Gore Street Energy Storage Share Discussion Threads

[cruelladeville] 27/11/2024 15:13

Yes, at HEIT I think a sale price of >70p a share should be realistically obtainable. I am a bit surprised the shares are languishing at ~50p actually. There's no news leaking out from HEIT which might suggest there isn't anything worth leaking about.

[scruff1] 27/11/2024 14:54

I thought it was going to be announced in the results on the 12th whether the divi was to be 6p or 7p. Am I wrong?

[craigso] 27/11/2024 13:03

@stargazer

Indeed NAV is just a number until realised. And I own a couple of ITs where even cash realisations haven't fully flowed through to the share price, even with major buybacks announced.

There's enough M&A activity in the power sector for possible realisations to remain an important factor in placing a floor on value. Unfortunately our next continuation vote is in 2028, so the investment manager doesn't really have to consider selling assets for a couple of years. But an asset sale to fund growth might end up on the table - once the upsized RCF is spent.

But I still reckon that a hedge fund or similar could buy GSF for 80p and sell the component parts for 100p+. HEIT should soon show what UK BESS can be sold for...

[skinny] 27/11/2024 12:55

Thanks both of you.

[wskill] 27/11/2024 12:48

New dividend policy as below.

Dividend Policy

We remain committed to regular capital allocation reviews and comprehensive analytical assessments, while remaining receptive to shareholder feedback, to ensure the Company continues to be managed effectively for investors. Following this year's review, the Board has decided to adjust the Company's dividend policy to better align it with the construction schedule of the portfolio.

It is the Directors' intention to continue to pay, in the absence of unforeseen circumstances, a dividend of 7.0 pence per ordinary share for the financial year subject to market conditions and performance, financial position and outlook, and fiscal environment. This is consistent with investors' expectations based on the current NAV but, from the 2024/25 financial year, the profile and quantum of dividend distributions will be more closely aligned with operational and other cashflows rather than NAV.

Moving from roughly equal payments across all quarters, the Board has determined to target a dividend of 1.0 pence per Ordinary Share for each of the first three quarters of the financial year. It is intended the amount of the final quarterly dividend (announced in June and paid in July) will make up the balance of the annual dividend target subject to cash flows at the time. As with the current dividend policy, all dividends remain at the discretion of the Board.

This is a prudent adjustment to the dividend policy reflecting the maturing nature of the Company's portfolio, with a transformative year for increasing operational and revenue-generating capacity.

[outlawinvestor] 27/11/2024 12:43

Quarterly dividends - their intention is that the final quarter marks to 7p.

[skinny] 27/11/2024 12:28

I notice that the 1st interim was halved - is this likely to be the case going forward?

If so, a revised dividend of 3.75p?

Apologies if this has been covered already.

[stargazerspark] 27/11/2024 11:47

It's worth keeping in mind that for infrastructure funds the upside is much more limited vs NAV than in traditional equity. Ie you get all of any mismanagement/changing landscape, but minimal upside.

The equity value in these structures accrues to the portfolio manager (via knowledge, experienced teams and future pipeline) who also take a tidy fee from it.

I own shares so believe I the value, but the dynamics are bad.

Unless there is a realisation, NAV is only a number. The share price will a function of expected dividend yield to give the required investor IRR. Expectations are poor and based on little hard evidence.

I suspect the floor is based on something like 3 years to a realisation possibility, NAV discounted by 0-20% to reflect a disposal and an IRR of 10%+ for risk.
Hence we see the share price reset every time NAV moves, even though the reductions "should" increase confidence.

[cocopah] 27/11/2024 11:19

I hope other investors ask the tough questions of the CEO on the Investor Meets platform on the 12th. Although he has been quiet of late O’Cinniede had plenty to say for himself when the share price was over £1.00.

[wskill] 27/11/2024 10:49

Yes Craigso that was my thoughts yesterday when I topped up in 2 lots around 55k GSF under 50p worst case scenario to me we were a few weeks late with big rock hardly justifies the fall I would say ,as for dividends happy enough with 8% if we get the whole 7p i will be over the moon.

You have to buy when the II are selling they always throw the baby out with the bath water ,far to cheap at present buy an asset at 50% of its build cost I will take that any day of the week.

[craigso] 27/11/2024 10:48

DGI9? LOL. Another one of my "high conviction" picks that is currently well underwater. (if my crystal ball was working better I'd buy closer to the bottom)

It's actually a great comparison because its current version is also cash generative with little corporate debt (Arqiva being non-recourse to DGI), but unloved by the market because of publishing NAVs that didn't seem credible. Yet marking down NAV to a more realistic level only made things worse for DGI's share price.

Identifying heavily-discounted investment trusts (and the catalysts for narrowing that discount) is an enjoyable, and potentially very lucrative, investment strategy.

With GSF, I think that catalyst will simply be delivering cash flows in 2025 from a fully operational portfolio with a decent % of fixed revenues. (plus the US tax credit)

[brucie5] 27/11/2024 09:52

Good points, Craigso. So long as this does not turn out to be another, better disguised version of DG19 (!!!) BESS is surely front and centre of any effective programme of decarbonisation via solar/wind.

[craigso] 27/11/2024 09:28

Will there still be a dividend?

Why not? Apart from some interest on the RCF and the (excessive) manager fees, there aren't really any costs that need to be covered by revenues. So a fully-operational GSF is undoubtedly cash flow positive. And investment trusts need to distribute 85% (I believe) of their net income.

You can argue all day about whether GSF should be promising / hinting / whatever about 7p, but once everything is online and they actually start earning more than 7p per share, people will regret not having loaded up at 50p per share.

And if it's never 7p but 4-5p? That's still a very reasonable return from here. And as I've mentioned previously, if the share price stays at this level, somebody will eventually decide that buying GSF is far cheaper than building BESS themselves.

[cellular3] 27/11/2024 08:35

That’s the question-will there still be a dividend

[brucie5] 27/11/2024 08:31

Pretax, I hope you're right. But I make the dividend nearer 14% at current level..?

[scruff1] 27/11/2024 07:56

Results on the 12th. Divi will be?

[outlawinvestor] 26/11/2024 22:30

Nasty chart tbh!

However, I hold for the income for as long as it is on offer. That said the speed of decline easily tips total returns into zero or negative territory and I say that as a fairly new accumulator!

Energy infrastructure assets will remain in demand for the present, near and far future so fair value is likely very close to NAV and will revise upwards eventually.

Morningstar provide a view on buying/selling activity by funds and institutions at - possibly useful info for the curious.

[cocopah] 26/11/2024 21:20

Hmm now we are sub 50p I don’t see the bleeding stopping in the short-term … it’s going to take a heck of a turn around from here. Silence from the company doesn’t help. Painful to watch. 🫣

[cellular3] 26/11/2024 12:31

Short the Reverend Starmer-£3miion votes already for general election

[wskill] 26/11/2024 09:28

I have managed to reduce my loss on GSF from 36% to 18% on paper not counting dividends ,I have averaged down not usually a great plan but its the only one I had.

[brucie5] 26/11/2024 09:24

scruff126 Nov '24 - 08:38 - 2084 of 2084
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George has a point though. Shorting GSF would have been far more profitable than any other policy to date.
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He's not just a shorter, but some kind of Pizza-gate weirdo; I can tolerate a contrary investment case, but when combined with conspiracy wielding loudmouth spouting obscenities, my patience wears thin.

FWIW, I've just added this morning. Now fully 5% of my folio and I intend to hang on for the dividends and until such time as the market reassesses.

Of course I could be wrong. In capital terms alone, I have been so far. But that can be the risk of a high dividend approach; though over time you hope to be more right than wrong.

[scruff1] 26/11/2024 08:38

George has a point though. Shorting GSF would have been far more profitable than any other policy to date