Member Info for tichtich

@Santiago

Bear in mind that the current dividend is not going to continue indefinitely (unless DEC can keep acquiring equally profitable new wells to replace the depleting ones).

Wow! According to Interactive Investor, my portfolio value has nearly doubled overnight! I'm going to enjoy that while it lasts. 😉

I just bought some AERS, on nearly 30% discount to NAV. Not bad when most of the UK renewables have narrowed their discount in the last few weeks. Of course, you have to consider how representative the published NAV is. I note that it's based on a lower discount rate than UK renewables.

AERS is pretty thinly traded, compared to its Euro-denominated equivalent, AERI. And on Interactive Investor I had to buy it by phone, not on the website (but they only charged me the web transaction charge).

Https://m.youtube.com/watch?v=gLvkWpnzba8

First part is about capping oil and gas wells in USA.

If you've paid 30% WHT, you might be able to reclaim half of it, as described here:

https://the-international-investor.com/investment-faq/reclaiming-withholding-tax-foreign-dividends

Hi. I only came across this stock last week. I was having difficulty confirming saintsforever's NAV estimate of £14, until I realised I wasn't looking at the latest update. Once confirmed, it looks like a great opportunity, so I've taken the plunge. Thanks, saints, your comment was helpful.

I recently bought another stock at over 40% discount to NAV, and the price has already risen 25%. I don't suppose RSE will go up so quickly, but maybe, if and when the Hammerhead sale goes ahead. On the other hand, I'm half expecting a general downturn once the dreams of a Fed/BOE pivot fade (which may have started today).

I agree with Trotsky. Many UK-listed shares seem to be at bargain prices. I've recently snapped up a few investment companies/trusts at big discounts to NAV.

Another factor to consider, if you're thinking of selling DEC shares from your ISA and re-buying them in your SIPP, is whether you're going to buy the same number of shares. When I did this, I bought additional DEC shares in my SIPP. In part this was because I generally consider shares in my SIPP to be worth about 15% less than those in my ISA, because I'm going to pay income tax on them (at 3/4 of 20%) . But in any case, I thought I might as well top up with the spare cash in my SIPP as the price was low, so I actually added more than 15%.

Here's my thinking on the subject. It makes sense to have your higher-returning shares in your ISA (if you can predict which those will be), since you're not going to pay any more tax on those returns. However, it's total returns that matter, not just dividends, since, when you pay income tax on withdrawals from the SIPP, it doesn't matter whether the money comes from dividends or sale of shares.

Personally, I have no particular confidence that my DEC shares will produce higher total returns than my other shares over the long run. If I was confident they would, then I would probably buy a lot more of them. In fact DEC is not one of my larger positions.

Discount to NAV is now down to 10%, thanks to the increased share price. I wonder whether it's still worth doing share buybacks rather than reducing debt. Other renewable companies are even selling assets to reduce debt. UKW seems to be so confident about its profitability that it's happy to borrow at 7%. Let's hope they're right!

The stock market's partying today, but no one invited JLP. 😥

I keep telling myself that a fall in share prices doesn't matter as long as the dividends hold up, since I'm not planning to sell. That said, I'm a bit concerned about (a) whether a big fall in markets would affect LGEN's profits and dividend, and (b) whether the dividend will keep up with inflation. (I'm mostly invested in stocks that get their expected returns from dividends rather than growth, as I'm pessimistic about future growth.)

Adding up the shares in the share purchase RNSs so far, I get a total of 1.15 million shares purchased. By my rough calculation, that's about 0.05% of the shares in issue, or about 0.33% of the shares they announced they were planning to buy over the next year (about 15% of shares in issue). They've still got a long way to go!

I was planning to add at 58p (50% discount to NAV). 60p was damn close. 😉

That link doesn't seem to be working. Try this one:

https://citywire.com/investment-trust-insider/news/trig-eyes-more-disposals-to-reduce-debt-says-it-may-buy-back-shares/a2429126

Here's a new article about TRIG's sales, but interestingly it says they were sold at a premium, which somewhat contradicts my thought that assets are being sold off cheap.

https://citywire.com/investment-trust-insider/news/trig-eyes-more-disposals-to-reduce-debt-says-it-may-buy-back-shares/a2429126?utm_medium=website&utm_source=citywire_it_insider&utm_campaign=home-content-list-1&utm_content=investment-trust-insider-latest-news-list&utm_pos=6#ShowComments

Monkshood, you're probably right that they're hoping to get the share price back up to NAV so that they can issue more shares to make more investments. In the meantime, they're happy to borrow at 7% to make new investments. I guess they think there are still some great investments to be made. I find that somewhat surprising given the failure of the last round of auctions for CFDs for new offshore wind farms (and I think it's still going to be difficult to get planning permission for new onshore). You would think that if there are no new assets being built, that would push up the price of existing assets. But on the other hand, maybe the same negativity that's cutting the price of renewable shares is also cutting the price of the assets. I read that TRIG has recently sold some wind farms to pay off debts. I guess UKW is more optimistic about the future than other companies, and is being greedy when others are fearful (to use Warren Buffet's expression).

By the way, I understated the amount of new (more expensive) debt UKW has taken on. I was looking at the June half yearly report, which I think showed no borrowing on the Revolving Credit Facility. But the recent Sept NAV update mentioned that they now have 400M borrowed on the RCF.

Foobar, I found the figure of nearly 1B earnings that I think you were referring to, in the last annual report. I believe those are statutory (IFRS) earnings, which are not useful for companies like this. I think it mainly has to go do with the way the accounting rules handle depreciation.

That said, the "net cash generation" figure, which UKW uses to calculate dividend cover, is also not ideal, because it ignores depreciation altogether. Since wind turbines are a depreciating asset with a limited life, I think the dividend cover is overstated. I've mentioned this before, and I suggested an adjustment that we should apply to dividend cover, but now I'm wondering if I underestimated that figure, so I'm going to give it some more thought.

Anyway, the best figure to use for valuing the shares is the NAV, as that's based on a discounted cash flow analysis which is better than anything you or I are likely to be able to do.

I certainly hope the remainder will go into debt reduction. I compared the interest rates on debt in the last annual report with those in the half year report. A large part of the additional debt is project-level debt that came with the recently acquired Hornsea 1. That's long term low rate debt. Good. But the other new debt (additional debt and replacement for matured debt) is at a much higher rate: about 7%, compared with old debt that's all under 3.2%. There's another 100M of cheap (about 2%) debt maturing in 2024. They should really pay that off and not roll it over at 7%.

Hi Foobar. That sounds too good to be true. Because it is!

According to the Jun 2023 half year report, debt was 2B and net cash generation was 200M for the half year, so let's assume about 400m for the full year. (Since then, debt has increased from 34% of GAV to 38%, which is about a 12% increase.)