Gore Street Energy Storage Share Discussion Threads

[fordtin] 11/9/2024 14:27

“although I'd rather see a direct shareholder return”

I’d vote for that, although I’d be equally comfortable with a 50/50 split between dividends and share buybacks. Building further assets and/or deleveraging can wait until all projects are operational and producing surplus income imo.

[waterloo01] 11/9/2024 11:40

If they have put new projects on hold, and it's about managing ongoing infrastructure, might we see a reduction in fees charged, or is that fanciful. It would go a long way to restore some credibility. Also means they won't be adding to the very minimal debt and could opt to pay it off completely, although I'd rather see a direct shareholder return.

[cc2014] 11/9/2024 09:41

It concerns me that GSF are using this range of $60-80m for the tax credits. It seems a pretty broad range when one would have hoped the construction cost is fixed with the supplier

The ITC scheme is as follows, although there are further bonus credits available for other things:

"Projects over 1 MW that begin construction 60 days after the Treasury Secretary releases labor guidelines (January 29, 2023) and no later than January 1, 2025 will receive a base tax credit of 6%. However, projects can qualify for the full 30% tax credit if they ensure that all laborers and mechanics involved in the construction of the project or the maintenance of the project for 5 years after project completion are paid wages at rates not less than prevailing wages. Projects must also ensure that a percentage of total labor hours are performed by qualified apprentices. The percent of hours increases over time to a maximum requirement of 15% in 2024 and thereafter"

[nickelmer] 11/9/2024 09:38

SteMiS, I agree, a proper P&L would show true profits and cash generation, if profits after tax are greater than 7p per share then the dividend is fully covered, the fact that they don't do this smells of fish

[waterloo01] 11/9/2024 08:50

Well if they hit the 7p return and also have another 7p (out of the US tax recovery $60m - $80m) which could be a special and it's seriously undervalued

[stemis] 11/9/2024 08:40

If GSF want to improve visibility, there's a simple way to do it - produce a proper consolidated P&L and Balance Sheet as part of the Chairman's Statement. Then we can all see what dividend cover is, how the valuation stacks up to financial performance and the impact commissionings etc could have on it. At the moment all we have is a made up NAV/share, a dividend cover based entirely on what the holding company can strip from it's subsidiaries (regardless of whether they are profitable or loss making) and a few financial statistics chosen to give a glossy view of financial performance. It just smacks of having something to hide.

[cc2014] 11/9/2024 07:46

Well I give up. This is what I see:

1. It appears that GSF have probably binned the rest of the roll-out beyond Dogfish. It doesn't say that but I construe it from what's been written "only three assets left to come on online" "influx of cash to de-lever, build further assets, dividends or buybacks"

I actually strongly agree with binning the rest of the portfolio but why not just say so. Without doing so the gearing will be out of control and I'm not sure who would have lent them the money anyway to gear up to do it.


2. I see all the generation numbers of Mw/Hr by region are not included making it difficult to see what's going on. This is a big disappointment and we are back to a lack of transparency

3. Who knows whether the revenue number of 0.5p contains liquidated damages or not and whether these are collectable. So, I have no idea what's been actually generated.

4. They have not changed the long term forecasts like GRID did, presumably because they don't have to because it's a quarterly update and the auditors don't look at it. What planet are they on here?

5. Changes to the DCF model for curtailment. Well this should have been in the model anyway but a change of 1.1p per share when the GB assets are what a quarter to a third of the assets. That's like a 3.5% change on the GB assets. That's quite significant. One wonders what "such as curtailment means"



Having said all that the share price is 58p. Are all my moans in the share price?

GLA

[markydeedrop] 11/9/2024 07:32

@Cocopah

"based on income constraints and a lower NAV"

why?

Once all 3 of the current projects are operational and tallied up with the RA for Big Rock, I'd expect a NAV enhancement not a shrinkage.

"we expect the portfolio to reach a steady state, able to meet its dividend targets from cash generation". The whole point of the diversification into the USA and Ireland has been to move away from the more volatile UK BESS market. Bolting on additional security like the 4 hour RA for Big Rock will bring even more stability.

The RNS today was incredibly positive, and with a share price of 58p and a 7p dividend, that gives a pretty impressive 12% yield.

"The portfolio is now materially derisked"

For income seekers this has become a solid option, and I'd expect some capital growth over time as well. Yes BESS in general is still in its infancy, but I think GSF are navigating the arena as well as can be expected and shareholders buying in at current levels will be well rewarded going forward.

As always, DYOR.

[spectoacc] 11/9/2024 07:09

OK. GSF has changed course in expressing commitment to the 7p (from previously saying the final 4p would be variable, depending on income). That seemed worthy of note.

[cocopah] 11/9/2024 07:05

#SpectoAcc not sure where you are coming from with “calling out” or why “making the first post” matters, it seems a bit pompous to me … the point I am making is about next year’s likely dividend (and is not related to this year’s deferred dividend) … it’s the likelihood of a lower dividend moving forwards for 2025 (based on income constraints and a lower NAV and servicing the debt).

[spectoacc] 11/9/2024 06:55

I made the first post this morning, pointing out the change in the dividend wording - now a "commitment" to the 7p.

Hence your subsequent post needed calling out.

"The latest cut in NAV is the start of rolling back next year’s dividend too."

[ammons] 11/9/2024 06:43

Cocopath and stemis both see a train.

[waterloo01] 11/9/2024 06:36

Spec, and the possibility of some chunky buy backs or special divi with the US tax credits

[waterloo01] 11/9/2024 06:34

Cocopath, surely that's both prudent and sensible with low pricing, in terms of UK revenue. It would be error to fix prices, as some others have, at this price IMO

[spectoacc] 11/9/2024 06:33

Commitment to 7p dividend is a big improvement on the previous RNS. Finally light at the end of the tunnel for GSF (only @Cocopath sees a train).

[nickelmer] 11/9/2024 06:29

The Oak Bloke substack is an informative read, I tend to agree and feel that the market has become overly bearish on Gore St, things could look much more positive in 12 months time with the share price re-rating to reflect that, then again imho and dyor

[waterloo01] 11/9/2024 06:26

cocopah

"we expect the portfolio to reach a steady state, able to meet its dividend targets from cash generation."

And that's separate from

Furthermore, we expect a material increase in contracted revenue contribution to portfolio cashflow through the Resource Adequacy contract, for which the 200 MW Big Rock asset is eligible once operational. Additionally, we expect a cash inflow of between $60-80 million under the Investment Tax Credit Regime for the 275 MW of US construction assets. This influx of cash adds optionality to de-lever the portfolio, build further assets, or reward shareholders through dividends or buybacks.

[cocopah] 11/9/2024 06:22

I remember the early days when the NAV was growing and the dividend with it. The latest cut in NAV is the start of rolling back next year’s dividend too. No detail on current income, just the hopes pinned on the cash return from the US tax credits. Makes me laugh that the CEO claims …

“We remain committed to providing strong returns through the unique exposure across multiple uncorrelated markets and delivering value for all stakeholders.”

… when many investors are nursing 40% losses!

Interesting update on Citywire yesterday about GRID and their intention to provide investors with more transparent performance metrics. Dividend being reinstated too.

[waterloo01] 11/9/2024 06:21

Comes out fighting.

"The portfolio is now materially derisked with just three assets left in construction. Once the three assets are completed, we expect the portfolio to reach a steady state, able to meet its dividend targets from cash generation. Furthermore, we expect a material increase in contracted revenue contribution to portfolio cashflow through the Resource Adequacy contract, for which the 200 MW Big Rock asset is eligible once operational. Additionally, we expect a cash inflow of between $60-80 million under the Investment Tax Credit Regime for the 275 MW of US construction assets. This influx of cash adds optionality to de-lever the portfolio, build further assets, or reward shareholders through dividends or buybacks.

We remain committed to providing strong returns through the unique exposure across multiple uncorrelated markets and delivering value for all stakeholders."

[rik shaw] 11/9/2024 06:10

Unaudited NAV and Dividend Declaration

[spectoacc] 11/9/2024 06:08

"The Board would like to take the opportunity to reaffirm to investors that it remains committed to the Company's 7.0 pence dividend target per Ordinary Share for the financial year"

[marvin tpa] 10/9/2024 13:38

Well the Oak Bloke believes in them anyway

hxxps://theoakbloke.substack.com/p/money-to-be-made-over-at-gore-street