Member Info for Monkshood

At this moment NG are paying £26MWh, tomorrows next day average price is £62MWh only about the second or third time it has been below £100MWh this year.
An article in Bloomberg at the w/e indicated that the EU may not apply now an electricity cap -
'A number of countries have also called for severing the link between gas and power prices through imposing a price cap on the fuel used for electricity production, an idea that the commission is not planning to put into operation. While such a model has lowered prices in Spain and Portugal, it bears some risks if introduced across the bloc, it said in the draft.'
It will be interesting to see what they do end up doing here. For what is supposed to be a 'boring investment' renewables have been more of a roller coaster ride than some of my small caps!

Now it looks like we will end up with a price cap, higher discount rate and no benefit from a reduction in corporation tax. Truss certainly knows on how to deliver 'growth' to the renewables sector!
Although I have not seen it mentioned, because the government are making up the difference between the market and capped prices energy is one of the largest areas that they can make 'savings' from the mini budget in, the cost of support could be as high as £100b which dwarfs the £2b of impact from the change in the higher tax rate. Expect them to squeeze as hard as they can.

Another 20 seats signed up, this takes them to 496 so there is a good chance they will exceed 500 this year as expected.
Hopefully this will stop the slide in the share price. I guess the next news will be the sale of the UVsan and HBE probably with a sight of numbers after the October half term holiday periods.

There will be few realisations in the current economic climate, so I wonder if they are also trying to ensure that they maintain a good cash buffer to meet any cash calls going forward?

Yep, the government certainly know how to encourage inward investment.
The US is subsidising their renewables industry (to the annoyance of the EU) and the EU look to set a cap three times of the one suggested for the UK. If you were an Intenational investor in renewables, you are hardly going to be looking to the UK to invest your money.
It was very likely that UKW would have done a placing this Autumn to reduce the debt for Hornsea and therefore release monies for their next investment. it is hard to see that happening now so we already can see the negative impact of government policies/lack of clarity which is crazy when they are looking to expand investment in renewables.
I am also puzzled how this will work with supplying electricity to Europe via the interconnectors, will they be benefiting from cheaper power because we have hamstrung our own renewable industry?

The flip side is that next day prices fell to £77MWh (range 3-164). They have a mean of 107MWh today.
At least it will not be costing the country as much to subsidise the energy cap.

Thanks.

In their last report UTL, which also have a significant holding in rsg, seemed to think that the new management have managed to turn the corner. Let's hope so...

No, my other holding in renewables is GRID.
I just saw that BSIF had a webinar and wondered if they would touch on the recent issues with gilts/discount rate, they do about midway through the presentation.

BSIF presented an updated analysis of the impact of recent changes (ie post mini budget) on their nav at their presentation of their H1 results last week. The combined changes in discount rate , inflation rate and corporation tax rate changes amounted to a 3.5p discount to the nav, higher forward price curves more than compensate for this decrease.

Is there an official date for this event? I need to go to the White City Campus in the next month or so and it would be useful to combine the two.

A good, detailed review of the business-
https://sprott.com/media/5766/221003-scp-rsg-initiation.pdf

Down 15% on 20 year average (government seems to have moved to this from a 10 year figure). High electricity prices will have more than compensated though.

Aside from the discount element, is part of the sp collapse across this, and other infrastructure holdings, related to the liquidity issue for the pension funds which required the BoE to restart QE?
This is an extract from an article on Bloomberg-
'Pensions have been asking fund managers to redeem holdings in equities, bonds, and also UK open-ended real estate funds in order to maintain their LDI positions, Bhagwan said.'
“Any pension funds which has used even moderate levels of leverage are struggling to keep pace with the moves,” Mackenzie said before the BOE intervention. “You have a bit of a death spiral potentially where pension funds in particular are being forced to sell because they’re breaching their leverage agreements with their LDI counterparties.”

The main trend seems to be the company buying shares back from the profits - which they then award to themselves.....
£8M is around 5% of next years profits. It cost £28M last year. which was 10% of the amount paid out to shareholders.
Given the halving of the share price over the past year perhaps the requirements for them being awarded the options should be a lot higher.

Most valuations are now post June which was the market low (around where we are now), so they should not be to far off.
With the £/$ at 1.16 at the end of August there will be more fx gains backed in as well.
I am not so bothered by the discount - if they keep delivering then at some point it will narrow back to historical levels, even at higher inflation rates their long term rate of growth would be sufficient to give a reasonable rate of return.

When you compare their results to those of John Lewis you can see what a good job Dunelm are doing of running their business.
Whilst I am all for rewarding this performance I am still not very impressed that they took out nearly £30 M from the profits for their performance options though.

Nice to see that todays interims have led to an upgrade by the brokers.
Zues-
‘Following upgrades to our estimates, our DCF-based valuation is lifted to 140p per share from 110p (a c.30% uplift).’
FinnCap -
‘We increase our price target to 100p/share (from 80p)’-20% uplift

I see that they are getting removed from the asx300 (19th sept) on mcap grounds, missed that one coming... Coupled to the falling pog it is bound to further increase the downward pressure on the sp.

Looking at GEAR's accounts there does not seem to have been any production at Ravenswood. They have had a fund raise and are looking to expand the production capacity at the site (this year?). Hard to see that they can meet the 500koz by 2024 with a target of 200koz p.a. There is however a rather ambiguous fudge in the Ravenswood sale rns about this -
'Payment of the Gold Price Contingent Payment is subject to the cumulative ounces produced from Ravenswood following Financial Close exceeding 500,000oz of gold over the four-year period and is subject to adjustment if the production plan adopted by the Buyer is reduced or lower than expected.'
The last sentence indicates that the production target is also dependent upon a 'production plan' as the exact details of this have never been specified (at least in an rns) it is hard to know how to interpret this.
I have requested the information from both RSG and GEAR but neither have responded. Given that RSG even referred to the A$200 in the presentation in todays rns you would think that they would be a bit clearer as to what the situation is with regards this potential payment(s). I thought that they were now being more open about their finances now but perhaps not....
At some point they will need $100m to go underground at Tabakoroni, I was hoping that some of that would come from the Ravenswood payments but I am not sure that these will happen.