Energy experts discuss nuclear - it ain't good, page-57

Lol.

Allow yourself to be schooled in capital allocation optimisation so that company financial returns don't get diluted from sub-optimal investments.

For starters, divert funds that otherwise would have been invested in the portfolio, back to the owners of the business; ergo, ratchet up the dividend payout ratio:



They say "at least 50%" dividend payout, but they are already tracking well ahead of this, with the interim dividend of 27.5cps on underlying EPS of 43.0cps, so 64% payout.

Then, the earnings that are retained in the business (and not paid out to shareholders), the model for that retained capital is it does not become permanently embedded in the asset base, which would have been the case before ORG Board stepped back from the thrust in renewables, but is instead just operated on the basis of it being "caretaker capital", i.e., recycled once projects are completed and can be divested.

So, a bit like a project origination, partnership and medium-term funding model with finite term equity interest, as opposed to a full-blown asset ownership model, which is what the strategy was before they realised how crappy the returns are on renewables.




(Oh, and PS, "bid into government schemes" is corporate-speak for "if the government throws the right amount of taxpayer money at an otherwise marginal project then we'll play")

Clearly, ORG's new role in terms of investing in renewables is far less committed and far more hands-off and functioning as a market intermediary where the right opportunities present themselves.

Instead of just looking at presentations, you should buy some shares, attend AGMs and wait until the cucumber sandwiches and tea afterwards when you can speak to the Chair, CEO, CFO and the independent directors and in doing so, get the strategic message straight from the horses' mouths.


As for this pearler from you, "Watch the uptake in EVs. ICE are going to be smashed", I think you have short memory. Remember these posts?






And certain equity market proxy clues tell the same story.

Compare the recent share price performances of two companies, one exposed to EV demand (i.e., PLS) and one that supplies parts and spares for ICE cars (i.e., GUD):

Investment Returns:
1-month: PLS = -25%, GUD = -3% (GUD vs PLS Relative performance = +22%)
6-months: PLS = -18%, GUD = -11% (GUD vs PLS Relative performance = +7%)
12-months: PLS = -36%, GUD =+24% (GUD vs PLS Relative performance = +60%)
18-months: PLS = -28%, GUD =+36% (GUD vs PLS Relative performance = +65%)

So, market is saying that rumours of the death of ICEs is greatly exaggerated and that they are going to be around for a very long time.


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