Member Info for TopFCA

Hi Anderson

I think you’re spot on re BSIF. A pension fund would love the reliable cash flows and the corresponding sale of the Asset Manager provides the development pipeline expertise.

Joining up the dots means that the acquirer could well be interested in Foresight Solar and NESF with further economies of scale in operations, and more importantly, displacement of Investment Manager fees..

Am hopeful of some news on BSIF soon given that they started their sale process in November and had narrowed down the number of parties in due diligence as of 3 March.

Watch this space..

TF

All

I really rate TRIG and have topped up following a switch from UKW after its excellent run.

I prefer TRIG right now as it has a better geographic and technology spread to UKW and has less reliance on UK government subsidies that are at the whim of both Labour and then Reform.

I would encourage folk to look at TRIGs free cash flow on page 6 of the annual results slide pack. This shows how the dividend grows with a dividend cover of 10% with an IRR of 10% on new projects. There’s no other share I can think of that provides an 11.2% yield now with the prospect of growth in the future. UKW is similar but with a lower yield.

Sub 70p is a bargain and this is before the inevitable uptick in electricity prices, notwithstanding that much of the near term income is contracted.

I’d also suggest electricity generation is ‘AI’ proof so deserves a premium – whilst its forward contracted income and solid cash flows allow quarterly dividends.

TF

Hi PJ

You’re absolutely right in flagging the physical risk for ENOG given its location in this conflict.

However the share price has only trod water in the last year and hasn’t rocketed 80-100% like its peer group – so this physical risk is heavily priced in. The dividend survived the comparable shut down last year and that was without the price rises following the closure of the strait.

Even if the FPSO was hit ENOG still has the inventory under ground and over 20% of the business is outside of Israel. So there is a residual value that puts a flaw to the downside.

ENOG is a very volatile share and I have made several quick trading profits after buying below £8.50. There’s also merit in having it in a portfolio as a hedge should the ceasefire falter. Overall it's fair to say this is one for the more risk loving investor..

TF

Evening Trek

I’ve read your messages with interest over the last year and owe you a pint for your Chesnara tips..

The elephant in the room with SEIT is the sustained underperformance of Onyx. The Onyx investment has driven the increase in the RCF whilst it has also ramped up its own project debt from $115m to $260m via the June 25 refinancing.

Onyx delivered an EBITDA of $12m on Project Equity of $419m in the year to March 2025 [just 2.9% return on capital] with $6m on $418 for H1 to September 2025 [just 2.9% annualised return on capital]. Let’s not forget that EBITDA isn’t net profit as it excludes deductions for depreciation/amortisation..

These very modest returns at Onyx have necessitated a disposal to substitute absent trading cashflows. Selling in the current tough environment has meant ‘high yielding’ assets have been sold at a discount to NAV with a likely dividend cut round the corner.

I believe the board are right in saying that they do not want this to carry on but I worry that they even considered the ‘alternative proposal’... That included (1) a dividend cut (2) a diluting share issue to buy some of the assets of the manager (3) a diluting share issue to a new ‘cornerstone’ investor in General Atlantic. I can earn a safe CPI linked yield of 10% with UKW at a 21% discount to their NAV, so why would I plump for jam tomorrow here given its execution risk??

The question now is what will be returned from the 87p of NAV as at September 25. This will depend on Onyx which will need to be traded for some time before it it can throw off a reasonable margin ahead of its sale. Remember SEIT tried to sell Onyx last year but failed.

So I am looking for a capital return of c60p and have invested again having ridden the 45-60p wave last year. Thank you in advance to SABA who will do good work for private investors.

TF