; not have the money to develop, but many also don’t even have planning permission or land rights – they’re gambling that holding a space in the queue will make them rich."

Chris O'Shea, Centrica CEO

A new independent report, commissioned by Centrica, has revealed the extent of the power projects holding back the UK’s energy security and creating risk around hitting net zero.

The report examined the UK’s existing queue for Transmission Entry Capacity (TEC) – the queue for connecting new projects to the transmission grid – and discovered that it is up to four times oversubscribed. Not only that, but this oversubscription has become significantly worse in the last few years.

It found that:

There are currently 371GW of projects in the queue, enough to significantly improve the UK’s energy security.
Around 114GW worth of projects have listed their connection date as before 2029…
…but around 62GW of these projects are only in the scoping phase and developers may not even have secured land rights or applied for planning consent.
The report suggests that the oversubscribed queue, and longer wait for connections. has a damaging effect on the investments that could drive the UK’s energy transition and energy security.

Ofgem is exploring rule changes (CMP376) to address queue issues and is expected to decide these before 10 November. These rule changes would grant the ESO the ability to remove projects from the queue if they miss key milestones. Ofgem is currently considering whether to apply this rule change to just new projects entering the queue, or whether the rule change should also be applied to projects already in the queue.

When examining Ofgem’s solutions, the newly published report estimated that applying the rule change to projects already in the queue could add an additional 12GW of green power to the system in the short-term, as space is created for those projects that are ready to progress. This would be a beneficial result for consumers, net zero targets, and energy security, as moving stalled projects out of the way would allow more renewables onto the system quicker. It also noted this benefit would not materialise if Ofgem opts to only apply the rule change to future projects and keep these phantom power projects in the queue.

Chris O’Shea, Centrica Group Chief Executive, said:

“In recent years energy security has rightly moved up the agenda as countries look to secure supplies and drive the transition to net zero. That’s why it defies belief that the queue for new, green energy connections is blocked by ‘phantom’; power projects. Not only do these ‘developers217; not have the money to develop, but many also don’t even have planning permission or land rights – they’re gambling that holding a space in the queue will make them rich.

“The system was created for a different time, when a small number of large projects were connected each year. Our current approach is not fit for purpose and needs urgent reform.

“Thankfully Ofgem has now recognised the need for action but every day we wait for action is costing consumers money. Urgently introducing an industry rule change and applying it to the current queue, so that existing phantom projects lose their place when they miss milestones, would show that Ofgem were helping to reduce costs for consumers, to drive the energy transition and to improve the UK’s energy security.

[marksp2011] 25/10/2023 11:40

Scruff - try reading the article. It doesn't match the headline

centrica are complaining that the Grid is giving equal weighting to mad cap schemes that don't even have planning permission or funding as they are to real developments that are funded and in build. It is being done on the basis of first come first served not on the basis of likely delivery. They are going to end up with grid connections to empty fields but no connections to built projects

[scruff1] 25/10/2023 07:36

Oversubsciption of electricity projects has caused a queue that is scaring off investors - Centrica

[daveoz1] 24/10/2023 23:53

cc2014: If you know that some of the posts are 'factually incorrect' I'm sure we would all appreciate it if you could 'enter the debate' to point this out to the rest of us!

[daveoz1] 24/10/2023 23:47

waterloo: Only 25% down! I bought at 95.9. At that point it had already dropped from 120 in 10 months and I thought it couldn't have much further to fall...boy was that a mistake! I'm now down 31%. I'm tempted to buy a little at this ridiculous price (66) to try to cut my losses a bit, but not when it's still going down every day...

[catabrit] 24/10/2023 15:34

These seem to offer a decent margin of safety so I have nibbled today.

[cc2014] 24/10/2023 14:54

FWIW at some point one has to commit one's capital at some time into something. GSF seems decent value here.