Strange drop in the bid at the end. Is something in the pipeline? |
also another odd thing with GSF is that their non-exec Chair Patrick Cox works also with their direct 'peer' Gresham House |
I’ve been banging on about the extortionate fees that #GSC take for ages. The fact that the CEO of GSF is a beneficiary doesn’t help. Servicing the debt and a 7p divi is a tough ask without this burden. |
It's not appropriate period |
Lets see where full yr revenues and divi cover settle. It will be clear at that point if the current fee structure is appropriate or not (not). The managers, cost aside seem to be doing a decent job. |
Institutional shareholders need to put the gun to managements head on rebasing fees to share price - if they don't then get someone else into manage it |
Disappointing ResponseWell well I never |
Disappointing response, but guess we still await the tax refund, confirmation of 4th Q divi and steady, covered revenues in next FY. |
For me it's about the revenue. Can it make the margin needed on the cost of buying energy vs the price they can charge to supply it back.
Last year wasn't good. Indications to date and other BESSers suggest this year better. |
The thing that jumped out at me was the unrealistic discount rates for assets that have now been completed. 8.75% for Ferrymuir?
I can maybe buy the argument for 9.5% on Big Rock because of the substantial fixed revenue element, but 8.75% for UK BESS is not where the market is... HEIT has its assets on 10.5% IIRC, so would require an above-NAV bid to justify how GSF is valuing UK assets. |
I take the point about unrealistic NAV but the discount here is madness imho. It will close if the company delivers cash from the now steady state portfolio, with the potential of ITC cash too. And there has to be possibility of a takeover as we are seeing elsewhere in the sector. Absolute steal for me |
Looks to me as though March NAV should also increase due to reduced discount rate on assets now energised. Holding announcement from HEIT - exclusivity now over but parties still talking |
With the heit offer we can see if the nav is correct I suspect the figures given are but it will be in black and white soon. |
Would have preferred something on the tax credit, but reads well overall IMO. GSF is the wrong price. |
Made up NAV RNS out confirming OPEX up and debt of £80m in play. No news on the receipt or sale of tax credit. Dividend of 1p confirmed. |
Next divi 1.0p ! |
HEIT takeover deadline next Monday 10th Mar
Last NAV is 93p. Any thoughts on how much they will get eventually?
Anything upwards of 85ish hyper bullish for GRID and GSF |
Decent volume going through!
See Musk has just secured favourable tax settlement in Texas to build battery storage, not dissimilar to our scheme. Can't see it being cancelled, as the company have stated |
 GRID's update this AM suggest a recovery in UK revenues through BESS, with more room to improve
"The revenue environment in 2024 evolved during the year. 2024 started with BESS assets being severely under-utilised (being skipped up to 95% of the time in January 2024 according to Modo Energy[1]) in the Balancing Mechanism resulting in unexpectedly low revenues in Q1 2024, whereas revenues had been expected to increase following the launch of the new Open Balancing Platform by The National Energy System Operator (NESO). From Q2, utilisation in the Balancing Mechanism started to improve, ending the year on a high, and in Q4 2024, the revenue performance of the portfolio had recovered to an annualised revenue rate of £75,000 per MW per year. Nonetheless there is still a lot of room for improvement as NESO is still skipping batteries over 80% of the time according to data published by Modo Energy1. Even NESO has now admitted that skip rates in the first seven months of 2024 were around 83%[2]. |
Report in CityWire but nothing we dont already know |
The interim results say gearing is circa 11%. Hoping that's not a Bernie Madoff, assume also it's based on NAV not share price |
I don’t think any of us know until the next set of financials just how much borrowing is in play. Obviously, it’s only the borrowing that has been taken out, not the facility.
Re: dividing up the income and costs and whether one wants to attribute them on an asset by asset basis, the simple truth is that income earned needs to be able to cover any borrowing that remains following receipt and sale of the ITC plus the ‘planned’; dividend.
Some of the income is locked-in and GSF appear confident of beating the market as far as the rest is concerned … I remain sceptical on the latter point.
On a separate matter, there is obviously a time-lag between energisation, optimisation and earning income. I don’t think we’ve ever been given any specifics around this but does anybody know any detail? |
There isn't substantial debt at Big Rock yet. (the announced facility sizes don't automatically mean drawn down amounts) And to the extent that Big Rock is project financed later, that simply becomes net cash at the corporate level.
But the point isn't to divide GSF's Enterprise Value into little chunks, it's to show how much value comes from a single asset with a substantial amount of fixed revenue. (if necessary it gets sold to "prove NAV" and pay a huge dividend)
The focus on debt in this thread is overdone. Net debt was roughly £30-40m at 30 September. Sure it's better to pay down the RCF than waste the money. But it would be complete madness to repay a tax-deductible project finance loan costing 7-8% instead of paying more cash to shareholders who have return expectations in the mid-teens - rational amounts of leverage are very beneficial to us. |
We will only know whether the share is undervalued when the value of the ITC is realised, hopefully the BOD will not be so stupid as to do anything else other than pay it all off the debt. Income will then need to support the remaining debt servicing and reduction plus - if the divi is to be maintained - a 7p annual divi. A baseline income that doesn’t fluctuate wildly is also a prerequisite for any rerate of the share price. You can’t do the math on all of the above yet. |
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