Downing Renew& Infra - Half-year Report
18/09/2023 07:00
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RNS Number : 6782M Downing Renewables & Infrastructure 18 September 2023
18 September 2023
Downing Renewables & Infrastructure Trust PLC
Interim Report and Accounts
Downing Renewables & Infrastructure Trust plc ("DORE" or "the Company")
announces its interim results for the six months ended 30 June 2023.
The Interim Report and Accounts can be found on the Company's website at:
https://www.doretrust.com/investor-relations
(https://www.doretrust.com/investor-relations) .
Highlights
á Acquired a portfolio of operational solar PV assets located in
the UK for £12.6 million. The addition of the new portfolio will increase the
total number of DORE's managed solar assets to c.4,800 with a total annual
average production of 100 GWh.
á Committed 9% of net asset value ("NAV") to non-energy generating
assets, significantly increasing the diversification across technologies and
revenues through:
o Signing an agreement to acquire the Company's first grid services asset,
Mersey Reactive Power, a UK-based, fully operational 200 MVAr shunt reactor
for £11.0 million. Completion is subject to Ofgem approval.
o Post period end, acquiring a Swedish Electricity Distribution System
Operator for £7 million. This regulated electricity distributor delivers
16-18 GWh per annum of electricity through medium and low voltage lines to its
c.1,500 domestic and business customers in Stromsund, northern Sweden.
á Continued to grow the Swedish hydropower platform with two
accretive acquisitions, increasing the generation capacity by 4.4%.
á NAV as at 30 June 2023 of £217 million, equal to 118.0 pence per
ordinary share, down a marginal 0.6 pence per ordinary share compared to the
NAV as at 31 December 2022. The fall was driven primarily by decreased power
price forecasts.
á NAV total return of 6.0% for the 12 months to 30 June 2023 and
30.5% since IPO.
á Interim dividends per ordinary share of 2.595 pence paid during
the period and a further 1.345 pence per ordinary share declared (but not
accrued) relating to the three months to June 2023 to be paid in September
2023.
á The Portfolio generated 207 GWh of renewable energy during the
period, avoiding 97,461 tonnes of CO(2)e and powering the equivalent of
153,146 UK homes' typical electricity demands for this period.
Hugh Little, Chair, Downing Renewables & Infrastructure Trust plc,
commented:
"DORE has remained resilient in the first half of this year, despite the
continued market volatility. The Company has now fully deployed all of its
cash, with the acquisition of a Swedish electricity distribution system
operator and an agreement to buy our first grid services asset further growing
and diversifying the portfolio. We believe DORE is well positioned to continue
providing its shareholders with attractive and sustainable long-term returns,
taking advantage of the global transition to net zero. We look forward to
providing further positive news in the second half of the year."
Tom Williams, Partner, Head of Energy and Infrastructure at Downing LLP,
commented:
"The untapped potential of the existing portfolio continues to represent a
significant opportunity for value creation. We have made excellent progress
both towards entry into the lucrative frequency markets through our
digitalisation and optimisation programme in the hydropower portfolio and also
in securing grid connections for new build battery projects on our existing
land holdings in Sweden."
Contact details:
Downing LLP - Investment Manager to the Company +44 (0)20 3954 9908
Tom Williams
Singer Capital Markets - Sponsor, Joint Corporate Broker +44 (0)20 7496 3000
Robert Peel, Alaina Wong, Alex Emslie (Investment Banking)
Sam Greatrex, Alan Geeves, James Waterlow, William Gumpel (Sales)
Winterflood Securities Limited - Joint Corporate Broker +44 (0)20 3100 0000
Neil Morgan (Corporate Finance)
Darren Willis, Andrew Marshall (Sales)
TB Cardew - Public relations advisor to the Company +44 (0)20 7930 0777
Ed Orlebar +44 (0)7738 724 630 /
Tania Wild +44 (0)7425 536 903
DORE@tbcardew.com (mailto:DORE@tbcardew.com)
About Downing Renewables & Infrastructure Trust plc (DORE)
DORE is a closed-end investment trust that aims to provide investors with an
attractive and sustainable level of income, with an element of capital growth,
by investing in a diversified portfolio of renewable energy and infrastructure
assets in the UK and Northern Europe. DORE has been awarded the London Stock
Exchange's Green Economy Mark in recognition of its contribution to the global
'Green Economy' and also in 2022 DORE won 'Renewables Fund of the Year' at the
Sustainable Investment Awards.
The Board classifies DORE as a sustainable fund with a core objective of
accelerating the transition to net zero through its investments, compiling and
operating a diversified portfolio of renewable energy and infrastructure
assets to help facilitate the transition to a more sustainable future. The
Company believes that this directly contributes to climate change mitigation.
DORE's strategy, which focuses on diversification by geography, technology,
revenue and project stage, is designed to increase the stability of revenues
and the consistency of income to shareholders. For further details please
visit www.doretrust.com (http://www.doretrust.com/)
About Downing LLP
Downing is a responsible investment manager established in London in 1986. We
currently manage £1.8 billion of assets under a broad range of investment
mandates across our funds, investment trusts and tax-efficient products. As a
certified B Corporation, we are focussed on creating a sustainable future, our
key investment areas are renewable energy, infrastructure, property and
healthcare.
Downing has c.60 professionals dedicated to renewable energy and
infrastructure and a proven track record in renewables. Since 2010, Downing
has made more than 175 investments and has c.£795 million of assets under
management in solar, wind, hydro and battery storage technology.
This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States
For further details please visit www.downing.co.uk
(http://www.downing.co.uk/)
Key Metrics
As at or for period ended 30 June 2023 As at or for year ended 31 December 2022
Market capitalisation £184m £210m
Share price 100.0 pence 113.5 pence
Dividends with respect to the period £5.0m £8.0m
Dividends with respect to the period per ordinary share 2.69 pence 5.0 pence
GAV1(,2) £319m £311m
NAV £217m £219m
NAV per share 118.0 pence 118.6 pence
NAV total return with respect to the period(1,2,4) 1.6% 19.5%
Total Shareholder Return with respect to the period(1,2) -10.5% 15.1%
NAV total return since inception(1,2,3) 30.5% 28.5%
Total Shareholder Return since inception(1,3) 2.5% 21.1%
Weighted average discount rate(1) 7.8% 7.7%
During the period, assets saved 97,460 tonnes of CO2 and powered the
equivalent of 153,146 UK homes' typical electricity demands for this period.
Chairman's Statement
On behalf of the Board, I am pleased to present the Interim report of the
Company covering the period from 1 January 2023 to 30 June 2023 (the "Interim
Report").
Acquisitions
In the Company's Annual Report I wrote how the Investment Manager had
continued to make great progress in deploying the Company's funds in Q1 2023,
completing the acquisition of two additional operational hydropower plants in
Sweden (with annual generation of 8.3GWh), located on the Gilleran and Moalven
rivers in the SE2 electricity pricing zone, for £5.1 million.
In this period, the Investment Manager has continued to support the Company's
investment strategy to increase stability of revenues and consistency of
income to shareholders through its acquisition of a portfolio of operational
solar PV assets located in the UK for £12.6 million. The 13.0 MWp portfolio
of two ground-mounted sites and approximately 1,600 commercial and residential
installations benefits from high levels of feed-in tariffs and renewable
obligation certificate subsidies. The new portfolio will increase the total
number of DORE's managed solar assets to c.4,800 with a total annual average
production of 100 GWh.
Diversification remains central to our strategy. During the period we signed
an agreement to acquire our first grid services asset, Mersey Reactive Power.
This acquisition demonstrates the Company's commitment to constructing a
diversified portfolio designed to provide greater certainty of future revenues
and predictability of income to shareholders by increasing its access to
non-generational assets. The project, which has an expected asset life of 40
years, supports the UK's electricity system in voltage management, providing
increased network resilience, reducing costs to consumers and lowering carbon
emissions by providing an alternative to fossil fuels. Mersey Reactive Power
has an initial fixed priced, inflation-linked, availability-based contract
with National Grid ESO until 2031. The acquisition will provide a new,
long-term, revenue stream for DORE, one that is not derived from the sale of
power on the wholesale markets.
After the period end, DORE made its second acquisition in the grid and grid
stability services sector, a Swedish Electricity Distribution System Operator,
Blasjon Nat AB ("Blasjon"), for c.£7 million. The Company is a regulated
electricity distributor, which delivers 16-18 GWh per annum of electricity
through medium and low voltage lines to its c.1,500 domestic and business
customers in Stromsund, northern Sweden.
Further details on the acquisitions during the period can be found in the full
Interim Report.
Debt Facilities
In the interests of capital efficiency and to enhance income returns,
long-term capital growth and capital flexibility, the Company is permitted to
maintain a conservative level of gearing. To allow flexibility when making new
investments, the Group can draw on two separate loan facility agreements: a
£40 million Revolving Credit Facility ("RCF") with Santander UK plc at a
holding company level and a seven-year EUR 43.5 million limited recourse debt
facility with SEB at Downing Hydro AB.
The SEB debt benefits from swaps until the end of 2032, the total costs of
drawn debt being 2.3%. As at 30 June 2023, the Santander facility was not
drawn on, while EUR 27.4 million of the SEB facility was utilised. Within the
United Kingdom solar portfolio there is a principal amount of £68.5 million
lent by Aviva and £10.1 million lent by institutional investors managed by
Vantage Infrastructure. Approximately 12% of the Aviva debt is fixed at an
interest rate of 3.37% and the interest rate is fixed in real terms on the
remaining balance at 0.5%. The Vantage Infrastructure managed facility has an
all-in fixed rate of 1.54%.
The Company has substantially deployed all of its remaining cash and post
period end has drawn down £8.5 million of the RCF to fund the acquisition of
Blasjon. A further £11m will be drawn at completion of the Mersey Reactive
Power acquisition.
Financial Results
During the period to 30 June 2023 the NAV per ordinary share decreased from
118.6 pence at 31 December 2022 to 118.0 pence, an decrease of 0.5% and
representing total return of 1.6% including dividends paid. The NAV total
return from IPO to 30 June 2023 is 30.5%, when dividends paid of 9.85 pence
per ordinary share are included.
The Company made a profit for the period to 30 June 2023 of £3.8 million,
resulting in earnings per ordinary share of 2.90 pence.
Portfolio Performance
The 4,863 operating assets produced approximately 207GWh of renewable
electricity during the reporting period. The assets continue to perform well,
with operating profit for the 12 months to June 2023 18% ahead of budget at
£26.2million.
For the period between 1 January 2023 and 30 June 2023, energy generation was
ahead of expectations for the wind assets as a result of strong availability
and good wind speeds. Generation in the hydropower and solar portfolios was
below expectations because of dry conditions and several ongoing technical
performance enhancement projects on the solar portfolio. The portfolio
produced an operating profit 8% lower than expected as a result of low power
prices in Sweden during spring 2023 and the lower generation mentioned above.
Dividends
The Company's dividend in respect of the quarter to 31 December 2022 of 1.25
pence per share was announced and paid during the period. The Board was also
pleased to announce a target dividend of 5.38pps relating to the year to 31
December 2023, a 7.6% increase from 2022. The first increased quarterly
dividend of 1.345 pence per share was paid in June 2023. I am pleased to
report that a further dividend of 1.345 pence per share has been announced and
will be paid on or around 29 September 2023 in respect of the quarter to 30
June 2023.
Capital Structure
The Board continues to keep the Company's share price discount under close
review and is committed to buying back its own shares when deemed appropriate.
While share buy-backs will not necessarily prevent the discount from widening,
particularly in times of market weakness or volatility, the Board believes
that buybacks enhance the NAV per share for remaining shareholders, provide
some additional market liquidity and help to mitigate discount volatility
which can damage shareholder returns.
During the six months to 30 June 2023, the Company has bought back a total of
702,500 shares into treasury at a cost of £0.7 million. Since the period end,
a further 815,000 shares have been bought back into treasury at a cost of
£0.6 million. As at 15 September 2023, the Company had 184,622,487 shares in
issue (including 1,567,500 shares held in treasury, which are available to be
resold at a premium to NAV per ordinary share if the opportunity arises).The
Company has purchased shares where it believes this is in shareholders'
interests, noting that share buybacks represent an attractive opportunity to
increase the Company's investment exposure to the existing portfolio at rates
of return well in excess of the relevant discount rates.
Outlook
The Board is pleased with the recent deployment of £17.7 million in the three
high-quality investments made in the period and especially pleased with the
progress made into the grid services market. Both Mersey Reactive Power, a UK
based shunt reactor being signed in June and Blasjon, a Swedish Electricity
Distribution System Operator, committed or completed after period end.
At a portfolio level, the Investment Manager's in-house asset management team
will continue its focus on delivering continued positive operational
performance, along with optimisation initiatives where appropriate. The
Investment Manager is making strong progress exploring opportunities to
maximise returns within the hydro portfolio including options to integrate
battery storage and gain access to Sweden's growing Frequency Containment
Reserve ("FCR") markets. The Company will continue to leverage the deep
expertise of the Investment Manager to deliver strong operational performance
while placing its sustainability goals at the centre of its operational
objectives.
Hugh W M Little
Chair
15 September 2023
Downing Renewables & Infrastructure Trust PLC
Portfolio Summary
At the period end the Company owned 197 MWp of hydropower, wind and solar
assets with an annual generation of around 414 GWh. The portfolio is
diversified across 4,863 individual installations and across five different
energy markets.
During the period the Group added an additional 14 MW of solar and hydropower
assets with an additional annual generation of 20 GWh.
The Company also signed agreements to purchase two non-generational assets. A
Swedish distribution network which serves 1,500 domestic and business
customers and an English 200 MVAr shunt reactor.
The Group currently has no exposure to any assets under construction.
Portfolio composition by valuation, as at 30 June 2023
Technology by GAV
Hydro 42%
Solar 47%
Wind 9%
Cash 2%
Geographic Exposure by GAV
Sweden 51%
Great Britain 38%
Northern Ireland 9%
Cash 2%
Power Market Exposure by GAV
Sweden SE2 25%
Sweden SE3 21%
Sweden SE4 4%
Great Britain 38%
Northern Ireland 9%
Cash 2%
Portfolio composition post acquisitions of Mersey and Blasjon:
Technology by GAV
Hydro 39%
Solar 44%
Wind 8%
Grid Services 6%
Cash 2%
Geographic Exposure by GAV
Sweden 51%
Great Britain 39%
Northern Ireland 8%
Cash 2%
Power Market Exposure by GAV
Sweden SE2 24%
Sweden SE3 20%
Sweden SE4 4%
Great Britain 36%
Northern Ireland 8%
No Exposure 6%
Cash 2%
Investment Technology Date Acquired Location Power Market / Subsidy Installed capacity (MW) Expected annual generation (GWh)
Ugsi Hydro Feb-21 Alvadalen, Sweden SE3 / n/a 1.8 9.9
Bathusstrommen Hydro Feb-21 Alvadalen, Sweden SE3 / n/a 3.5 10.3
Asteby Hydro Feb-21 Torsby, Sweden SE3 / n/a 0.7 2.8
Fensbol Hydro Feb-21 Torsby, Sweden SE3 / n/a 3 14.1
Rodbjorke Hydro Feb-21 Torsby, Sweden SE3 / n/a 3.3 14.9
Vals Hydro Feb-21 Torsby, Sweden SE3 / n/a 0.8 3.2
Torsby Hydro Feb-21 Torsby, Sweden SE3 / n/a 3.1 13.7
Tvarforsen Hydro Feb-21 Torsby, Sweden SE2 / n/a 9.5 37
Sutton Bridge Ground mount solar Mar-21 Somerset, England UK / ROC 6.7 6.7
Andover Airfield Ground mount solar Mar-21 Hampshire, England UK / ROC 4.3 4.1
Kingsland Barton Ground mount solar Mar-21 Devon, England UK / ROC 6 5.8
Bourne Park Ground mount solar Mar-21 Dorset, England UK / ROC 6 6.0
Laughton Levels Ground mount solar Mar-21 East Sussex, England UK / ROC 8.3 8.8
Deeside Ground mount solar Mar-21 Flintshire, Wales UK / FiT 3.8 3.4
Redbridge Farm Ground mount solar Mar-21 Dorset, England UK / ROC 4.3 4.2
Iwood Ground mount solar Mar-21 Somerset, England UK / ROC 9.6 9.3
New Rendy Ground mount solar Mar-21 Somerset, England UK / ROC 4.8 4.7
Redcourt Ground mount solar Mar-21 Carmarthenshire, Wales UK / ROC 3.2 3.1
Oakfield Ground mount solar Mar-21 Hampshire, England UK / ROC 5 4.7
Kerriers Ground mount solar Mar-21 Cornwall, England UK / ROC 10 9.7
RSPCA Llys Nini Ground mount solar Mar-21 Swansea, Wales UK / ROC 0.9 0.9
Commercial portfolio Rooftop Solar Mar-21 Various, England UK / FiT 0.3 0.0
Commercial portfolio Rooftop Solar Mar-21 Various, England & Wales UK / ROC 5.2 4.0
Commercial portfolio Rooftop Solar Mar-21 Various, N. Ireland SEM / NIROC 0.7 1.0
Bombardier Rooftop Solar Mar-21 Belfast, N. Ireland SEM / ROC 3.6 2.8
Residential portfolio Residential rooftop solar Mar-21 Various, N. Ireland SEM / NIROC 13.1 9.6
Lemman Hydro Jan-22 Alvdalen, Sweden SE3 / n/a 0.6 2.5
Ryssa Ovre Hydro Jan-22 Mora, Sweden SE3 / n/a 0.7 2.6
Ryssa Nedre Hydro Jan-22 Mora, Sweden SE3 / n/a 0.6 2.4
Rots Ovre Hydro Jan-22 Alvdalen, Sweden SE3 / n/a 0.7 2.8
Rots Nedre Hydro Jan-22 Alvdalen, Sweden SE3 / n/a 0.4 1.4
Gabrielsberget Syd Vind AB Wind Jan-22 Aspea, Sweden SE2 / n/a 46.0 107.9
Vallhaga Hydro Jan-22 Edsbyn, Sweden SE2 / n/a 2.5 12.9
Osterforsens Kraftstation Hydro Jan-22 Edsbyn, Sweden SE2 / n/a 1.6 11.5
Bornforsen 1 Hydro Jan-22 Edsbyn, Sweden SE2 / n/a 0.7 2.9
Bornforsen 2 Hydro Jan-22 Edsbyn, Sweden SE2 / n/a 1.5 9.3
Fridafors Hydro May-22 Fridafors, Sweden SE4 / n/a 4.4 16.9
Summit Hydro Oct-22 Sweden SE3 /n/a 3.1 13.4
Summit Hydro Oct-22 Sweden SE2/ n/a 0.3 1.2
Hogforsen Hydro Feb-23 Sweden SE2/ n/a 0.3 2.5
Gottne Hydro Feb-23 Sweden SE2/ n/a 0.8 5.8
AEE Renewables UK 13 Solar Apr-23 Devon, England UK / ROC/FiT 5.5 5.4
Gloucester Wind Solar Apr-23 Various, England and Wales UK / FiT 1.1 1.0
Hewas Solar Solar Apr-23 Various, England and Wales UK / FiT 2.0 1.7
Penhale Solar Solar Apr-23 Surrey, England UK / FiT 0.3 0.3
Priory Farm Solar Farm Solar Apr-23 Suffolk, England UK / ROC 3.2 2.4
St Colomb Solar Solar Apr-23 Various, England and Scotland UK / FiT 0.8 0.6
TOTAL AS AT 30 JUNE 2023: 198.6 402.1
Post balance sheet date acquisitions and commitments:
Investment Technology Date Acquired Location Power Market / Subsidy Installed capacity (MW) Expected annual generation (GWh)
Mersey Grid Services June-23 United Kingdom United Kingdom n/a n/a
Blue Sea Grid Services July-23 Sweden SE2 n/a n/a
TOTAL AS AT THE DATE OF THIS REPORT: 198.6 402.1
Investment Manager's Report
Introduction
The first half of 2023 has been busy but rewarding, with the Company making
three new investments during the period, spending £17.7 million. The assets
acquired during and after the period end further underpins the Company's
commitment to pursuing a highly diversified investment strategy. The
investments provide new, long-term, revenue streams including revenues not
derived from the sale of power on the wholesale markets. The Company also
increased its Revolving Credit Facility from £25 million to £40 million.
Acquisitions
During the first half of the year, we have continued to grow our portfolio and
have made four acquisitions in the hydropower, solar and grid services
sectors. This comprises two additional Swedish hydropower portfolios to
complement the Company's existing portfolio and a portfolio of Solar PV assets
located in the UK. The Company further diversified its energy market exposure
by signing an agreement to acquire its first grid services asset, a 200 MVAr
UK-based shunt reactor. After period end, the Company acquired a Swedish grid
services company.
Solar - Occasum Project
In April 2023, the Group acquired a portfolio of operational solar PV assets
located in the UK for a cash consideration of £12.6 million. The 13.0 MWp
portfolio of two ground-mounted sites and approximately 1,600 commercial and
residential installations benefits from high levels of feed-in tariffs and
renewable obligation certificate subsidies. Due to the revenue profile of
these assets, this acquisition increases the percentage of revenue from
subsidies from 51% to 54% across our solar portfolio.
The new portfolio will increase the total number of DORE's managed solar
assets to c.4,800 with a total annual average production of 100 GWh.
DORE will remain unaffected by the UK's Electricity Generator Levy ("EGL")
following this acquisition, with the Company having significant headroom in
the EGL's annual allowance.
Hydro - Downing Hydro AB ("DHAB")
DHAB is the vehicle through which the Group acquires and owns its portfolio of
hydropower plants.
In February 2023, the Group acquired a 2.5 GWh hydropower plant in Hogforsen,
on the Gilleran river, a tributary to the Indalsalven river. The plant was
commissioned in 1915 and in 2011, the plant underwent a major renovation,
including replacement of generator, turbine and control system.
In March 2023, the group acquired a 6 GWh hydropower plant in the municipality
of Gottne, located on the Moalven river. The plant underwent a major
refurbishment in 2015.
The acquisitions increase the total number of DORE's managed Swedish
hydropower plants to 28 with a total annual average production of 197 GWh. The
new hydropower plants will be integrated into the existing portfolio and will
continue to support DORE's highly diversified investment strategy, designed to
increase the stability of revenues and consistency of income to shareholders.
The acquisitions were accretive to NAV due to operational and capital
efficiencies as a result of the integration of the assets into the Company's
platform. During the period, a £0.3 million increase in NAV was recognised as
the new investments were revalued throughout the period.
A framework agreement is in place with Axpo (a leading Swiss energy company)
which allows DHAB to lock in energy prices. DHAB has hedged positions in line
with DORE's risk management strategy. The hydropower assets do not attract
material government subsidy payments.
Grid Services - Blasjon Nat AB (Post Period end)
In July, DORE acquired a Swedish Electricity Distribution System Operator
("DSO"), Blasjon Nat AB ("Blasjon"), for £7.3 million. The Company has
acquired 100% of the share capital in Blasjan, a regulated electricity
distributor, which delivers 16-18 GWh per annum of electricity through medium
and low voltage lines to its c.1,500 domestic and business customers in
Stromsund, northern Sweden.
An Electricity DSO is a critical entity within the electricity supply chain
that plays a vital role in the efficient and reliable distribution of
electrical power to end-users. The electricity distribution system is the part
of the power grid responsible for delivering electricity from the transmission
system to consumers, businesses, and industries at lower voltage levels.
Blasjon's grid network is 436km in length and comprises overhead lines, three
primary and 161 secondary substations. Blasjon operates a licensed monopoly in
a highly regulated environment and generates consistent and predictable
cashflows that are not directly exposed to energy price fluctuations. This
reduces DORE's risk exposure to movements in electricity market prices and
increases the Company's revenue diversification. Long term revenues under the
regulatory regime are linked to inflation and interest rates. Grid networks
are operating businesses with very long-life assets.
This is DORE's second acquisition in the grid and grid stability services
sector, and will further support the Company's strategy of constructing a
diversified portfolio by increasing the stability of revenues and consistency
of income to shareholders. Blasjon will account for 3.5% of the Company's
revenues, providing a steady revenue stream throughout the year without being
affected by seasonal variations.
Grid Services - Mersey Reactive Power
In June, the Group signed an agreement to acquire Mersey Reactive Power, a
UK-based, fully operational 200 Megavoltamperes reactive ("MVAr") shunt
reactor for a cash consideration of c.£11.0 million. It is located in
Frodsham, Merseyside. Completion is subject to Ofgem approval.
This grid services asset became operational in May 2022 and was the first
project to go live as part of the National Grid's Stability Pathfinder
initiative. The project, which has an expected asset life of 40 years,
supports the UK's electricity system in voltage management, providing
increased network resilience, reducing costs to consumers and lowering carbon
emissions. Mersey Reactive Power further reinforces the Company's commitment
to providing stable revenue through an initial fixed priced, inflation-linked,
availability-based contract with National Grid ESO until 2031.
Traditionally, reactive power services have been provided by large fossil fuel
plants, but to support the transition to low and zero carbon energy, new
sources and providers of reactive power are needed. The Mersey region has been
identified as a key problem area for reactive power and as fossil fuel
generation assets continue to be decommissioned across the network, reactive
power will become more expensive.
In power transmission systems, the interplay between real power and reactive
power is crucial for maintaining voltage stability. Real power is the power
that does practical work, such as running motors or powering appliances.
Reactive power is required to maintain voltage levels in the system and
support the flow of real power.
Mersey Reactive Power supports the balancing of real and reactive power
through a shunt reactor, a piece of electrical equipment used in high-voltage
electricity transmission systems. It is a passive device, meaning it does not
generate electricity itself but rather helps in regulating the flow of
electricity on the power grid. In power transmission systems, when long
transmission lines are not adequately loaded, they may experience overvoltage
conditions. Overvoltage can damage equipment and lead to inefficiencies in the
transmission network. A shunt reactor is designed to absorb and consume
reactive power, which helps in maintaining the voltage levels within an
acceptable range.
When the transmission line is lightly loaded or has excess capacitive reactive
power, the shunt reactor draws in this reactive power. By doing so, it lowers
the voltage levels, preventing overvoltage issues. Conversely, when the load
increases, and the system requires more reactive power, the shunt reactor can
reduce its absorption, allowing more reactive power to flow through the line
and support the voltage levels.
The acquisition will provide a new, long-term, revenue stream for DORE, one
that is not derived from the sale of power on the wholesale markets. It
demonstrates the Company's continued commitment to pursuing a highly
diversified investment strategy. DORE will continue to seek similar
opportunities in the grid services sector, constructing a portfolio designed
to increase the stability of revenues and consistency of income to
shareholders.
Mersey offers a higher than average returns profile compared to other core
renewables assets. The investment is materially de-risked by a nine-year,
availability based, fully index-linked High Voltage Pathfinder Contract
("Pathfinder Contract") from National Grid.
Market Development and Opportunities
The outlook for the Company is very encouraging. The existing assets continue
to operate well and five new acquisitions have been signed in 2023, including
the Company's first grid services assets. The Investment Manager is
progressing a significant pipeline of opportunities across technologies,
geographies and sectors including wind, solar, hydropower, utilities, battery
storage and ancillary markets and continues to work to finalise a series of
investments that would see the RCF fully utilised. The main geographical focus
of the opportunities in progress is the Nordic region and the UK, with certain
further opportunities across Northern Europe.
Within the hydro portfolio, the Investment Manager is investigating thoroughly
opportunities to maximise revenues and returns, including gaining access to
the attractive Swedish Frequency Regulation Markets, by installing add-on
equipment and software to the existing hydropower stations and / or the
potential integration of battery storage assets on land already owned by the
Company.
FCR is a type of ancillary service provided by power system operators to
maintain the grid frequency within the standard range. If the frequency
deviates from this value, it can cause significant issues and even blackouts.
The combination of an increasingly centralised operation system across the
hydro portfolio and software and hardware upgrades will enable the Company to
regulate its power production to such an extent that it can bid for FCR
contracts. The Company is targeting initial participation in this market in Q4
2023.
The Company has a significant landbank alongside its hydropower plants that
make suitable locations for battery installations and is well positioned for a
reduced cost of entry to the FCR and Fast Frequency Reserve ("FFR") markets.
Limited supply in the FCR / FFR markets combined with increased underlying
demand as a result of an increased share of intermittent generation in the
electricity system has resulted in high FFR and FCR prices, making the market
particularly attractive. Batteries, especially large-scale energy storage
systems, play a crucial role in modern power systems due to their ability to
store and release electricity quickly. This makes them valuable assets for
providing FCR and FFR services to the grid.
Portfolio Performance
The 4,863 operating assets produced approximately 207GWh of renewable
electricity during the reporting period.
The assets continue to operate well, with operating profit for the 12 months
to June 2023 18% ahead of budget. Portfolio generation for the 12-month period
was 7.5% under expectations, driven by low natural resource in the wind and
hydropower portfolios, and technical performance enhancement projects in the
Solar portfolio.
Asset Generation Vs Budget 6 Months to June 2023
Actual Production (MWh) Expected Production (MWh)
Hydro 96,630.65 101,497.90
Solar 52,776.55 55,818.93
Wind 57,339.11 53,734.00
For the period of operations from 1 January 2023 to 30 June 2023, generation
was ahead of expectations for the wind assets as a result of strong
availability and good wind speeds, but slightly lower than expected in the
solar and hydropower portfolios.
The solar portfolio performed slightly below expectations, generating 53GWh.
The solar portfolio experienced good irradiation levels throughout the period
at 4.6% above expectations. The deviation between irradiation and generation
was due to several technical performance enhancement projects at some of the
older ground mounted sites. These projects, alongside the Asset ManagerÕs
dynamic spare parts strategy continue to be addressed by the Asset Manager. A
full update on this strategy can be found in the full Interim Report.
The hydropower portfolio performed well from an operational perspective,
however precipitation in Sweden was 5% below the long-term average leading to
a lower-than-expected generation figure of 96 GWh.
Operating profit was lower than expected as a result of low power prices in
Sweden during spring 2023, which impacted both the wind and hydropower
portfolios. As previously reported, the hydropower portfolio strategically
holds water in reservoirs for release at times when power prices are higher.
However, during the period this became difficult due to low inflow and the
need to maintain a regulatory minimum release of water from the reservoirs. As
detailed under 'Ancilliary Services Projects', Downing is exploring several
options to enhance the flexibility and revenue options for the Swedish
portfolio to optimise the portfolio's participation in the power market and
reduce the direct impact of such periods of low power prices.
Asset Operating Profit Vs Budget for 6 month period to 30 June 2023
Actual Operating Profit (£m) Expected Operating Profit (£m)
Hydro 2,409,263 4,507,731
Solar 9,696,816 8,652,643
Wind 845,329 959,726
Portfolio and Asset Management
Downing has invested significantly in an in-house asset management team
capable of providing a full scope service to a wide range of generation, grid
and storage technologies. Established in 2019, the team totals 26 and includes
expertise across power markets, engineering, data analytics, finance and
commercial management.
Health and Safety
The health and safety of contractors and the public is a fundamental part of
asset management processes. Throughout the period, a range of workstreams were
carried out by the Asset Manager in line with the Company's approach to Health
and Safety management.
In order to ensure a comprehensive approach to Health and Safety management,
the Asset Manager has engaged a third-party expert to provide health and
safety support to assess systems in place and revise existing processes where
applicable.
A rolling programme of Health and Safety audits continues across the
portfolio. These audits are based on a two-tier approach, where risks and
procedures are audited at the site level and also the operator level. Downing
has a process of continuous assessment and feedback of site and operator
practices, ensuring effective management systems are in place and adhered to.
Finally, IT systems are used to thoroughly track all incidents. As well as
these systems enabling performance measurement and trend analysis, they also
ensure the effective communication, escalation, and management of incidents.
Optimisation
During the period, the Asset Manager continued to develop and implement
performance and proprietary data optimisation and power pricing strategies,
the latter enhancing Downing's data driven approach to asset management.
The digitalisation pilot project on the Swedish hydropower sites has
progressed well. Onsite remote monitoring was installed at the pilot project
sites and successfully connected to a central system that can be used to
operate the sites and store the data. Work continued to automate and optimise
a production planning and dispatch strategy for the assets, which has
previously been calculated manually. This involves incorporating real time
data from the sites and their corresponding water reservoirs along with price
forecasts and meteorological forecasts to produce automated, site specific
dispatch plans. A project is also underway to calibrate the model using
historical telemetry data, with a simulation of the tool expected to start
next quarter.
The Asset Manager has been working with a specialist artificial intelligence
company to create an interface that produces predictive component failure
analysis and identification of likely short and long term maintenance costs
for ground mounted solar sites. A report showing the Mean-Time-To-Failure
for inverters has been developed which gives insight, based on historical
incidents, into when the inverter is likely to fail. There will be further
development that aims to include a greater variety of parameters into the
model that will provide further insights into the correlation of anomalies and
incidents so that maintenance could be scheduled prior to component failures.
During the period, the Asset Manager has continued to enhance existing spare
parts strategies, with the aim of reducing downtime and maintaining asset
performance given prolonged equipment lead times. The strategy considers all
technologies within the DORE portfolio and aims to utilise opportunities of
cross compatibility across the portfolio.
During the period, the Asset Manager also completed a successful O&M
tender and takeover process for 13 ground mount solar assets, transitioning to
new contracts with RES and including additional maintenance stipulations and
performance guarantees.
Ancillary Services
A number of ancillary service projects have commenced during the period. These
services present opportunities for additional revenue streams for the assets
in Sweden, as well as supporting the relevant local grid in balancing supply
and demand.
FCR and manual Frequency Restoration Reserve ("mFRR") are services required by
the grid when there is an imbalance of electricity between supply and demand,
at which point assets are asked to power down or power up. Downing has been
exploring these markets and is expecting to participate with the Swedish
hydropower plants in Q4 2023. To participate in these markets, the Asset
Manager is currently upgrading hardware and software on site to enable
additional functionality such as remote switch off/on.
The Asset Manager is also in the process of assessing which Swedish hydropower
sites could be suitable for the installation of battery energy storage systems
("BESS"). This involves reviewing space requirements, grid connections and IT
infrastructure. Installing BESS will enable the assets to participate in
additional frequency regulation markets such as Fast Frequency Reserve
("FFR"), presenting additional revenue stream opportunities for the portfolio.
Financing and Capital Structure
The Company and its subsidiaries ("the Group") adopts a prudent approach to
leverage. Its objective is that each asset will be financed appropriately for
the nature of its underlying cashflows and their expected volatility.
Long-term debt may be used where appropriate at the SPV level to facilitate
acquisitions, refinancing, capital expenditure or construction of assets.
Total long-term structural debt will not exceed 50% of the prevailing Gross
Asset Value. At 30 June 2023, including project level financing, the Group's
leverage stood at 32%. All third party debt is held by the Company's
subsidiaries.
In addition, the Company and/or its subsidiaries may also make use of
short-term debt, such as a revolving credit facility, to assist with the
acquisition of suitable opportunities as and when they become available.
Revolving Credit Facility
The Group has access to a loan agreement through its main subsidiary DORE Hold
Co with Santander UK plc. The RCF is available until December 2025, with the
possibility to be extended for a further year. On 26 January 2023, the Company
announced that the RCF had been increased from £25m to £40m further
facilitating the execution capabilities of the Company's pipeline.
The terms of the RCF now includes a 'Green Projects' initiative, operating
under the Loan Market Association's ("LMA") Green Loan Principles, a framework
of market standards and guidelines that provides a consistent methodology for
use across the green loan market.
Under the 'Green Projects' criteria, the RCF can only be used in connection
with assets that present environmental benefits and appropriate green
credentials. Additional monitoring and reporting obligations on the
environmental benefits delivered by such assets will be required, which
comfortably aligns with DORE's current investment strategy as an Article 9
fund.
The RCF has the additional benefit of being able to be drawn in both GBP and
EUR (with the ability to also make use of funds in other currencies) and is
priced at the Sterling Overnight Index Average ("SONIA") plus 2.25% per annum.
The Group will make use of the RCF mainly to fund the acquisition of
additional assets.
Post period end the Company has drawn down £8.5 million of the RCF to fund
the acquisition of Blasjon, and a further £11m will be drawn at completion of
Mersey Reactive Power.
Refinancing of Hydropower Assets
In early 2022, DHAB entered into a seven-year bullet repayment EUR 43.5
million debt facility with SEB, a leading corporate bank in the Nordics. As of
30 June 2023, DHAB had utilised EUR 27.4m of the facilities, predominately as
source of funding for acquiring further hydropower plants in Sweden during
2022. The remainder of the undrawn facility is predominately available to fund
future capital expenditure requirements and further acquisitions. The total
cost of the drawn debt is 2.3%. DHAB benefits from interest rate swaps until
the end of 2032.
UK Solar Portfolio
Medium term amortising debt (September 2034 maturity) is in place for the
United Kingdom solar portfolio and, as at 30 June 2023, comprised outstanding
principal amounts of £68.5 million lent by Aviva and £10.1m lent by
institutional investors managed by Vantage Infrastructure.
Approximately 12% of the Aviva debt is fixed at an interest rate of 3.37%. The
interest rate is fixed in real terms on the remaining balance at 0.5%. The
debt service of this larger debt tranche is inflation-adjusted, with
indexation tracking UK RPI. The Vantage Infrastructure managed facility has an
all in fixed rate of 1.54%.
A summary of the debt across the portfolio can be found in the table below:
30 June 2023 31 December 2022
Hydro Wind Solar Working capital Total Hydro Wind Solar Working capital Total
Equity value (£m) 110.6 27.7 71.9 6.8 217.0 103.0 26.4 62.6 26.9 218.9
Debt (£m) 23.5 0.0 78.9 0.0 102.4 23.0 0.0 68.5 0.0 91.5
GAV (£m) 134.1 27.7 150.8 6.8 319.4 130.6 25.6 133.7 20.5 310.4
Foreign Exchange
The Group's generation assets in Sweden earn revenues in EUR and incur some
operational costs in SEK. Assets in the UK operate entirely in sterling.
The Group, together with its foreign exchange advisor, has developed and
implemented its foreign exchange risk management policy in line with the June
2022 Prospectus. The policy targets hedging expected short to medium-term
distributions (up to five years) from the portfolio of assets, that are not
denominated in GBP on a 'linear reducing basis', whereby a high proportion of
expected distributions in year one are hedged and the proportion of expected
distributions that are hedged reduces in a linear fashion over the following
four years. This is a rolling programme and each year further hedges are
expected to be put in place to maintain the profile.
In total, 39% of the Group's forecast EUR dividend receipts from SPVs out to
December 2027 were hedged as at the reporting date.
Dividend Hedging
% hedged of forecast distributions
2023 84
2024 96
2025 15
2026 19
2027 0
Power markets and exposure
Through its portfolio companies, the Group adopts a medium to long-term power
price hedging policy for its generation assets, providing an extra degree of
certainty over the cash flows for the hedged periods. The fixed price
generation position for the portfolio as of 30 June 2023 is set out in the
chart below, showing the impact of the combination of subsidy and fixed income
from power sales. The hedging positions are continuously reviewed to ensure an
appropriate position is maintained and new hedges are taken out as
appropriate.
The invasion of Ukraine continues to have a major impact on power prices
throughout Europe and the UK as European gas supply is dominated by Russia.
The UK gas and UK power markets are likely to remain volatile if the
uncertainty about the Russian gas supply continues. The Company has taken
steps to reduce its exposure to this volatility, due to its high level of
fixed pricing over the short to medium term.
Including the acquisitions of Mersey and Blasjon, the Company has increased
its percentage of fixed revenues, reducing the percentage of revenue exposed
to power markets.
United Kingdom
Weather and LNG gas supply dominated the evolution of forward power prices in
the UK in H1 2023. Wind generation reached record highs in the beginning of
the quarter which, combined with milder weather, lower demand and rising
imports pushed power prices to levels below those at the start of the Ukraine
crisis over the course of the quarter. Industrial action in France, North Sea
gas outages, news about continued cracks in French nuclear power plants and
cold spells in Q1 resulted in various brief uplifts, but overall the forward
power prices followed a downward trend in H1, although the market recovered
somewhat at the end of Q2.
Nordics
The Nordic power market was dominated by the falling gas and power prices on
the continent in H1 2023. A cold spell resulting in a (temporary) increased
demand and the delayed spring flood resulted in bullish news in Q1. Warmer
weather than usual combined with the delayed spring flood turned into hydro
inflows which were twice as high as the seasonal average, this resulted in a
downward pressure at the beginning of Q2. The market recovered again at the
end of Q2 when the hydro inflows eased off. The variability in the wind
generation added to the volatility on the spot market.
Dividends
The Board has declared the Company's interim dividend of 1.345 pence per
share, equivalent to £2.5 million, in respect of the three months to 30 June
2023. Once paid, this will bring total dividends paid in respect of the first
half of the financial year to 2.595 pence per share. This dividend is not
reflected in the accounts to 30 June 2023.
In the Annual Report to December 2022, the Company announced that it would
increase its dividend guidance to target 5.38 pence per share for the 12
months to December 2023, a 7.6% increase from 2022. The increased dividend is
expected to be fully covered by income from the current portfolio.
The Company has chosen to designate part of each interim dividend as an
interest distribution for UK tax purposes. Shareholders in receipt of such a
dividend will be treated for UK tax purposes as though they have received a
payment of interest in respect of the interest distribution element of this
dividend. This will result in a reduction in the corporation tax payable by
the Company.
Dividends paid during the financial year to 31 December 2023 are as follows:
For the Period Dividend Paid No. of Shares Total Dividend (pence per share) Interest Element (pence per share) Dividend Element (pence per share)
December 2022 March 2023 184,622,487 1.25 0.875 0.375
March 2023 June 2023 184,587,487 1.345 0.875 0.470
June 2023 September 2023 183,919,987 1.345 1.076 0.269
Total 3.94 2.826 1.114
The Company intends to pay dividends on a quarterly basis, with dividends
typically declared in respect of the quarterly periods ending March, June,
September and December. Payment of the relevant dividend declared is expected
be made within three months of the relevant quarter end.
Valuation of the portfolio
Net asset value
The Company's NAV decreased during the period from £218.9 million to £217.0
million as at 30 June 2023, equivalent to a decrease of 0.6 pence per share
from 118.6 pence per share to 118.0 pence per share. The NAV decrease was
driven by long term power price forecasts, and an update to discount rates.
The table below shows the movement in NAV during the period, with each step
explained further below.
H1'23 Nav Bridge by Movement
Opening NAV 1-Jan-23 218.9
Management Fee (1.0)
Other Costs & Charges (1.9)
Performance 7.2
Power Curve (9.5)
FX 6.2
Inflation 1.4
Acquisitions (net) 0.7
Other 0.3
Discount Rate (0.5)
Dividend (4.8)
Closing NAV 30-Jun-23 217.0
Opening
Represents the audited NAV at 31 December 2022.
Management Fee
Fees charged to the Company by the Investment Manager.
Other costs and charges
Charges incurred by the Company, and its immediate subsidiary DORE Hold Co, in
its normal operations. No transaction costs are included.
Performance
Represents the balance sheet variance at the portfolio company level
representing higher cashflows than anticipated in the short term.
Power Prices
The Company uses long-term, power price forecasts from third party consultants
for the purposes of asset valuations. In both the UK and Sweden, an equal
blend is taken from the most recent central case forecasts from two leading
consultants, along with forward pricing for the first three years. In Sweden,
an additional third power price forecast is blended into the curve. Where
fixed price arrangements are in place, the financial model will reflect this
price for the relevant time frame. The impact of our short-term power hedging
strategy is also included in this step.
Foreign Exchange
Cashflows from assets that are generated in a non-sterling currency are
converted in each period they are earned using the actual hedges in place,
with the residual amounts converted at the relevant exchange rate.
The relevant exchange rate is taken from a forward curve provided by the
Company's foreign exchange advisors for ten years, at which point the exchange
rate is held constant due to the impracticalities of hedging currency further
into the future.
Inflation
Since IPO, the Group has used a near-term annual inflation forecast of 2.25%
until December 2023, and a medium-term forecast of 2.75% rising to 3.0% from
2024 for the purposes of UK asset valuations. From 2030 onwards, this forecast
reduces to 2.25% because of the RPI reform announced by the UK Government in
2021.
Given the recent increases in inflation throughout 2022 and 2023, the UK
inflation forecast for the remainder of 2023 has been increased to an
annualised 8.0%.
For the Swedish asset valuations, the Company previously used a near-term
inflation forecast of 4.0% and a medium to long-term inflation forecast of
2.0%, which is reflective of the Swedish central bank's target inflation rate.
Again, given the recent increases in inflation throughout 2022 and 2023, the
Sweden inflation forecast for the remainder of 2023 has been increased to an
annualised 8%.
All models are updated quarterly to reflect actual inflation to date.
Other
Reflects changes to operational contracts (such as insurance), the cost of
debt in the future, and other minor changes.
Discount Rates
Discount rates used for the purpose of the valuation process are
representative of the Investment Manager's and the Board's assessment of the
rate of return in the market for assets with similar characteristics and risk
profile. The discount rate of the solar assets has been increased to a
weighted average 8.0% from 7.8% to reflect the current market transactions.
Discount rates for the levered solar and hydropower portfolios are 8%. The
Company has an unlevered wind asset in Sweden which has a discount rate of
6.5%. The increased discount rates applied to the solar portfolio have
resulted in a slightly increased weighted average discount rate from 7.7% to
7.8%.
Dividends
Distributions paid by the Company in the period.
Key Valuation Assumptions
Asset life
Where land is leased from an external landlord, the operational life assumed
for the purposes of the asset valuations is valued at the earlier of planning
or lease expiry.
Where a project has an indefinite life, the land it is located on is owned and
there are no constraints regarding planning and asset valuations are based on
a perpetual life. This is the basis for the valuation of the hydropower
assets.
The asset life assumed for each of the ground mounted solar sites was set
taking into consideration the length of the respective planning consent and
term of leasing agreement in place at the time of acquisition. On a
capacity-weighted basis this results in an average asset life of close to 25
years. There is an ongoing process underway to extend planning and lease terms
to allow the assets to operate for longer than initially expected. This
project is expected to increase the weighted useful life of the ground mount
portfolio to 27.8 years.
Portfolio Valuation sensitivities
The NAV of the Company comprises the sum of the discounted value of future
cash flows of the underlying investments in solar, wind and hydropower assets
(being the portfolio valuation), the cash balances of the Company and its
holding Company and the other assets and liabilities of the Group.
The portfolio valuation is the largest component of the NAV and the key
sensitivities to this valuation are considered to be discount rate and the
principal assumptions used in respect of future revenues and costs.
A broad range of assumptions are used in the Company's valuation models. These
assumptions are based on long-term forecasts and are generally not affected by
short-term fluctuations in inputs, whether economic or technical.
The Investment Manager exercises its judgement and uses its experience in
assessing the expected future cash flows from each investment.
The impact of changes in the key drivers of the valuation are set out below.
Sensitivities
Negative directional change to assumption (pence per share) Positive directional change to assumption (pence per share)
FX (+/- 5%) (4.41) 4.87
Inflation (+/- 1%) (6.17) 6.92
Power Prices (+/- 10%) (10.86) 10.85
Generation (+/- 5%) (9.90) 9.94
Discount Rate (+/- 1%) 11.72 (9.78)
Discount Rate
The weighted average discount rate of the portfolio at 30 June 2023 was 7.8%.
The Investment Manager considers a variance of plus or minus 0.5% to be a
reasonable range of alternative assumptions for discount rates.
Generation
For the solar assets, our underlying assumption set assumes the P50 level of
electricity output based on reports by technical advisors. The P50 output is
the estimated annual amount of electricity generation that has a 50%
probability of being exceeded and a 50% probability of being underachieved.
For hydropower assets, the expected annual average production is applied to
the valuation, similar to the P50 assumption applied to solar and wind assets.
Given the long operational record of the hydropower assets, the annual
production forecast is derived from historic datasets also taking into
consideration the effect of climate change in the future and validated by
technical advisors.
The generation sensitivities use a variance of plus or minus 5% applied to the
generation for each year of the asset life.
Power Prices
The power price sensitivity assumes a 10% increase or decrease in power prices
relative to the base case for each year of the asset life.
While power markets can experience volatility in excess of +/-10% on a
short-term basis, the sensitivity is intended to provide insight into the
effect on the NAV of persistently higher or lower power prices over the whole
life of the portfolio, which is a more severe downside scenario.
Inflation
The Company's inflation assumptions are set out above. A long-term inflation
sensitivity of plus and minus 1% is presented.
Foreign Exchange
The Company's foreign exchange policy is set out above. A sensitivity of plus
and minus 10% is applied to any non-hedged cashflows derived from non-sterling
assets for each year of the asset life. The Company will also try to ensure
sufficient near-term distributions from any non-sterling investments are
hedged.
National Storage Mechanism
A copy of the Interim Report will be submitted shortly to the National Storage
Mechanism ("NSM") and will be available for inspection at the NSM, which is
situated at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
LEI Number: 2138004JHBJ7RHDYDR62
For further information, please contact: Link Company Matters Limited, +44
(0)7596 599436
Name of authorised official of issuer responsible for making notification:
Link Company Matters Limited, Company Secretary
(#_ftnref1) 1 These are alternative performance measures.
(2) A measure of total asset value including debt held in unconsolidated
subsidiaries.
(3) Total returns in sterling, including dividend reinvested.
(4) Based on NAV at IPO of £0.98/share.
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