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To provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of primarily UK-based solar energy infrastructure assets.
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UK renewables down the pan.
Is 98p a gift is the government is out to destroy the sector?
The sooner Truss and her oil-sponsored goons disappear, the better.
Looked like a gift at 98p this morning.
I imagine investment in the sector will again be tax free as it should be ….. and used as an incentive to oil & gas producers.
Market is closed on Hbos. All you can do is go negotiated and lose your shirt..
If the government does push through the prices per megawatt hour referred to in the article, what will be the incentive for these companies to expand. Can they fund expansion and pay a dividend at those rates ?
https://bmmagazine.co.uk/news/government-to-push-through-revenue-caps-for-renewable-generators/
Just received !
Not yet...I’d wait till close of business today and re check.
I get a lot of this on a regular basis. :-))
I am with II . Thought we were due a dividend today ? Has everyone received it ? thank you
Renewable energy companies simply issue new shares to write off debt …. As they have been doing …. It was an easy earner …. Wait for book build of new shares at a discount wait a few days buy in take profits move onto the next .. rinse repeat.
I've had another look at the annual report. I don't think "interest income" is going to offset higher borrowing costs. These are mostly loans to subsidiaries that don't earn interest for the group. The critical paragraph is on p58:
"Apart from any drawings under two revolving credit facilities for an aggregate
of £145m that expire in 2022 and 2024, there are no borrowings by the Company or any of the HoldCos or SPVs that are expected to be refinanced."
Let's assume borrowing costs increase by 3% per annum on £145m. That's £4.35m per annum, which has a present value of £69m at 6.3% interest. This about 10% of the current net assets of NESF, which would justifiy a 10% reduction in the share price.
… nice few days on renewables … bounced from bluefield, to Trig, to FSFL, to JLen . No reason why this will not bounce like the others.
GLA
I do wonder why NESF is singled out for the price falls yet FSFL seems to escape relatively unscathed. Could it be that FSFL balance sheet is stronger and will not be affected so much by higher borrowing costs ?
There are two possible explanations for the price fall:
1) Anticipation of higher discount rates (as a result of higher gilt yields) that will reduce calculated net asset values. This is not something that will affect future profits and dividends.
2) Higher borrowing costs for new loans (not existing loans which are hedged).
3) Higher interest earned on new debt investments.
(2) and (3) WILL affect future profits and dividends, but as the annual report indicates borrowing and debt investments are roughly equal, the net effect may be small. It will depend on how much the Trust earns from this debt arbitrage, which isn't clear from the accounts.
Logically, higher borrowing costs should only affect how the revenue stream is split between interest and dividends. It should not affect the revenues generated by renewable energy.
Hi PJT. Understood and both good points, but that FT article I see as positive for the SP and the fund.
The budget didn't reveal the cuts feared, and since it's in our GOV's nature to print then give money to the private sector guised as incentives, I'm not convinces that's a reason for the sell off either.
Kwarteng in fact made positive moves for the sector. See here.
https://www.investmentweek.co.uk/news/4056852/mini-budget-22-chancellor-unveils-growth-plan-accelerate-infrastructure-development
Gavster, I think Whitelye's point below offers a clue, as does the following and the general market sentiment:
https://www.ft.com/content/0b373f7f-ae94-4887-8a4a-986846999816
99p... What is going on, I know it's Everything, Everywhere, All at once but even so. This is a swift adjustment of yield if ever there was one. It's not the electricity cost. I can only think it's a market reaction to inflation triggered by Putin and the FTSE is not persuaded to strengthen due to the total ineptitude of Truss's plan to make the rich slightly richer at the cost of everyone and everything else. Those very tax hikes in value have already been negated within a day of the budget due to the weakened pound.
https://www.nimblefins.co.uk/average-cost-electricity-kwh-uk
This is quite a sell off.
I bought back in at 111 with the capital gained from selling in the 120s to see the SP go down further.
Figured a bounce from 110 support, but now the next stop down is 104.
Hi Sam and all,
It's a thought, however consider this article, which argues what happens in the USA echoes elsewhere including the UK, with regards the Inflation Reduction Act and its boost towards clean energy.
https://www.raconteur.net/sustainability/us-climate-bill-inflation-reduction-act-uk-cleantech-sector/
That said, I actually top sliced this morning, as I aim to have plenty cash in my portfolio for upcoming dips going into the next few weeks/months. I'll still DRIP the upcoming divi cash.
Kwarteng will be under huge criticism if he cuts the subsidy but its nature will keep it out of the main stream media so if they can get away with such a cut, this government will.
Read in the Sunday papers that Kwarteng is looking to change the subsidy arrangement for a fixed 5yr period on less favourable terms. This in an effort to "claw back" some of the excessive profits being made by this sector. So (if you can believe the papers) we will be exposed. Very short sighted especially given that both solar producers are moving into battery storage.
Good question, Sam. I can't answer that (although I'm sure there are others here who can), but I have a question of my own...
When the electricity grid goes down (& power suppliers can no longer get their wares to market (so to speak)), do these shares become priceless, or do they collapse?
Very pleased with this share but read in its results today that 50 per cent of its revenues come from govt subsidies. If the new govt cut green support, will we be exposed ? Grateful for thoughts