Gore Street Energy Storage Share Discussion Threads

[waterloo01] 31/10/2023 12:56

Note chimes with my and most on here (with a couple of exceptions). Thanks for posting

[speedsgh] 31/10/2023 12:53

Worth bearing in mind that Shore Capital are joint corporate broker to GSF so will almost inevitably be bullish.

[someuwin] 31/10/2023 12:47

Couple of snippets from Shore Capital's comprehensive note on 26 October 2023

Gore Street Energy Storage +

Materially undervalued

Despite the share price falling c40% YTD, the portfolio continues to perform well, with GSF’s weighted average portfolio revenues averaging 3x the revenues achieved in GB (£18.9/MW/h vs £6/MW/h) in the quarter ending 30 September 2023. GSF also recently secured $60m funding for its 200MW/400MWh California project, which will benefit from a high level of long-term, contracted revenues (up to 40%).
The balance sheet remains strong, the portfolio well diversified and the operational capacity should more than double to 813MW by the end of 2024. Trading at a 43% discount to NAV and yielding 11%, we believe the current share price materially undervalues GSF’s fast-growing portfolio of cash generative assets that should reach an annualised revenue run-rate of c£100m by the end of CY24.
...

Valuation case:
Despite the shares declining 41% YTD, portfolio cash flows remain unaffected, and the portfolio build out continues to progress. We therefore recommend investors take advantage of the 43% discount to NAV to gain exposure to a highly attractive portfolio of assets in a sector uncorrelated to the business cycle, which is expected to grow significantly over the next decade as we transition to a grid dominated by renewables.

...We argue that GSF is exceptionally well placed to continue to capitalise on the opportunities provided by its internationally diverse portfolio to meet its return targets, whilst also reducing revenue volatility. Despite this international exposure enabling GSF to outperform peers in recent months, with portfolio cash flows largely unaffected by the decline in GB revenues and its superior balance sheet, the market has failed to recognise GSF’s outperformance, with the shares falling in line with GB focused peers.
We encourage investors to revisit the energy storage sector given its significant de-rating, with discounts exceeding 40%. We highlight GSF as our top picks thanks to its international strategy, strong balance sheet and excellent in-house expertise.

[mirandaj] 31/10/2023 11:31

Purely for interest:

26th October:


3rd August:
EDF also optimised Stony BESS.

The agreement will see EDF optimise the Stony BESS through its market-leading Powershift platform, providing access to a variety of revenue streams including the Balancing Mechanism, wholesale optimisation and ancillary services, alongside leveraging EDF’s trading expertise.

This is the third contract GSF has awarded EDF, which already manages the trading and optimisation for both the 20MW Lascar and 20MW Hulley BESS assets.



October:


From 9th May:

[chubby chandler] 31/10/2023 11:29

Well I helped the seller offload with top ups at 62p yesterday.

Nice to finally see some respite today!

[cc2014] 31/10/2023 11:14

@TimonOfLondon

That would be nice but no, absolutely not.

What you have been seeing is a someone who wants out of GSF and has been prioritising volume over price. For whatever reason they care far more about volume than price. They have been selling so much stock that the market has not been readily available to absorb it.

There have been similar patterns on many other "bond proxy" type stocks particularly in the renewable sector but also in the infrastructure and property REIT areas.

[timonoflondon] 31/10/2023 10:49

@cc2014 - I am a buy-and-holder, I am managing a sipp for income rather than trying to trade for capital gain - so I am inexperienced in interpreting the data on daily trades. Is it possible that what we are seeing in the GSF volume these last weeks is someone building a material stake ahead of an attempted buyout ?

[timonoflondon] 31/10/2023 10:39

@ghhghh, I hold a lot of infra - 30+% of my portfolio, as I believe in the inflation linked income stream backed by real assets. One point re gilts/market valuation - there is a strong argument that pricing of the infa trusts in the UK is reflecting the decline in gilts /increase in discount rate, but hasn’t reflected the increase in income streams from inflation linked revenues. As an example, UKW paid a divi of 7.72p last year (2022) but following its update last week will pay 10p this year (2023) - 29.5% divi increase yoy ! UKW is best in class, but GSF (which doesn’t have inflation linkage I believe), which I also hold and am adding to has been increasing divis by 0.5p annually. BSIF and INPP are also examples of other infra trusts that have increased current year divi guidance in the last couple of months. Fwiw I’m buying GSF hand over fist at 12-13% yield.

[cc2014] 31/10/2023 10:22

Well based on the price action the market seems to think they have pillaged the seller at his maximum level of pain for all the shares he had left.

[brucie5] 31/10/2023 09:51

Donald, yes indeed. And the advantage of closed end funds is in inverse proportion to the disadvantage of unit trusts: you get to buy at a whopping discount. Of course there is uncertainty over the sector generally and navs are subject to revaluation, but if a dividend can be sustained you have a value against which to assess your risk. My hunch is that buying hereabouts will be well rewarded in due course.

[donald pond] 31/10/2023 09:30

The big holders of these type of assets were open ended income funds. I think as they get redemptions they are forced to sell. And when people can get 6% from NS&I and have been holding a fund that is dropping every day, the pain threshold triggers more selling. In short, the price action across the sector has nothing to do with fundamentals. There are pound coins on offer for 50p everywhere. But they could be 40p next month. It's madness!

[cc2014] 31/10/2023 09:23

It is my perception that the way the volume is coming on the book on GSF suggests to me that someone wants the cash in a hurry.

We can see someone has sold maybe 650k shares at 60p this morning (although some could be matched bargains) and had they slowly dripped them into the market during the day I'm sure they could have got around 61.5p.

But they didn't. They were in a desperate hurry, presumably to raise the cash to spend on something else they think will give a better return.


tbh it's my current view that the markets have been bashed down enough for the moment and all the renewables, infra funds and property REITs are due a rally of at least 10-15%. Just buy anything. Well not anything. Some are to be avoided but I'm sure you all get my drift.

[ghhghh] 31/10/2023 08:57

I've been buying but think the concern is the DCF calcs to support the NAV. I think there is a disconnect between what the Infrastructure funds (and their valuers) believe is the current on the ground value and the sellers who are anticipating these values will fall to catch up with gilts.

Clearly there is less investment going into renewables as the IF's are prioritising reducing debt and buying back shares. This must eventually support valuations.

GCP Infra is my top holding.

[spectoacc] 31/10/2023 08:54

Lol @fozzie. So true on so many atm.

[fozzie] 31/10/2023 08:42

I couldn't resist at 79p a month ago and look where that got me.

[cc2014] 31/10/2023 08:36

Is 60.5p a good price? I couldn't resist!

[alan pt] 30/10/2023 16:38

Live in hope that they might be trying to clear the books before end of month, been a lot of volume this month

Even with the sector struggling I would have thought 80-90p range would make more sense for this

[waterloo01] 30/10/2023 16:29

Do wish they would finish. (Must be taking some bath if it's a large holder). Final top up at 61.5p

[alan pt] 30/10/2023 16:08

Guessing there must still be a big seller dumping, happy to grab some more at 61.7

[waterloo01] 30/10/2023 15:48

Almost 12% divi at this price. 50% below high of £1.20 and below the all time low of .62

[waterloo01] 28/10/2023 16:56

Thanks, although not sure when this was recorded. Looks like some months back

[mirandaj] 28/10/2023 16:27

This was kindly posted on lse on 27th by someone and is an informative presentation:

Gore Street Energy Storage - Alex O'Cinneide

[waterloo01] 27/10/2023 14:58

Back in April 22 they raised £150m at £1.10, so someone's taking a bath.

[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?