Gore Street Energy Storage Share Discussion Threads

[brucie5] 29/4/2024 15:32

Interesting fordtin. Thanks.

[fordtin] 29/4/2024 15:30

Hi Brucie5,
My portfolio is mostly passive income, with occasional small tweeks to rebalance.

I had a rummage through the last few years of financial reports this morning and it confirmed my gut feeling that it’s pointless trying to figure out the next year’s dividend cover, EBITDA etc. using figures from a period when they only had about 60% of current capacity and before they issued a load of shares to fund growth.

If you look back to post #1398, they’re expecting another major hike in capacity by the end of the year, so any financial predictions are still very 'whether' dependent.

I don’t know if the seller(s) intend to take the share price much lower, but I decided it was cheap enough for a top up, so just spent my last month’s divi sweep on a few extra GSF shares.

[brucie5] 29/4/2024 13:00

fordtin29 Apr '24 - 08:11 - 1411 of 1415
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Thanks so much. Only question for me really was whether this was an add or hold since I hold it as part of a largely passive 3rd party folio of income stocks. In which respect this is most helpful.
;)

[leadixon] 29/4/2024 10:49

Well after 4 months of keeping an eye on this, I’ve decided to take the plunge and bought a small £3.5k position, alongside my NESF i bought 3 weeks ago. I just can’t see how this has much more to go and majority of risk is baked in. Even if BOE does a .25 drop in the next 3/4 months it should help sentiment across the renewables market as a whole.

Agree with all the comments though about the gap in clear communication in financials…..praying for sufficient divi cover

[wassapper] 29/4/2024 09:48

Thanks fordtin. Intersting observations which on their own might make GSF a buy, but when you figure in the paid for growth in (international) capacity this year, it makes for a very compelling story. See also GRIDs more positive results this morning.

[fordtin] 29/4/2024 09:23

You’re welcome scruff.
For anyone who isn’t aware of it, if you look below the video to the bit that shows the number of views, then click on ’more’, it reveals a link to enable an AI transcript.

It’s raw with no punctuation, so takes a bit of time to tidy up for posting quotes, but it's a lot easier than trying to type it from scratch if you’re a two digit typist like me.

[scruff1] 29/4/2024 08:51

Thanks fordtin. Interesting

[fordtin] 29/4/2024 08:11

This link should start at 26m42s




26:43
questions more specifically for James's portfolio manager, James can you say more about what battery storage assets you see most attractive and why do you consider that the current prices of GRID and others are an overreaction of recent problems?

27:00
Yes that's a good question, what I would say is that all three are trading now at a discount to replacement cost, so if you had to go out and build those assets it would cost considerably more than their implied value. Given their share prices in terms of ones we own, we actually own all three.
We were big sellers of GRID and Harmony HEIT toward the end of last year. So they were much smaller parts of the portfolio than Gore Street, which is GSF.
And the reason we did that was, and I should say we sold them at quite considerably higher prices than they're currently trading at today, and the reason we did that is that revenues were actually falling off for quite a way over last year as the frequency market became rather saturated.
Now the key differentiate between these three companies is that Gore Street is a much more international business in terms of it has assets in Ireland and also in in the US, and a small one in Germany as well.
Now, if you take Gore Street's NAV, and you assume that it's UK operations are totally worthless and just value the US and the Irish and German assets, you still come out, I mean I worked it out at 72 P, so I'd encourage people to do their own calculations, but you know it's easy enough to do.
So, the shares are implying that the UK assets are worthless and there's a discount on the US and the Irish assets, which have actually continued to perform very well. So that's why we have quite a considerably higher holding in Gore Street than the other two.
Now, one thing that's been happening recently, which should work to the advantage of the predominantly UK ones, so Gresham, GRID and Harmony HEIT, is that the UK's or National Grids balancing market system, whereby batteries will be full participants in the balancing Market, which has taken a while to get off the ground, now does seem to be hitting its stride and both those companies GRID and Harmony have recently reported improved revenues over March and in to April.
Whereas the share prices don't seem to have reacted quite in the way that I would have imagined.
So, yeah, and that's a kind of long roundabout way of saying I'm not allowed to say whether they're expensive or cheap, but, yeah, the market doesn't seem to have given them, I think, the credit they deserve. And the market just seems to be rather fixated on the very low revenue environment that we saw in January and February, and doesn't really attribute any improvement in revenues that we've actually seen coming through over the past month or two.



30:05
okay um and then uh the next question

(Apologies to the interview participants for any errors in punctuation)

[jimjamthe2nd] 29/4/2024 05:49

They talk about it in the Q&A at the end https://youtu.be/w7nILqCKafc?feature=shared

[brucie5] 28/4/2024 19:39

jimjamthe2nd28 Apr '24 - 16:32 - 1407 of 1408
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I watched PMGR's latest presentation on Investor meets over the weekend and I thought they took an interesting view on GSF in the Q&A.
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Thanks for bringing this to attention. Do you by any chance have a link?

[panshanger1] 28/4/2024 18:04

Let's hope the market sees it that way !!

[jimjamthe2nd] 28/4/2024 16:32

I watched PMGR's latest presentation on Investor meets over the weekend and I thought they took an interesting view on GSF in the Q&A. They calculated the NAV for the non-UK assets as 72p, so at the current share price you can buy the non-UK assets at a discount and get the UK assets thrown in for free!

[george stobbart] 26/4/2024 19:04

Cocopah stop acting like a bum boy and please sell your shares and leave.

You are the cancer of this chat.

GSF is the best investment in the world

[cocopah] 26/4/2024 18:46

Thought that investors might appreciate seeing what we’re up against … The cut and paste below is from a LinkedIn post by the CEO who was interviewed by Tamarindo Insight …

… But O’Cinneide argues that, in the longer term, the numbers make sense. “Will revenues be a lot lower over the 20-year horizon that you need to own this asset for? I think it’ll average out. So as long as investors have taken an appropriately mature attitude to how capital should work, how leverage should work, how diversification should work, we as citizens and participants in the energy society should welcome there being a big stable of energy storage facilities in GB.”

Cheeky @@@@ … “as long as investors take a mature attitude” … how about the CEO taking a “mature attitude” when he has overseen a 50% decline in the share price since it’s high and is unable to be anything but opaque on investor concerns? It beggars belief and took all my patience not to comment on the post in LinkedIn!!!😡🫣🤷‍♂️

[dickiehh] 26/4/2024 18:37

Does it make sense that GRID is up 35 % this week and GSF is down -5+%? Both of them are benefitting from the increased revenues from BESS aren't they??

[waterloo01] 26/4/2024 16:42

Indeed no debt servicing, which is, geographic split aside, why GRID et all are troubled. The other thing about depreciation, it's not 'cash' as such, so doesn't effect the ability to pay divi's out of cash and cash flow. It also comes before tax, so reduces that somewhat. No question though, both through increasing prices (UK) and new capacity on stream, they need to grow revenues.

[stemis] 26/4/2024 16:34

Post reporting, yes, they've raised a $60m 3 year loan from First Citizen for Red Rock at subsidiary level.

[cc2014] 26/4/2024 15:54

I would have to check but isn't all Big Rock's debt at the project level and therefore in the subsidiary.

As far as I'm aware right now GSF have no debt at the company level as the only debt is on the Big Rock project.

[stemis] 26/4/2024 15:12

Is the debt at subsidiary level, ie the trading co's, being amortised? Some of the infrastructure co's do, some don't - makes a big difference to the numbers.

BSIF do something like that, which produces a weird hybrid between profit and cashflow. However, I don't think GSF have any debt at subsidiary level.

GSF aren't the worst offender by a long way in terms of disclosure. SEIT (mentioned above) produce hardly any consistent financial performance data on their subsidiaries.

Whilst GSF don't have to produce consolidated accounts, there's nothing to stop them producing a proforma consolidation as part of their narrative. But they don't...

[fordtin] 26/4/2024 15:12

How does the capacity growth affect your forecast for future EBITDA & dividend cover?




 
 




Date
Operational capacity (MW)
change


 
 
 


March 2025'
800.1
"increase its operational capacity above 800 MW over the next 12 months" (reported March 2024)


 
 
 


May 2024'
478.4
 "energisation of the 57 MW Enderby project (May 2024)"


 
 
 


March 2024'
436.1
"acquired the remaining 49% stake from Low Carbon in two of its existing Irish projects: Porterstown" &" Porterstown comprises a 30MW operational asset"


 
 
 


February 2024'
421.4
"Post-period, the Company's energised capacity increased by 49.9 MW to reach 421.4 MW, following the successful energisation of Ferrymuir on 12 February."


 
 
 


September 2023'
371.5
"September's energisation of 79.9 MW of additional capacity"


 
 
 


March 2023'
291.6
 


 
 
 


March 2022'
231.7
 


 
 

[riskvsreward] 26/4/2024 14:30

How does this one compare with Gcp and Seit. It feels the other two have better certainty and quality but on similar and more secured yield.

[spectoacc] 26/4/2024 14:21

Is the debt at subsidiary level, ie the trading co's, being amortised? Some of the infrastructure co's do, some don't - makes a big difference to the numbers.

[stemis] 26/4/2024 14:19

What do you mean?

[spectoacc] 26/4/2024 13:54

Do the subsids amortise debt?