Gore Street Energy Storage Share Discussion Threads

[stemis] 26/4/2024 12:35

Actually the company claim (in the 2022/3 finals) "an operational dividend cover of 0.90x".

I'd suggest that dividend cover on a consolidated basis is far lower than that if it exists at all.

From the accounts

Dividend cost - £31.0m

Operational EBITDA £27.8m, less holding company and subsidiary holding company expenses gives total Fund EBITDA of £16.8m. Deduct from that depreciation and tax and what are you left with, if anything at all?

Because of the way GSF is able to account for it's subsidiaries, we do not know their real asset value is, how much has been invested in them and what the likely depreciation is. It seems to me that it's at least £300m and even if depreciation was over 20 years, that's £15m a year.

I'm not sure, on a consolidated basis, that GSF is even profitable at all...

[loglorry1] 26/4/2024 11:50

"nobody who did any research claims that the dividends are covered. they are not coverred until USA assets are online."

My problem with this argument is that they still have a lot to spend in the USA to get there and I don't believe the net cash they have now is sufficient. Sure they can gear up at the project level etc. but....

Suppose I start a new co with the current GSF net cash level in it and tell you I'm going to build a company with 2x or more battery storage in the US using that net cash. You'd probably laugh. Even if you assume that's possible then this surely implies a very low asset value of the current largely UK storage they've built to date.

Yes there is some IP and relationships in projects which are ongoing etc. but its not worth that much.

[cc2014] 26/4/2024 10:41

I have the feeling that sooner or later a very large block delayed trade is going to get reported.

[hindsight] 25/4/2024 17:50

Added too, another sector where new supply must surely slow/stop

[george stobart] 25/4/2024 16:50

So Rathbones still selling with both fists

Anyone knows how big their bag is left?

[spectoacc] 25/4/2024 16:33

Personally a big fan of Christmas.

Added more late on, getting very favourable prices so seller very much still there.

[kev0856153] 25/4/2024 16:23

what a turkey

[alibaba42] 25/4/2024 14:38

nobody who did any research claims that the dividends are covered. they are not coverred until USA assets are online. however after that they should be (at minimum covered and potentially a lot more).

GSF is a bit of a gamble on the usa and usa being on line in time - so its up to them to deliver that. likely to be a few months late but even if thats the case it would still be fine

[scruff1] 25/4/2024 13:36

Higher volume and selling than usual today. If its not one seller its a general flight. After the trend this year its getting very worrying that its about to totally collapse even from this level

[stemis] 25/4/2024 12:25

Any company on planet earth is stripping capital out of their subsidiaries or SPVs to cover their dividend.

This is elementary level corporate finance and is happening since the establishment of the first corporations in the 1600s.

I think you misunderstand. If GSF produced consolidated accounts, you'd see that the dividend isn't covered by the profits of the Group. Instead they are allowed not to produce consolidated accounts and focus on dividend cover solely at holding company level. The way the holding company generates sufficient earnings to pay the dividends is by stripping more out of the subsidiaries than the subsidiaries make in profit. Ultimately that's not sustainable unless profitability of the subsidiaries increases sufficiently.

To put it bluntly the dividends they are paying isn't a distribution of the profit of the Group but the return of capital in the Group. Which is probably why the share price is falling.

[spectoacc] 25/4/2024 12:09

Indeed @SteMiS, but if c.40% UK, then everyone's just been through same. That dip wasn't sustainable IMO.

[george stobart] 25/4/2024 10:33

Any company on planet earth is stripping capital out of their subsidiaries or SPVs to cover their dividend.

This is elementary level corporate finance and is happening since the establishment of the first corporations in the 1600s.

[stemis] 25/4/2024 10:16

The problem is that (as far as it's possible to tell) the dividend is uncovered on a Group basis and they are stripping capital out of their subsidiaries to maintain it. Maybe they'll grow profits to cover it but if they don't then a cut is inevitable...

[scruff1] 25/4/2024 08:57

Hard to disagree with any of that Specto. It does look like the support at this level is fairly solid (touch wood) but so it bloody should be. If they cut the divi then imo their credibility is shot. I thought we would have had an RNS re the seller by now. Hes defo still there

[spectoacc] 25/4/2024 08:30

I'm a buyer of GSF down here. I know the disclosure's imperfect, and unsure what effect on the US side if/when Trump re-elected, but it feels like GRID did to me - too cheap.

Has a slug in the UK so was wary of that, but pricing has clearly improved, even if BESS isn't out of the woods yet.

They're over-distributing and may yet cut, but they may also grow into the divi with everything coming on stream/pricing improving.

Definitely still a seller out there and can buy nearer to bid, and will look bad if it breaks through support, but but but. Everything has its price, and IMO GSF is pricing a lot of bad news in.

[kev0856153] 24/4/2024 12:31

why is this pish not going up

[wassapper] 24/4/2024 11:08

Some more positive news from GRID today. Should help here as well

[melody9999] 22/4/2024 19:01

CC - NG have egg on face wrt battery revenues. THey'll be working hard to avoid further embarrassment.

[cc2014] 22/4/2024 12:49

There is currently a seller or two in the market. Patience required.

I look at it this way:
Energy generation in the UK will move from 45% renewables now to 70% by 2027. That's only 3 years and is a dramatic shift.

How many new gas peakers will get built? None. None will ever get built again in the UK so those assets will slowly come off the system.

How many new batteries will GRID, HEIT and CORD install in 2025? None. GRID and HEIT have no cash and GSF are prioritising the USA

Which leaves how many batteries will be built by others? I don't know, but I suspect the cost benefit analysis looks very different than it did before Christmas. There's plenty in the pipeline but how many of these are actually funded to completion I suspect is very open to question. Not as many as the market needs is what I think


So, I think whilst revenues will continue under pressure for the next 6 months after that not only does everything come back in line but starts to whipsaw in the other direction because renewables are coming on line but very few new batteries.

I'm talking my own game of course. If someone is kind enough to give me an exit at 90p I'll be out.

[alan pt] 22/4/2024 10:26

Just stuck in the trading range where it has been for the last month

The extraordinarily high dividend would suggest that the market expects a cut, but it's hard to see what would force that

Neither the GRID news nor the prospect of US interest rate cuts receding has provided a negative shock, so it feels more like it wants to break upwards than downwards, but it might take a while yet

I'll keep collecting the divis and wait

[scruff1] 22/4/2024 09:12

Ex girlfriend george ? Thats surprising

[george stobart] 22/4/2024 09:07

My ex girldfriend's uncle says big city buyers are coming for this one. He know many stuff unlike you plebs

[scruff1] 22/4/2024 08:51

This mornings trading doesnt give much hope of a reprieve. There is quite heavy selling and the price is already below that indicated.

[scruff1] 22/4/2024 08:27

Covered perhaps I should have said. They claimed that the US projects due for completion in 2024 (more than doubling op. assets + lifting divi cover x 0.5) costing (from then to completion) £190m was fully funded. They had options to lift debt to £230 but aimed to keep it below £150m (21% of GAV). 75m cash