Member Info for Temple_of_Doom

Markets look forward …. 🙄

Obviously I kept the Pref problem under wraps until cleared out … but hey ho … predicting future is important in this game.

So … according to 11 March RNS … in 9 years the divi drops to 5p or so even with investment now … meaning that NAV at 10% can drop to the same level … that of course will likely happen as subsidies trail off. So the background bet for me was to hold until July or the AGM to see if the company is sold off … but the spike to 49p was too hood to miss … and bailing today with the rest easily recoverable for me. All my opinion of course.

… and one of the reasons I have been unwinding what was a large position. Shame I got caught by 11 March RNS … was moving across the Maldives at the time c/o Trump not being able to get back to UK … but such are markets.

My understanding:

Conversion into Ordinary Shares

From 1 April 2036, the preference shareholder (USS) may convert all or part of the preference shares into ordinary shares. The number of ordinary shares received depends on:

1. The original preference share value (100p per preference share),

2. Plus any accrued unpaid dividends,

3. Divided by the prevailing NAV per ordinary share at the conversion date.

"BUT would wipe out the £200m in debt" .. is also true ... I emailed investor relations in January pointing out that encouraging conversion into shares would tackle may problems .. but was not aware at the time that conversion would be weighted by NAV ..... in other words ... delay adds value in terms of shares to recoverability of Pref Share holders. NESF have kept this quietly under wraps.

"they'd sooner have there £198.5m back" ... and how do they get THEIR money back? It would require borrowing to buy back the Prefs. Not my problem .. I'm out.

I wrote a stinging rebuke to investor relations in March ... projections going forward did not show investors the effects of not investing in battery technology ... NESF should have seen this problem earlier going forwards and certainly last year when the wind down was first touted. Needs to merge with a stoarhe company .... or sell. Were investors misled? Legally probably no so no comeback ... but the wind down of dividends as government subsidy trails off is a major concern and at the same time as pref conversions.

Dire prospects going forwards in my view.

Conversion of prefs is not 1-for-1 it's 100/75 as current pricing if I read correctly ... meaning that existing equity holders are swamped. I took 75% off the table by yesterday afternoon and sold the remaining 25% on the up lift today at 46.5p. Trading share for me now going forwards unless the AGM decides to wind down - then I'll re-evaluate.

At these levels, management fees are eating into shareholder returns … people should work back to March 2026 figures … dividend increase to 6p at 10% yield allows NAV to drop to 60p by 2032 or thereabouts assuming no more government meddling.

Best chance here is a wind down but the the problem is the buyer … and I’ve seen one other case where the buyer was in effect the holding company looking to buy back on the cheap.

I’ve taken a hit here the past year but made on others in the sector … and such is markets.

The problem with NESF is the preference shares and if and when they are converted into equity down the line. At 46p these guys will swamp existing equity holders … according to my calculations. So, whilst preference shares were cheap debt that was only the case whilst NAV remained high.

I'm clear here as of today ... waiting for other in the sector to catch up. Nice.

Only half half profits in as of now. Will wait for drop ... if it doesn't happen .. hey ho.

The only re-something party I'll vote for is REmove - Reform.

Bought a few .... the past few days .... looks way oversold and up she goes.

LIO have been losing AuM despite record highs for FTSE100 ... doesn't bode well in a sell off.

"Deutsche Bank maintained Liontrust (LON: LIO) at ’sell’ " .. these guys have been playing the system for a couple of years in my view via the old Numis .. taken over .... the upgrade maintaining sell rating defines their position but probably looking to close their short ... they overcooked by the looks.

I did some more research on prices of consumer bills a few days ago ....

The "Supplier of Last Resort" (SoLR) Levy

The collapse of nearly 30 suppliers (most notably Bulb) added a massive "stealth tax" to every bill. Under the SoLR process, the costs of migrating millions of customers—and honoring their credit balances—were socialized.

This resulted in a bill levy that added roughly £80–£100 per household just to clean up the industry’s lack of capital.

This one shocked me:

Poor Hedging & the "Price Cap Trap"

The Ofgem Price Cap effectively forced suppliers to hedge in a very specific window. When the market became hyper-volatile, suppliers who hadn't bought enough gas in advance were forced to buy at "spot" prices that were astronomically high, leading to the bankruptcies mentioned above. It turned a protective cap into a floor that trapped prices at the peak.

... with VAT still in place.

One should not forget of course ... that a weak £ post 2016 Brexit voted added another £75 to household bills meaning that in addition to supply concerns post the Ukraine war ... the Truss budget and collapse of the £ in 2022 added to Natural Gas price increases and profits for the sector ....

.... the FX £ exchange rate simply leaks into almost every valuation ... is it worth "investing" as a result? Possibly not .. stick to FX.

"today's RNS from TRIG " ... hence my "where there is to my mind an advantage in downsides being protected." yesterday.

"CFD replaces the wholesale market pricing part." .... The government are trying to force legacy renewables onto fixed contracts ... the only reason to shift is in the event of fixed contracts being beneficial to shareholders with the advantage that downside are protected for the life of the contract. If the deal offered is poor there is no obligation to shift ... where there is to my mind an advantage in downsides being protected.