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To provide a sustainable and attractive long-term dividend by investing in a diversified portfolio of utility scale energy storage projects located in the UK, North America and Western Europe.
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Eadwig. Yes, I understood they would be raising more cash. One of the reasons I bought in in the first place. My gripe, and the same for others by the look of it, is that I now am effectively not able to participate as my shares are all stashed in a SIPP. That wasn't mentioned in any prospectus.
Then there's this from the recent RNS that will have grabbed some attention:
"GSF highlighted that since October dynamic containment paid an average of £17 per megawatt hour versus £6.5 MW/hr for fast frequency response during the same period.
It would potentially create a significant uplift in revenue across GSF’s 90MW of operational assets in Britain. The company specifically said that it believes that current dynamic containment prices may result in a material uplift in the company's revenue for the current calendar year.
“Gore Street is excited to take part in this service which reinforces the benefits of our revenue stacking model, enabling our assets to participate in multiple contracts to generate significant value,” said Alex O'Cinneide, Gore Street Capital chief executive."
Must be driving some of the SP growth.
Yes that all makes sense to me Eadwig, and of course the larger GSF grows the more it will appeal to the larger income Trusts and Funds providing, as you say, management keep their eye on the ball. Re the dividend, I'm certainly hoping for level payments of 2p per quarter within a year or so, then up and away from there. Hence the demand for shares and subsequent SP rise.
I know there have been negative comments on here recently but I'm struggling to see a downside, and I'm looking hard.
Anyone taken by surprise by this cash raise hasn't done their homework on the stock. From the prospectus onwards it had always intended to raise more cash... and that is always going to hold down the price.
The only big question here for me is why the price keeps pulling away so far. Perhaps the answer is there is a lot less yield about than there was 18 months ago and GSF is offering a whopper and easily covered if management stay on top of things and don't get carried away.
For those who haven't read the prospectus and subsequent cash raising literature, the last NAV was 99.6p and the promise is that once the NAV is 100p+ the MINIMUM 7pps divi will start to rise.
You are more than welcome my friend. Yes, GSF isn't an exciting share but relatively safe than few other high risk ones. And it pays high dividend too. Will surely make good returns in the long run.
I also wish you the very best of luck too.
Thanks seen_it_done_it, I'm slowly building a position here and I must admit the discounted placings have helped so far. I'm here for the dividend yield as many others will be, looking to identify about a dozen reliable payers that are also relatively low risk. I'm up to six so far where I'm gradually moving funds from higher-risk shares. Good luck with your own investments. K
Also correct that the dividend is barely covered. It's why the company needs to grow to do more business. So that they can make more profits. This is why GSF is raising new money to invest in new projects in order to grow then more profits will be made.....
So, let's hope that all things will go well for GSF and for everyone invested here.
GLA
It's correct that GSF is raising £190+m from it's proposed placing of 190m new shares. It will be more than the current shares in issue (144m) but the proceeds will be used in a 1.3GW project pipeline, which will significantly increase the company's revenue and therefore also profit in the long run. That's the way to grow and the market is receiving it well. The 1.3GW project will become the company's new assets, not dilution! That's why the SP is holding up well.
Hmm, I'm beginning to wonder if there's more in what you are saying than I thought adv11. This from today's Shares Magazine, under the banner "Trusts regularly raising cash to invest in assets can hamper returns" (they are describing issues at GCP but could just as well apply to GSF):
"Since 2015 the share price has gone from 120p to 102p while the company has raised close to £450m in new shares resulting in massive dilution of earnings. Remember every time new shares are issued the value of the existing shares is diminished.
Fortunately, net asset value per share is slightly higher than in 2015 but that’s not much comfort for investors.
On a total return basis the shares may have beaten the All-Share but last year’s dividend was barely covered."
Food for thought, certainly.
I've seen similar comments on SUPR after their last raise (not from you adv11), I guess I see it slightly differently to you and others. Still, each to his/her own, sorry to see you go. Can I ask, which company(ies) have you decided to invest in now you've sold up here? Fwiw, I'm also in EAT which is currently paying a decent dividend and has been rising steadily for some time. Hope you'll pop back from time to time, see how we're getting on? K
Oh listen to all the happy campers happy to keep paying lower and lower prices. Obviously they raise money, but at 102p when the price was 109p ? They are just giving the company away with no respect for "retail" investors. Every time there is a fund raise, the new shareholders take money out of the company with their dividends before the money is invested and actually earning the dividends. If you are happy with it, pile your money in guys, but don't have a go at me for making my comments known.
I sold half a few weeks ago when the plans were made known, and the rest at 105p when the announcement was finally made. Plenty of companies out there who do respect their small investors.
Ok, guys, beat me up, if it makes you feel big men.
Agreed, for now though I think they are seeing so many opportunities that more discounted cash-calls are inevitable until the Trust reaches optimal size, judged by the directors. And that could be some way off yet. So I suspect these dips are going to keep happening for several years yet.
Krusty, sure, but a bit of growth as well would be handy.
I agree with the grips about raising cash this way, I know that primary bid has given retail investors better access to placings but SIPP holders can't participate.
This isn't a growth share Panderman. If you want capital growth, beyond covering inflation, you're in the wrong place. This is a dividend-paying share with a pretty decent yield for us oldies.
adv11, "Raise cash to pay dividends.". Can you explain what you mean? Do you have any evidence for this?
My first slight concern with this is the longer-term yields on some of these investments. The returns look amazing at this stage, which is presumably why the company keeps asking for money so they can keep buying them up, but will it last? Surely other players will want a slice of the pie and competition could increase?
The second is having to use the PrimaryBid app to buy more shares. This seems to be a feature of all PrimaryBid offers these days, and presumably precludes brokers from making bids on our behalf? I'm going to wait a few days this time though, I'd already applied through PrimaryBid last time before my broker invited me to apply through them.
First cash call at above £1.00, bodes well for capital growth in the future. I'm hoping to see 8p in dividends by next year, based on the additional capacity being added. All in all, very positive about this. Forms a significant part of my income generation going forward.
Just going well then this happens, ******s.
@adv11 Where does your statement come from? My reading is that fund are being raised in excess of nav to invest in cash generating storage projects - and from there cash will be generated to pay increasing dividends.
My grouse is why, as a shareholder at flotation, do I now need to line up with others on Primary Bid?
102p. What an absolute joke ! Raise cash to pay dividends. Only going one way.
Raising cash if you get 10% IRR isn't a problem surely, especially where size of asset base isn't matched by the size of the G&A expenses it gives economies of scale too?
are we not forgetting the constant need to raise more cash ?
Absolutely - good news flow and the messages are clear.
Everything seems to point to the 7p dividend being rock solid and more than covered to allow organic growth. They are exceeding 10% IRR on these sets discussed today.
Wallop.
GSF is going places! A great company to have shares in.
Energy storage is the way forward and GSF seem to be making it work. A bright near and long term future!
The crispy dividend yield and reinvestment of it makes this a strong buy from me.
Has this as a "buy" at 106p:
"One area where there could be meaningful growth is energy storage, as the potentially exponential growth in renewable energy inevitably leads to significantly more volatility in the power supply when the sun doesn’t shine or the wind doesn’t blow, increasing the need for infrastructure to store excess energy until its needed.
A good option in this space is Gore Street Energy Storage (GSF), which offers a 6.7% dividend yield and has shown good potential for growth having added 4.5% to its NAV in the last quarter of 2020.
There could also be further upside to come with analysts highlighting that Gore has also won three contracts yet to be reflected in its NAV, while also not included in the NAV is news that its Porterstown project in Ireland has secured grid connection rights to treble capacity."
K