Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hopefully this 60p malarkey will stick and we can all move on. Been a bit of a disaster - getting stuck with too much exposure to wind which destroyed value when the Tories got in and not finding away to use the listed route to market which destroyed value by having the overheads of such a vehicle.
The Portref and 18mw bio CoD are significant announcements in my opinion. 1. Portref (along with Denzell / St Breock / Ramsey II) mean the wind side of the business has plenty of stuff to build and flog to BR. Hopefully weaker Euro will benefit construction cost, offsetting the lower sales price due to power prices being as flat as the bubbles left over from New Year. 2. Bio - finally having the scale to make the effort (and overheads) of cleaning all that chip fat to operate in the peaking market worthwhile. Would have questions about how shareholders get some upside - maybe the buy back programme gets increased. Or maybe the assets stay on balance sheet until 2017, hopefully a better power market. I like the thought of that - don't know the terms with BR if it's allowed. Would also want a lot leaner overheads if they are going to hold stuff again. But generally in a good place going in to 2015. Back in with a small purchase of 15,000 looking to get to 50,000 by 31 March. Good luck all, noodles.
http://hsprod.investis.com/ir/rwe/ir.jsp?page=news-item&item=1508983072361093 This is great news - good to see the front end of the business started moving again. What a site, RNS says the 9MW combined site will generate 27,000MWh - that is 34% capacity factor. Great figures from a numbers point of view. Even allowing for the slightly softer wholesale market and reduced ROC regime this consent is still worth over £5m when constructed if sold. A lot more if operated, but we all like gravy today. Gravy tomorrow is cold and lumpy. Noodles. Considering jumping back in.
Useful notes - using the old stuff to pay the wages is a nice touch to the business model, and reduces risk from our point of view. A good year will be a lots of profits from sales to Black Rock - a bad year is break even. The reason I invest in WIND is because they recognise the difference between a planning consent and an operating project. And they generally get 2 or 3 new sites up and running most years. I'll be honest and say I was fortunate enough to have a 45p average so have taken some profits, but still hold a few. I will be buying back in on planning decisions, Well played EH for y'day - GL with your holdings, Noodles
Good find. My worry is no turbines have been ordered. South sharply took 13 months from turbine order to operations, sancton hill took a year an orchard end looks like a year. I.e- unless they get a turbine order in soon i doubt it'll be operational this year. But hey- they were plenty busy with the black rock stuff :)
On the wind side of the business I read in a REG presentation that the cost is £1.25m p/MW. You can get the bank to put in £1m of that, and the developer puts in £0.25m p/MW. You then sell to BlackRock at £2m p/MW which takes the debt of £1.0m p/MW with it, giving the enterprise value of £1.0m - making a return of £0.75m p/MW. A cracking return on an investment of £0.25m. That is the model - it'll be hard work for them, and they do everso well at getting consents and getting stuff built. Make no bones about it, look out your window now - not easy putting up 100m towers. Not easy convincing local communities to support an onshore development. But the returns are there - for Wind. Bio and STOR is complex and unpredictible. National Grid have many options to keep the needle at 50htz. Demand side - the economy is bumping along the bottom so demand is static, about 10% lower than the peak in 2007. That is a lot of demand gone. What if we are all getting more efficient and it never comes back? Supply side - coal is cheap, old coal plants are running full tilt, perhaps some old coal plants are even in the STOR mix. If it is being difficult to predict, further capital investment is a tough call when you have a bucket full of wind projects to invest your £0.25m p/MW and get serious returns. The Board have demonstrated they know what they're doing when it comes to developing/financing/operating renewable projects. If there is a way - they will find it. If you understand the markets and technology this is a brilliant company to invest in. If you don't have the understanding that is where you don't stand much of a chance because REG are not brash about their PR - which means the company is not on the radar of many PI's. Hopefully this announcement realises some historic value for the long term holders and introduces a model for newbies.
1. The BlackRock rns talked about pre construction project finance. That means REG doesn't need anywhere near as much cash to develop and construct. Is this the long term plan and does that mean more divs and buy backs? 2. How is developing the pipeline going? Haven't had enough rns' about planning decisions this year. The last presentation I saw talked spending 4m pa on development and getting 80mw into planning- with 30mw of consents. If the metrics change significantly you might as well buy consents from another developer. 3. What is going on in Ireland?! They bought a consented 18 months ago for 1.1m and no turbines have been ordered. 4. Treasury- what is all this restricted cash? Tied into coop finance but I looked at the accounts for Loscar and it has millions locked away doing nothing. 5. What extra overhead does the asset management agreement need? 6. Bio power. Is the turnaround plan working? 7. Other technologies - solar is cheap and easily sold. Must use similar skills to the wind business
Look in years gone by, WIND announce their interims in March. 4 of Feb is a big leap forward. Must be an effort to get out of close. Hopefully the Directors stick their hands in their pockets and buy a few, supporting they still believe it is undervalued at 60p. All very well going on about being way undervalued, but if the BoD aren't buying any it is just words. Need to see more than just loading up on free options for the sentiment to stick.
Well that has baked my noodle. Great news. A model of converting the value into cash to fund construction and return cash to shareholders. That gives shareholders an exit - the missing piece. I won't be heading for the door just yet, Orchard End, St Breock, Denzell Downs, High Down can go through the same process and that should generate another £20m of value - and send the SP towards 80p. That is without the impact of any positive planning news. I think WIND have loads awaiting determination.
Indeed- I had a holding at 9.3 and sold at 8.9 with the worry something isn't right. Everyone being paid in shares means cash must be low. Further placing, drill delays and no oil meant take a small loss. Finally taken some proceeds out of CEY and put them into WIND. Small onshore wind company I've researched a lot. Keep an eye on them
Jolly is right on the definition and the main consequences. Dividends are paid from retained earnings normally. Worth noting lots of offshore companies do not follow this procedure, Jersey for example - can pay from any form of capital. Jolly - am I right in thinking u are currently in NEW? They are having a good day.
The fact £7m of capex has been ploughed in and its all quiet had me worried, so did some more digging. On a sub branch of their website the refer to the site coming online at the start of 2013. http://southsharpley.regwindpower.co.uk/articles/270 Looks like it is safely moving forward. Just sloooowly. Can't imagine the snow will help!
Still here - watching, waiting for an entry price of 50p that might have gone forever. Also up to my neck in Centamin too, which has treated me well tbh. On TRI, like LLOYD I think there is a chance the divi could be reinstated off the back of the 31/3 results. That would attract new buyers and drive up the price. Also, full year EBITDA could support a 60p price on 6x earnings Speak soon Noodles
This is the RNS for South Sharpley... "Renewable Energy Generation Limited ("REG") (AIM: WIND), the UK renewable energy group, today announces that it has purchased three Vestas V80 2MW wind turbines for its site at South Sharpley in County Durham. The turbines are scheduled for delivery in late summer 2012 and the project is expected to be operational in the autumn. The wind farm is anticipated to produce approximately 16GWh of output per annum and the total project cost is expected to be around £8M. Andrew Whalley, REG Chief Executive Officer, said: "South Sharpley is on course to be our second new wind farm completed in 2012 and will increase REG's clean electricity output to around 150GWh per annum. *** Autumn is long gone, financing was annouced a while back - but hasnt been drawn down. Anyone know the reason for the hold up? Be annoying if the project misses out on the good wind of the winter! Even more annoying if it misses the 1 Roc! "We are also pleased to be continuing our productive relationship with manufacturer Vestas."