Gore Street Energy Storage Share Discussion Threads

[cocopah] 25/3/2024 15:27

I follow the CEO on LinkedIn. He posted about the transaction today with no mention of the additional consideration so I commented “what was it?” … will let you know if he answers!

On a positive note, I think the operational assets in Ireland command greater contractual income so perhaps there is a silver lining there.🤷̴5;♂️
29300;

[stemis] 25/3/2024 13:11

The market isn't missing anything, just some of the shareholders. The '111p' is just a value the GSF directors have put on the shares. I doubt those who received them place such a value on them. All the announcement says is that GSF have bought the 49% for 9.7m shares plus some cash. The '111p' is irrelevant.

GSF haven't even disclosed how much cash they've paid.

Another smoke and mirrors attempt which some (but not the market) seem to have fallen for...

[spectoacc] 25/3/2024 12:06

Assume they're only allowed to issue at NAV? Therefore agree with the point that the number of shares is adjusted.

Answer will come in July, and whether the new shares start hitting the market at these prices.

Credit to GSF though, for not issuing at market price. Will they do the same with their share options I wonder?

[nickelmer] 25/3/2024 11:57

Two deals with partners taking shares at much higher prices, what is the market missing here?

[zingaro] 25/3/2024 08:54

There was also a mention of "cash" without quantifying the amount ! "issued at 111.0 pence per Ordinary Share[1], plus cash consideration."

[bountyhunter] 25/3/2024 08:52

The current share price is at a huge discount to NAV. It just shows how far we have to go when interest rates progressively fall. Definitely a hold for me.

[lord gnome] 25/3/2024 08:50

Looks as though they were issued at around nav which, is fair enough.

[bountyhunter] 25/3/2024 08:45

How did they manage to issue shares accepted at 111p when the current price is 64p? Was there a purchase price adjustment and if so what was the point of issuing at the higher price.

[fft] 25/3/2024 07:49

If when the lockup ends, they sell the shares anyway, it indicates the assets being bought are not worth the headline price. We will see... I need someone who knows this area to crunch the numbers. I guess it all comes down to how long it takes to get connected to a grid, regardless of which country you are in, and the price you can charge. Diversification has to be good though ?!?

[scruff1] 25/3/2024 07:38

It's a big premium. Plenty assets. Just need plenty cash flowing in and an share price going upwards

[spectoacc] 25/3/2024 07:31

"...Subject to a lock-up and orderly market arrangement, with one-third of the shares locked up until July 2024, a further one third locked up until October 2024, and the final third until February 2025."


That'll be the test.

[fft] 25/3/2024 07:13

I am impressed that, again, they have managed to issue shares at a premium. Assuming the assets being bought are worth it.On the face of it, it looks a good set of deals. Unless it isn't as it looks.....

[scruff1] 23/3/2024 10:19

It didn't have any positive effect yesterday when the promis

[cc2014] 22/3/2024 15:47

Perhaps there is one point worth adding

After the recent volatility in battery revenues, it is certain that investors in this area see greater risk and will demand a greater return.

(all that will go out the window of course as and when interest rates fall a couple of percent and there is far less money to be made from bonds)

[stemis] 22/3/2024 15:25

Both are fair points. If what CC2014 says is achievable and would lead to dividend cover for the Group and the company were more open and clear about performance so that investors could reach that conclusion, I'd certainly be interested in buying shares (after all, a dividend yield of 11.7% is nothing to be sniffed at). But at the moment I'm probably not...

[george stobart] 22/3/2024 15:24

Cocopah ok but don't tell me what to do.

Never do that to me again sir.

Stop treating us as your erotic encounters

[cc2014] 22/3/2024 12:21

#1238

Here are a few things to consider:

1. We know from the RNS's that the revenue per MW/Hr is about 5% higher for the last 5 months than at the interims. This against a background of a dire income stream in the UK
2. The capacity at the interims was 291.6. The target for the end of the year is 813.4. That's an increase of 178% (i.e. nearly triple not double)
3. I understand but am open to correction that the 813.4 is reached without further debt
4. The additional capacity coming on stream is biased outside the UK so that will help the revenue per unit too
5. There's a further 358 planned on top of the 813 but this will require debt. Obviously the margin on this will be lower because it requires debt but the 358 again doubles and bit more what they have at present.

[stemis] 22/3/2024 12:02

I think if you search my posts on this board you'll get the drift of what I think...

[brucie5] 22/3/2024 11:23

Interesting distinction. So what is your basic assessment of the value case here please?

[stemis] 22/3/2024 11:02

There's no comparison between RECI and GSF. RECI's NAV is made up mainly of the value of loans it's made that will (hopefully) be repaid. GSF's NAV is a number made up by the board, using a npv calculation on cashflow and growth assumptions that none of us know...

[brucie5] 22/3/2024 10:50

11.49 is a dividend that screams "Cut me!". But then you see the discount to net assets at 41%. And of course with good geographical diversification. It seems to me a decent core holding; but whether to overweight? Not so sure. Similar dilemma in RECI. I'm sure many income seekers hold both, with one eye on the exit in event of the unforeseen, but not unforeseeable.

[stemis] 22/3/2024 10:48

Improvement, probably, but enough? Who knows.

The dividend cost at 7.5p is £37m.

From half year results; "the portfolio generated £19.3m of revenue during the period, amounting to £12.2m in operational EBITDA". Off that is holding company expenses of £3.8m. So group EBITDA was £8.4m. Annualised that's £16.8m. Even if you doubled that it would be £33.6m, so not enough to cover the dividend. Then there is depreciation (and remember this is an asset based business), interest and tax to come off the £33.6m which isn't going to be peanuts.

If they wanted to prove that group profits cover dividends then they could simply disclose group earnings. But they don't. I wonder why...

[spectoacc] 22/3/2024 10:42

Good summary @AlanPT. I'd add that a variable dividend on GRID and HEIT would probably include them asking for money back some qtrs :))

[alan pt] 22/3/2024 10:33

GSF are saying that the dividend will be fully covered once buildout of the existing assets is complete, but that won't be until the end of this year

In the meantime, around 0.6 is about right, though there is significant qtr to atr variability and I think there was a recent qtr which did achieve close to full coverage, so it can be a little confusing depending on which stat you read

This volatility is also why there is the idea of a variable dividend for the sector (this affects GRID and HEIT even more). As I have said before, I don't think that's a bad idea - maybe a base dividend with a top up bonus. But seems unlikely that GSF will go for it at the moment and to be fair their buildout coverage strategy seems sound

[wassapper] 22/3/2024 10:04

I think doubling your capacity and most of that being in non-UK markets is likely to make an improvement to the divi cover. Non?

"The £556m portfolio intends to double the size of its operational fleet to 800MW in 2024, at which point the US assets will account for 55% of total operational capacity, while GB will slip from 53% to 29%."