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We're below £6m. It's pretty obvious that there's no demand for this stock and at this price... it's also kinda obvious that institutions don't care about this company.
As I've suggested in the past.. there's probably around 1000 people around who own a few shares of SAE.
The good news is that it can't get much lower. I've already accept the fact that it's not unlikely I might lose my money ok this company.
It's in Graham's hands now.
Will CfD money be enough to get this sector going?
actually almost all of those entities are stockbrokers holding private investors shares, apart from simec who took half of the original atlantis in exchange for a half ****d plan and a disused coal fired power station, and morgan stanley who provided seed capital to atlantis, iirc. i believe the only "voluntary" institutional investor on that list is janus henderson.
A lot of that list act as broker's so still held by retail investors.
According to the company’s website today, 88% of the Company’s ordinary shares are not in public hands – see under Investor Relations Shareholder Information & FAQ’s
https://saerenewables.com/investor-relations/shareholder-information-faqs/
“SIGNIFICANT SHAREHOLDERS
As at 28th March 2024, SAE is aware of the following shareholders holding 3% or more of the issued share capital in the company:
Shareholder Shareholding (%)
SIMEC UK Energy Holding 29.68
Hargreaves Lansdown PLC 15.16
abrdn plc 10.47
Lloyds Banking Group 5.54
Morgan Stanley 4.57
Interactive Brokers Group 4.35
Janus Henderson Group plc 4.07
A J Bell Group 4.03
Barclays Bank 3.28
While the Company has implemented requirements within its articles to comply with the provisions of AIM Rule 17, the statutory disclosure of significant shareholdings is not identical to the requirements of the Disclosure and Transparency Guidance Rules for companies incorporated in Singapore and may not always ensure compliance with the requirements of AIM Rule 17.29. 88% of the Company’s ordinary shares are not in public hands.”
*monopile!
We had years ago Drew Blaxland rolling his eyes at running a hydraulic pitch adjustment mechanism rather than the eventual electric one.
We had every turbine with its own cabling because the subsea cable wasn't around.
Every turbine on gravity foundations and now moving to monopole.
Going from 1.5MW to 3MW turbine size is definitely a big question, but overall Meygen should be seen as a probably very successful R&D project in turbulent economic and political times that were hard to control for. It makes very little sense to expect a new technology to be immediately successful with only the first 4 examples of that technology in the water. Lots of sub-ideal circumstances not least of all share price but no reason not to believe that they didn't start out needing to learn pretty much everything, and as has been pointed out, SAE probably have done quite a lot of learning invaluable to the company and the sector.
On the Proteus website it does say
Our system to be deployed at Raz Blanchard in 2026/7
https://proteusmr.com/projects/
But this is SAE so who knows 😂
Interesting read below Proteus aim to get a 3mw turbine in next year but will it be Scotland or France ?
https://www.linkedin.com/feed/update/activity:7186368339525390336?trk=organization_guest_main-feed-card_social-actions-comments
Just had a long and interesting read of posts here for the first time in many months - a much improved standard of posting than existed back then. But I do feel that I should point out that the post claiming that institutional investors hold more than 80% of the company shares is not correct, they appear to me to own approximately 2.8%.
I believe that they learned from every mistake... the turbines were not only repaired but optimized and you don't know this beforehand but they got smarter.
Got to agree with munin here.
Quite some time ago I did all the math and came up with some numbers back then. I think 27% capacity factor was what I came up with. Not bad but not great either.
Maybe this will improve and economics at scale may change all that.
I'd like to know at what point a reduction in capacity deployed will become visible in the LCOE. Simec lowered the cost from whatever to £300 to below £200 / MWh so far but now we're back above it.
Yes, still without the scale but here is where CfDs come into play.
If SAE can reduce the cost per MWh as the industry promises, then perhaps tidal has a chance.
It really depends on that and only that
"Anyone still worried that MeyGen can’t generate the revenue to pay for the turbines?"
I think "won't" rather than "can't" better reflects my concern here. I'm worried about the operating losses at Meygen. Happy to be corrected, but I think Meygen plc has made a net operating loss nearly every year since the array started operation.
The main reason being that all four turbines have not been in the water generating £150k/month as per the happy scenario painted below. At almost every point one or more turbines have been sitting under water awaiting recovery (not generating £150k/month revenue); being recovered by expensive vessels (costing £X00k); sitting onshore for months being repaired (not generating £150k/month and costing £X00k); or being redeployed (costing £X00k).
As a result, in most years the company hasn't covered it's operating costs. Debt has increased and investors have not been repaid. We've all seen what's happened to the share price.
Like many on this board I want tidal power to work - I want to believe! Can you explain to me why you think the issues affecting the Phase 1 array will not affect Phase 2? Why will this time be different?
(3 of 3)
Well, what about the debt – the loans and borrowings? The Abundance bonds are secured against the shareholding in MeyGen. So, if private equity want a proportion of SAE’s shares in MeyGen in exchange for supporting the roll out, someone is going to have to procure the release of those shares, presumably by discharging the loans and borrowings secured against them. Some SAE shareholders might welcome a deal that effectively writes off all of SAE’s £58m debts in exchange for the bulk of SAE’s shareholding in MeyGen. On the other hand, some (including Timaeus) would argue that carrying some debt can help keep takeover predators at bay, and that preserving a majority shareholding in MeyGen until the entire 398MW array is completed might ultimately be the only way SAE can ensure the MeyGen array gets built to full capacity.
Maybe a couple of decades after SAE’s IPO some economic historian will write about the intrepid investors who had the vision to hold their shares long-term and top-up at a penny a share giving them a slice of an income stream worth more than 7bn over 15 years. Perhaps some LTH’s and Abundance investors really just want to save the planet, whatever it costs. Or maybe 20 years from now it will all just be an obscure question in the general knowledge section of a Tuesday night pub quiz.
(2 of 3)
Remember that the 2022 annual accounts were independently audited (unlike the numbers posted on this BB on 17 Jun 23), in effect confirming that each 1.5MW turbine does indeed produce about £150k per month, perhaps even a little more.
So, when SAE told Abundance debenture holders in a webinar about a year ago, that each 1.5MW turbine brings in £150,000 a month, it’s likely that was accurate.
It represents £100k per MW per month or £1.2m per MW per year.
At that rate, if all 4 x 1.5MW turbines were turning for a full year they would produce an income of £7.2m.
If Phase 2 of MeyGen (28MW) means introducing (say) 9 x 3MW turbines, they could generate revenues in the region of £32.4m in a full year (assuming a 3MW turbine could bring in £300,000 a month). Add together Phase 1 and Phase 2 and the income could be £39.6m per year. From 2027 onward. Or £198m over 5 years.
If phase 3 of MeyGen (22MW) adds (say) a further 7 x 3MW turbines (target commissioning date 2028) then Phases 1, 2 & 3 combined (a total of say 54MW) could be producing revenues in the region of £64.8m annually. That’s £324m over 5 years or £972m over 15 years.
At these prices, the full 398MW array could bring in more than £475m a year – or more than £7bn over 15 years.
Anyone still worried that MeyGen can’t generate the revenue to pay for the turbines? Say, following financial closure on Phase 2 (due in Q2 2025), MeyGen negotiated a price of £10m each for the first 16 x 3MW turbines. The turbines for Phases 2 & 3 combined would cost £160m – which represents about 16.5% of projected revenue from Phases 1, 2 & 3 combined over a 15-year period. There will be other costs of course, including for hubs; cabling; onshore works; convertors; deployment; etc. And not all the turbines will be in the water all the time. Say, each turbine needs a service once in 5 years. You could envisage a routine of one coming ashore every 3 or 4 months perhaps with an extra turbine available to replace the one coming ashore….
Very poor response indeed as number of postcards received with correct answer = 0. You only had to name a successful company that was founded 22 years ago, launched its initial public offering in 2010, first turned a full-year profit in 2020 and has never paid a dividend. Big clue: it’s an electric car manufacturer named after a Serbian-American electrical engineer whose name began with a T.
This week Timaeus (no relation) has been mulling over what Chairman Duncan Black has delicately referred to as “the group’s financial position” and the need for well-resourced turbine suppliers. How is it that the group nurses ambitions to obtain supplies of expensive turbines when it has extremely limited levels of trading income and very substantial debts (loans and borrowings totaled almost £58m as at 31 Dec 22) that are secured against group assets (including the shareholding in MeyGen) and which are going to be increasingly expensive to service (see the 13 Feb 24 post for a calendar summarising the dates when enhanced interest becomes payable to Abundance bond holders)?
Start with why the income is so limited. The annual accounts for the 12-month period to 31 Dec 22 show revenue from “power sales” was just over £3.9m. Well, you might recall, not all the turbines were in the water throughout that period. The dates of the 2 most relevant RNS announcements in 2022 were:
21 Mar 22 – reporting that with the AR1500 back in the water, 2 of the 4 turbines were fully operational.
23 Sep 22 – reporting that with a 1.5MW turbine redeployed, 3 turbines were fully operational again (note it was not until 5 Jul 23 that there was an RNS announcing the last 1.5MW turbine (known as Turbine 2) was back in the water).
Allowing for 2-3 weeks or so between redeployment and RNS to confirm each redeployed turbine was running normally, these announcements mean that during 2022:
1. From 1 Jan 22 until early Mar 22 (ie for just over 2 months) only one 1.5MW turbine was operational
2. From early Mar 22 to early Sep 22 (about 6 months) there were only 2 x 1.5MW turbines operating
3. From early Sep 22 until 31 Dec 22 (almost 4 months) 3 x 1.5MW turbines were operating.
If you add these together (say 2 months of 1 x 1.5MW turbine output; plus 6 months of 2 x 1.5MW turbine output; and say 4 months of 3 x 1.5MW turbine output), you get a total (2+12+12) of 26 months’ worth of 1.5MW turbine output.
If you were to divide the reported £3.9m of revenue from power sales by 26 you’d probably get pretty close to the amount of revenue per month produced by a 1.5MW turbine. Try it.
Not much news around bit on Meygen here
https://www.offshore-energy.biz/world-first-eco-friendly-cable-protection-system-deployed-offshore-scotland/
And
https://www.linkedin.com/feed/update/ugcPost:7183740185308737536?trk=organization_guest_main-feed-card_social-actions-comments
It's all good but TSE does not eat up valuable land isn't an eye sore. What we don't know if it can compete in cost.
https://www.independent.co.uk/tech/renewable-energy-solar-climate-targets-b2529461.html
Wake me up at 10 GBX
The prospect of SAE ever actually owning any of the more than 100 x 3 MW turbines that could be deployed at MeyGen seems vanishingly small. Arguably there’s a more realistic prospect of SAE encouraging others to build, own and lease them to MeyGen in return for some of the money obtainable from selling power to the grid and from CfD payments over the next 15 years.
Perhaps the private equity backers of the Proteus management buyout believed it likely Proteus would be able to assemble and supply something like 9 x 3MW turbines to MeyGen by about the end of 2027 providing them with a decent ROI within a 5-year period. But an AR3000 is supposed to have a life-expectancy of 25 years. But how would you like to be able to buy a 3MW turbine deliverable in 2027, lease it to MeyGen for 5, 10 or 15 years, then sell it abroad second-hand for say 2/5 of its original cost and invest the proceeds in a newer (up-dated, even cheaper and more efficient) model that you could also lease to MeyGen then re-sell a few years later? The answer, blindingly obvious even to Timaeus, would be: “It depends what an AR3000 would cost!” It’s perfectly possible Timaeus is being grossly over-simplistic or is just completely wrong but it’s worth more than nothing to know now the strike-prices which will prevail well into the 2040’s and will start being payable from 2027 once turbines are turning.
Timaeus, perhaps over-simplistically, labours under the impression that the CfD’s were designed to support the deployment of large-scale renewable energy projects which probably wouldn’t otherwise happen because of the difference between the understandably high initial costs of pioneering the new technology involved and the level of payments normally receivable for supplying energy to the grid. It might be that no-one realistic ever expected to ‘make’ money from CfD’s in the sense of an ‘actual’ profit for a company whose shareholders could expect to ‘see’ any of the public money involved in dividend form.
If the interim accounts for the 6 months to 30/12/23 were to show a trading surplus, a wise shareholder might be happy to see those funds reinvested or used to reduce debt rather than distributed. Some investors might see improving the balance sheet and reinvesting trading surpluses as ways of adding value to a company’s stock eg by funding growth. By way of example, can anyone think of a company now doing OK-ish that was founded 20-odd years ago, launched its initial public offering in say, 2010, first turned a full-year profit in, let’s say 2020 and has never, ever paid a dividend? (Answers on a postcard, please, to the usual address and minus points if your answer is HS2).
SAE and Proteus would need to wake up, change course completely and start trying to reduce the cost of TSE a ‘lot’ if that wasn’t what they have actually been working on quite successfully all along. Of course, Timaeus could be quite wrong, but it looks like SAE sees its future as being an asset-light, specialist project developer. There have been many months to actually think through Chairman Duncan Black’s statement about the Group’s financial position (dated 25 July 2023) in the 2022 Annual Report making it crystal clear that SAE is not going to be building turbines or ‘seeking to compete’ with large scale wind and solar:
If the tidal power sector is to be viable, it needs well capitalised tidal turbine suppliers that can provide large turbine orders backed by the required warranties, which the Group is not able to provide given its financial position.
Black said restructuring the Group “has significantly reduced the Group’s operating costs and created a pure play sustainable energy and battery storage project developer…. We are not seeking to compete with large utilities and oil companies in delivering “commoditised” renewable energy projects such as wind and solar, but rather seek to identify innovative solutions to help aid the energy transition.”
By the end of June ‘24 (when SAE should be publishing interim accounts for the 6 months to 30/12/23) the 4th turbine is due back in the water. How strong is the likelihood the news proves positive enough on both counts to more than cover the bid-ask spread for those buying between now and then? Or would it be better to buy and hold because you want to see tidal complement wind and solar and meet up to 11% of UK energy needs?
To add: that's 300% and it's actually not SAE that needs to prove that, but Proteus..
Also: This website is a pain in the butt on mobile
To
I don't want to be that guy, but, there's another side you left out imo.
The money SAE can make with CfDs is public money. This money will never result in any actual profit for the company until scale and reduced cost make TSE competitive.
If you buy SAE today, you'll not see a single penny in profits because that money will have to be re invested until you can build more turbines for less money until you can do that without governmental funding. That's when you reach the point where the company can make more money than what you have to put into.
SAE has to prove that it can do that. Lowering turbines alone won't suffice. These turbines have to become cheaper. A lot cheaper.
We need to close the relative gap to wind and solar. £50 vs £198 /MWh (all rounded grossly) +400% isn't going to cut it.
All eyes will remain on that number and the question if SAE can follow a trajectory that says: We can truly be, not just theoretically, competitive.
https://assets.publishing.service.gov.uk/media/64fa0473fdc5d10014fce820/cfd-ar5-results.pdf
So... anyone topping up?