BullDog wrote:Equity raise to fund expansion in the USA announced. Offer available to existing shareholders. It doesn't look like a bargain at the 155.5p offer price though?
I have had GRID on my watchlist for a couple of years now. Back in May at around 155p and prior to that the offer price of was close to the NAV, but subsequently the share price has fallen and at about 90p is now trading at a discount to NAV of around 37%. Backward yield at this level is around 7.8%, so on the face of it I am tempted to take the plunge. But I ask myself what ails the price?
Gresham House Energy Storage is an Investment Trust
To provide an attractive and sustainable dividend over the long term by investing in a diversified portfolio of utility scale operational energy storage systems, which utilise batteries and generators, located in Great Britain.2 broker assements back in the Spring were overweight, with target 184p
chat on LSE website (for what it's worth) is broadly positive, speculating that it might be a takeove target
according to recent RNSs,
directors have been purchasing shares of late
2nd quarter dividend of 1.8375p, which if sustained would be a yield of around 8%
Latest trading update (Sept) said
2.5GWh target portfolio before potential disposals (310% growth vs 31 December 2022) by mid-2025 achievable with no further equity funding
· Lower H1 2023 revenues due to near-term systems and process challenges being addressed at National Grid Electricity System Operator (NG ESO), and cyclically low levels of power price volatility
· Strong revenue recovery potential from current levels boosted by growing operational portfolioTotal debt drawn at the end of period was £110mn from a £335mn facility
Half year results in June were mixed, see
[url]https://www.lse.co.uk/rns/GRID/half-year-results-to-30-june-2023-0jmqoclpj8ylqz1.html
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Some optimism regarding how they hope things might change for the better in the UK electricity system.
It really comes down to whether you believe in the future of large scale battery storage in the UK and whether the predictions come to pass.
Headwinds might include sluggish demand for electric cars, but balancing a supply increasingly dependent on unpredictable renewables (solar and wind power) and demand where electricity may increasingly replace gas is surely going to require significant load balancing capacity.
On balance, this seems like a reasonable opportunity so I bought a few £k worth at 89.1p
sparkily,
S