Gore Street Energy Storage Share Discussion Threads

[george stobbart] 27/5/2024 19:54

Blue Horseshoe loves GSF. RNS tomorrow 7am

[stemis] 25/5/2024 10:20

Yes, I agree Cocopah

[daveoz1] 25/5/2024 09:08

g stobbart 1571: Ah, thanks for that. (I think!) If you could make me happier about the GSF price dropping from 95+ p to 64p, I'd be really grateful..

[cocopah] 24/5/2024 15:53

#SteMIS I’m not arguing about what you are saying, or saying that it’s not right or relevant, it is.

I didn’t mention the specific level of fees in my posts, I simply pointed out that there are a whole host of fees and charges (or simply gifts) that Gore Street Capital is making which in total amounts to taking the pi&s out of #GSF investors whilst the share price is in the bin and of course it impacts dividend coverage.

I would say that I am surprised nobody has challenged the significant increase in corporate service fees from £1.89m in 2022, to £5.58m in 2023 … and they have the audacity to call them KPIs in the annual report!

At the next meeting if not before we should all be asking questions about this and how management can justify it.

My point about the increase in the number of staff at Gore Street Capital (and their wages and performance related pay), in their capacity providing services to #GSF, also appears completely unjustified.

I think we’re on the same page in thinking that it’s not on! 👍🏻😎

[george stobart] 24/5/2024 13:23

These comments have been relevant to your whole life, you just didn't know it

[daveoz1] 24/5/2024 13:05

g stobbart: Are these comments relevant to anything?

[stemis] 24/5/2024 11:27

Cocopah. You are, not unsurprisingly, missing my point. Gore Capital don't charge GSF £7.4m, they charge over £13m, although GSF only disclose £7.4m. I'm afraid I have to go out, but when I return I'll show you how they do it and technically stay within the truth of their disclosure.

Whilst it's strictly true that the investment manager (Gore Street Capital) only charge £7.4m to Gore Street Energy Fund PLC, they also route further charges through Gore Street Capital's, subsidiary, Gore Street Services Limited, directly to the porfolio companies of GSF.

Gore Street Services provides 'management services' to these portfolio companies and charges them £5.6m. But Gore Street Services has no employees. Instead it pays Gore Street Capital to provide these services, effectively routing the majority of the income back to them.

So whilst it's technically true that (Gore Street Capital) is only charging £7.4m to Gore Street Energy Fund PLC in reality GSF is being charged £13m.

So out of an group ebitda of £29.8m, and probably a PBT of at most £24.8m, the investment manager is taking out £13m, leaving at most £11.8m for shareholders.

Nice work if you can get it.

[cc2014] 24/5/2024 09:39

Here are my numbers

First figure is 31/03/24, Second figure is after 800MW buildout

Operational Capacity 311.5, 800.0
Revenue 41.4m, 106.3m (pro-rata)
Operational EBITDA 28.4m, 72.9m (pro-rata)
Fund EBITDA 20.4m, 64.9m (fixed)
Debt 12.0m (150m at 8%)
Nett Nett 20.4m, 52.9m

52.9m/505m shares = 10.4p per shares EPS or a 16% yield based on current share price of 65p

Notes:
I'm happy to pro-rata the revenue as it's only UK that's depressed and anyway most of that is already in 2024 results.
Geographical mix should improve average revenue per Mw so I'm being cautious
Pro-rating the running costs will be too high due to larger sites being lower running cost per unit so that's cautious too
Debt forecast is taken from 2023 accounts.

I suggest the risk is the timeline on the buildout.

A price target of 90p does not seem unreasonable to me by Xmas if the assets get energised on time.

[stemis] 24/5/2024 07:58

No waterloo01, that's not the explanation.

Cocopah. You are, not unsurprisingly, missing my point. Gore Capital don't charge GSF £7.4m, they charge over £13m, although GSF only disclose £7.4m. I'm afraid I have to go out, but when I return I'll show you how they do it and technically stay within the truth of their disclosure.

Smoke and mirrors...

[cc2014] 24/5/2024 07:55

This is an interesting article.




By implication GSF's Texas batteries are generating 56% more than this time last year.

The summer will be interesting. As far as I can remember GSF changed their optimiser in the late summer and missed out on a large amount of the revenue opportunity in Texas last summer.

The price spikes in Ercot are driven by more renewables on the grid. However, there is one other factor. When it gets really hot the gas fired generators are so old they have to shut they down as they overheat, meaning there is nowhere else to go but batteries as the marginal source of power.

[waterloo01] 24/5/2024 07:50

Stemis, they must have earnings that are related to other work outside of GSF, ie the Japanese JV

[george stobbart] 24/5/2024 06:28

Sometimes women marry men for their money but they always ensure they have fallen in love with them

[cocopah] 24/5/2024 05:51

I guess the point I’m making is that investors should look into the smokescreen that is Gore Street Capital and start to hold the CEO to account (at least publicly) for taking the pi&s out of #GSF shareholders. Everything from donations to universities, to performance payments, management fees, consultancy fees, the wage bill … all whilst investors have seen their hard-earned decimated by 40%. Trust is key and the workings of Gore Street Capital combined with the opacity of #GSF is the opposite of trust.

[stemis] 23/5/2024 21:29

I agree but you are missing something in the accounts of Gore Street Capital. In the accounts of GSF it says that the investment fees and performance fees charged to GSF (by Gore Street Capital) were £7.4m. However in the accounts of Gore Street Capital, the turnover is £13.5m....

[cocopah] 23/5/2024 21:02

No point arguing about EBITDA when you see the accounts of Gore Street Capital … staff numbers doubled, CEO paid £50k last year for ‘consultancy fees’ on top of handsome rewards … pants taken down comes to mind! 😡🫣

[stemis] 23/5/2024 19:20

@Stemis Er, yes, I know what EBITDA is and that was exactly my point, the receivable interest was excluded, so it's an addition that you are failing to account for in your calculations

The majority of interest in the holding company is interest receivables on loans to subsidiaries. The interest payable in the subsidiaries is excluded from the operational (i.e. portfolio) ebitda, so you can't include the receivable in the holding company as group income.

[cocopah] 23/5/2024 19:16

Below is the PDF link to Gore Street Capital’s most recent accounts. Take a look at the management and performance fees. As an investor I find it difficult to swallow these numbers when the share price has declined so significantly. It’s easy for the CEO to claim that we’re all in this together when he is amply rewarded for his ‘performance’!!🫣

[george stobbart] 23/5/2024 19:04

The relationship was purely romantic but she told me this is a 2 for 1 split during the divorce.

Now I drink coca cola and eat crisps with chicken nuggets every night

[williamcooper104] 23/5/2024 18:40

You exclude interest in ebitda because you want to get to an unlevereged enterprise value Eg even if you've got no debt and loads of cash you want to exclude that interest as you are going to exclude the cash to get to the enterprise value But when that interest is interest on sub-debt then it's a core earning and not a return on an asset separate from the core business so you ought not to exclude it

[alan pt] 23/5/2024 17:02

@Stemis Er, yes, I know what EBITDA is and that was exactly my point, the receivable interest was excluded, so it's an addition that you are failing to account for in your calculations

I will read the finals with interest, until then it's all a bit moot. I do agree that (unfortunately like many trusts) the recent release was selective in the information provided, it's always frustrating

[cc2014] 23/5/2024 15:03

I'm not sure what to make over Rathbones.

They are selling down in a controlled manner but it's hard to tell whether they are selling when the price goes above 65p ish or whether they are just selling a few every day.

They don't appear in any hurry but they do have 50m left to shift if that's their intention. Personally I don't think it's their intention to go to zero else they would be in more of a hurry. It seems more likely it's continued repositioning after the merger and at some point they will cease.

[waterloo01] 23/5/2024 13:48

""Across the sector, it is increasingly apparent that the range of strategies employed by asset owners are yielding increasingly different financial outcomes, with Gore Street producing revenues c.3x of our peers and lowering the volatility of those revenues by 50%. "

"However, it is clear that the impact of capital allocation strategies, whether based on gearing levels, geography concentrations or capital expenditure, is a key component of a company's long-term viability. Within the sector, we have seen reports of a resurgence in GB revenue based on annualising a very limited data set of revenue over a 15-day period in April. It should be noted that GSF's estimated average revenue of £15.1 / MW / hr (or £133k / MW / year) for the past 12 months is almost double that of what peers considered as an annualised highlight based on 15 days of trading in GB in April (equating to c.£70k / MW / year). GSF's consistent outperformance is a testament to our prudent approach to capital allocation and operational excellence. We are the first asset owner to stack revenues in the Irish and German markets, and this control of the optimisation of our portfolio, we believe will continue to produce superior returns."

The US assets continue to benefit from Investment Tax Credits under the Inflation Reduction Act while new energy storage mandates and potentially even support schemes are expected under new legislation agreed by the European Parliament.

[loglorry1] 23/5/2024 13:40

So if $60m is enough to build out half of the US capacity which will double current capacity why should we not assume the current capacity is worth $120m? Probably less because as you point out it's in a less profitable country (UK/Ireland). Current EV is £280m.

[waterloo01] 23/5/2024 13:35

They have already secured 50% debt funding which makes up the gap from cash resources

o" A $60 million loan financing from First Citizens Bank at project level secured against the Company's 200MW / 400MWh Big Rock asset in California.