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1002MWh in September. A 10% drop in load factor compared to recent months but nothing to get excited about.

Focusing on what the interim report said about Meygen Phase 2:

> Last year they were "continuing to develop" the Phase 2 project, now they are "exploring options for the development" of the project.

> Grid connection challenges. No surprise given connection reform but it's interesting that the much newer Meybess connection has "protected status" while Meygen does not.

> Funding challenges. Phase 2 financial close was initially slated for 2024 (in 2022), then Q2 2025 (in 2023), but crickets since then.

> "Need to demonstrate the next generation of turbines" before deployment. This is a sensible approach but is not going to happen quickly.

Phase 1:

> One turbine out of commission. Work scheduled Q4 2025.

> No update on the renegotiation of senior debt.

> Output in August was 1116MWh, consistent with 3 turbines running steady.

... sorry I meant to say similar to June, when output was 1,111MWh, or 37 MWh/day versus 38 MWh/day in July and 48 MWh/day in April.

Output in July was 1168 MWh, similar to July, and down 21% from the peak in April in terms of daily output. Consistent with one turbine either being out of operation or limping badly. I wouldn't be surprised if this was the Andritz turbine that had been operating for over 6 years - that's a remarkably long innings.

1111 MWh, down almost a quarter from the record 1426 MWh output in April.

Doesn’t excuse the poor comms but good to get this settled before the AGM.

I'm not too bothered about the name change. I'm more concerned about is that they have proposed another 27% increased in Directors’ fees and emoluments on top of last year's 81% increase: a whopping 130% increase over 2 years.

(Last year's AGM proposed an increase of from £733k to £1250k. The actual figure paid was £1329k, so pay in 2024 exceeded the amount approved in the AGM.)

I don't mind if pay reflects results, but how can this be justified when the company is reporting huge losses and failing to meet it's commitments to creditors? The focus should be on incentivising the successful completion of the AW1 project and return to profitability rather than rewarding performance during a loss-making year, regardless of any "strategic achievements".

The company simultaneously claims:

- "Disciplined cash management" while increasing executive pay by 130% over two years

- A focus on "Positive cashflows" while only achieving positive cash flow in 2024 through one-off land sales

- Financial prudence while awarding substantial bonuses during a £25.1 million loss-making year

This is hypocrisy. True "disciplined cash management" during a challenging financial period would involve:

- Modest or frozen executive compensation

- Performance-based increases only after returning to sustainable profitability

- Demonstrating cash discipline at the leadership level before asking shareholders and stakeholders to support the strategy

The proposed increases send exactly the wrong message about management's commitment to the financial discipline they claim to champion. If the company is serious about cash management, executive compensation should reflect that same discipline.

PS I'm trying to understand what might have caused the massive deferred tax liability because there is precious little explanation in the report. It might be related to the rules around assets used for leasing, which I think are excluded from capital allowances (though I'm no expert).

https://www.pwc.co.uk/services/tax/insights/full-expensing-new-valuable-capital-allowance.html

Timaeus, good to hear from you.

I share your view that there are very mixed signals on tidal in this report. As to the reason for the massive write-down, I see Scottish Enterprise put a director on the Meygen plc board last year - it is possible they brought with them a more cautious view on future revenue and costs.

I note that the revenue from Meygen remains ring-fenced, but it's not clear for what or on whose demand (though I assume it is the senior lenders). I also note that the parent company guarantee associated with the 2014 Scottish Enterprise loan has increased from £2 million in 2023 to £3.5 million in 2024, so exposure of SAE to this debt has increased.

My only quibble with your analysis is that I don't see how the group has loaded debt into Meygen subsidiaries. ~90% of Meygen's £49M debt comprises original loans for project finance (from SE, CES, Morgan Stanley and Engie) - i.e. the bulk of the debt was always Meygen debt, which has accumulated over time because Meygen operating expenses have exceeded revenue. Am I missing something here?

I'm afraid it gets worse. The company has delayed the full scheduled payment to Abundance bondholders which was due yesterday. They say the details are confidential - I will respect this, though I doubt they have any right to demand it. The update is posted on the Abundance website.

Clearly, this is relevant news for shareholders and should have been included in the annual report. The news was communicated to bondholders yesterday, a few hours after the annual report was released. It's not as if they didn't know this was coming. The bond payment shortfall is similar in size to the pay rise the CEO and CFO were awarded last year.

So the company is awarding executives bonuses while failing to repay their original lenders (Scottish Enterprise and Crown Estate ), failing to meet their commitments to bondholders (only telling them the day that payment was due), and failing to inform shareholders. This is extremely concerning.

I'm struggling to understand why the CEO was awarded an 87% pay rise last year, from £420,000 to £785,000. The CFO also more than doubled his take home pay to £430,000. How can this be justified based on company performance?

Sale appears to be their preferred model to monetise the lease income on the land. They also sold the land for the first (operational) 230MW battery project to Electric Land for £9.8 million - see RNS from 5 Dec 2023.

First impressions, focusing on things I didn’t know yesterday:

- big write down of tidal assets

- big tax hit to battery business

- confirms Meygen phase 2 delay to 2029

- renegotiation of Meygen debt delayed

- eyewatering executive pay

Dropped to 1244 MWh in May; MWh/day output down by 16%. Oh well, you can't expect a record every month.

I believe AIM requires the report to be issued by 30th June, though the 2022 report was delayed to 26 July 2023.

I'll be looking for news on financial close for Meygen Phase 2. A press release in Nov 2022 said this would be in 2024, with operation starting in 2027. The 2023 interim report said financial close would be in Q2 2025 with operation commencing in 2027. The 2024 annual report said "commercial operation" would be achieved in 2029 but didn't mention financial close. I don't think there has been any update since then.

Mehmet - I agree it would be beneficial to have more time. It is a big leap to build an array of untested devices, particularly given the many years (and £ millions) it's taken to get the existing fleet operating reliably.

altolusso - many thanks, that's a much clear explanation than mine!

Sparked by altolusso's post I've done a bit of digging into the grid connection - thoughts and corrections welcome.

The lease is for 398MW and the consent is for 86MW. The grid connection is separate to both of these.

The existing connection is for 14.9MW (source: and various company announcements). This is shared with the 9.2MW Lochend wind farm (source: Atlantis press release July 2016). There might be a bit of spare capacity on this but I assume not a lot.

The remaining grid connection capacity is actually just grid connection *agreements* - the physical connection capacity is not yet in place. There are five separate agreements totalling 287MW. The additional capacity and expected connection dates break down as follows (source: SAE press release 11 June 2024 and TEC register).

- Tranche 1, 28MW, 01/04/2027

- Tranche 2, 43MW, 01/04/2028

- Tranche 3, 83MW, 01/04/2028

- Tranche 4, 83MW, 01/04/2028

- Tranche 5, 50MW, 31/10/2030

The UK grid is massively oversubscribed, particularly in Scotland, and grid connections are often delayed due to delays in network reinforcement. Since this is a common occurrence and outside the generator's control the CFD start date can be pushed back to allow for this delay. On top of this, the NESO reform process is reprioritising the grid connection queue which means some projects will be brought forward and others delayed, possibly by many years.

I don't know where the Meygen grid connection agreements stand in relation to the NESO process but I wouldn't be surprised if these connection dates changed. I assume that SAE will keep us updated of any progress or delays.

Thanks altolusso, that's a very important point since I believe many grid connections will be delayed following the NESO review.

I'm struggling to find up to date information on this (e.g. that confirmations are expected mid-August) - can you suggest a link?

The latest SAE annual report said the company owned 11% of Effective equity interest in Proteus Marine Renewables Limited via their subsidiary Atlantis Projects Pte. (page 63). The difference between 10% and 11% might be due to different classes of share.

1426 MWh in April - another record month