Gore Street Energy Storage Share Discussion Threads

[craigso] 25/11/2024 17:49

@Brucie5

No. I don't work in BESS. But I used to work for a major power company doing M&A and project finance, so I know the kinds of metrics that Boards of Directors would want to see when considering new investments.

The value per MW is usually a reflection of the cost of fuel. (the more expensive the fuel, the less profit per MWh generated and therefore the lower "value" per MW installed) The tricky thing about BESS is that the cost of the "fuel" for a 2-hour battery is quite variable. It could be sub-zero in certain situations or it could be relatively high. (but still worth charging up the battery ahead of an expected demand peak) You also only get 1 or 2 cycles per day, whilst a wind or solar farm could be generating power for 8+ hours each day and other technologies are "baseload". This is why the monthly £ / MW revenue number is quoted by the funds, but moves around so much.

There is always going to be demand for BESS from major power companies who need to match generation with customer demand, especially those who want to sell "green electricity". I am less sure of the raison-d'etre for standalone investment trusts - other than the fact that you can just drop a box on the ground, connect to the grid and you're off. (whereas a gas or nuclear plant requires a bunch of people who know exactly what they're doing)

In that sense, what makes GSF more attractive - the geographical diversification - makes it less likely that that it might be bought whole. Whereas it's easy to imagine an Octopus, say, snapping up HEIT or GRID when buying a fund is cheaper than building out their own BESS.

[brucie5] 25/11/2024 17:18

craigso23 Nov '24 - 14:15 - 2075 of 2076
0 7
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Craig, that's a great post, thank you so much. Do you work in BESS by any chance?
I hold GSF across a number of folios, and have not felt inclined to sell despite paper losses.

We're now at 52% discount and 14% yield, which can only be explained as peeps not believing in either! So your figures, assuming them to be authoritative, lend credence to the extreme value case. I may be buying more with incoming dividends - in which case, tin hats on!
;)

[waterloo01] 23/11/2024 14:38

750 mw should be operational by Feb 25, once Enderby, Dogfish and Big rock come online. (Prob close to 700mw by yr end.)

Interesting analysis. Thanks.

[craigso] 23/11/2024 14:15

A useful rule of thumb in the electricity business is £ / MW installed. Gore Street doesn't make it easy, but it looks like they have 750 MW operational or very close. The company has a little bit of net cash at the moment, so we're looking at a market cap of £250m against 750 MW operational. £333k / MW is ridiculously low.

We'll see what HEIT sells itself for, but it's likely to be at least double that number (per MW). There is no shortage of electricity companies / funds looking to expand into the BESS space. GSF itself quoted £600k / MW as replacement cost and people are building BESS all over...

Add the fact that GSF is net cash - and therefore at zero risk of going bankrupt - the current share price is ridiculously low. Will that stop it from going any lower? No... but at these levels there will be PE / infrastructure / renewables etc. funds sharpening their pencils to get a massive bargain.

[waterloo01] 22/11/2024 18:35

cocopah, I know that all too well and I'm not in disagreement with you, but once the knife stops falling...there is a real and potentially very profitable business here. IMO

[cocopah] 22/11/2024 18:28

#waterloo01 catching a falling knife whilst trying to average down is always fraught with risk. The main problem here has always been prompt execution and clear and honest communication especially on income.

We also all know that #GSC unashamedly take a lot out(the difference between the two dividend covers - fund and operational - is testament to that!).

Management want us to believe that it will all magically come together in January (despite evidence that previous projects have slipped considerably). They’re also very confident that they will receive and be able to sell the tax credit in a tight time window. Meanwhile income pressures are building in Germany, Texas and Ireland.

I would like to see directors taking more skin in the game at this level too!

Like many here, I am seriously under water so holding for want of a better option.

[waterloo01] 22/11/2024 17:51

Agree, but then I would, but I continue to add at these prices. Over 50% discount to NAV is daft given the potential. I think they will do the 7p divi this yr if the tax credit comes in, 5p if not, and they should have built out capacity FY 25 to reach divi cover. If sentiment changes, and it's poor across the sector, so will the share price IMO

[pretax2] 22/11/2024 17:04

I think I went through the pain barrier with Gore Street last week. Very close to selling; but then had a period of reflection (considering the dividend potential) and now I’m thinking about adding more.
If a Martian were to read the RNSes, look at the climate crisis and the political emphasis on sustainable energy, they would guess that the share price was at or above NAV.
I concluded that the ONLY thing wrong with GSF (give that it’s still in the earlier stages of growth) is the share price That’s not a reason to sell; it’s a reason to buy.

[waterloo01] 22/11/2024 14:44

All the renewable/battery funds have very similar charts. Many think that Gore is the best in the sector, very lowly geared compared to most and diversified across markets.

All way too gloomy here given fundamentals. Last 2 RNS's being secured funding and $14m a year, 10 yr contract on one US asset.

It's almost like traders are hoping for yet another RIET type wind up, as the assets have significant value. I really hope they fail, if that is the case.

Edit: Big rock alone, should bring in annual revenue of $35m. (ie $14m fixed making up 40% of expected revenues)

[cellular3] 22/11/2024 14:06

Yeah gsf graph is something else 😬

[george stobart] 22/11/2024 13:06

welcome to the house of pain and suffering

we'll slam the dungeon door shut and put you into a chamber with screens of GSF live price graphs

this is the only way to pursue immortality

purge and purify

[kev0856153] 22/11/2024 12:49

After doing some in depth, highly detailed research I've decided to take an initial position in this pish.

[cocopah] 22/11/2024 12:27

#cc2014 now we look to have broken the 50p barrier I see nothing to stop this fall increasing. The numbers due in December must be shocking otherwise we would have heard some calming words from the BoD. Worrying times indeed! 🫣

[cc2014] 22/11/2024 11:22

Ok, so I think I'm probably one of the most pessimistic people about this share but even so I'm looking at the share price and thinking things are getting a bit stupid.

For sure the Irish revenues are under pressure, Texas ones too and will Enderby ever get finished but there seem to be reasonable assurances around the US assets and UK revenues are at least stable whilst acknowledging they aren't great.

I also get that gilts have not been helpful but nonetheless I keep looking at the share price and thinking it's been bashed around enough. Of course it's not the only one and there are plenty of other candidates to put your money on.

So, I call a bottom here, I'm not sure if it will be a bottom or any rally will just be a DCB, but it seems low enough to me for now.

Am I putting any cash into GSF, well no, as I've spent my elsewhere on things which I hope will do even better, but surely, (he says to himself), surely it's time for a bounce if for no other reasons that stocks don't fall in straight lines.

GLA

[cc2014] 22/11/2024 09:24

Waterloo. The evidence suggests there is plenty of excess capacity on the grid

[george stobart] 22/11/2024 09:09

we're going to be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism

[waterloo01] 22/11/2024 08:32

UK power using everything it can get, so batteries very much in use today.

[scruff1] 22/11/2024 07:43

Yep its beginning to look like 20p is no longer impossible. If Big Rock is on time I will be gobsmacked but even so I cant see this ever getting back to 100p. I would have thought that with Big Rock on the verge of coming into the fold even with the enhanced debt there would have at least been a bit of a whiff of positivity and a break from the incessant drip down - but no.

[george stobbart] 22/11/2024 07:24

GSF Belongs to the 20p purgatory and doldrums as long as the scums in GSC keep managing the fund

[waterloo01] 22/11/2024 07:17

Winds back, shame it doesn't seem to blow our way. Below 50p gift or value trap?

[waterloo01] 19/11/2024 17:41

atlantic, it's possible but would require more than a few quarters of clear divi cover. .The current discount to NAV more than reflects the current situation. I added a few at 51p.