Gresham House Energy Sto... Share Discussion Threads

[mr george stobbart] 05/2/2024 08:48

GSF reaffirmed dividend policy.

Given the strength of the BESS market, evidenced by the comments of the world's largest BESS investor US listed NextEra Energy in Jan-24 earnings call, it is fair to assume an aggressive growth in dividends for GSF going forward.

The UK market is worse than dead on the other hand and a toxic market lacking a stable regulatory framework.

Investing in UK-focused BESS trusts is a suicide mission

[nickrl] 04/2/2024 23:09

Not sure how they work out divi cover as asset income alone wouldn't have covered the 42m let alone the finance costs and inv mgt fees. This has been relying upon illusory capital growth which is now wiped out and unlikely to return anytime soon. The key here is whether Greshams insistence that there are future revenue streams to had out of the ESO although we've heard that before.

As i see it the only winner here is Gresham House who will keep collecting their fees leaving nought for shareholders. Of course im sure at these depressed levels we will see a dcb but until there is some positive news that revenue generation is improving can't see it holding. Maybe a bidder will come along but in a saturated market it aint going to be at the current NAV thats for sure.

[podgyted] 04/2/2024 19:36

Jefferies stated that they thought dividend cover slipped to 0.1 in Q4.

If that is the new norm, rather than just a blip, then a 0.1 cover of a £42m annual dividend gives a net profit of @ £4m.

Its MV at the current low is £274m - you've got to be sure that this is just a blip. I think waiting for some further information in the year-end accounts could be a prudent move.

BWDIK

[marktime1231] 04/2/2024 11:51

Not sure we can rely on Ben Guest for anything.

I would be shocked if they continue to forecast future revenues and prices without revising their assumptions. No-one believes NAV is mid 140's and I'm not sure the market would believe it if they only shave it. But as newbold observes the compulsion to print a sustained number to preserve their fees means they will try it on.

The sp, and any recovery prospect, is therefore more likely to be cued by what they decide for the revised dividend policy, to be announced on or before 5 April. If earnings have halved, and even if they consider the lull to be transient, the reset might be to 1p a quarter. GSF (early Mar) and HEIT (tba / late Feb) presumably have similar decisions to make and they will be watching each other. A relatively confident report from GSF on 10 Jan was in contrast to the warnings from GRID and HEIT. Their share price has also tumbled but not nearly as bad, thanks to market diversity perhaps.

OK I think I'm reaching a conclusion subject to that dividend decision a GRID rebuy possibly worth a gamble in the low 40s, more likely in the 30s.

[cc2014] 04/2/2024 09:37

With regard to the NAV, Ben Guest has already given us a broad clue from the webinar last week in that he stated that the valuations they've had through already on the future power price curve are not significant different from those being used already.

He also pointed to the discount rate which is above 10%.

If those are maintained and no changes are made then the NAV is going to be around 125p.

I'm not saying this is going to happen. In my mind this is likely to be revisited before the NAV is published

[nickrl] 03/2/2024 23:19

Red Scar shows as GRIDs best performing asset on bessanalytics over last year but monthly income has been falling all year and is half what it was 12mths ago. Others though from other owners show far less declines and they are largely the two hour batteries so GRID will be able to cite the investment they are making to move to longer duration will increase the revenue stream. I can't see how they can publish a NAV anything les than a 100p now but lets see.

[newbold120] 03/2/2024 21:14

Gresham House has a big conflict here - as the aifm it is responsible for providing the valuation for the NAV. Its fees are based on the NAV. Why would it mark the NAV down to reflect market changes, as it would materially reduce the fees it earns?

[wskill] 03/2/2024 16:11

To change batteries to 2 hour duration is it just adding extra batteries to 1 hr duration ones and why not do this on initial installation.

[marktime1231] 03/2/2024 10:42

So following some of the conversation above we should wait to hear an audited revised NAV figure before we can judge the risk-opportunity here.

On 6 Apr last GRID reported a BDO-audited NAV as at 31 Dec 2022 of 155.51p.

Since when (unaudited):

155.61p as at 31 Mar, plumped up just ahead of the last placing
146.66p as at 30 Jun, down due to declining revenue forecasts
146.08p as at 30 Sep, higher (!) revenue forecast offsetting project delays

We will have to wait until April to hear what the FY23 audited NAV might be, but I wonder how we might judge for ourselves ahead of time. FY22 ebitda was £48.8M, operational dividend cover of 1.28x.

"Operational" eg cashflow dividend cover so gross rather than net

1.32 FY21
1.46 Q3 FY22
1.28 FY22
0.97 Q1 FY23
0.67 H1 FY23
0.45 Q3 FY23

And reportedly according to Jefferies that dividend cover slumped to 0.1 in Q4. Except there wasn't a Q4 dividend.

Where might that drive NAV to? If it was just about cashflow then my sums say NAV has plunged to 57p but it isn't, there is much more to NAV than current cashflow it is about subjective guestimates of future cashflow etc.

[giltedge1] 02/2/2024 22:16

These were marketed as alternatives, alternative to what?, going bust.Luckily I managed to stay away, Interesting were share price will be in 6 months.

[marktime1231] 02/2/2024 17:58

Well which is it then ... the foregone dividend (573 million shares at 1.8375p) was of the order of £10.5M not £2M? Today's buyback was trivial.

As were the director buys, a show of support was overdue but this has done little to help the share price What have we got to go on to judge what level might be worth the risk?

[spectoacc] 02/2/2024 17:09

David C Stevenson, 5,143 shares, dear oh dear.

[nickrl] 02/2/2024 16:47

Stevenson and another director had a dabble this afternoon. Stevenson of Citywire fame has previously suggested these along with other infrastructure funds shouldn't have been so income focused as they are more long term investments so he got that right.

[cc2014] 02/2/2024 12:38

The RNS stated that the buy-back would be for the same value as the foregone dividend.
Additionally Ben Guest stated in the webinar yesterday it would be for around £2m.

[cellular3] 02/2/2024 11:16

Got out few days ago-not holding a fund with managers and bad actors behaving like this. Better places to put my £

[marktime1231] 02/2/2024 10:59

GRID commence a buyback programme without any specified parameters. Unbelievable, how does the market know how to react? Quite right that the share price has not responded positively.

A more honest rns from HEIT pulling its dividend. A further 20% share price retreat seems a bit harsh. No silly buyback, concentrating on delivering its capex programme to enhance income. A bit of an eye-opener though, HEIT admits the collapse in revenue was evident way back in Oct 2023. We have been kept in the dark then.

[misterd1] 02/2/2024 10:38

@catch007 - couldn't agree more

Madness imo

[nickrl] 02/2/2024 10:03

@igoe the ESO is now dependant on batteries for frequency control and will become more so as the level of renewable generation increases and gas declines so there is baseload demand for them. Problem is current BESS build out rates are outrunning the renewables but that dynamic will improve back end of this and into 2025 when more offshore wind is commissioned. The bottom line is this market is commoditised now and the best outcome here is survivability although i wouldn't be surprised to see one of the bigger energy trading organisation that operate at scale in the UK electricity market taking out this or HEIT.

[shinnas] 02/2/2024 09:56

No one willing to hold today

[catch007] 02/2/2024 09:24

When cash flow is a priority now I cannot understand the logic of launching a share buy back. I bought GRID as an income play and it is now looking at being a basket case along the lines of DGI9!

[mr george stobbart] 02/2/2024 09:05

Harmony cut the dividend until further notice.

Down another -10% and has fallen in the 30p purgatory.

Market is pricing a bust or a wind-up similar to the likes of Digital 9 Trust.

[nickelmer] 02/2/2024 09:03

So Jefferies smashes the price down with broker notes and then participates in the share buyback program, Does anyone smell fish?

[igoe104] 02/2/2024 08:55

These should recover over the next year or so. Cant see the government letting battery storage companies struggle, because they desperately need them to store all this large incoming wind power thats coming online from the dogger find farm, which is the biggest in the world.

[newbold120] 01/2/2024 21:08

Is that the ironically named "Secure" Income REIT?