Nextenergy Solar Share Discussion Threads

[hedge fund harry] 20/3/2024 07:46

Inflation down to 3.4%, less than expected.

[spectoacc] 20/3/2024 06:54

Saw a great description of a lot of these renewables ITs as "Giving your capital back in taxable form". But won't beat that drum again.

On interest rates - guessed 1x 0.25% cut this year IMO, & seen no reason to change that. Market still hasn't adjusted enough to the new reality of higher for longer.

[stagvalley] 19/3/2024 21:43

I guess things could look rather different by August if we have had a 1 percent cut in base rate or that is in prospect. It feels like there isn't a lot of confidence in the NAV. Maybe external offers if accepted would have forced a NAV re-rating on the basis that market testing is the best evidence of whether your NAV is right. We probably won't get to know but have to make our own assessment. The question for me is whether the dividend has to be cut because of the higher finance costs. Surely there is some company sensitivity analysis published somewhere?

[marktime1231] 19/3/2024 11:58

Assuming the continuation vote has arisen because the discount to NAV has been averaging above 10%. Actually the discount has been over 30% for a month now, and no amount of good news is moving the share price

That Camilla is 6-9 months late has been pasted as good news. Not sure, only 1 hr duration is not where we need to be.

The prospect of a sharp NAV correction, heavy debt and looming refinance at higher interest rates leading to dividend cut ... all very well moaning the low share price is unjustified but NESF have not come up with a convincing response. The "capital recycling" didn't attract external buyers. In which case a discontinuation is not a welcome prospect.

If there is still comfortable surplus cash flow maybe they will try a buyback but they haven't because? But you shouldn't borrow to buyack your own shares should you.

Finding it very hard to decide if NESF is stuck and it is time to move on or whether it is due a rebound and worth doubling down. An audited NAV and details of net debt and the dividend cover provided by current run-rate operating cash flow due early June I think.

Can we rely on an unaudited NAV update, superficial operations update and final dividend announcement in early-mid May? Actually what will move things more than anything is the start of interest rate cuts to ease the pain of refinancing.

[unastubbs] 19/3/2024 10:38

hello - does anyone have a view on the proposed continuation vote in august?

[stagvalley] 19/3/2024 10:18

(Try again...) Sales to reduce debt, etc might show the NAV to be somewhat overstated given low energy prices. But there is a view that NAVs are not straightforward to define / interpret in this sector in any case, and that the dividend and its sustainability are more important. Certainly the dividend is high and currently quite well covered. Peter Spiller on the free Money Makers podcast was negative on NESF and said that there had been little progress on sales (have a feeling he said the one sale so far was to a related party) and he seemed to doubt the sustainability of their business model. I'm still coming to my view, holding some but trying to decide whether to top up. Obviously low energy prices if they continued long term would further hit the NAV. Though my instinct is that energy demand and energy prices are going to increase in the medium term as climate pressures driving electry demand will remain whatever the short term negativity in the UK in some quarters about net zero. Interest rate declines of a couple of percent would also help highlight the attractions of the very high current dividend here. I probably need to review analysis of the NAV sensitivity to energy prices and interest rates. Is there a recent presentation with good analysis? For some of my income stocks, such as SUPR, the business model looks very robust and is basically just less attractive due to risk free returns elsewhere linked to higher interest rates. Not so sure about this sector or this company. Has anyone done a rigorous comparison with Bluefield Solar which is more expensive but perhaps for a good reason?

[stagvalley] 19/3/2024 10:16

Sales to reduce debt, etc might show the NAV to be somewhat high given low energy prices. But there is a view that NAVs are not straightforward to define / interpret in this sector in any

[yump] 19/3/2024 10:12

Camilla is 50mW. In the commentary elsewhere the 300mln with Eelpower also mentions another 250mW.

Also not sure if that 202k is a grand total, as previously double that was mentioned as an annual rate.

I’m sure the exact detail is out there somewhere !

[pyemckay] 19/3/2024 08:38

thanks masurenguy . Might need to look into what the overall 300m project entails but Im still sceptical that renewables are still reliant on subsidies to make them viable.

[masurenguy] 19/3/2024 08:24

Well £35.79 per/KW is a good fixed price that is consistent with the existing comparitively high priced forward contracts for the rest of the portfolio that the company has previously negotiated. At a shareprice of 73.5p the current yield is 11.3% and that is before any further increase in the dividend for fiscal 24/25 that should be announced when the year end results are released in June. Also, the shares are currently priced at a discount of circa 32% to NAV as at the end of last month.

An update from QuotedData last week stated "NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Interest rates look to have peaked, which is improving sentiment but there is further to go. We find it hard to comprehend why any stock with a nine-year track record of growing covered dividends in line with inflation would not trade on a much lower dividend yield. NESF also has one of the largest capital recycling programmes of its peer group, which is aimed at freeing up cash to slash debt, fund share buybacks and existing and potential construction projects. Those projects should be both NAV and earnings enhancing. A re-rating of NESF's shares is overdue."

[masurenguy] 19/3/2024 07:17

1GW Milestone and 50MW Energy Storage Asset Online>

NextEnergy Solar Fund, a leading specialist investor in solar energy and energy storage, is pleased to announce that the Company's maiden standalone 50MW energy storage asset, named Camilla, has successfully begun commercial operations. This is a significant milestone for the Company as it increases NESF's total installed net capacity above 1GW to 1,014MW. Camilla connected to the National Grid in December 2023 and progressed successfully through its final phases of commissioning early this year. Camilla is a 50MW 1 hour lithium-ion battery located in Fife, Scotland, which has been pre-configured for augmentation to 2 hours. Camilla is the first asset to be delivered through the Company's £300m Joint Venture Partnership programme with Eelpower Limited.

The Company is encouraged by the recent progress made by the National Grid as it continues to make improvements in the dispatching capability of batteries in the Balancing Mechanism and the introduction of additional reserve products. This is positive for new operating assets entering the market at this point, such as Camilla, as it represents additional revenue opportunities. On 20 February 2024 National Grid ESO published the provisional results of its T-1 Capacity Market Auction for delivery in 2024/25. Camilla successfully bid and secured a contract with a clearing price of £35.79/kW. The contract was secured with a derated capacity of 5.659MW and is expected to generate £202k (£4k/MW on a total capacity basis) of additional contracted revenue for the period 1 October 2024 through to the end of September 2025.

The Company's disciplined approach to capital allocation focuses on accretive investment activity, consistent with the Company's investment objective of providing ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends. Michael Bonte-Friedheim, Founding Partner and CEO, NextEnergy Group, commented: "I'm delighted to confirm that Camilla's energisation increases NESF's total installed net capacity to over 1GW, alongside the recent energisation of NESF's first two international solar co-investments. Expanding into energy storage complements NESF's existing large portfolio of solar assets on a standalone and co-located basis and provides multiple diversification benefits for shareholders."

[unastubbs] 17/3/2024 17:14

So what do you think about a continuation vote? Would you vote to continue the fund or to gradually sell off the assets? Albeit the latter will take a long time.

[fordtin] 17/3/2024 09:22

SpectoAcc - this is a useful website; A quick copy&paste gives the following;



Annualised gross returns in $
 
 
 
 




over one, three, five and 10 years to Jan 2024
 
 
 
 


 
1 year
3 years
5 years
10 years


MSCI Alt Energy
−34.2%
−20.3%
4.10%
2.20%


MSCI World
17.60%
8.60%
11.90%
9.70%

[spectoacc] 17/3/2024 08:07

Brilliant table if you skim down it - won't format, but:

Gross returns in $ from Jan 2009 to Jan 2024
MSCI World
453%
MSCI Alternative Energy
−24%


+453% vs -24% look better in bar graph form.

[unastubbs] 17/3/2024 07:39

www.sharesmagazine.co.uk/article/why-have-renewable-energy-funds-performed-so-poorly

According to this (excellent) article:

August - NextEnergy Solar continuation vote

I didn't know about that so thought I would post. Apologies if it has already been mentioned :)

[keith95] 16/3/2024 11:17

Energy storage in the UK are making paltry returns … see GSF Gore Street … in part down to UK’s reliance on gas to fill in energy gaps as apposed to battery storage and poor switching methodology. The sector has also been hit by “woke” criticisms in favour of fossil fuels …

…11% yield covered 1.3x albeit lower next year as electricity prices fall with gas prices suggests a rally is some way off … but with US gas at 30 year lows in real terms … I’m trading the gas commodity whilst holding here.

[unastubbs] 15/3/2024 09:21

same Tag57 :(

[tag57] 15/3/2024 09:14

LG, I am in the same boat, in fact I have too much in NESF at an average price of £1+ unfortunately.

[lord gnome] 15/3/2024 08:53

Not at all, but it is an issue that has been raised by others. My only concern is that I would like to buy some more but I am maxed out.

[tag57] 15/3/2024 08:05

LG - do you have divi cover concerns? NESF state they have forecast cover of 1.3 times for 2024 but assume they would already include this energisation in their expectations.

[lord gnome] 15/3/2024 07:57

Today’s announcement of energisation of the Spanish and Portuguese projects should help dividend cover concerns.

[speedsgh] 11/3/2024 13:28

New QuotedData research note...

High- and growing-income opportunity -

[wassapper] 06/3/2024 12:19

From 29 Feb RNS:

Dividend:

· Total dividends declared of 6.26p per ordinary share for the nine months ended 31 December 2023 (31 December 2022: 5.64p).

· On track to achieve target dividend of 8.35p per ordinary share for the year ending 31 March 2024.

· Forecasted target dividend cover remains c.1.3x for the year ending 31 March 2024.

· Total dividends declared since IPO of £333m or 65.7p per share.