Jlen Environmental: Half-year Report
28/11/2022 07:00
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RNS Number : 6950H JLEN Environmental Assets Group Ltd 28 November 2022
28 November 2022
JLEN Environmental Assets Group Limited
Announcement of half-year results for the period to 30 September 2022
The Directors of JLEN Environmental Assets Group Limited (the "Company" or
"JLEN"), the listed environmental infrastructure fund, are pleased to announce
the Company's half-year results to 30 September 2022.
Financial highlights
· Portfolio valuation as at 30 September 2022 of £890.2m (31 March
2022: £795.4m)
· The Net Asset Value ("NAV") as at 30 September 2022 of £829.6m,
equating to a NAV per ordinary share of 125.4 pence as at 30 September 2022
(31 March 2022: 115.3 pence)
· Post the balance sheet date the UK government announced plans for
its "Electricity Generator Levy" that reduces the NAV to £822.6 million which
equates to a NAV per share of 124.4 pence. Further details on this post
balance sheet event are provided below
· A second interim dividend of 1.79 pence per share declared for
the financial year to 31 March 2023 taking total dividends declared for the
six months to 30 September 2022 to 3.57 pence, in line with the target set out
in the 2022 Annual Report. Cash dividend cover of 1.64 times on dividends paid
during the period
· Share price total return for the period since IPO of 92.4% (8.0%
annualised)
· Overall fund gearing as at 30 September 2022 was 25.5% and
£98.6m undrawn on RCF
Portfolio highlights
· Four acquisitions completed in the period, giving a total of 41
assets, including two investments in a new sector - controlled environment
· Diversified portfolio: 28% wind, 28% waste & bioenergy, 21%
anaerobic digestion, 15% solar, 5% low carbon & sustainable solutions, 2%
controlled environment and 1% hydro (% by value)
· The renewable energy generating portion of the portfolio
delivered 655 GWh (six months to 30 September 2021: 560GWh)
Board matters
· Appointment of Ed Warner as Chair, effective 2 August 2022
Post balance sheet event
Post the balance sheet date, the UK government has released details of the
'Electricity Generator Levy' ("the Levy"), through which it intends to capture
what it sees as excess profits being made in the wholesale electricity market
by low carbon generators such as wind and solar. This Levy sees in-scope
generators pay 45% of revenues earned on prices in excess of £75/MWh. A
£10 million per year allowance will apply, such that revenues below this
threshold will be exempt.
This constitutes a non-adjusting post-balance sheet event as the Levy was not
known at the balance sheet date. However, there was an expectation that some
form of government intervention would be introduced, as well as a recognition
that high near-term power prices may not be captured in practice by
generators. In the face of such uncertainty, the Directors used their
judgement to reduce price forecast curves used in the valuation by 50% across
the portfolio for the next 12 months, with this percentage stepping down by
10% per annum to zero over the next five years. This was applied to all UK
generating assets
including Renewables Obligation Certificate and Feed-in Tariff supported
generators and gas assets supported under the Renewable Heat Incentive. Using
this approach, the Directors valued the portfolio at £890.2 million as at the
30 September 2022, which results in a NAV per share of 125.4 pence.
The Directors have now assessed the impact of the Levy and have also
considered the latest available price forecast curves and actual inflation, as
well as removing the discounts that were applied to forecast curves for the
valuation at the balance sheet date. This has led to a reduction in the NAV as
calculated for the 30 September 2022 of £7.0 million to £822.6 million and
equates to a NAV per share of 124.4 pence.
The following table illustrates the key valuation and NAV movements between 31
March 2022 to 30 September 2022 as well as the Company's assessment of post
balance sheet event adjustments described above:
NAV per share
NAV at 31 March 2022 115.3p
Payment of shareholder dividends -3.5p
Acquisitions and further investments -
Distributions received from investments -
Forecast power prices +13.7p
Economic assumptions +5.7p
Discount rate changes -5.5p
Change in foreign exchange rate +0.2p
Balance of portfolio return +0.7p
Other fund level movements -1.2p
NAV at 30 September 2022 125.4p
Add back short term price discounts +12.8p
Application of Levy -11.9p
Post balance sheet event NAV 126.3p
Latest power prices and actual inflation -1.9p
Updated NAV post Autumn Statement 124.4p
Dividend Timetable
Ex-dividend date: 8 December 2022
Record date: 9 December 2022
Payment date: 30 December 2022
Ed Warner, Chair of JLEN, said:
"JLEN has delivered strong returns during a period of extraordinary
dislocation in the global economy. During the period the Company expanded its
portfolio by making four acquisitions and generating a strong pipeline of
near-term investment opportunities for further growth. Our diverse portfolio
of environmental assets is well placed to benefit from the continued drive for
a more sustainable and secure way of living."
Half-year report
A copy of the half-year report has been submitted to the National Storage
Mechanism and is available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The half-year report is also available on the Company's website at
www.jlen.com (http://www.jlen.com)
Details of the conference call for analysts and investors
A webinar for the annual results will be held at 10:00 a.m. (UK time) on 28
November, hosted by Chris Holmes and Chris Tanner, Co-lead Investment Managers
to JLEN. To register for the webinar, please contact SEC Newgate on +44 (0)20
3757 6882 or by email at JLEN@secnewgate.co.uk.
Presentation materials will be posted on the Company's website, www.jlen.com,
from 9.00am.
For further information and enquiries, please contact:
Foresight Group +44(0) 20 3667 8100
Chris Tanner
Chris Holmes
Winterflood Securities Limited +44(0)20 3100 0000
Neil Langford
Chris Mills
SEC Newgate UK
Elisabeth Cowell Jlen@secnewgate.co.uk
Axaule Shukanayeva +44(0)20 3757 6882
About JLEN
JLEN's investment policy is to invest in a diversified portfolio of
Environmental Infrastructure. Environmental Infrastructure is defined by the
Company as infrastructure assets, projects and asset-backed businesses that
utilise natural or waste resources or support more environmentally friendly
approaches to economic activity, support the transition to a low carbon
economy or which mitigate the effects of climate change. Such investments will
typically feature one or more of the following characteristics:
· long-term, predictable cash flows, which may be wholly or
partially inflation-linked cash flows;
· long-term contracts or stable and well-proven regulatory and
legal frameworks; or
· well-established technologies, and demonstrable operational
performance
JLEN's aim is to provide investors with a sustainable, progressive dividend
per share, paid quarterly and to preserve the capital value of the portfolio
over the long term on a real basis. The target dividend for the year to 31
March 2023 is 7.14 pence per share(1). The dividend is payable quarterly.
JLEN is an Article 9 fund under the EU Sustainable Finance Disclosure
Regulation and has a transparent and award winning approach to ESG.
Further details of the Company can be found on its website www.jlen.com
(http://www.jlen.com/)
LEI: 213800JWJN54TFBMBI68
(1) These are targets only and not profit forecasts. There can be no
assurance that these targets will be met or that the Company will make any
distributions at all.
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