Skinnypope, thanks for that information.
So on my rough calcs, that means that the subsidies expire in 2034/35.
At which point income will drop considerably, though debt interest payments will also fall a lot by that point too.
Assuming no changes to the portfolio in the intervening period, how much value will be left in NESF portfolio in 2035? |
@skinnyhope good luck with that exercise! I see main issue is the accounts being filed are so far out of date compared the trusts reported accounts as to be of limited use but at least you will be establish what the true position is even if over 12mths stale.
@WC solar isn't dispatchable power and you don't need ne tot ell you it only works during the day. Thus its all producing simultaneously at the same point and already drives the day ahead price negative. The more thats connected the worse that is and whilst it displaces gas fired power stations its now getting to the level that they can't turn anymore off to keep the system stable. This will drive ppa prices down and the smart producers will agree to prices now which might be low but at least they will generate income. |
It's exposed to power prices more so than some other trusts, but I'm happy with that as part of a portfolio Wouldn't worry too much about new supply reducing prices given that a lot of it is replacing what we already have |
In 28/29, 61% of estimated income is expected to come from subsidies.
When do these subsidies expire?
(The Trading updated says that a large portion of the debt amortises in line with the maturities of the subsidies, but it doesn't give any details).
IMO, if on average it's 2031, then the timing of the ending of the subsidies is very important, if its 2041 then less so |
SpectoAcc I think they have done us pensioners a great deal of good ,as now I only have to have 30% of my Sipp in these high yielders at 10% to 12% yield to provide the same income I require for a very nice retirement .
We seem to go from famine to feast very quickly on the income front not that I am complaining well done to the wealth managers for looking after us.Wish our own government would do the same to us pensioners. |
But how much of it is in the price? Every co talks up their prospects.
If the money keeps rolling in, annuity-style, I like the renewables. Tho I don't expect a lot to be left over at the end.
They didn't work at 6-8%, but NESF 12.5% last I looked.
I accept it's possible the entire sector's a giant accounting trick, & the energy market can certainly be dysfunctional, but I'd place a high probability on current s/p's being wealth manager selling/idiocy, & an opportunity. |
 Uncovered in the sense they say expect to hear an annual report of 1.1-1.3x cover averaged cross the year, not over the quarter in question where I suspect actual performance was 0.7-0.9x even on their own gross measures. And that claimed coverage is I think before deducting things like central finance, pref share payments and management costs which are all significant. Who cares what the gross coverage is, it is net performance which matters.
The NAV roll forward model, behind which they are hiding so as to not reveal operating and financial performance, allowed 2.4p for the quarter vs 2.5p paid in dividends. And a big negative impact in the cash movement row.
But as nickrl points out it is almost impossible to know what is actually going on because they don't want to tell us, not in the "trading" update and not even in the formal half-yearly reports. As we found last time they obscured true net trading performance by shuffling large numbers on paper between the various group, hold co and subsidiary entities. So massaged we had a testy unresolved debate on here about what was really going on, even the brainy guys couldn't agree. My small brain concluded that management and the board are snowing us with falsely positive-sounding headlines. But as you say, we can't know for sure. |
More solar capacity, yes, but a lot more forecast demand. I suspect the inverted nature of the power curve will be a permanent feature and that the average PPA strike will be somewhat in excess of the current forward projections. (even after accounting for inflation).
The concerns over future dividend coverage are entirely valid, but it is by no means a negative tale. Making any firm statements about any market 10 years hence is foolhardy, but this lack of certainty justifies a sometimes deep discount whenever the centre of gravity for risk taking moves to the left. Far too much to the left on occasions. |
@WC104 do we really ever know what the aggregated cash cover is in these entities. Of course we can guestimate from power production and average cost but unhelpfully they deign not to provide either at the NAV update. What they do say is irradiance is below forecast and lets be clear the subsidies are only received for energy produced. Then they don't tell us what the average income the portfolio is forecast to generate each year. They do have this info in final & interim reports and the last update was showing it falling away later in the decade. So whilst the short term power curve is far better than even 3mths ago the long term curve remains pretty unchanged. I'd also wager with the amount of solar coming on stream across the UK over the next few years we will see power prices becoming quite depressed in the day ahead market and this will begin to influence forward markets as well as why lock in at higher price when you can get leccy far cheaper in the day ahead mkt.
In the round i want to like NESF but there lack of transparency about the operating entities leaves me weary. |
Appreciate cash cover can be misleading but how do you define true net basisI work on both cash cover and market Discount rate covered Eg if the discount rate is 8 then you take of management costs and adjust for leverage to get the NAV return Then you adjust that for the share price discount to NAV So long as that rate > divi yld then you're covered - but - only so long as the cashflow assumptions behind the NAV are sensible |
At least management fee structure is in discussion. |
Where is the operational update? Nothing about energy generated or trading and prices or income achieved vs budget. They continue to say the dividend is covered when it really isn't anywhere near on a true net basis. Looks like they are burning through borrowed cash to make up the shortfall. |
61% subsidy for 28/29, up from 52%. Nice! |
Looks a decent enough RNS to me this morning. |
2wild, don't ignore the ex-divi - which accounts for half the fall from the high of the recent jump. |
Yep - better to divert some of the divi to share buy backs |
the dy is too high here imho and is choking off growth. |
NESF DOWN 5.2% from Monday close to Thursday close. Unsure if it will drift much lower over next few weeks.
SEIT is back near lows after an 18% dead cat bounce, towards Ex Dividend day, a couple of months ago, |
Wrong board @nickrl ;) Meant for FGEN. |
Actually who cares about anyone’s “investment policy” if that’s what a bit of gambling is. |
Yes sounds like sour grapes old chum. You can also see from the reply after that post that it hasn't been edited. I don't diss your investment policy.... |
Any old fool can edit previous posts. Nobody knows what any poster did or didn't do, nor how big -or small -a risk they might have taken. |
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