Triple Point Energy Tran... Share Discussion Threads

[redhorse2020] 05/12/2023 08:26

Any idea when the next update / dividend declaration is dude for TENT? Would've thought we'd have heard something by now...

[cc2014] 05/10/2023 11:24

If you mean the share price losses then I refer you back to my post 19.

Since then they have made another loan for battery storage where one may like to carefully consider the counter-party.


In the end it's all about what investment returns they are getting and the credit risk behind the borrowers.

[apollocreed1] 05/10/2023 11:17

Can anyone please answer this question:
Are the losses that TENT are suffering mainly due to bad management or bad macro conditions?

[davebowler] 19/6/2023 16:41

htTPs://uk.citywire.com/partners/redirector.aspx?contentid=2419695&deliverytargetcode=web3__sections__investment_trust_insider&re=110189&ea=252901&utm_source=

[tigerbythetail] 19/6/2023 08:44

Results out.
Stronger than I expected, with no significant red flags as far as I can see.
Much depends, of course, on how UK interest rates move in the short / medium term.

[spectoacc] 09/5/2023 08:52

Citywire on TENT, fwiw:



Think my headline might have been: "Better to be in TENT, p*ssing out".

[davebowler] 27/4/2023 15:55

Edison-Triple Point Energy Transition:Pitching TENT – a diversified energy transition storyTriple Point Energy Transition (TENT) invests in a portfolio of energy transition technologies aimed at reducing CO2 emissions in power Fgeneration, storage and consumption. We view dividends as fully covered by cash flow in FY23 and forecast that dividend cover will reach 1.2x by FY25. NAV return for the 9M to December 2022 was 7.8% and we see scope for growth in NAV/share given TENT is still rolling out its portfolio of cash-generative assets, all else being equal. Its existing investments include run-of-river hydropower assets in Scotland, a debt provider to a rapidly growing portfolio of battery energy storage systems (BESS) and combined heat and power (CHP) plants co-located with food producers. Led by Jonathan Hick, TENT's team focuses on specific high-return/less commoditised niches in the energy transition sphere. In our view, the fund is trading at an unwarranted discount to NAV with an attractive dividend yield of nearly 9%.

[cc2014] 17/4/2023 15:19

I think we can conclude that given the length of time this has now been down here that there's something not right as very many analysts will have looked at this by now.

Also, unless you're the MM's friend it looks like it's 59p to sell for amounts even as litle as around £10k.

[tigerbythetail] 16/4/2023 18:30

I've looked at this over the weekend, because at first sight the discount and dividend look appealing.
IMO, the market has sniffed out that the tomato-growing business (to which TENT is over-exposed at c. 20%) is in trouble. Combine that with the persistent seller and you get the current apparent but actually illusory discount.
So this is a "no" from me. GLA.
Finally, thanks to CC2014 for the very helpful posts.

[cc2014] 14/4/2023 14:41

Companies House shows TP leasing have been doing business with Innova prior to this TENT loan.

Basically TP has a business making loans in the same area as TENT.

Nothing wrong with that of course as it's the investment managers job to bring opportunties along but I would like to be assured it's a new loan on a new asset, rather than a rolled over one. I'll never get that information.

[spectoacc] 14/4/2023 14:06

Agreed, thanks all. "Dodgy, but might be in the price" seems to sum it up. Sadly also a description of a number of others.

Anything "PI" seems an excuse for picking pockets.

[badtime] 14/4/2023 13:30

Some really informative posts today ..big help personally

[jonwig] 14/4/2023 11:46

We probably have similar age and risk profiles. But I saw no particular reason to sell TENT on the way down from IPO 100p. Maybe I was lazy? If it lurched lower than this, though, I probably would.

Apart from generally low risk, I do have some conviction ideas such as private equity (hence PHLL, also PIN, APAX, III) which I believe has overdone the downside. I also subscribe to a VCT every year.

Other convictions (long only): uranium, silver, hydrogen, Japan.

[jonwig] 14/4/2023 09:38

CC2014 - thanks for that, and the detail.

In my earlier response I was reminding myself of the quarterly update to 31/12, issued on 20/03:



Perhaps they are being over-confident in what they say, but if there really are serious concerns, they have a duty to say so. They don't.

• You say APS can't grow tomatoes in winter owing to the costs. In fact just 8% of its capacity was mothballed last winter:



• Discount rates aren't discussed in the latest update because it's largely an operational comment rather than a financial one. However, the H1 results to 30/09 said:

The Company engages Mazars as an external, independent, and qualified valuer to assess the validity of the discount rates used by the Investment Manager

• The loan to Spark Steam is amortising over 10.5 years from 2021, so some de-risking is built in.

So one conclusion from your analysis is that yes, there are concerns, but they are "in the price". Your criticisms may well be valid, but would it be unkind to suggest you were "looking for trouble"?
🙄

[cc2014] 14/4/2023 09:02

This fund is covered in red flags

1. Fund manager is Triple Point who are also SOHO and DGI0 where share prices have also cratered

2. The sourcing of the initial investments in APS from an in-house open-ended fund. Whilst shareholders were assured this was done at a fair value my concern is the valuation and the nature of the transaction

3. The fund has one third of its assets to one borrower APS Salads at IPO. Less now I guess. Too mnay eggs in one basket is a school boy mistake. The accounts of the parent company A Pearson Holdings are available at Companies House and one must consider the ability of APS to pay the interest on the debt to TENT given interest rates have rised from 0.1% to 4.25%. APS grow tomatoes are now unable to do this in winter due to the high price of gas. Their labour costs must be through the roof post Brexit and rising minimum wages. If this all goes wrong and one third of the NAV has to be wiped out... OK, TENT have security over the CHP plant but how much is a second hand CHP plant worth? especially since one of them is on the IOW IIRC. Now, to be fair TENT say the equity of the main off-take counterparty for CHP has been acquired by a new shareholder which is APS Growth Holdings Ltd. A search on companies house reveals APS Growth Holdings Ltd to have been set up in Dec 22 and therefore has no accounts and minimal shareholder capital. Then a bunch of charges from IOW Squirrel Ltd (really?) and Shawbrook Bank. A broad guess is that APS were in trouble and/or directors wanted an exit but to guess any more would be just that, guessing. Perhaps the new company is better capitalised or perhaps it isn't.

4. Another loan to consider is the Spark Steam one at 7% IIRC.

5. Then there's the recent loan from the latest RNS. I looked up the accounts of the borrower and well it's a maze of companies and my best guess is thats its a loan for general working capital purposes, probably with security over the WIP and my best guess is that the loan is at over 10% and rolled over from a previous lender who was getting 9%. The last part is a guess though and one might consider why the existing lender didn't want to roll the business although that could be
nothing.

6. the RCF is sourced from guess who Triple Point. TP do do this but it's just a little too "convenient" for me and the rate is 6% IIRC. Out of all the possible parties that could provide finance it turns out the best value comes from a TP internal company?

7. Have those hydro projects been bought at the top of the market?

6. Then finally there's the discount rate, which is a biggie. TP do not seem to have adressed this in the latest quarterly update imho. The base rate has risen by 4% and yet for example IIRC and unless I've missed something becasuse at this point I've got enough red flags I can't be bothered to go and check I think TP are using almost the same discount rate on most of their investments as when they made them. Something is nagging at me telling me I'm exaggerating there and they have moved a little but however much it is it's clearly not in line with the rest of the market, all of which keeps the NAV up and TP's fees.

However, the share price is around 61p to buy and someone(s) are clearly offloading. It looks to me like the classic institution pushing the price down so far as to make the entry price look amazing and can shift volume. Classic transfer from instiutions to PI's. As to whether they have some fundamental piece of information and the NAV is about to get slaughtered soon or at some random point in the future or whether they just want out and 60p will turn out to be a bargain who knows. My guess is that eventually the seller will be finished, the share price will bounce and then things will unravel at a later date with a big gap down below 60p

Simply put it's about the reputation of Triple Point and the credit risk of the counterparties.

[jonwig] 14/4/2023 07:21

Yes, it's been left behind in the recent small improvement in the sector.

All its investments apart from Hydro appear to be debt facilities, so there's little room for growth.

9% yield is covered, and they do have cash for buybacks - they've expressed concern about the discount.

[2wild] 14/4/2023 07:12

It is odd, I was able to add to my sipp and ISA a few days ago below 61p. With a dividend healed approaching 9% and discount to NAB at 38%, a buying hold for the long-term for me. Comparable investment trusts in the sector are on discounts of around 7%.

[badtime] 13/4/2023 22:19

Why has this lost a further 10p over the last few weeks?

[2wild] 20/3/2023 23:03

Agree very good value. Pity they Wasted money joining the main market, Which means we now have to pay stamp duty.

[apollocreed1] 20/3/2023 12:13

I still think this is too cheap. Liz Truss's budget caused substantial damage and it never recovered.

[jonwig] 20/3/2023 07:18

They are doing well enough, despite th poor rating:



The dividend is "substantially covered". That doesn't tell me enough.

[davebowler] 10/3/2023 16:11

TENT
Like RMII, Triple Point Energy Transition reported positive returns during its latest six-month period, as Chairman John Roberts reported: “The six months ended 30 September 2022 saw a high level of market volatility…Despite the deterioration in the macroeconomic environment, the strong contractual and defensive nature of the Company's investment portfolio has facilitated a strong financial performance over the period. We are delighted to have returned a NAV per share of 100.26 pence for the period ended 30 September 2022 (31 March 2022: 9 6.12 pence). This combined with the 2.75 pence per share dividends paid has delivered a total NAV return of 7.2% over the six months.”

It's one thing paying out a high dividend, another to be able to sustain it. That’s why dividend cover is key for trusts investing in the renewable energy infrastructure space. Broker JPMorgan honed in on this metric in its coverage of TENT’s interims: “Total dividends for 2.75pps were paid in the period. The next payment is 1.375pps, due on 6/1/23. Total dividends paid in the period were 0.98x cash covered, net of expenses and cash finance costs. TENT is targeting total dividends of 5.5pps for the full FY, with the managers focusing on this being fully cash covered. The second half will benefit from the portfolio being more fully invested and some additional income from the BESS projects as the commitment is deployed.”

TENT did only come to market in October 2020 and so is still in track-record building mode but so far so good.

[apollocreed1] 02/12/2022 13:01

@jonwig. Thanks for that post.
Since the mini budget, most renewable energy companies have had a decent recovery so I think there should be some hope of an improvement here. They are also too small to suffer from the Windfall tax.