Gore Street Energy Storage Share Discussion Threads

[spectoacc] 19/12/2023 07:17

Someone has faith:

"The Company is pleased to announce that, as part of the long-term strategic partnership with Nidec, Nidec will be subscribing for 14,000,000 new ordinary shares in the capital of the Company (the "Ordinary Shares") at 112.9 pence per Ordinary Share, being the 30 September 2023 NAV announced on 14 December 2023, resulting in gross proceeds of £15,806,000 to the Company"

[cocopah] 15/12/2023 13:11

#waterloo1 … I don’t think legerdemain was too harsh … at least not in the views expressed on Citywire by the analysts (Shore Capital aside, who are the in-house broker) … they express my thoughts to a tee! ⬇️


“The interims showed total revenue of £19.3m, representing an average of £15.10 per megawatt (MW) per hour, down from £16.80 a year ago, but with the international assets delivering 2.6 times more revenue of £19.66 per MW per hour than the UK’s £7.54 per MW per hour.

Nevertheless, dividends of 3.5p per share remained uncovered during the six-month period. Before fund expenses, operational dividend cover fell to 0.72 times from 0.9 times in March. This reflected weak UK revenues and the portfolio’s heavy weighting to construction assets, with only 291.6MW in operation and 878.4MW in development.

However, in the three months to 30 September, a surge in revenue from a heatwave in Texas and high winds in Ireland meant the 2p quarterly dividend was 1.15 times covered. GSF’s policy is to pay out 7% of NAV a year.

Stifel analyst Sachin Saggar questioned how ’repeatable217; the revenue from the ‘blowout’; quarter was in these regions and the sustainability of the dividend.

Next year, five assets are due online, with UK assets pushed back by grid connection delays. Currently, the assets, which exclude Northern Ireland, make up more than a third of the 291.6MW operational portfolio, including the most recently energised Stony asset in October.

The trust is yet to buy back any shares but has total available liquidity of £135m, including its undrawn debt facility.

‘We’ve been given cash to build out a portfolio of energy storage assets,’ O’Cinneide said. ‘We’re operating in a good cash position but that cash is committed to our portfolio. That is the strategy and 98% of investors voted for continuation a month ago. Share buybacks are always considered but we haven’t implemented any.’”


I think that if the discount continues to remain at its current level or widen again, they will have to consider implementing a share buyback scheme. The biggest issue is that income pressure will continue to grow and trading is not yet well-established.

Overall, I’m a huge believer in what GSF is doing but that doesn’t make me endured to their shortcomings with respect to shareholders.

[cocopah] 15/12/2023 12:46

I wonder which assets Cox is referring to when he talks of a sale and (bearing in mind it’s assets on-line that drive income) how redeploying the cash elsewhere will provide an immediate boost to the share price? Curious and curiouser … 🤔

Given that there was no rider on reversing asset discounts if inflation and interest rates fall (and no forward guidance on potential NAV once FerryMuir and Enderby are up-and-running); the self-imposed ‘cap’ on divi increases brought about by keeping the annualised NAV under £1.14 will keep the share price subdued (divi investors can easily beat the current divi- e,g. L&G).

I think GSF are doing a lot of the right things on operations but not with respect to managing the share price.

[cc2014] 15/12/2023 09:09

National Grid have finally got the Balancing Mechanism sorted this week to allow battery storage to participate through a electronic mechanism rather than manual operators choosing the provider.

It seems they have been often choosing gas, so this is an opened up market for the battery operators.

Should be good for additional earnings from the UK assets.

[someuwin] 14/12/2023 16:13

Shore Capital...

...Prospect of rate-cuts in 2024 could facilitate a re-rating: We expect energy storage to play an essential role in the transition to a grid dominated by renewables. GSF remains our top pick thanks to its strong balance sheet (£75m cash, no company-level debt as of 30 Sept’23) and geographical diversification benefits, and hence, its ability to deliver less volatile cash flows and a superior revenue performance relative to its peers. Having witnessed a sharp decline in inflation and with the fed now forecasting three rate-cuts in 2024, we argue that trading at a 25% discount and yielding 9%, GSF could be in store for a material re-rating in the near-term as sentiment towards the renewable sector recovers, supported by its fast-growing portfolio of cash-generative assets

[waterloo01] 14/12/2023 16:01

Cocopath, legerdemain. lol. Very harsh though. The last Q didn't have Stoney revenue and quarters going forward, including the key winter months, will have further capacity added. That should give some comfort that they will have a divi cover over 1+ throughout the rest of the year and beyond.

It's only when the investments start generating revenue that the capital finally starts to work in producing revenue.

[scruff1] 14/12/2023 15:08

Im staying with my original assessment. Not much has changed. Nothing really bad nothing really good. Back to waiting and hoping. Bit disappointing though to not really be thrown any juicy bones - especially now having ticked down a tad to rub it in.

[cocopah] 14/12/2023 11:51

Disappointed in the drop in NAV … now means divi will probably stick at 7.5p for the next year (they can discount the assets at will - down 2.8p wiping out all the cash generation! - so we will likely not see an annualised NAV of £1.14+).

Market commentary not too kind either, noting the significant and embedded income pressure (worrying and why they need to drive income from energy trading IMHO).

Although GSF is saying dividend cover is now above 1.0, there is a tad of legerdemain there as it only applies to the last quarter. There are 481m shares in issue, so as long as the NAV stays above £1.07 the annual dive will cost c £36m. £8.3m EBITDA for the last quarter extrapolated doesn’t quite cut the mustard annually (although with FerryMuir and Stoney we should get there by the middle of next year).

A share buyback to reduce the discount would help but this looks unlikely.

I look forward to robust questioning in the investor presentation.

[yump] 14/12/2023 10:40

Something for another thread really but it seems farcical that so much land and property was acquired for HS2 (with some people making a mint out of their sale) and yet it seems that only a handful of councils are acquiring long term local empty property to house people. Apparently 250,000+ properties in UK are long term empty.

We are supposed to be a developed country aren’t we - not third world ?

[scruff1] 14/12/2023 08:37

At least we are streets ahead of HS2. When I was a young man I had a friend who went to California as a project manager for an engineering company. He had an alarm watch which at the time were novel in the UK but he said a necessity in the US as there was a constant threat of litigation if deadlines werent met. He returned to the UK as he couldnt stand the constant pressure. He found the opposite in the UK was just as stressful so went to Oz where he became very successful. When HS2 is the standard set by such a prestigious project every other has a good chance of being left in the litigator's pending tray to catch dust.
Dont know about you guys but my portfolio has just gone up like a rocket. Happy day so far

[fordtin] 14/12/2023 08:26

At least they've given a reasonable explanation for the delays;

" Project progress overview

Great Britain (GB):

Stony was energised in September 2023.

Energisation and commencement of commissioning for Ferrymuir are awaiting completion of the last remaining non--contestable work packages carried out by Scottish Power Energy Networks, including telecommunication and SCADA works. All other material non-contestable works, including the Point of Connection circuit breaker modification, have been completed. The slight delay to the grid connection works program has been driven by resourcing problems at the distribution network operator and the insolvency of the main sub-contractor undertaking contestable works on behalf of the Project.

Procurement, manufacturing, and delivery of key battery components for Enderby are complete, with works progressing well on site. The project is on track to meet its energisation target of May 2024. "

[scruff1] 14/12/2023 08:06

So was Ferrymuir by now. They are both well behind schedule

[scruff1] 14/12/2023 08:05

Stoney was set to be energised in September

[whilstev] 14/12/2023 08:04

Scruff the announcement states that Stoney has been energised, it is Ferrymuir where they are awaiting NG to energise.

[scruff1] 14/12/2023 08:03

Be interesting to see what the market thinks. Pretty much as you were imo.

[mirandaj] 14/12/2023 07:54

Also contains COP28 comments on battery storage dated 13th.

[bountyhunter] 14/12/2023 07:49

Divi cover now >1.5
NAV 112.9p
A good set of results with significant non-UK income lowering the UK risk.

[scruff1] 14/12/2023 07:49

Agreed its good looking forward. But its slow progress. Stoney is well overdue.
Should be a good discount to NAV. This time last year we were 120p

[mirandaj] 14/12/2023 07:48

Good discount to NAV too at 84/85p
NAV 30th September 112.9 (115.6 as at 31st March)
Intention to pay 7% of NAV in dividends

[waterloo01] 14/12/2023 07:35

Pretty impressive to me. Cash inc subsidiaries close to £90m, divi cover over 1 and gearing at zero at fund level.

[nickelmer] 14/12/2023 07:35

Fully funded to complete the full build-out, dividend cover is increasing and should increase further as sites go live, very good looking forward imho

[scruff1] 14/12/2023 07:16

Results out. Divi covered 1.15x. Divi increased by o.5p Decrease in NAV per share. No increase in operational capacity (Stony???). Earnings down £2.6m. Total return down 3.9%.
My first reading = not great - more jam tomorrow. Back to the waiting game.

Others views?

[cocopah] 11/12/2023 22:53

The last month has seen the share price flatten-out at c85p. Assuming that the NAV stays around £1.15 at the next update (so that next year’s dividend is 8p) and that income has improved to cover the dividend … it will be interesting to see whether this is enough to narrow the NAV/share price gap to £1.00.🤞995;🤔

[mirandaj] 09/12/2023 13:16

Ends FYI

Gore Street has one of the more internationally diversified BESS portfolios in the world. It has around 1GW in operation in the UK, as well as assets in Ireland, Germany and Texas’ ERCOT market, as well as a 200MW/400MWh asset in construction in California’s CAISO market.

In a recent appearance on specialist podcast Redefining Energy, Gore Street CEO Alex O’Cinneide said that on average, Gore Street Energy Storage Fund’s assets earned about £19/MW (US$24/MW) throughout the past year. Spreading its investments across different markets enables much higher revenues, O’Cinneide said, with average revenues in the UK at about £6/MW for the same period.

O’Cinneide, who was selected by judges for the Outstanding Contribution award at this year’s Energy Storage Awards, hosted by our publisher Solar Media, said in a statement today that this international experience and grounding as an early mover in the UK market would be an advantage in the new Tokyo Metropolitan Government fund.

“We have developed a specialist platform offering the full range of technical expertise needed to successfully monetise energy storage assets throughout their lifetime, from acquisition and construction, asset management and commercialisation all the way through to decommissioning and recycling,” the CEO said.

“We look forward to bringing this experience to Japan, alongside our partners at ITOCHU, to deploy the energy storage capacity needed to accelerate the country’s clean energy transition to a low-carbon and sustainable future.”