The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
I suspect not but I'd be happy to be proven wrong. Over the last few years the share price has made a habit of rallying ahead of results and falling back afterwards. The interim are due in early June.
How scalable are these batteries really? Most new grid bank projects under consideration are now 100MW+. These batteries do have many advantages over lithium-ion batteries (cost, durability, fire etc.) but size isn't one of them. Even when double or tripled stacked they're likely to need quite a lot more land than equivalent lithium-ion batteries, which might prove to be at a premium the closer grid banks are brought to urban centres where they are needed.
I'm not currently a holder but I'd say the gist was positive. On of the largest capital raises on the UK market this year despite the current lack of appetite for smaller company fundraisers.
The technology looks interesting. The article seems to suggest that one container size battery can store enough electricity to power 30 homes for a day and that it can hold its charge 3x longer than a lithium battery, with no fire risk.
The Dixons have reduced. On 9 April they held 36.25m shares. Thye now hold 30m shares. One would imagine that they sold some, if not all, of those 6.25m shares to Schroders.
The general view seems to be that this is going to be a difficult balancing act. Unlike previous de-nationalisation offers the government can't simply offer the shares at a heavy discount to market value to encourage the Sids to buy (you could see class action lawsuits if they did) but if it doesn't what incentive would there be for the Sids to buy? Personally, on the face of it, I think it's an impossible problem to solve to all parties' satisfaction.
The only solution that might resolve the problem is if the government was to, say, offer their shares with some form of benefit attached i.e. wrap up the discount that they might normally consider offering he Sids and converting it into some other monetary form e.g. a staggered tax rebate over a period of several years (at the end of the day all of the money goes into the same pot).
Staggering the tax rebate over a period of, say, 3-5 years (with pehaps a provision to pay any remaining tax rebate in full on death) might make the Sids less inclined to rush and sell their new shares immediately, particularly if it might result in them crystallising a loss that they might have to wait several years to cover from their tax rebate. I would not make the tax rebate conditional on them retaining the shares (this would be too complex to regulate). Most, if not all, online brokers now require you to provide your NINO, so it should be possible for them to make applications on behalf of their customers for both the shares and the tax rebate fairly seemlessly.
So, for example, if the government wanted to sell its shares in tranches of (say) 500 shares at a discount of (say) 20% to the current share price (say £3 per share), they'd offer each tranche at £1,500 (500 x £3) plus a tax rebate of £300 (20% x £1,500) payable in equal instalments of (say) £100 per annum over a period of 3 years or £60 per annum over a period of 5 years.
Given that we went ex-div today (4.9p), finishing 5p up isn't too bad a result. Hopefully the current upwatd price trend will continue tomorrow.
Toneman, You say "... their revenue is still using a high portion of acrual ...". I'm not sure that I follow your drift. The accruals at the end of FY23 and H1 FY24 don't appear excessive (trade creditors have fallen from c£3m at the end of FY23 to c£1.8m at the end of H1 FY24; they were high at the end of FY23 because of the timing of fund raising in H2 FY23). Obviously there may be some deferred cash flow impact if your creditors are higher than your debtors but I wouldn't say that GSF's is abnormally high. Also, accruals are irrelevant to operational cash flow (they are adjusted out).
I take your point about the dividends although I'd be surprised if they quoted their dividend cover based on the dividend actually paid in the quarter. I think it's more likely that they'd quote their dividend cover based on their EPS for H1 FY24 divided by half of their expected DPS for FY24 to smooth out any peaks and troughs in the frequency and quantum of their dividend payments. I think this would be the approach adopted by most companies that paid their dividends less regularly and I don't think that investment trusts would adopt a different approach simply because they pay their dividends at least quarterly but I stand to be corrected.
As with most everything else in life the proof of the pudding is in the eating and it will be interesting to see the FY24 figures. I'd currently expect investment income to be in the region of £25-£30m (I don't think we'll start to see the full benefit of the 27% increase in operating capacity in Q3 FY24 until FY25) and admin expenses of c£10m or less i.e. revenue PBT should be in the region of £15-£20m for FY24 (as opposed to c£2.6m in FY23). The PBT in H2 might be less than H1 because some fees don't appear to be accrued evenly through the year (see below).
Having looked at the admin expenses again, I can now see that the main contributory costs are the investment advisory and performance fees. The latter fees, at least, don't appear to be evenly accrued through the year. Instead, they are computed based on performance against a Benchmark after the year end and would appear to be wholly charged in H2 (and capped at no more than 50% of the advisory fees). Given that there hasn't been any major change to the disclosed NAV since the end of FY23, I'd currently expect the investment advisory and performance fees, subject to any cash adjustments, to be broadly in line with FY23 but it would seem probable that the expected performance fees (c£2.5m) would be wholly charged in H2.
SEDI, You're mixing your apples and oranges. Operational cash flow is income less operating expenses (not just revenue); try looking at a cash flow statement.
As I said in my previous post it's not uncommon for Investment Trusts investing in infrastructure projects to pay dividends out of capital raised until the projects are up and running (and that's recognised in the business plan from the outset).
GSF generated almost as much investment income in H1 FY23 (c£12.4m) as it did for the whole of FY22 (c£12.5m) whilst its admin expenses (c£3.8m) were on a par with its admin expenses in H1 FY22 (c£3.8m). I'd currently expect its investment income for H2 FY23 to be ahead of H1 FY23 because of the 27% increase in operating capacity in Q3 FY23. However, I would not be too surprised if its H2 FY23 admin expenses were on a par with H2 FY22 (c£6.1m) due to the Nidec fundraise in mid- December.
All of the current indicators are that GSF has covered its dividend payments from net operating revenues for FY23 and with the operational fleet now set to more than double by the end of FY24 plus the non-UK diversification, all of the inidcators are that GSF's dividend cover will only continue to improve from here on out.
Furthermore, the UK is set to account for less than 30% of operating capacity by the end of FY24 which, given the current disparity between UK and non-UK income per MW/hr, would suggest that the UK might only account for 10-15% of GSF's revenues for FY25 and beyond but with scope to improve if UK rates continue to rise as they have done since the recent re-jigging of the BESS market.
GSF, unlike GRID, is a lot a less reliant on the UK market.
ST60, It would seem that Rick123 is not the only poster you choose to offend. Given that you seem want to abuse anybody who asks you, politely, to stop, you leave me no alternative other than to report your post.
Congratulations your the first poster I've ever had cause to report sor simply being facetious and having absolutely nothing of worth to add to the discussion board )other than emojis - do grow up).
Kats, According to the note to the FY22 accounts both Rockmasters and Spark Advisory's warrants had an exercise price of 0.1p (£0.001) but you are right about the subsequent placing warrants (in my haste I misread the RNS and thought they'd subscribed for one new share at 10pps plus a warrant - Doh!).
Spark Advisory have definitely exercised their 467k warrants (they were due to expire on 22/07/23. Rockmaster on the other hand appears to have until 18/09/2027 to exercise its 9.34m warrants but doesn't appear to have exercised any since the FY22 accounts. As far as I can tell, Rockmasters don't have any notifiable shareholding in ZED so could only leverage their warrants if they owned, and sold, less than c4.2m shares and/or utilised CFDs or their like.
The warrants issued to Donald Nicholson, Four Grant Investments, John Harvey, Andy Muir, Nick Luckett and Amati Global have all since expired unexercised (they had an exercise price of 19pps) and it would appear that Brandon Hill Capital's warrants are likely to expire unexercised on 22/07/24 unless the share price moves above 20p between now and then.
Amati do appear to have been selling down their shareholding recently.
Broomtree, Wouldn't disagree.
Zac, I think the metrics are more relevant to the Magnificent 7 than LGEN. They are now established profitable trading businesses. There might be some hidden value (such as AI and/or data centres in Amazon/MSoft/NVidia and/or market monopoly in MSoft) but it tends to be long term rather than short/medium term IMHO. As for Tesla, I'm not sure there's the hidden value that Musk likes to brag about (or use as support for his ridiculous share award claims).
ST60, Don't know what your issue is with Rick123 (it seems to be long standing) but give it a rest. If you don't care for his posts just filter him. That goes for the rest of us too if, at times, some of his posts start sounding like a broken record.
That's a red herring as you well know (or should know). LGEN is required to mark to market its investments (mainly bonds) despite the fact that it intends to hold its investments to maturity and has, as a result, been taking large fair value hits for the last few years.
If you strip out the the fair value adjustments (£1,577m), the effective tax charge thereon (£371m) and the one-off Bermuda deferred tax credit (£340m) then the profits attributable to equity holders would have been £1,323m (as opposed to £457m) and the diluted EPS would have been 21.08pps (as opposed to 7.28pps), which in turn would imply a current P/E ratio of c11.28 (as opposed to c32.65).
Because of the particular issues caused by MTM and the way that insurers account for profits on their AuM, the valuation of LGEN and its ilk is not generally assessed based on their P/E ratios; more weighting is placed on their ability to sustain and increase their distributions (they are viewed more akin to annuities).
Saintly, They issued the NAV and dividend declaration on 26 April last year.
Krusty, Look at the FY23 income statement. It splits out the income into revenue (operational) and capital.
You're looking backwards rather than forwards. It's not uncommon for investment trusts investing in structural assets to pay dividends out of capital whilst the assets are under construction. In their recent NAV updates GSF have indicated that dividends are now being covered by operational cash flows. 12 months on from the FY23 results they are now benefitting from a full year's production from the assets brought on line during FY23, plus the production assets brought on line since, and the (marginally) rising BESS prices in the UK. Furthermore, operational cash flow should continue to improve as more of the assets currently under construction are brought on line.
My thoughts would have been one of the warrant holders, either Rockmasters or Sparks Advisory, who are able to exercise their warrants at 0.1p per share. We know from the RNS issued on 24/07/23 that Sparks exercised the warrants they held at 30 November 2022 (they would likely have received these warrants in lieu of fees and are unlikely to be a long-term holder). Rockmasters might not have exercised their warrants yet but they could in principle be selling shares they currently own (or perhaps be using CFDs and/or spread betting) in expectation that they will be able to replace the shares when they exercise their warrants. We also know that 8.75m warrants were issued as part of the fundraising in June 2023 but don't know the terms, exercise price or expiry date.
GSF has an operational dividend cover of 1.15x and that's likely to start increasing as more assets come on line and a low debt burden. Also, 55% of its operational income is being generated in the US; so it's not been as exposed to the UK BESS market as the likes of GRID.
They're a bit late by historical standards; failing the end of last week, I would have expected a NAV and dividend declaration yesterday/today but it may not be too late today. Although unusual, they have made announcements mid-afternoon before now. Regardless, I would expect an announcement this week.
Zac, Thanks for the response reagrding the S&P 500 growth. With regard to the figures from MSOFT, they have to be taken into context. From what I've seen from Meta for example, quarterly figures are no bellwether (they tend to fluctuate from one quarter to the next without any consistent line of travel).
As regards MSOFT, it's FY24 Q3 figures were impressive and its diluted EPS growth year to date is up c27% but it's trading on a P/E of c35 and a PEG ratio of c1.35. Ideally you'd want a PEG ratio below 1, which would imply that MSOFT's current share price is at least c25% overpriced. It's definitely no bargain.