Gore Street Energy Storage Share Discussion Threads

[cc2014] 11/3/2024 16:43

FWIW I feel Rathbones are responsible for a fair chunk of the selling in the IT sector. That won't stop them selling more though!

[waterloo01] 11/3/2024 16:36

Guess with the merger they were overweight. Divi 12%. Discount to NAV 42%


James Carthew: ‘Buy’ great opportunities in run-down renewables

[spectoacc] 11/3/2024 16:19

Just another 11%..

There's others in similar position - is creating some bargains, but bargains that'll go lower first.

[cwa1] 11/3/2024 16:17

Rathbones continuing to reduce. Wonder how low they want to go? Zero? Long way to go if they want to sell out completely :-/

[waterloo01] 11/3/2024 10:51

Money still heading toward the sector

NextEnergy Capital raises US$110 million for Europe/US solar and storage fund

[alan pt] 11/3/2024 10:06

It is discussed because sudden changes in direction are not unknown

To take a recent example, DGI9 on 18th July 23
www.londonstockexchange.com/news-article/DGI9/company-update/16044584
"The Board reaffirms it is targeting an aggregate dividend of 6.0 pence per Ordinary Share for the year ending 31 December 2023"

DGI9 on 28th Sept 23 (barely more than 2 months later)
www.londonstockexchange.com/news-article/DGI9/syndication-q2-dividend-shareholder-consultation/16143203
"The Board has therefore elected to not declare the Q2 2023 dividend and withdraw its target dividend of 6.0 pence per Ordinary Share for the year ending 31 December 2023"

A particularly egregious example, but the point is that these statements mean precisely nothing

[scruff1] 11/3/2024 08:35

Would that the share price was similarly remarkable in its resilience. Usual start to another week I see and although I havent checked em the sales are already well ahead of the few buys so it looks like the trajectory continues.

[melody9999] 10/3/2024 23:09

I don't think it can be much clearer than this so not sure why it is still discussed.

Based on the current year's performance, GSF reaffirms its commitment to a dividend target of 7% of NAV for the fiscal year.

If you were GSF management, would you make this commitment unless you were comfortable? And note it is 7% of NAV...which has been remarkably resilient at over 100p considering the change in share price

[clissold345] 08/3/2024 15:30

loglorry1 - Apparently GSF's energy storage projects have an "over 20-year life". GSF say this in the last annual report: "Given the over 20-year life of energy storage projects, management believes a careful approach to investment and construction is prudent for energy storage".

[debeege] 08/3/2024 11:58

"The Company's operational fleet is on track to more than double by the end of 2024."

With such an increase in the fleet surely the dividend is only going to go up? Any projections on the dividend since debt is so low, fleet expansion, and already fully covered divi?

[cc2014] 08/3/2024 10:19

Dividend policy

· GSF reaffirms its dividend target of 7% of NAV for the fiscal year. It has met its dividend target since listing.

· The Company's dividend cover has been trending upward and was fully covered in the last reported quarter (September-end 2023).


Liquidity and Dividends:

The Board seeks to reassure shareholders and address any potential concerns on liquidity management and dividends. While these are recognised as valid in light of recent sector news, the Board wishes to provide comfort to investors. The Company maintains a strong balance sheet, with sufficient cash to meet its contractual obligations and undrawn lines of credit totalling c.£83 million. In line with its prudent investment policy on leverage, the Company has a low debt burden and, consequently, a low refinancing risk. The Company also continues to generate a healthy operational cash flow and fully covered its dividend during the last reported quarter (September-end 2023).

The Company continues to follow its mandate to deliver sustainable long-term returns for its investors. Based on the current year's performance, GSF reaffirms its commitment to a dividend target of 7% of NAV for the fiscal year.



I don't think the dividend is at risk. If you take them at their word for dividend being 7% of NAV the dividend would actually increase from 7.5p to 7.9p. The market will go crazy if that happens but I see it as very unlikely

[alan pt] 08/3/2024 09:55

A little odd to see it drifting downward just before ex-divi. Would expect to see declaration Monday, ex-divi about a week later

Worries about divi reduction? Or about the NAV update?

[rambutan2] 07/3/2024 14:26

TRIG, results out last week, and just bought a BESS developer, is saying that BESS is still v attractive if develop from start and 20%irr is possible.

[waterloo01] 07/3/2024 13:02

Another thing you need to account for is that the actual cost of the battery (which as you point out is going down currently) is only one factor in the costs of building the plant, including ground works, connections, controls etc etc. In many ways the actual battery cell (which is the wasting bit) is 7yr cycle consumable.

[loglorry1] 07/3/2024 12:51

Spodumene price (which they refine into Li Batteries) is also falling very fast

hxxps://www.fastmarkets.com/insights/participants-speculate-price-floor-for-spodumene/

[waterloo01] 07/3/2024 12:42

loglorry17 Mar '24 - 12:10 - 1145 of 1146
0 1 0
Thanks so we rely on nobody with cheaper batteries coming in and undercutting us?

More to the point is replacement batteries should come down in price, which works in our favour. Meanwhile the value is in the on going revenue and connections/contracts.

Much of the MW is in the process of being built, so will only see the revenue once up and running (esp US)

[loglorry1] 07/3/2024 12:42

I suppose the energy storage bulls would argue that storage will become more in demand and so they returns become more profitable as the shortage in energy becomes more acute.

Recent history shows that Lith battery prices have fallen a lot though so I'm not sure its one for me.

[stemis] 07/3/2024 12:31

Which ties back to my point about why I'm not sure NAV (and therefore discount) is a useful metric against which to judge value. The NAVs are discounted cashflows and we've no idea over what timeframe, what discount factor, prices and even residual values are being used in an environment in which the batteries may become technologically out of date.

[cc2014] 07/3/2024 12:00

Short answer is that GSF can choose

What tends to happen in the industry is that a percentage gets locked in on short or long term contracts and rest is "trading" at spot.

[loglorry1] 07/3/2024 11:27

I'm looking at this one and have a question. Will email IR as well and see what they say.

As @steMis points out it looks rubbish on current earnings but they have a lot of capacity about to come on stream. What I don't understand is if this new capacity (and existing) has some sort of long term contract underpinning its income stream? Do they just make what they can providing the battery storage at the time and hope it fits their forecast or have they locked in some multi-year inflation proof deals?

If the former then there is an obvious concern that some cheaper provider will just come in. The price of Lithium is dropping rapidly and there are other technologies which might disrupt their sunk investment coming along fast.

[stemis] 07/3/2024 11:15

I like a dividend as much as the next man but what puts me off vehicles like GSF is that, as an investment entity under IFRS10, they don't consolidate their subsidiaries but instead put a value on them based on what they think they are worth (based on a set of forward projections none of us have any knowledge of). Consequently I don't think the NAV has any real meaning (imagine if other non investment entities could do that, what 'NAVs' they'd come up with).

GSF to be fair do produce some data on underlying performance of their 'investments' so let me see if I have this right. From their interim accounts

The portfolio generated £19.3m of revenue during the period, amounting to £12.2m in operational EBITDA.

Since their investments are 'valued' at £469.3m I make that around 12 x revenue and 19 x ebitda?

Administrative and other expenses (3,834,334)

I presume these are holding company expenses? Which if deducted from the ebitda of their subsidiaries, would mean Group ebitda for the half year of £8.4m?

The Company's cash balance as of 30 September was £75.0m with a further £13.9m held across its subsidiaries

So consolidated 'Group' cash of £88.9m. With market cap at 65p being £322.0m, that would give an EV of £233.1m? So around 14 x ebitda?

Dividends in the period were 3.5p at a cost of £16.8m (on the share count at the time). That's double the 'consolidated' ebitda.

If they did produce consolidated accounts I wonder how attractive their shares would look.

Happy to have those numbers pulled apart and to be proved wrong since, as I said, who wouldn't like a dividend yield of 11-12%?

[scruff1] 06/3/2024 18:35

Someone must want out in a hurry!! Its been a long hurry