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Wonder what the read across from today’s deal with KKR taking a stake in Zenobe.
Zenobe expects to be operating 1gw of grid scale batteries shortly. (Not all they do)
SMS is after all a metering company with a nascent battery operation.
Not a big player…..a target for consolidation eventually…
The indexed income is a useful factor….however it does depend on containing the cost base.
Another good trade. This one has been buy in the 600’s sell in the 800’s for ages and if you don’t get back in in the 600’s leave it alone. Looks like it’s gonna be back on again!
Usual caveats
Trek
Also full dividend off 33p share, 10 % YOY inline with company policy.
16-Jun-23 16-Jun-23 Buy Gail Blain 735.50 GBX 2,717 2,717
15-Jun-23 15-Jun-23 Buy Tim Mortlock 733.13 GBX 6,820 58,194
06-Apr-23 06-Apr-23 Buy Miriam Greenwood 751.00 GBX 2,728 32,049
29-Mar-23 28-Mar-23 Buy Tim Mortlock 744.70 GBX 16,114 51,374
21-Mar-23 17-Mar-23 Buy Miriam Greenwood 801.80 GBX 92 29,32
25/07 Expecting a decent update,
Tim, Miriam and Jamie all done well in last few weeks!
I should have added more ... doh
https://presentations.investormeetcompany.com/investor-meet-company/SMART-METERING-SYSTEMS-PLC-Investor-Presentation?bmid=5230ae9510c2
ask them directly?
Been reading in the press that connection to the grid is an issue for these battery farms…..maybe some scarcity value will prolong decent margins in the short to medium term.
Agreed, lithium-ion batteries are needed but their current revenue stack comes almost exclusively from helping deliver second by second responses (frequency services). They're not great at storing renewables, as consistent full charges and discharges (cycling) of these batteries damages their state of health and requires significant replacement of cells. Lithium-ion does have a roll to play in enabling a green grid but this comes predominantly from frequency services which have a *limited demand*. I do fear SMS have arrived late to the party and could face disappointing returns from these investments.
https://www.pv-magazine.com/2022/11/02/uk-battery-energy-storage-acquisitions-heating-up/
BESST - you are right to say there has been huge expansion of BESSs. The above article suggests a relatively low installed base of 1.6Gw, pipeline up to 30Gw in various stages of planning/development. The article does suggest 50Gw maybe needed in the long run…..my guess is more renewables will mean more capacity will be needed and advances in battery design will drive down costs.
SMS is a small operator…which is a risk in itself….with the current cost pressures….we will all need to keep our positions under review.
I used to love SMS plc stock however I have significant reservations about their recent entry in the world of utility scale battery storage. There has been a massive flood of investment into this space and the UK currently faces significant over-build of utility batteries in the short to medium term, saturating the revenue available to them. Taking the average EBITDA contribution per MW across the 140MW currently operational, you'd expect approx £8.5m of EBITDA from these batteries per year. However the performance of these batteries over the last two months would indicate they'll deliver closer to £4.9m. If they continue to build out their pipeline, this issue will only become worse. There could be some seriously underwhelming trading updates over 2023 and beyond as they write down investments and see lower than expected revenue.
The update as usual is pretty upbeat….the battery business seems to be doing well….and when all current build is installed will be generating £45m EBITDA…..although quite a bit of DA I would expect….
Dividend +10% for 2023
One concerning note is the cash position…..not unexpected that they need to invest in the business infrastructure….but it looks like they have burnt through £100m in 2022….the assets they have built are valuable so they can always securitise future cash flows or sell them if needed….will read the FY Results and cash flows with interest….
Broker price targets still well ahead of current price….but shares are vulnerable to a cash raise.
Trading update likely next week.
I wonder what inflation is doing to their business? In theory the meters business is index linked so should be increasing billings significantly and matching increasing labour and equipment costs….i expect there will be cost increases to the battery storage business at some point but power security still seems to be an issue sp maybe pricing power is with SMS…..
JPM short here 17-11-22
https://www.shorttracker.co.uk/company/GB00B4X1RC86/
Only 0.53%
Probably expecting a brief pull back below 800 as it’s defied gravity! Lol!
Usual caveats
Trek
I have been expecting a rise here on the back of Octopus offering reduced off peak energy costs for those that have smart meters. But nothing in the media. Shares keep rising.
I actually think it’s the energy storage proposition that’s most attractive but again zilch!
Oh well!
Usual caveats
Trek
From under 700 to 800p in a month!
Timing is everything!
Trek
Sorry I mean 700p! Lol!
Trek
Unbelievable w weeks ago these were under 600p. Still rising now! What an opportunity.
Didn’t anyone grab any??
Trek
Well and truly on the turn now. What an opportunity that was!
Hope a few other PI’s took advantage!
Usual caveats
Trek
Yah! Blue finish for me having added more sub 7!
If it goes back there will add again.
Can only conjecture what the drop was for. Seems to coincide with LDI as it’s bounced in unison with insurers today. If that’s the case then it’s technical selling which means one for the bargain hunters.
The last update was sooo good.
If they do raise it will be accretive so not bothered will buy any dip here. A little gem imo!
Usual caveats
Trek
Or could be pension fund dumping liquid stock ahead of covering LDI margins?
Trek
Another drop, sniff of a RI???
In for a few more!
Trek
Well sat on my hands picked some up 752 ish. Back for more later!
Usual caveats
Trek
I think that’s a good call wisleyman. They can run as they are but to grow will need a serious cash injection. It’s just too expensive to borrow. Equity is an obvious choice. That way they can keep the divi funded from ops albeit over more shares.
If they cut the divi that will send certain investors away. Income is king to mitigate inflation erosion at these times. If the capital value goes south as well that will be a double whammy.
I will start buying back in at 800p if it comes. But not all at once!
That’s because 800p is a good price for a longer term investment here and I can add if it goes lower.
Usual caveats
Trek