TIDMGSF
RNS Number : 8278C
Gore Street Energy Storage Fund PLC
15 June 2023
15 June 2023
Gore Street Energy Storage Fund plc
(the "Company" or "GSF")
NAV uplift and operational progress with dividend in line with
expectations
Gore Street Energy Storage Fund plc, the internationally
diversified energy storage fund, is pleased to announce its 5.9%
increase in unaudited Net Asset Value ("NAV") for the year ended 31
March 2023.
The Company's NAV continues to deliver strong and steady growth
despite recent pricing volatility in GB. Dividends announced for
the period have increased, and the Investment Manager secured
record prices in the T-4 2023 Capacity Market auction.
Net Asset Value
The unaudited NAV as at 31 March 2023, increased to 115.6 pence
per Ordinary Share from 109.1 pence per Ordinary Share at 31 March
2022, an increase of 5.9%. NAV Total Return, including dividends,
was 12.3% during the period. This is a particularly pleasing
performance and illustrative of the Company's differentiated
approach to this asset class, highlighted by its geographic
diversification and the Company's valuation policy as appropriately
set to reflect the resilient nature of our asset class.
The final quarter of the fiscal year (January - March 2023) was
also strong for the Company, seeing NAV increase by 1.8% from
113.5p at December-end 2022 and providing a NAV Total Return of
3.6% inclusive of dividends paid during the quarter, despite
challenging market conditions in GB.
GBP millions Pence per Ordinary
Share
NAV as at 31 March 2022 376.5 109.1
Gross Offering Proceeds 150.0 0.3
Offering, Fund and Subsidiary
Holding Companies Operating
Expense (17.3) (3.6)
Interest Income 3.6 0.8
Dividends (31.0) (6.4) [1]
Increase in NAV of portfolio
SPVs 258.0 53.5
Distribution from SPV 39.9 8.3
Capex and Acquisitions (223.4) (46.4)
NAV as at 31 March 2023 556.3 115.6
Financial and Operational highlights for the year ended 31 March
2023
-- NAV increased by 47.8% to GBP556.3m (31 March 2022: GBP376.5m).
-- NAV per share increased 5.9% to 115.6 pence (31 March 2022:
109.1 pence per share), with a NAV Total Return of 12.3%.
-- The Company has continued to achieve its dividend target from
IPO, with a total dividend for the reporting period of 7.5p (2022:
7.0p).
-- Portfolio capacity increased through acquisitions by 86.7% or
544.6 MW during the financial year.
-- Operational capacity increased by 59.9 MW or 25.8% during the year.
-- Portfolio revenue of GBP39.3m or GBP134,790 per MW/yr [2] .
This was generated by 19 revenue streams across four different
grids.
-- EBITDA of the operational portfolio increased by 19.1% to
GBP27.8m (31 March 2022: GBP23.3m). This represents an EBITDA of
5.77 pence per share.
-- During the reporting period, 63.5% of the portfolio's EBITDA
was secured outside Great Britain.
-- The Company raised GBP150m in an oversubscribed issuance in April 2022.
Key NAV drivers over the twelve-month period:
-- Capacity Market Contracts - Capacity Market (CM) contracts
were secured for both Great Britain ("GB") and Irish assets in the
February 2023 auctions. Six sites were awarded contracts worth
GBP63/kW/year for delivery from October 2026 under the T-4 auction
and are anticipated to deliver a combined value of c.GBP45m,
representing record-level T-4 auction pricing. This includes a
15-year contract awarded to the Middleton asset, expected to
generate GBP2.97m annually in CM revenues (subject to CPI
adjustments). The Company has 15-year CM contracts for its entire
GB construction portfolio. The two 50 MW assets in Northern Ireland
("NI"), meanwhile, secured CM contracts from 2022 until 2027, while
Porterstown in the Republic of Ireland ("ROI") secured a CM
contract for 2026-2027.
-- Discount rate - The weighted average discount rate across the
portfolio increased to 10.1% (FY 2022: 8.3%), in response to the
current macroeconomic environment. The Investment Manager has
updated discount rates based on their respective grid and stage of
development.
-- CPI assumptions - CPI has been revised per third-party
forecasts, with an updated long-term target of 2.5% from 2025
onwards. Changes to inflation rates, have impacted forecasted
revenues and operational expenses.
-- Asset stage - The Company's operational capacity grew by 26%
during the reporting period, reaching 291.6 MW, following the
successful commissioning of the Porterstown asset in January 2023
and the acquisition of operational assets on the ERCOT grid
(Texas).
-- Operating performance - GBP39.3m in revenue was generated
during the reporting period, averaging GBP134,790 per MW/yr. Over
the 2022 calendar year, the Company achieved a consistently high
average revenue of GBP157,414 per MW/yr [3] .
-- Portfolio expansion - The Company made acquisitions totalling
544.6 MW during the period. This comprised of 144.65 MW of projects
on the ERCOT grid in Texas, 200 MW in GB, and 200 MW on the
Californian grid (CAISO). The Company's geographical split is now:
42% in GB, 27% in Ireland, 12% in Texas, 17% in California and 2%
in Germany.
-- Portfolio revenue curves - Portfolio revenue curves across
geographies have been revised based on updated third-party
inputs.
Portfolio Update
Operational capacity increased by 59.85 MW, or 25.8%, reaching
291.6 MW during the fiscal year. A significant proportion of assets
under-construction/pre-construction (521.8 MW) are scheduled to
become operational within the following 18 months.
An overview of the portfolio's assets and their status as at 31
March 2023 is provided below:
Project MW / MWh Grid Location Revenue Status
denomination
-----------------------
Boulby 6.0 / 6.0 GB (Yorkshire) GBP Operational
------------ --------------------- -------------- -----------------------
Cenin 4.0 / 4.8 GB (Wales) GBP Operational
------------ --------------------- -------------- -----------------------
POTL 9.0 / 4.5 GB (Essex) GBP Operational
------------ --------------------- -------------- -----------------------
Lower Road 10.0 / 5.0 GB (Essex) GBP Operational
------------ --------------------- -------------- -----------------------
Mullavilly 50.0 / 21.3 NI GBP Operational
------------ --------------------- -------------- -----------------------
Drumkee 50.0 / 21.3 NI GBP Operational
------------ --------------------- -------------- -----------------------
Hulley 20.0 / 20.0 GB (Cheshire) GBP Operational
------------ --------------------- -------------- -----------------------
Lascar 20.0 / 20.0 GB (Manchester) GBP Operational
------------ --------------------- -------------- -----------------------
Larport 19.5 / 19.5 GB (Herefordshire) GBP Operational
------------ --------------------- -------------- -----------------------
Ancala 11.2 / 11.2 GB (Various) GBP Operational
------------ --------------------- -------------- -----------------------
Breach 10.0 / 10.0 GB (Derbyshire) GBP Operational
------------ --------------------- -------------- -----------------------
Cremzow 22.0 / 29.0 Germany EUR Operational
------------ --------------------- -------------- -----------------------
PBSL 30.0 / 30.0 ROI EUR Operational
------------ --------------------- -------------- -----------------------
Synder 9.95 / 19.0 US (ERCOT) USD Operational
------------ --------------------- -------------- -----------------------
Westover 9.95 / 19.0 US (ERCOT) USD Operational
------------ --------------------- -------------- -----------------------
Sweetwater 9.95 / 19.0 US (ERCOT) USD Operational
------------ --------------------- -------------- -----------------------
Stony 79.9 / 79.9 GB (Buckinghamshire) GBP Energisation scheduled
------------ --------------------- -------------- -----------------------
Ferrymuir 50.0 / 50.0 GB (Scotland) GBP Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Enderby 57.0 / 57.0 GB (Leicestershire) GBP Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Middleton 200 GB (Heysham) GBP Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
PBSL Expansion 60 ROI EUR Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Kilmannock 30 ROI EUR Under construction/
(KBSL) Pre-construction
------------ --------------------- -------------- -----------------------
KBSL Expansion 90 ROI EUR Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Cedar Hill 9.95 US (ERCOT) USD Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Mineral Wells 9.95 US (ERCOT) USD Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Wichita Falls 9.95 US (ERCOT) USD Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Mesquite 9.95 US (ERCOT) USD Under construction/
Pre-construction
------------ --------------------- -------------- -----------------------
Dog Fish 75 US (ERCOT) USD Under construction/
Pre-construction
-----------------------
Big Rock 200 / 400 US (CAISO) USD Under construction/
Pre-construction
-----------------------
Total: 1173.2
--------------------------------------------------- -----------------------
Dividend Declaration
The Board has approved a fourth interim dividend of 1.5 pence
per share, bringing the total dividend for the period ending 31
March 2023 to 7.5 pence per share (compared to 7 pence per share
for the full year ended 31 March 2022), in line with the Company's
progressive Dividend Policy. The ex-dividend date will be 29 June
2023 and the record date 30 June 2023. The dividend will be paid on
or around 17 July 2023.
Any such dividend payment to Shareholders may take the form of
either dividend income or "qualifying interest income", which may
be designated as an interest distribution for UK tax purposes and,
therefore, subject to the interest streaming regime applicable to
investment trusts. Of this dividend declared of 1.5 pence per
share, 1.5 pence is treated as qualifying interest income.
Notice of Results
The Company will announce its results for the twelve months
ended 31 March 2023 on Monday 17 July 2023.
Alex O'Cinneide, CEO of Gore Street Capital, the investment
manager to the Company, commented:
"I am pleased to report the continued growth of the Company,
driven by our successful diversification strategy. Our commitment
to expanding the portfolio across international markets has proven
out, resulting in strong financial performance and further
positioning us as the global leader in the energy storage
sector.
Our unique diversification strategy has allowed us to navigate
market challenges and capture new revenue opportunities across
different grid networks in uncorrelated markets. This approach has
not only mitigated the impact of lower revenue in the GB market in
2023 but also provided stability and consistent growth.
The Company's Irish assets have been particularly impressive,
generating outstanding revenues and bolstering our overall
portfolio performance, a trend that continued to the end of the
reporting period. Our entire operational portfolio has been
well-placed to capitalise on the seasonal variations in revenues
seen across all the markets in which we operate, showcasing the
resilience and effectiveness of our diversification strategy.
Over the period, we have strategically acquired assets in key
markets, further enhancing our operational capacity and expanding
our geographic presence. We are now operating assets in four
non-correlated energy systems, with construction taking place in
five grids. These acquisitions have delivered cash-generating
assets and positioned the Company for long-term growth as we tap
into the increasing demand for energy storage solutions
worldwide.
Appropriate valuation of the Company's assets has also enabled
continued growth, minimised fees for shareholders, and insulated
the Company from any potential revaluing of assets due to
short-term volatility in one grid. Our assets have been sized for
the market opportunity available in each grid and not built on
unfounded assumptions of new revenue streams suddenly
materialising.
Our strong performance is a testament to the expertise and
dedication of my colleagues in the Investment Manager, a committed
board of directors, as well as the continued support of
shareholders. Over the next twelve months, we are focused on our
portfolio along the following areas 1) bringing projects to
operation at the lowest cost per MW/MWh fully installed 2)
generating the highest revenue per MW/MWh in each of the markets we
are competing in 3) utilise our economics of scale to materially
increase EBITDA margin 4) creating increased capacity in our
existing projects over the original project size. We remain fully
committed to delivering value and maintaining our position at the
forefront of the energy storage sector."
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso Tel: +44 (0) 20 3826
0290
Shore Capital (Joint Corporate
Broker)
Anita Ghanekar / Rose Ramsden / Tel: +44 (0) 20 7408
Iain Sexton (Corporate Advisory) 4090
Fiona Conroy (Corporate Broking)
J.P. Morgan Cazenove (Joint Corporate
Broker)
William Simmonds / Jérémie Tel: +44 (0) 20 3493
Birnbaum (Corporate Finance) 8000
Buchanan (Media Enquiries)
Charles Ryland / Henry Wilson / Tel: +44 (0) 20 7466
George Beale 5000
Email: gorestreet@buchanan.uk.com
Notes to Editors
About Gore Street Energy Storage Fund plc
Gore Street is London's first listed energy storage fund and
seeks to provide Shareholders with an opportunity to invest in a
diversified portfolio of utility-scale energy storage projects. In
addition to growth through exploiting its considerable pipeline,
the Company aims to deliver consistent and robust dividend yield as
income distributions to its Shareholders.
[1] 136.36m shares issued in April were eligible for only 5p of
dividends during the period since the fundraise in April.
([2]) Figure includes liquidated damages on late commissioning
of the PBSL project and based on operational MW as of 31 (st) March
2023.
[3] Figure excludes liquidated damages on late commissioning of
the PBSL project since project was operational in January 2023.
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END
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