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Its all about operational gearing.
The fixed costs will not be covered until the volume of sales rises. The order book and level of interest suggest that may come in 2025. Finance to cover increased working capital needs is as you say likely to come first, but a strategic partner may cover that need, or indeed if IES can find the right customers they may fund their purchases in stages.
Quite probably right HarChris...hopefully the company will be in a strong enough position to sell at (or above?!?) market value! And a good strategic partner will of course provide extra strength and support for the company.
Very little to dislike about that RNS. Reassuring and positive, everything going according to plan and more. Exciting times ahead. Next steps are further commercial agreements being finalised, Mistral being actively deployed and funding arrangements. 2024 should be transformative
No harm in a bit of research first ils...
IES has yet to make a profit, all investors know that. The launch of their next gen tech Mistral improves efficiency, lowers MWh footprint etc etc to such a degree that margins are improved significantly and cash generation will begin. That starts in 2025, there was always one more round of funding needed to get there although we weren't sure whether cash runway was H1 2024 or H2 - so today's news is positive on that front.
Behind these words is a hint at another fundraise. Yes £21.6m income for the 2023 year end. However it looks like it is selling these storage devices at less than what they cost to make. its going to need yet another fundraise. Looks more like a charity than a profitable business.
Still, in whatever form it comes, delivering on these projects expecting to be concluded in Q1 will make the funding far more palatable, especially as Mistral will be well within sight by that point.
I agree Richard although wouldn't funding from strategic partners come in the form of issuing shares? I assumed it would at least be part debt and part equity, still positive in the sense of bringing long term partners onside that weren't here for a trade.
If at all possible they will be after funding from strategic partners rather than issuing further shares. It will be a good indicator as to how well these discussions are progressing, if we don’t hear of any further strategic partnerships by the end of H1 2024, but instead end up falling back on us. That large and increasing pipeline, plus the launch of mistral will hopefully be enough. If central banks start cutting rates early in 2024 then there will be an increasing amount of FOMO even at the corporate level!
Funding clearly a prospect in H1 2024. Generally very upbeat. As ever real world growth and development happens at a slower pace than many in the AIM market expect.
Well that was a pleasant read and has certainly got my tail back up! GLA, let’s hope 2024 really is the ‘pivotal’ moment we all crave 🤞
With a little time on my hands and a spot of reading, I looked at how Vanadium Energy Storage could be in the near future.
Are vanadium batteries the future?
Based on water, virtually fireproof, easy to recycle, and cheap at scale, vanadium flow batteries could be the wave of the future. Huang 2022.
The problem- Vanadium redox flow batteries (VRFBs) can effectively solve the intermittent renewable energy issues and gradually become the most attractive candidate for large-scale stationary energy storage. However, their low energy density and high cost still bring challenges to the widespread use of VRFBs. For this reason, performance improvement and cost reduction of VRFBs are the keys to their commercialization and large-scale energy storage applications. ABS Publications
The principle based on bringing this to market is Core Component Material, System modeling, Operational Optimization, and Business Challenge.
Within the sector, Energy Storage has mainly been around the model of Lithium Storage to supply but through study that model has had some problems. With an ever-growing decarbonization, Energy Storage is fast becoming a new frontier.
China recently introduced Vanadium Storage on a larger scale with 2 of the biggest facilities so far. They said it illustrates China's thinking of moving away from Lithium to more long-term storage to tackle demand.
Invinity Energy Systems has developed the Vanadium Storage codename, Mistral. They intend to launch the product to Commercialization in 2024. Mistral has been co-developed with Siemens.
Invinity Energy Systems in the short term has had problems with Funding. It recently did a Fund Issue in 2023 which should see it through to April 2024. The company 2023 has announced Funding projects in the USA, UK, Australia, South Korea, and Taiwan. These have been with Partners like Taiwan.
Mistral seems to have tackled the 4 principles mentioned earlier in bringing it to market. China has shown how Vanadium can be scaled to cater for Electrical Grind.
Vanadium Storage has a future. Invinity Energy Systems' market model is built on long-term Royalty revenue from projects it will set up. The projects that have been announced are large Funding Projects. These would have a time scale of 10 to 20 years to run.
Invinity Energy Systems has a project, it depends on whether the Board is capable of Delivering or will someone else take over and push it through.
Quite a good site that, energy storage news. Surprised the company didn’t take the opportunity to do an RNS mind you.
Invinity Energy Systems
High target ----- 145p
Ave target ----- 99p
Low target ----- 75p
Current price --- 27p
https://twitter.com/Benzalito/status/1735288101180785011
A vanadium redox flow battery (VRFB) with a 24-hour discharge duration will be built and tested in a project launched by Pacific Northwest National Laboratory (PNNL) and VRFB technology provider #IES Invinity Energy Systems.
https://www.energy-storage.news/vanadium-flow-battery-pnnl-and-invinity-launch-24-hour-project-in-texas/
A very small number of trades, only 171k shares traded according to Hargreaves and Lansdowne... so if they are all sells it's easy for it to go down. And much more noticeable on a day like today where everything else is blue. There is no bad news from the company so patience is required.
Yes, I know that feeling well!
Bad news travels fast so I think we would be seeing a major collapse in the SP if that were the case. However, once again the world appears to be dragging its feet where grid scale battery storage is concerned and when this picks up is anyone's guess. The question is will it be soon enough to save IES in its current form? My guess is it will result in a takeover by a major player because at the current price, considering the amount of money that needs pumping into the operation, it is realistic.
Despite everything rallying strongly this morning including Clean Energy, doesn’t appear to be a single trade registered for IES so far?!! I’m getting that sinking feeling in my stomach again and IES desperately need to release a very positive RNS before year end
Thanks. I see it as the difference between being an investor versus simply a trader of stocks.
That’s genuinely really helpful and well intentioned, even if you two are in a tiny minority.
James, so did I. Of course it's a tiny amount in the grand scheme of things so doesn't make any difference to me. But I thought it best to offer up my money as that's what the company needs right now. I wonder how many other investors think the same way?
Fool that I am I have exercised my warrants via Hargreaves Lansdown. As Hargreaves Lansdown seemed to remove my warrants from my holdings page a week or so ago maybe, I don't hold out much hope that open offer PI HG Invinity holders now will even realise they can exercise their warrants. The rest will think buying additional shares at 50p is foolish when the price now is under 30p.
I wish I added more to my Monthly plan SP is low before it takes off. The next few weeks will be interesting.
I'd be content with giving away say 15-20% of the business at a premium to ensure a strong partner comes on board that capitalises the business right through to Mistral and beyond. 40 million shares issued at 50p i.e £20m funding and 17% ownership after dilution.
They wouldn’t sell for double, it would have to be many multiples. Look at Hotel Chocolate, that went for 250/300% premium and we ain’t selling chocolate here!!!! Schroeder’s hold 22% and there average price is far north or where we are so ain’t going to happen on the cheap imo and I just don’t see a sale of the business at this time
Certainly hope not. Even a 100% premium would be disappointing and, with Mistral imminent, all our patience would have been for nothing.