clissold345 wrote:Quotes below from a Citywire article dated 20 March 2024. You have to register to read the article.
"The dividend remains uncovered, with Jefferies’ Matt Hose previously estimating 0.5% cover for the financial year to 31 March [2024] with a slight improvement to 0.6% in the current fourth quarter."
"The manager expects to be dividend-covered based on projected 2025 revenues and an increase in operational assets. Given this conviction, we would prefer to see the manager switch to a variable dividend policy from 2025 to give themselves some wiggle room should any region disappoint."
https://citywire.com/investment-trust-i ... n/a2438665
I had a look at the GSF Strategic Report for the year ended 31 March 2023 here:-
https://www.gsenergystoragefund.com/doc ... t-2023.pdfI was looking for information relevant to revenue, cash generation and dividend cover. I picked out the following points:-
Page 30 cash on hand £123.7m enough to fund all remaining capex for the planned portfolio expansion. So no extra debt or funding is required to complete the planned expansion programme it would seem.
Page 26 makes it clear that the 7p dividend was already not covered at the time of this 2023 annual report as the available cash flow at that time was 6p.
Page 25 500MW extra generation capacity to be energised before the end of 2024 (to add to existing portfolio capacity of 291.6MW). One would hope that revenue from this extra capacity might be sufficient to cover the gap in dividend cover ??????.
Pages 29-34 the management look to have performed extensive modelling of various scenarios with their effect on NAV and revenues. On the face of it these look encouraging.
So perhaps GSF can weather the storm and are just suffering from the apparently far worse prospects of the likes of GRID and HEIT who don’t have the benefit of GSFs international diversification, can’t say that for sure though !.
I guess if you still own GSF shares right now then holding hoping for a recovery might be the best plan, if they can recover. The share price does seem to have found some stability in the mid 60s. I have to say though their current 11.2% dividend yield does look like a red flag to me. I have no plans to re-enter GSF anytime soon myself. Tried it once, not keen to try again.
And on a day like today 21/3/24 with most equities up significantly, but GSF about 2.8% DOWN, why would you want to hold GSF when there are so many more attractive options, some good dividend payers ?. Not me anyway. Each to their own though….
ATB
Pref