# Gresham House Energy Storage Fund publish Quarterly NAV, Dividend and Factsheet

- Link: https://www.directorstalkinterviews.com/gresham-house-energy-storage-fund-publish-quarterly-nav-dividend-and-factsheet/412982817
- Published: 2021-04-28T07:12:37+01:00
- Author: Giles

**Q1 2021 NAV**

**Gresham House Energy Storage Fund Plc** ([LON:GRID](https://www.directorstalkinterviews.com/company/gresham-house-plc/ghe.l))
has today announced its NAV as of the 31st March 2021 was £371.8m or 106.66p per
ordinary share.

**Dividend Declaration**

The Board is pleased to announce a dividend of 1.75p per Ordinary Share for the 
period from 1 January 2021 to 31 March 2021. The dividend will be paid on 4 June
2021 to Shareholders on the register as at the close of business on 14 May 2021.
The ex-dividend date is 13 May 2021.

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 1.75 pence per Ordinary Share,
0.75 pence is declared as dividend income with 1.00 pence treated as qualifying 
interest income.

**Q1 2021 Factsheet**

The factsheet for the period ended 31 March 2021 is available at:

[http://newenergy.greshamhouse.com/esfplc/](http://newenergy.greshamhouse.com/esfplc/)

Extracted text of the commentary is set out below:

**Financial highlights**

From IPO to the end of March 2021, the Fund has delivered a share price total return
of 27.3%, compared with a 7.9% total return from the FTSE All Share. The attribution
of returns since inception is 14.5% to capital and 12.8% to income.

For the quarter ended 31 March 2021, the Fund’s NAV was £371.8m or 106.66p per share,
an increase of 3.70p per share in the quarter.

There was a 4.36p uplift from the revaluation of projects recently acquired (previously
held at cost) while income in excess of dividend distributions in the quarter accounted
for a 0.72p benefit. Partially offsetting this by 1.22p were a more cautious set
of assumptions which included taking into account the impact of the corporation 
tax rate rising to 25% from 2023, as announced in the recent Budget.

Dividend coverage in Q1 2021 was c.1.3x despite a significant cash balance and, 
as such, the Fund remains committed to its dividend policy of 7.0p per share paid
in equal quarterly instalments.

Finally, the Fund is exploring a debt facility which is expected to drive down its
cost of capital which, in turn, is expected to be significantly accretive to GRID’s
overall return on capital, once any debt facility is fully deployed. The Fund will
provide a further update in due course.

**Portfolio activity & market outlook**

The Investment Manager has had an active quarter, completing the acquisition of 
80MW across four projects (Glassenbury Extension (10MW), Port of Tyne (35MW), Tynemouth(
25MW) and Nevendon (10MW)) and a further 30MW since the quarter end in the form 
of Byers Brae near Livingston in Scotland.

The Investment Manager is also preparing to commence construction, subject to final
due diligence, on a further 275MW across five projects (one is 100MW, two are 50MW
and the other two are 40MW and 35MW respectively). The construction of these projects
will fully commit all the funds raised in the November 2020 equity issue.

The Fund has a significant additional exclusive pipeline of 527MW across eight projects
which will be built subject further debt and/or equity fundraising.

The market environment remains favourable as evidenced by the Fund’s dividend coverage
over Q1 2021. National Grid continues to procure more in the way of frequency response
than there are projects in the market, with the suggestion that this will continue
for several more months. Over the next two years, the level of procurement is expected
to increase steadily.

In addition and long anticipated, the volatility in power markets has increased 
significantly, as a result of several instances of insufficient power driving power
prices very high this winter. This was caused by low wind generation (which has 
come out much lower year-over-year due to low wind resource) and various other factors,
including forecasting errors (of supply and demand, and outages of either generation
capacity or inter-connectors at different times).

**Portflio & Pipeline**

| **Current portfolio** | 
| **Project** | **Location** | **MW** | **Status** | 
| 1.     Staunch | Staffordshire | 20 | Operational – 2018 | 
| 2.     Rufford | Nottinghamshire | 7 | Operational – 2018 | 
| 3.     Lockleaze | Bristol | 15 | Operational – 2018 | 
| 4.     Littlebrook | Kent | 8 | Operational – 2018 | 
| 5.     Roundponds | Wiltshire | 20 | Operational – 2018 | 
| 6.     Wolverhampton | West Midlands | 5 | Operational – Q3 2019 | 
| 7.     Glassenbury | Kent | 40 | Operational – Q4 2019^(1) | 
| 8.     Cleator | Cumbria | 10 | Operational – Q4 2019^(1) | 
| 9.     Red Scar | Lancashire | 49 | Operational – Q4 2019^(1) | 
| 10.   Bloxwich | West Midlands | 41 | Operational – Q3 2020 | 
| 11.   Wickham Market | Suffolk | 50^(2) | Operational – Q4 2020 | 
| 12.   Thurcroft | South Yorkshire | 50 | Operational – Q4 2020 | 
| 13.   Tynemouth | North Tyneside | 25 | Operational – Q1 2021^(1) | 
| 14.   Port of Tyne | Tyneside | 35 | Operational – Q1 2021^(1) | 
| 15.   Nevendon | Essex | 10 | Operational – Q1 2021^(1) | 
| 16.   Glassenbury Extension | Kent | 10 | Operational – Q1 2021^(1) | 
| 17.   Byers Brae | West Lothian | 30 | Operational – Q2 2021^(1) | 
| **Total Portfolio** |  | **425** |  | 
| 1. Operational assets acquired from the market, showing when the project was acquired by the Fund and not the date of commissioning.2. Asymmetric projects with lower Import Capacity versus its Export, all other projects have a symmetrical Export/Import Capacity.  | 
| **Project** | **Location** | **MW** | **Commissioning** | 
| **Committed Pipeline** | 
| 18.   Project M | Swindon | 100 | Q1 2022e | 
| 19.   Project E | Leicester | 50 | Q1 2022e | 
| 20.   Project D | Manchester | 50 | Q1 2022e | 
| 21.   Coupar Angus | Co. Perth | 40 | Q1 2022e | 
| 22.   Arbroath | Co. Angus | 35 | Q1 2022e | 
| **Subsequent Pipeline** | 
| 23.   Project Emerald | Republic of Ireland | c.40 | 2022 | 
| 24.   Monet’s Garden | North Yorkshire | 50 | 2022 | 
| 25.   Lister Drive | Merseyside | 50 | 2022 | 
| 26.   Project G | Northampton | 50 | 2022 | 
| 27.   Project P | Preston | 50 | 2022 | 
| 28.   Project E2 | West Yorkshire | 100+50 | 2022 | 
| 29.   Project B | West Yorkshire | 87 | 2022 | 
| 30.   Project Y | York, N. Yorks | 50 | 2022 | 
| **Total Pipeline** |  | **c.802** |  |

**Gresham House Energy Storage Fund plc** also announced its second set of annual
results since the IPO in November 2018. This covers the 12 months ended 31 December
2020 together with an update for the quarter ended 31 March 2021.

**Performance highlights during the FY20 period**

·       Net Asset Value (NAV) up 74% to £358.9m  (FY19: £205.9m)

·       NAV per share up 2.2% to 102.96p (FY19: 100.79p) and NAV total return of
+8.4%

·       Share price total return of +10.8% versus FTSE All-Share Index total return
of -9.8%

·       Underlying portfolio revenues up 89% to £19.0m (FY19: £10.1m), driven by
Frequency Response services, Trading and Triads

·       Underlying portfolio EBITDA up 135% to £15.8m (FY19: £6.7m)

·       Total dividends of 7.0p per share paid for the year, as targeted and reaffirmed
for 2021

·       Total equity funds of £151.2m raised and £14.9m of bonds issued

·       Portfolio weighted average discount rate of 10.8% (FY19: 11.2%)

**Deployment**

·       Total operational capacity increased to 315MW (FY19: 174MW)

·       £85.3m invested and 141MW of operational capacity added:

o  41MW Bloxwich (July 2020)

o  50MW Thurcroft (October 2020)

o  50MW Wickham Market (November 2020)

·       Cash position of £111m at year-end

**Post-period end highlights, to 31 March 2021**

·       NAV per share up 3.5% to 106.66p

·       Share price total return of +27.3% since IPO versus FTSE All-Share index
total return of +7.9%

·       £49.0m invested into 110MW of operational capacity taking total to 425MW(
including the 30MW Byers Brae acquisition announced on 22 April 2021)

·       Updated Pipeline of 802MW, of which 275MW due to start construction shortly

o  Investment into 275MW fully commits equity funds raised in November 2020, expected
to take operational capacity to 700MW by Q1 2022

o  Additional exclusive pipeline of 527MW to be built subject to further debt and/
or equity fundraising

**Operational Performance**

·       COVID-19 impact on operations was modest. Commissioning dates on two projects
experienced delays during the year, for which compensation was received in the form
of liquidated damages

·       GRID remains market leader, with market share around 30%, and largest operator
by at least 2x

·       First and only operator to enter all new National Grid services in 2020

·       Operational uptime of 98.8% achieved for Firm Frequency Response

·       Battery duration is longer than most competitors, with over 1 hour average
duration, reducing battery cycles and degradation

·       Investment and asset management teams expanded and well positioned to scale
portfolio and deliver operational efficiencies

**Environmental, Social and Governance**

·       Battery Energy Storage Systems are playing a key role in pathway to net 
zero carbon

·       Supply chain policy developed for contractor evaluation

·       Batteries owned by GRID could discharge enough energy for over 47,000 homes
in 2020

·       GRID awarded LSE Green Economy Mark and investment manager awarded Principles
for Reponsible Investing A+ rating

> **Commenting on the Fund’s results, John Leggate CBE, Chair of Gresham House Energy
> Storage Fund plc said:**
> “2020 was a milestone year for GRID, with the need for battery storage highlighted
> by the sharp mismatch in power supply and demand during the first UK lockdown,
> and the Government accelerating decarbonisation targets.
> “We have a substantial project pipeline and access to the necessary resources 
> to deliver on our ambitious plans to maintain the growth momentum of our battery
> storage portfolio. This is fundamental to delivering a stable, cost effective,
> and carbon-free power generation infrastructure.”
> Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc & Managing Director
> of Gresham House New Energy said:
> “The UK’s global leadership in renewable generation and in its setting of ambitious
> decarbonisation targets, continues to make it one of the world’s most attractive
> markets for deployment of utility-scale battery storage technology. We are encouraged
> by the system operator, National Grid, continuing to test and facilitate new ways
> for battery storage to contribute to system balancing.
> “More renewable energy on the system will inevitably lead to more intraday power
> price volatility, driving the improved revenues and profit from trading which 
> GRID is best positioned to capture. We are intent on driving shareholder value
> by maximising project returns through our portfolio scale as well as operational
> and cost leadership, while striving to reduce our cost of capital, including through
> a potential new debt facility.”

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