Member Info for Mehmet66

Ultimately we are dealing with AIM here so everything is a product of sentiment. Already SAE has more revenue, more profit, more assets, more government support and prospects than many a stock with a considerably higher valuation. Of course the company has also been around for years and so of the small pool of retail investors some will have been burned, and others heard about its troubles in ways that would create caution.

Like many though I think that a basic rerate is underway and will almost certainly clear the 5p mark. A significant UK investment in tidal (for which SAE and Meygen would be the obvious recipient) also has the potential to change a lot quickly. We are there in an interesting position whereby storage is now the breadwinner in the company but tidal is the thing that really gains it attention and gives it a deeper strategic value (aside from the need of more storage in the grid).

Lastly the difference of buying in at 3p on a stock that has done nearly 200% in the last month, or at 5p on one that has gained 20% (or 10p and 10%), is considerable. At some point serious investors will begin to look more at overall value and less at price movements, which everything suggests is some way above the present share price.

Interesting if we go back to pre-Ukraine and interest rate hike there seemed to be a good amount of price support around 5p. In many ways it is now a totally new company (and realistically on a much surer footing than in 2021) so it will be good to see what that translates to now. If it is still there or a new level comes in.

I'd say forthcoming news will be CFD and for BESS hopefully just moving through the planning process both at Mey and future Usk stages. Every step taken there derisks the potential projected value slightly. Would also suspect a first tenth of the Usk Phase 1 batteries installed before too long, with a £1.25m payment triggered there.

Hopefully more rewards to patience soon. Very nice to see the old gang both quiet & regular coming out of the red.

I am far from a chartist but it is a very nice triangular wedge-shape starting up behind the price, compared to the wide-tooth comb of the last few years.

Obviously people will sell at the time and price right for them and depending on personal and wider circumstances.

I would say however that the approx 5p (BESS valuation) and the approx 7p (BESS+Meygen) valuation doesn't take into account the possible material value of direct investment by GB Energy. These valuations simply reflect things as they currently stand and don't allow for potential sea change in public investment. Then you also have the potential for AIM stocks, especially small caps, to really take off (even if this effect may be mitigated because many will know SAE previously - for good and bad).

In short and I think the 20p valuations of recent reports can be realised. Going too on Graham Reid once saying that the company would like to one day be paying a dividend, which you'd certainly hope for given the projected possible £30m annual revenue in 5 years' time. This then alters the calculation again (of course depending what kind of investor someone is) because the holdings people have accumulated will also be paying out regularly.

Don't want to get ahead of ourselves but also feel that recent events and the removal of the going concern issue allows some kind of medium term consideration of this nature. These are just my thoughts - once again, people will sell when they want or need although hopefully at a time that works for them and not because they had to take profit when there was more to come for those who were able to wait. Whatever happens it certainly seems like it will be an interesting remainder of 2024.

The glasses aren't rose tinted.

Not wanting to be a broken record but the SP lost most of its value since 4p in the interest rate hike up to 5% to end the inflation causesd by Ukraine. I'm not about to plot SP against BoE base rate but those decisions killed many an AIM stock and the UK economy with it, thus reducing energy prices. Things are turning a positive corner with SAE as a company but the macro climate is what caused or contributed to the sub-1p.

In short I'm gonna miss you guys when we're all either drowned out by rampers or SAE is so solid there's no cause for comment. Probably a good idea to keep watch here mostly because we are cumulatively probably not an insignificant shareholding. It's been emotional.

FT reporting UK National Wealth Fund to start raising and placing its £7bn "immediately".

Not realy surprised to see the SP drift back up above 2. Suspect that there'll be a few announcements drop for a few companies in the coming weeks and you probably wouldn't want to be out when it comes. The big renewables trusts seem pretty flat, suggesting disappointment at what a Labour government means for the industry as a whole, but the emphasis on small companies in need of different investment models will probably be a boost for tidal, batteries, hydrogen.

This is obviously irrespective of SAE's own schedule of events.

As far as I'm aware Energy Independence Act is due in the opening couple of months (way before the Budget) so I don't think the wait will be too long.

Also onshore wind planning repeal announced today and although Lab drastically cut proposed funding to the sector in advance, the feeling is they're probably hoping to lead on renewables stuff. Lots of broadly popular and headline-grabbing easy wins even if it falls short of what is needed and was first promised.

Think insufficient appreciation here for the limits and obvious high costs of only having four turbines (because of Tories messing up the policy environment back in 2016). Four of anything is expensive. Imagine the costs (already high enough) if there were only four gas power plants in the world. Having a vessel for 1 turbine rather than a handful of them, each turbine with its own cabling. We know all the reasons why this is expensive so far.

And indeed, yes, actually tidal costs are already at or marginally below what offshore wind was at in the same stage of deployment (ie. only 4 turbines). Obviously it's not going to be easy but that isn't the same as saying we're dealing with an nonviable technology here. The opex costs we see with only 4 turbines in the array / world are simply entirely unrepresentative of what a real deployment of the technology will look like - exactly as one would expect!

Just read the report. They are some good numbers. 7p current valuation and 23p likely overall.

Bit disappointing that BESS dominates so much over tidal, but clearly both part of the project and hope for that to change, with Meygen phase 2 financial close the event to watch for. From a corporate perspective it should however be a great reassurance that Meygen debt is A. So much with Scottish government and B. Kept distinct from the SAE finances.

Also noticeable that this must be first in years that the pump of good news hasn't really been followed by a significant dump of traders taking profits. We look to have new investors coming in at a new price point.

My view is that 6MW is valued higher than 50MW because the turbines are spinning, and that's pretty much it.

As noted Scottish Government are clearly hugely supportive and that's great. I also don't think Meygen is easy money (perhaps certainly not compared to batteries in freight containers being placed on gravel bedding) but it is a lucrative government-backed contract, with a solid cost-reduction curve underway, and I think people are losing sight of this a little.

.. Labour binned their green spending commitments. It's now at 70p, so this is a good indication of the value of 700mw of owned and operated storage.

Upcoming events and SP

I believe we are due a further payment in the region of £1.25m for the USK BESS. We then receive a final 1.25m when the first 10% of batteries are installed, which hopefully is just a formality at this point. These numbers aren't seismic but will continue to build both the cash-at-bank, SP momentum, and momentum of positive RNSs.

Despite their breaking of promises, and hopefully Greens and other parties can give a good showing, Labour will likely form next government and renenwables shares will react positively on July 5th. Currently we see a dip in all the UK renewable stocks as big investors hedge against a surprise. That the SAE SP is rising despite this is healthy. Lastly and without jinxing it August is quite likely to see a small BoE rate cut which (given impact of rate hikes on small caps) will have a positive ripple all through AIM. This will be compounded for SAE because anything that augurs pickup in the economy will also help bring energy prices back up off the floor.

Lastly and we can expect a turbine going back in soon. Of course it would be nice to have all four down there and turning out £120k monthly revenue apiece, but even if not it should still hopefully be more heartening news in the RNS and again helping build on SP momentum. With the CFD auction results also out by this time, one would hope the SAE story is going to be getting more compelling both to newcomers and those who bailed out in the rough years.

As always and good luck all. Apologies for truncated posts and have a good weekend.

Nice to have the gang around without the spammers. Thought I'd put down a few thoughts ahead of the weekend and in response to what a few people are saying.

Tidal

Given the tidal beginnings of SAE and how excited most of us are for the technology it seems there's a bit of disappointment at a perceived relegation of the technology. I would say that I don't feel this quite the right way to look at it, it's more a case that the storage side of the business has clearly surged in value, in a way that took SAE by surprise (or wasn't apparent at outset) as well as all of us. Noticeable to me in reading the report was how many times the words "Scottish Government" appeared alongside Meygen, which I find very reassuring. I think the tone about Meygen is one of realism, everyone is aware of the scale of the task but I don't think anyone believes that SAE isn't up to it after so many years work. Just because there is now a very strong supportive side of the business now in storage, I think it would be an error to see this as anything but an asset to a tidal side of the business that is firstly linked to storage anyway, and secondly will be very lucrative in its own time.

Well done to Munin with the eagle eyes on the reduction in the Proteus holding - that is indeed a little disappointing, but again and as mentioned there is work in-kind (Proteus do the work at Nigg and the buyout also included their covering certain operations at Meygen) so I would be surprised if there wasn't some arrangement where the return of equity wasn't covered by something that saved SAE on some opex costs. At root and though we started out as turbine manufacturers, I think we probably just need to adjust our horizon to being the Orsted and not the Vestas of tidal, and that's fine by me.

Storage

It's clear the potential of the grid-ready storage prospects is huge, and these projects are also fantastically deliverable. The determination evident in the recent interviews and report to have SAE operating rather than only building and selling these projects is for me the crucial factor in realising this value. With financial stability now seemingly secure, it doesn't seem impossible to start getting in shape for this.

Value

This in turn for now is I feel the main determinant of the SP and overall value. In the past I considered the UK's main energy storage supplier, Gresham, as the obvious comparator, although then the scale of Gresham compared to a single 200MW at Usk, that we weren't operating ourselves, seemed ridiculous. Now I'm less sure. Gresham have around 700MW in operation and more being built, but a 1GW storage target for SAE hardly seems unrealistic, so again the key is that we operate and profit ourselves.

Value

This brings me to value, and of course for now it is to an extent anybody's guess, though higher valuations and multiples don't right now seem crazy. Gresham were valued at £1/share before Tories destroyed the economy and Labour binned th

I look forward to the day £10m revenue from Meygen is disappointing!

For the new yaw I suspect that if it's just out of testing it won't be going on to one of the Meygen ones just yet. Also sounds like that one is specifically for a 3MW turbine so probably beyond what we can expect on the 1.5MW models. All good things to have up ahead though.

A quick misreading on my part there: £4.5m revenue from Meygen (within £10m overall). Also turbine scheduled for redeployment now in Q3. Disappointing slight delay but at this stage one can expect it is now certainly within the coming months. Will be looking forward to some boat-watching excitement and it will be fun to think about it not even affecting the SP!

The report in full makes for great reading. Very professional outline and and reduced debt and costs particularly reassuring.

Another noticeable thing is that today we hit what I think is approximately a 3-year high in the SP. These things come and go of course but they do highlight progress to those watching precisely these metrics.

Good to see strong buying pressure even high above 2p. Seems like a good deal of price support is building, as it should be with the clearer understanding of NAV.

The Simon Hirst CFO interview is as impressive if not more. His is a slightly better communication but both have an absolute straightforwardness about where things are at and going, including on the replicability of these results. If anything I find the absence of a glitzy sales pitch reassuring - it all quite simply speaks for itself.

Noticeable too that tidal is spoken of as contributing to the operational experience on BESS, but is scarcely mentioned as part of the business case - which focuses on BESS. Tidal is almost presented as an additional upside for new investors. Very reassuring mention of raising finance rather than equity for additional projects.

Incredible set of results and richly deserved reward to long-term patience. Whatever the exceptional 2022 energy price situation owing to Ukraine, it is still fantastic to see Meygen bring in in excess of £10m revenue.

Well done all. Enjoy.

It is all just feeling quite healthy right now. If Proteus really are moving towards a viable 3MW turbine, even without the 20% SAE holding, that is great news for the sector. Then if you add in Orbital picking up work in the US and Nova having it in Canada and EU (the former getting built the latter serious funding) as well as potentially Indonesia (where diesel power on remote islands with strong tides is hugely expensive/polluting/wasteful).. we really are starting to look like we have a sector on our hands.

And all this is without even mentioning Meygen, which is of course the flagship and most successful project in that entire sector, and stands to grow naturally with it.

I wouldn't say 6 months, but it will be interesting to see where things stand a year from now.

I'm not expecting anything to change in time for the next announcement, especially not with bids having already gone in. My curiosity is more what amount SAE feel they can deliver and at what price (much more/ much lower?) on the basis of the economies of scale now being built by all prior phases at Meygen.

For next year it is hard to say but I'm cautiously optimistic. A GB Energy with an HQ in Scotland (for all the Labour weaselling and absence of hard cash backing) is certainly going to be good for tidal. Similar the desire of the Westminster set to perhaps see off the SNP when weak again means I think tidal is pretty safe from too much meddling that would anger Scotland needlessly.

I've been impressed with the method and motivation from the MEC. As such I'd be surprised if the ring-fence isn't increased in the next round. I also think a formal GW target for tidal is an inevitability that will help build momentum, and it is low-hanging fruit for government to provide. I think EMEC in Orkney growing in scale and business model will help make another compelling advocate for investment, especially as it has to become financially more self-reliant. Same applies for the successes the other main manufacturers seem to be enjoying, especially with big funding going from the EU to Nova.

Finally I would not be too centred on the CFD model. MEC are I believe rightly advocating for alternatives to support it (although not replace). Think of CFD as a trickle-down approach to a problem - at a higher price you make lots of money if you can generate lots of power. This is great until your cable frays or your yaw mechanism breaks and you are making no power. Targeted grants for technology development not only help avoid this they also provide up-front funding that is crucial to new technologies. Again, I think MEC are abreast of this and let's hope to see some of it adopted; push-factors to support the pull of the CFD mechanism.

Meanwhile it will be good to see the report soon, and hopefully also Graham Reid's interview before long.

Key word missing there was Meygen financing*.

I think you're right to highlight some big stuff on the horizon, and a high likelihood of some good news that will continue the upwards trajectory. Very curious to see what sort of scale a new phase of Meygen could win in forthcoming CFD.

For me though the next truly pivotal thing is Meygen scheduled to be announced in H1 2025. So I think your time frame is out, even though a SP improvement before isn't impossible and would be nice, especially if we are finally to see an end to the harsh interest rates policy soon.