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You can find the caiso and ercot details if you google ercot grid live (grid status) bessanalytics gives a pretty good indication for 1 hr batteries- you can take a small premium for their in house trading if you like. ireland grid live (eirgrid site) also gives you the details. ireland revenues did go down because of ancilliary services but its stilll by far the most volatile and profitable grid that keeps things together.

Caiso and Ercot do indeed benefit from extreme heat but none the less the added capacity in these grids did reduce the volatility and pricing in this summer (compared to any recent summer). sure there might be more volatility in the future but as things stand your regular income is around 17-20 million so perhaps 3-4 pence per year.

Unless the management are forced to sell some assets and upgrade for revenue then this is the steady state - nothing says the rates cannot stay as they are or that they might even decline in some places like ireland and uk - due to higher competition.

so what can we say - there is possibly some more upside volatility in ercot and casio, but likely more downside in Ireland. UK likely to be flat more or less unless in extreme cases.

so you will receive around 6.5% a year but whats the risk reward here? seems like a low return with only potential for a reasonable return.

You can find all the information online rather than gaslighting yourself. the current revenue rate is around 37 million a year which just about covers the 3p dividend.

UK revenue is doing very badly

USA is doing badly but has seen a bit of life recently though that may be short lived

ireland is propping it up

this is volatile cashflow with ireland propping it up, while uk revenue might improve a bit due to increasing duration if they ever complete the project (we know how long that takes them). given the risks, you would want a significantly higher than 6% yield so i would say the sp has to go down further, possibly to 40 before this becomes good value - and there should be visibility og markets becoming more stable etc - so more assets and or slight revcovery in core markets (or alternatively if other assets are sold and existing ones improved- allowing them to generate revenue from the dead unproductive NAV)

What a beauty, actually I think I'll wait for 50

HAHA this company just keeps on giving. thank god i sold. your funds are just a watering can for Cox's retirement

Therosy 1 - the dividends are not covered, so all youre doing is receiving your money back slowly. the share price will simply drop by the dividends. what you really want to see is a sustainable income covering dividends, and unfortunately, once again gore street is some way off from that - due to a combination of high debt and high fees but also the markets are simply not performing well. your income is just the company paying you from your own pocket

What a trashy board and company, honestly, who would even want to stay on as an investor unless its bargian prices

Ireland will drop but it seems it won't drop to the levels of the GB grid and indeed oaks assuming this too. Although it depends on how many cells are being built there, I still wouldn't put all the upgrades in GB, in any case, all this is basically gearing up for another drop in expectations coming soon, but I don't understand why it's so hard to just get rid of all these managers

I dont understand why the oak guy and gore street do not recommend to increase ireland assets insteaf of GB - if ireloand is performaing much better. Oak's assumptions are also that the uk market has a significant recovery in 2027 or so and texas too - maybe but those are all ifs and even with these Ifs he does not forecast huge profits. you have to wait till 2027 and things have to go well - then you earn 34 million in that year - but youre paying over 300 million for that now. those are some pretty rosy expecations from oak still (looking at current performance of Caiso and ERCOT AS WELL as GB - its not on target for his assumptions unless those markets recover). i do not believe its good value at the moment especially with the fees as they are.

my target price to buy some is 55

Clissold345 - in that situation there is still nothing stopping RM from being shareholders or even part of the board - but they are pure advisory - just need a rational competent person from the GSF execution team (like the polish girl) to be leading the whole execution with a good team - then if the fund sees opportunities they can ramp up investment and scale, but that comes with shareholder votes and a real presentation about the merits of said investments

The investments have been made and the value has already been lost - the value was lost by buying cells at the peak of lithium privces and investing into overheated california and ERCOT markets. whatever the CEO of Mondo says, these markets wont return to their extreme levels any time soon - if ever (it was akin to an oil price shock, also the ceo of mondo is not an independent voice - he is funded by BESS industry so of course he will be saying what they want to hear).

you cannot return that money, the best you can do is now manage what they have well, and look for opportunities to invest in what they still have - intelligently. you really dont need an overly complicated board nor do you need some experts from a fund to do this - this is Operationalisation - its like being a caretaker of the operational assets - its mechanical.

new investments into other regions would require further expertise etc - but even extending capacity or building out sites is pretty trivial - the expense of these 'experts' would be more than the value they create with their expertise (at least for the relatively small assets of Gore st).

what the experts and others could do is look for opportunities for co-investment and co-engineering activities with other funds or companies - although this seems lika long shot it could be interesting.

the Fund thqat acquired some shares can say what they like, but when the share price was super volatile and trading at 46 etc - didnt hear a peep from them, nor did they buy then (clearly since the buy announcements are coming much later) so since they are not shrewd or intelligent buying operators, why would the be shrewd or intelligent in other domains

What has the Ned board of directors done at gore street apart from making terrible strategic decisions..to be honest I wouldn't necessarily trust the new fund either.

I would interview Alex and other people doing the actual execution and see where they want to take gore street. As it is it's just a company without clear direction and neither having the fund nor the existing board will pull it out of this rut.

But the shareholders lack the activism and organisation. To put the real propositions to a vote

The problem is that the variance of the returns in ercot and caiso is incredibly high. You rely on just a few very high return days per year to give most of the returns. At the moment these regions are rubbing at very low returns closer to 20k permwh per year, but it all depends on if that volatility will ever come back. At the moment to meet it looks doubtful although with ai data centers etc it might but the grids have a lot of storage now so they really are not that stressed and honestly in absolute terms the data centers are not that energy intensive for quite a few more years.

I had initially anticipated that USA would pick up in the summer with a bit of volatility but they really haven't so I sold because the next set of results will be pretty bad.

I actually don't understand why the share price did this huge drop then return, and why is a fund buying at these prices? My guess is that there is probably some long term value to these grid connections and that's probably right since these will be more limited in the future. But for the moment I just don't see the returns to justify even the current share price.

It may be possible that this is just a lull in the USA market but since it's also occuring in the UK a s since battery prices are going down considerably and will continue, I struggle to see big profits for at least 2 years or more until demand catches up and perhaps puts the grid under some marginal loads again.

Hopefully the capacity being deployed will greatly reduce now, not sure it makes economical sense anymore, and with tarrifs it could reduce this further.

I probably would have held the stock if the management wasn't so sneaky and eager to cover themselves. They take any opportunity to obfuscate and always abstain from any details that would allow you to work things out for yourself. There are further red signs like- if they need to hire a consultant to figure out what to do with their money then what's the point of having the fund managers?

Also I was kind of hoping the company debt wouldn't go over 100 million but again these details like everything else was swept into a some general updates rather than being properly reported on and elaborated.

If the profits don't improve then I do think the fair value again moves to the 50s and even so it's a case of long term hold but don't expect anything drastic for the foreseeable. It really relies on the grids being stressed again but by now there are many more operators competing too

As i have stated previously, gore street is just not that profitable - this is the core reason. but another almost equally disturbing problem is that the management are almost always deceiptful. Of course the hiding of information and subtle misrepresentation would be something we might be able to overlook if there were sufficient profits. I had previously given a profit range of 37-50 million in revenue per year (last year 35 but this will increase in california while decreasing in ireland) - coming to a more refined 42 million recently. this is proving out to be exactly the case.

ireland continues to do well and is essentially the last good margin BESS region. the rest of the regions have settled into a pure arbitrage pricing (basically moving the electrity from low cost to high). - this massively limits their ability to make anything over $100/MWh in the usa and uk - in fact it is even declining below this as the gas prices decline (and of course not all of this can be captured). - so the max revenue from uk+usa comes close to GBP35million but this is now unachievable with current saturations.

ireland will significantly decrease in revenue since ds3 is now calculated differently and will have to be phased out in a few years max.

their best bet is to put ALL the money into ireland and not repay any debt.

so i think my point still stands and a revenue of 42 milion per year seems reasonable. i think they can reduce costs to a bit below 20 million - so a steady state profit of 22-25 million a year - this is around 4 pence per share which is close to their new dividend rate - and this is because they know exactly what i am saying.

they are honestly terrible managers - trying to keep their jobs. if i was them i would just borrow out the 50 million now and immediately expand ireland all the way - and wait for the credits to repay the debt.

then sit on it and look for opportunities with a reduced workforce

Exactly, all pretty simple. the value of the assets is subjective but if some BESS are sold off by some companies, we can be more sure.

those assets have a life of around 15 years so a depreciation of around 30 million a year - which is in fact the profit per year approximately. so its possible that GSF management have taken your money and paid it back to you over 15 years.

OK break down the balance sheet - you can use 3 entries. who cares how they spent it. we know how much they spent and we know how much the assets are worth - we can conclude pretty easily the rest ourselves. just because your profession requires you to move imaginary entries between imaginary accounts, does not make it real. I wanna know what the company has now, or will have in the future. the rest doesnt really matter

Assets

Debt

Cash

My conservative estimate bakes in some additional uncertainty in future profits too. consider it a slight discount of future revenues or Warren buffets famous hurdle rate.

I dont just consider profits for this year. sure they might squeeze out 70, but next year Ireland is still going to reduce in revenue (maybe in 2 years). im accounting for this and perhaps slight reversion in the UK - they may have to invest some of that £50 million profit into future revenue so thats why i say 35 left over.

Therosy1@ that does not help. but to put it simply. if GSF raised a load of cash from people buying their shares. some of that was used for investment into assets, some of it was kept as cash etc. this is just an accounting term to show us that they raised the money. We only need to concern ourselves with the assets, cash and debt as it stands today

Hi JJhbev - i am presenting a base case, based on revenues as i see them at the moment. I believe that gore street is making a few assumptions:

ERCOT and CAISO grid volatility and daily price fluctuations will be significantly higher in summer than they are now (such that the annual average return is higher than what i predict). i dont exactly disagree, but i am waiting for the proof of that in summer.

second, i believe they are still assuming fairly high revenue in Ireland - Im not sure about ireland because from my calculations the new DS3 rates mean that the frequency response is now a much smaller part of revenue. looking at the daily spreads - it does actually look very good - there is sometimes a 200 euro spread TWICE a day in Ireland. is GSF cycling the cells twice in Ireland and taking advantage of this while they can? i am not sure.

all in all im taking a conservative approach to my assumptions hence my revenue predictions. im happy to be proven wrong by them but i believe it would be somewhere in between or closer to my estimate in the end

Spiking downwards from the recession?

Shamus are you a GSF Plant? how is only 12% of GSF revenue coming from wholesale trading? GSF has the following:

700k a year CM from ireland

2m a year CM from UK

$14m a year from CAISO

rest is from wholesale

thats it. Balancing mechanism is not fixed and neither is it less risky than Merchant. in fact, many bess systems are moving away from BM due to the added costs without the added guaranteed revenue.

GSF is changing the discount rate as a form of desperate financial engineering to prop up the declining NAV.

latest valuation:

GSF will have 100 million in debt and 30 million in cash by end of March. It will have another £60 million from ITC if that comes through. Thats a total of 100 million in cash (and debt). Ok revenues?

£14 million a year from CM (fixed) rest is floating revenue from merchanting. Latest revenue from Ireland has been quite good and so has UK, but CAISO and ERCOT have been bad.

UK revenue has been 60k per MW per year - but GSF say they achieve a 20% premium so lets say 70.

Ireland has had its DS3 heavily caped so its basically mostly arbitrage revenue at this stage - based on daily spreads in the last 3 months it has achieved around 6 million Euro per anum arbitrage revenue (around 73k per MW per year - so similar to UK).

ERCOT and CAISO have achieved daily spreads of around $100 per MWh so given their capacity of:

400 +135 = 535 MWh

535 *100 = $53.5k per day or $20m a year.

ok to sum up:

uk and ireland revenues around 73k per MWh per year - totalling around £25m a year

ERCOT and CAISO doing pure arbitrage achieving $20m a year.

plus £14m a year in fixed revenue (from above)

plus Germany around £2m a year

total is around £55m - minus 20m in opex is around 35 million GBP per year.

ok the debt and cash cancel each other (GSF has not historically been able to earn a higher return that the debt interest anyway).

so you wanna value 35 million a year stream? that may last some 10-15 years with some terminal value of the assets/rights/connections/upgrades.

doesnt sound too mispriced to me