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To provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of primarily UK-based solar energy infrastructure assets.
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Started: StarBright, 20 Jun 2024 13:02
Last post: Temple_of_Doom, 2 Jul 2024 15:14
This time last year I had 50K shares at an average of 98p since 8% yield seemed pretty good to me at the time and I'd moved away from the oil sector .... as of today and bailing a load on the friday/moday spikes .. I have 100K shares at an average of 52p ... including dividends.
Nat Gas futures are collapsing so I'm expecting a re-trace.... not bothered either way but was over exposed here two weeks ago back to comfortable now.
GLA.
Correction, they made me 20% !!
I bought a load early in the year for 71.7p for some unknown reason. With today's div they have made me 15% in half a year and still they are cheap IMO.
There it was …. Dividend payday friday to boit.
GLA
Yes, good stuff, we discussed this a few weeks ago on this board I think. I wonder if more director buys will arrive now, each a decent stamp of approval.
Started: Troajan, 2 Jul 2024 09:11
Last post: Troajan, 2 Jul 2024 09:11
Started: StarBright, 19 Jun 2024 07:08
Last post: StarBright, 19 Jun 2024 14:57
My observation is simply that the LT forecasts NESF is using for power prices are essentially unchanged from those they were using back in 2019 pre Covid/Ukraine/CoL, at around £50/MWh. There’s been a transient spike between 2021 and 2023 that is in the process of being unwound. For a fundamental-driven long-term investor, revenue expectations per MWh are essentially unchanged from those extant when the sp was closer to 125p. If inflation and rates return toward (if not all the way) to LT levels then there’s every reason for holders to be optimistic for price appreciation from the current level. Buy now and collect the divis whilst waiting on inflation and rates is my strategy.
If and when inflation and rates fall we’ll see the return of demand for yieldy assets. Expect price appreciation for NESF and the other renewable income funds at this point.
LT holders who bought at £1+ are in pain now, but the range of likely outcomes is tilted favourably toward those prepared to hold and wait for macro (inflation and rates) normalisation.
Hello Starbright,
Graphs showing the power price forecast are also on the same page. As you say, they assume that the recent spike will be reversed and power prices will be much lower, in real terms, over the next 20 years. It's reassuring that the cash-flows can withstand this - it seems much of price volatility has been hedged.
@Actuary63 - 100% agreed re forward curves. But there’s an element of “base effect” in these, an unwinding of the spike caused by the Ukraine war. This is being revealed in the -ve NAV adjustments. If the charts on pg53 showed (say) 10 years history as well as 20 years projected the transient impact of this spike would be more readily apparent. If you had looked at the pg53 chart back in 2019, would it have shown a materially different long-term outlook? Essentially the NAV(s)became over-inflated for a variety of reasons and the air is being let-out more gradually. I think investors able to access the current yield can look past this. Just my view..!
Sorry for multi-posts….
It’s also worth noting that the shareholder base of NESF has more representation from genuine Insto investors (Artemis, L&G, Valu-Trac, ABRDN etc) than many of the other renewables funds which have problematic %holdings by DFM’s who are essentially spivved-up retail. It’s these insto investors who will call the shots on the discontinuation vote. They are already making their presence felt - for example through the pausing of new storage investments. Their continued presence on the register is a positive for holders, or for potential holders attracted by the 11%+ yield.
Enough from me on this now.
Hello Starbright,
Reductions in NAV caused by a higher discount rate are nothing to worry about. But reductions due to reduced power price forecasts and "project actuals" are more of a concern (see page 50 of report for details).
The graph I have used to construct my own cash-flow model is on the bottom right of page 53. The projected revenues shown are from operational assets and should allow for the latest power price forecasts. They do not include revenues from new assets that will emerge over time. Based on this graph, the projected return on buying the shares at 77p is over 12% per annum. This would reduced to 9-10% per annum if the shares were bought at 105p.
Started: AL75, 19 Jun 2024 09:34
Last post: AL75, 19 Jun 2024 09:34
Technical perspective:
Neckline (resistance) at 79.
If forms a right shoulder, then 71 is in sight.
Fundamental perspective:
Many measures, e.g. Losses, gearing, NAV, debt, cost of capital etc. are still heading in the wrong direction. Market may see these improving with recent price appreciation. Probably already discounted
Why share buy back? (should be given to shareholders as part of dividend)
Price Discount to NAV shows how market still undervalues the stock. Will take significant changes to energy market and/or interest rates to change this.
Started: StarBright, 18 Jun 2024 17:04
Last post: Temple_of_Doom, 18 Jun 2024 17:15
Those bought with the sell off after the ex divi have been cleared on the spike ... reading the RNS with interest now.
Interesting announcement(s) today.
- NESF has sold “Whitecross” for £27m (reportedly a 14% premium to its holding value) via a competitive sales process. An open-market transaction that supports directors’ recent assertions re NAV etc.
- A £20m share buyback programme has been initiated.
These are positive developments for holders….
Started: globaluser, 17 Jun 2024 09:00
Last post: Temple_of_Doom, 18 Jun 2024 16:37
As I said below .. this share spikes when she goes .... luvvit.
That would be nice! Hopefully we’ll get some certainty of a rate cut on the 20th too, even if it’s coming in August.
I think some positivity back into the SP. A lot occurring politically, but overall we should see a change in electrical use as AI and travel changes.
So what do we think Wednesday will bring? Any predictions?
Try typing the full name of the trust in to youtube. Sometimes you will find a presentation and that might be helpful.
Hello SB,
I'm not an investor in ORIT, so I can't answer your question. The renewable trusts that I invest in disclose their debt and gearing levels, irrepective of whether they're held in subsidiaries, so ORIT ought to do the same. Have you looked in the notes to the accounts? Detailed information on borrowing is normally disclosed there.
Actuary63.
Can you help please. You seem very knowledgeable in the renewable sector.
I have asked questions on ticker ORIT. Your opinion there would be helpful.
Thanks in anticipation.
SB
Started: AL75, 10 May 2024 16:30
Last post: Actuary63, 7 Jun 2024 14:33
Hello eccles04,
Your point is especially true for companies (like NESF) which use the discounted cash flow method of valuing their assets, where the discount rate is linked to market bond yields.It reflects the new "market consistent" philosophy applied to financial statements, which is supposed to make accounts more transparent, but actually makes the annual earnings very volatile and useless for assessing the underlying profitability of this business. That's why I focus on projected cash-flow and dividend cover for these renewable trusts.
Alls == falls
Stocks related to "battery storage" have taken a hammering these past 6 months check out GRID GCF PMGR - much down to problems in UK with the balancing mechanism that curiously has switched onto gas as the default in UK.
Good deal of "poker play" with stocks - you can check at level II on NESF it has all the hallmarks of HFT trading that can do untold damage to share prices along with eviction from FTSE250 that took me by surprise but the hedgies would be on a win win if they can damage share going short forcing trackers to sell.
There are red flags here - pledges to buy back shares not taken on board along with the capital recycling program that is selling assets to a connected party in NESF - but its generating cash and the price is indeed low.
The question as always is whether the market is right or wrong to misprice at these levels. Bear in mind as well the share is "trippy" ... when it moves it moves with big gains and big alls as happened in November/December last year especially.
We have a bit of accounting foolishness to consider here which has no effect whatsoever on the amount of cash being generated. As a retired qualified accountant I can and do call it foolishness: Affecting the bottom line is a "loss" of £55m from "unrealised fair value" of the company's investments. Seeing as the company has no intention of disposing of these assets because that is where the cash comes from, the accounting standard which says that you must put this in your profit and loss account is pure pie in the sky and I would scrap it (the accounting standard I mean) given half a chance because it tends to deceive investors like you and I. In my young day as a trainee accountant many years ago we did not have such impracticable accounting rules dreamed up by academics not working in the real world. Perhaps I should explain a bit further;- That number of £55m shown in the half year accounts will almost certainly have changed by a significant amount by now because it is dependent upon day to day changes in market conditions.
Temple: Even at 90p the yield was still a most accepetable 9+% so I really can't understand why we are now in the 70's. It has to be great opportunity to buy more and so I will when I have a bit of spare cash directly.
Started: AL75, 7 May 2024 19:34
Last post: Temple_of_Doom, 8 May 2024 12:49
£450K trade gone through at 76.1 ... about time.
All time record volume of 6.3m shares in the last hour of trading today. No bullish reversal yet and overhead resistance at 77 is strong.
Last post: Temple_of_Doom, 7 May 2024 17:35
Quite a fun day .... the drop took me by surprise I must admit given Nat Gas over USA .. but cleared out of GCP grabbed more 72.9-73.5 took 75.5 or thereabouts this afternoon on NESF and back into GCP down 1.5p ... so good day trading.
MMs playing it today for the big buyers/sellers, plenty of volume. Quarterly divi should be announced soon.
Bear raid today.
"NextEnergy Solar Fund
As its name suggests, NextEnergy Solar Fund (LSE: NESF) invests in large scale solar farms and related technologies like energy storage. This FTSE 250 fund currently has a 10.32% yield and aims to provide shareholders with regular quarterly dividend payouts.
It offers investors a diversified asset portfolio to mitigate risk. Additionally, most of NextEnergy Solar Fund’s long-term cash flows are inflation-linked via UK government subsidies, providing a further layer of income protection. Its NAV discount is currently at 32.78%."
https://uk.finance.yahoo.com/news/3-top-investment-trusts-green-115700191.html
Started: theoldmansdoneit, 18 Apr 2024 08:43
Last post: Temple_of_Doom, 18 Apr 2024 16:44
… and what looks like a profit warning from GRID. Bailed GRID on the RNS today. The UK will I suppose sort itself out eventually.
Decent trading update from Harmony Energy (HEIT) today which should read across well for NESF.
NESF held up despite market turmoil.
"Iran’s IRGC seizes ‘Israeli-linked’ ship near Strait of Hormuz"
Most of Middle East oil flows through the Strait of Hormus. Troble there means oil prices going up. Renewable energy becomes more impotant then ever now. It's cheap, clean and ralatively more reliable too.
Thanks Actury63, I had a look at seqi, follow what you are saying there..
I was looking to use some of my isa allowance today and of all the sectors investment trusts in such that we are discussing appear to be most forgotten of all sectors, all the rest, or many at all time highs, therefore Ive put a little more into this.... Plus no stamp duty on nesf, fantastic.... I feel energy is a great investment over the next 10 years, might get some weakness if a full blown recession emerge but with the green electrification move underway, the future should be bright for this one... Maybe a little sp appreciation once they get the debt refinanced
Hi Dadean,
I should have mentioned that I also invest in Greencoat UKW, about the same amount as in NESF. Obviously, wind is different from solar and UKW has a higher dividend cover and a stronger commitment to increase future dividends in line with RPI. That said, the current dividend yield on NESF is so high that it would be a good investment without any future dividend increases.
As both NESF and UKW are exposed to electricity prices, I consider SEQI to be a more risk-diversified fund than either. SEQI is currently my largest investment.
Hi Actuary thank you for sharing the notes below. All things Considered I believe nesf compliments well with ukw holdings and I'll likely look to increase my holding albeit I'm terribly overweight energy, while including other holdings, thanks
Started: ians12345, 15 Apr 2024 15:38
Last post: ians12345, 15 Apr 2024 15:38
There's ample room for the renewable energy production to grow.
The vast majority of planet-warming carbon dioxide emissions since 2016 can be traced to a group of 57 fossil fuel and cement producers, researchers said on Thursday.
https://www.reuters.com/sustainability/climate-energy/majority-recent-co2-emissions-linked-just-57-producers-report-says-2024-04-04/
Started: NorfolkRhapsody, 20 Mar 2024 11:19
Last post: Brixton, 4 Apr 2024 14:32
My first purchase of 5,000 . Timing 🤔 ?
“The recent price weakness has afflicted the whole sector means that dividend translates to a dividend yield of 11.1%, one of the highest in its sector, and the share price on a near 30% discount to net asset value, provides the prospect of attractive capital appreciation when sentiment towards the sector recovers.”
I think the post-invasion energy panic caused most governments to secure energy supploes from whereve they could and this was largely from fossil fuels because the product is there and just has to be paid for and delivered. I am surprised that the elevated prices didn't feed through the sustainable supplies but maybe that was due to advance sales or hedging or whatever. On the [lus side, NG has just announced the need for an enormous expansion of the grid because of increased sustainable supplioes, especially off-shore wind. Until fusion can be made to work, wind and solar are where it has toi be, And fusion has been 40m years away for the last 60 years so good luck with that. I hope the sentiment towards NEDSF perks up as interest rates and inflation fall. I manage a SIPP for my daughter and I am uncomfotably overweight in NESF. Still...divs next week :)
As you say Norfolk, NESF management are issuing lots of positive statements and yet there hasn’t been one director share purchase since June 2023 (at over a quid!). I’d feel a lot more optimistic about my holding here if they put their money where their mouth is!
Started: dadean, 2 Apr 2024 18:54
Last post: dadean, 3 Apr 2024 22:23
Thanks for the links 2227, appreciated. Had a look at the YouTube videos suggested too. Useful. Saw an interesting comment in one set of accounts where they said that they thought the levy would not materially affect them, albeit they paid more tax that year... Funnily I've just realised I've walked through one of their solar farms once years ago, when out on a old walk I knew... small world thanks
US gas prices are recovering from 30 year lows, the UK's BESS switching mechanism is in disarray, higher interest rates .... perceptions of "woke" feeding into renewables .... not a lot going for this share save the dividend, that is too tempting to turn down for me - so I have built up a comfortable position this past year.
GLA
Hi don't know if anyone know the answer to that question, cheers, struggling to see myself
Thanks Legsofman, i'll definitely watch, cheers for the link, much appreciated.
Yes the divs are a major plus point - crazy some of the yields in the uk!
I must admit, the dividends are one of the largest drivers in my interest and returns on the PF
thanks
Dadean, if you haven't read up a lot on this trust the following video 2 months ago from Ross Grier Next Energy may be of value, only 30 mins of your life!...I’m heavily over invested over the whole renewables sector and see this current sentiment as a bargain hunting opportunity.
Retired so the divis matter more to me than pure growth.
Good luck with your investments.
https://m.youtube.com/watch?v=S6K8vg88Rnk
Thanks for your replies, very kind and useful to note... really looks like this one is tied to interests rates, as the pop up and down in the share price in december kind of suggests, if we get bond prices increasing, i would not be surprised if this increased by 10-20% the way you hear the media and central banks talk youd think interest rates are never coming down, but i just don't think thats possible...... i'm going to give very good thought to increasing my position in this greatly. i see in tehir presentations that the div is covered that is excellent... as for elec prices going forward, i think that should be a tailwind for them, its higher than before indefinately albeit lower than a year ago... thanks again gla
Interest rates are forecast to go down so that is likely to boost the share prices . It seems to be the best time to buy these high yielding renewables imo.
Started: HarrisM, 29 Feb 2024 12:26
Last post: Temple_of_Doom, 4 Mar 2024 13:15
Sold my NGSP this morning ... US gas is on a short squeeze ... time for the shorts to return money to longs .... on NESF ...
GLA
Comforting to hear others have similar views.
A lot to digest about what tichtich posted re NAV's for renewable firms.
It's difficult to get clear valuations but I've found this resource useful instead of relying on NAV's alone:
https://valueinvesting.io/NESF.L/valuation/dcf-growth-exit-5y
By all accounts, even with a question on NAV accuracy, investment trusts in this sector appear a strong buy, but there is this recent endless wave of waning support. I feel that firms the chances of some form of M&A consolidation here as low valuations, improving rates, demand for renewables, subsidies etc make this attractive especially when there are so many small small players duplicating effort in the same space - consolidated they would be a real force.
As said, best strategy seems to be buy on weakness and DRIP dividends... maybe just add a tactic of buying across the sector to increase chances of catching some M&A action (if that ever happens) :-)
Forward electricity prices are reverting back to pre pandemic levels while US gas is down at 20 year lows after the Ukraine spike … US are cutting gas production hence the mini rally this past week, while spring and autumn lows are not uncommon as people switch from heating to air conditioning …. While the UK market itself is weak reflecting the economy with higher for longer interest rates hence the sell off in this sector the last two months.
Probably some additional nerves about a Labour government at what it has in mind for the energy sector …
… energy storage in the UK is a take back control basket case so lots of ill wind blowing against NESF hence the 94p-73p sell off these past two months in the sector.
SEIT led the way early january … but has now recovered … I expect the same here … with a current average of 80p against 105p last year and a tad over 10% yield suits me fine.
GLA
Hi HarrisM
Agree totally, results for Bluefield and UKW, also both showing great discounts to NAV. Bluefield just announced a buyback and UKW's is ongoing. I would not be surprised to see NESF announce a buyback whilst this discount is ongoing.
The problem then is that M&A action might well come from abroad, but BP and SSE could be interested. We'll see, but I'm not counting on it. Buy weakness and DRIP dividends. Rates coming down in 2024 will be great for the sector too. Interesting comments by tichtich about the NAV calculations on the Bluefield board, here https://www.lse.co.uk/ShareChat.html?ShareTicker=BSIF&share=Bluefield-Solar
Agree, it's sentiment as well, commitment to renewables has 'slackened', but it will change and I'm looking to add further at these levels.
Last post: StarBright, 18 Feb 2024 13:18
Some thoughtful/insightful comments in this thread - thank you.
NESF have made a big play on subsidy free renewable energy production post 2017/18. It’s looking to reduce RCF debt with sell offs … but on the other hand it has £200 million preference shares recorded as debt on the balance sheet paying 4.5% interest at this point … that is cheap given the current market rates.
US Natural gas spot prices are close to 20 year lows - bringing electricity prices down with it in anticipation … is the recent issue.
I think the montly inflation figures and what they mean for interest rate cuts are the key. The surprise fall to 3.9% announced in December led to a surge in the share price, which has since been more than reversed following the surprise increase to 4% in January. Nothing happening in energy market explains these price movements.
Gas price is down 30% since last year so that hasn't helped. Political parties watering down their green energy investment hasn't helped either. SP down 16% in last month.
11.3% Divi at today’s sp. It’s another buy more on the list of Renewables going down.
Is it me that’s mad.. :-))
Another one sunk by the dividend.. Good job we are booming (not)
Started: Gavster-NBC, 16 Nov 2023 09:09
Last post: Gavster-NBC, 8 Feb 2024 07:13
Dividend announced, amount and date exactly as expected and here we are at 80p !!
All that upward promise got dashed.
Definitely time to sit tight, reinvest the divs or average down if possible.
Nice little pop this morning ..... taking some off the table .... average down to 85p from 105p six months ago .... onwards and upwards.
Still a gift getting a sale price above buy price late yesterday on ex divi day. Bailed those bought in the last 30 minutes looking for 85p today.
GLA
Up 17% since 23rd October not bad for last 3 weeks. Excellent 9% yield at current price. Next BoE decision is a month away and I expect rates will be held ... but with inflation continuing to fall it looks like SP could head to 100p+ next year.
Since the calm has restored on rising interest rates, so it has here for now.
I especially like the fact we are over 1% up at 89p today, today being our ex-dividend day.
Not sure the we'll get back to the 90s just yet unless the next interest rates decision is also flat or even better, a cut.
Started: myoung, 4 Feb 2024 08:33
Last post: myoung, 4 Feb 2024 08:33
Started: spindok, 3 Jan 2024 11:43
Last post: AlexHodler, 3 Jan 2024 14:14
Thank you spindok
This was suspended as per the rns until further notice...
Started: AlexHodler, 3 Jan 2024 11:12
Last post: AlexHodler, 3 Jan 2024 11:12
Hi everyone I ve been an investor in nextenergy for the last couple of years, I always had in agreement with my bank the dividends returned directly in the form of new shares this last month the divi came back in my account in the form of cash,. I would like to continue to get the dividend directly in shares, as i save in banking operations , dd anyone have the same issue ? is this a new directive from Nextenergy company? thank you for your time
Last post: tweedly, 18 Dec 2023 13:05
In @86. Hoping to double up my holding over the next month or two.