REG - Gresham House Energy - Quarterly NAV announcement and business update

Gresham House Energy Storage FundAnnouncement

22/05/2025 07:00

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RNS Number : 6848J  Gresham House Energy Storage Fund  22 May 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU 596/2014) WHICH IS PART OF UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018.

 

22 May 2025

Gresham House Energy Storage Fund PLC

("GRID" or the "Company")

 

Quarterly NAV announcement and business update

 

Gresham House Energy Storage Fund plc (LSE: GRID), the UK's largest fund
investing in utility-scale battery energy storage systems (BESS) reports its
latest NAV. As of 31 March 2025, NAV was £622.4mn and NAV per share was
109.38p per ordinary share.

 

Highlights as of 31 March 2025

 

·    NAV per share was 109.38p, up from 109.35p at 31 December 2024.

·    Operational capacity was 945MW / 1,307MWh on 31 March vs 845MW /
1,207MWh of 31 December 2024 and has subsequently increased to 945MW /
1,447MWh in April.

·    During the quarter, the most significant changes to NAV per share
included:

o  +1.16p from new investments to fair value driven by the removing of
construction premiums on discount rates for projects becoming operational and
the value from acquiring the land at Elland

o  +1.15p from the movement in working capital, fund and debt costs

o  +0.89p on the model roll forward

o  +0.72p from construction updates due to lower battery CAPEX which was
partially offset by delayed start dates for projects in construction

o  +0.12p from a reduction in O&M contractual costs at York, Elland and
West Bradford

o  -0.05p impact from the movement in the interest rate swap

o  -3.95p from a reduction in revenue forecasts, now reflecting a lower gas
cost assumption in the longer term

·    No changes to inflation assumptions or underlying discount rates were
made during the period.

·    Weighted average discount rate (WADR) is 10.68% for the full
portfolio including projects under construction and 10.54% for the operational
portfolio.

·    Operational assets are valued at an average of £698/MW. Discounted
cashflows represented £686k/MW of the total while working capital represented
the remainder. The increase from year end is from including Melksham as an
operational project.

·    NAV does not include potential value upside from new projects and
augmentations in the Three-Year Plan as financing has not yet been secured.

·    The underlying portfolio generated revenues of £15.9mn and EBITDA of
£11.2mn in Q1 2025.

·    Total debt drawn at the end of the period was £160mn; the total
facility size is £195mn.

·    Cash on hand between the Company and its investments was £42.1mn as
of 31 March 2025.

 

Portfolio earnings update

 

The underlying portfolio generated revenues of £15.9mn resulting in
underlying portfolio EBITDA of £11.2mn in Q1 2025, an improvement on Q4 2024
where the portfolio generated revenue of £15.6m and EBITDA of £10.4m. This
is due to a larger operational asset base combined with consistent underlying
revenue performance. Portfolio revenues rates were £76.5k/MW/Yr 1  in Q1 2025
which was on par with Q4 2024 of £76.4k/MW/Yr.

 

Merchant revenues from the operational portfolio are currently above the
third-party revenue curves for 2025. The third-party merchant forecasts still
assume a gradual rate of improvement in revenues in the short term. Meanwhile,
we expect that the rollout of improvements in the BM over the rest of 2025
should lead to a further improvement in revenues.

 

Construction and Pipeline update

 

Melksham, at a one-hour duration (100MW/100MWh), was completed in January 2025
with the site then beginning augmentation works immediately after
commissioning. The augmentation was completed in early April 2025 taking the
project to 100MW/200MWh shortly after the quarter end, making it the largest
operational project owned by the fund.

The augmentation of Coupar Angus, adding 40MWh to make the site a 2-hour,
40MW/80MWh project, was also finished in April 2025, marking the completion of
the current augmentation pipeline. Since the start of 2024, the Manager has
added 330MWh of battery capacity through augmentations.

 

The remaining two projects in construction are expected to complete by the end
of Q2 2025. Shilton Lane (40MW / 80MWh) is built and energised up to the DNO
connection. This project, however, is waiting on final NESO compliance
documentation to be completed before the site can be switched on, which is
expected to come through shortly. West Bradford (87MW / 174MWh) is on course
to be energised before the end of Q2 2025.

 

With Shilton Lane and West Bradford, the Company will have completed all new
projects and augmentations in construction, taking the operational portfolio
to 1,072MW/1,701MWh.

 

Refinancing update

 

The final lending groups have been selected for the refinancing and for the
new facilities for new projects.  The selected lenders are progressing
through materials and work is underway to finalise terms and documentation.
The Manager therefore still expects to conclude the refinancing in Q2 2025,
with new project financing to follow. Concluding the refinancing and securing
additional project finance for new projects is expected to provide capital to
fund additional new projects and augmentations, unlocking significant value
for the fund. More information on the refinancing and pipeline plans will be
announced in due course.

 

Transaction to demonstrate valuations

 

A transaction to demonstrate valuations in the portfolio continues to progress
well and is in final stages. An announcement on the transaction is expected to
be made in the current quarter. The competitive process to acquire HEIT is
also encouraging for the sector, demonstrating the widening interest in BESS
assets and providing support for industry valuations.

 

Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc &
Managing Director of Gresham House Energy Transition, said:

 

"We have been working hard on the refinancing and new project financing
process in order to unlock the funding for the augmentations and new pipeline
detailed in our Three-year Plan. I'm pleased to say that we are nearing the
end of the refinancing process which will enable us to review capital
allocation, including dividends.

 

"With the refinancing and the current construction pipeline completed later
this quarter, we can then look to the future with confidence and start
realising the value in our Three-year Plan.

 

"It has also been good to see continued improvement in revenues for the
operational portfolio. This should continue as we bring online more
operational capacity and as upgrades to the NESO systems continue to be rolled
out."

 

For further information, please contact:

 

Gresham House Energy Transition

Ben Guest
 
+44 (0) 20 3837 6270

James Bustin

Harry Hutchinson

 

Jefferies International Limited

Stuart
Klein
+44 (0) 20 7029 8000
Gaudi Le Roux
Harry Randall

Peel
Hunt

Luke
Simpson
+44 (0) 20 7418 8900
Huw
Jeremy

KL Communications
 
gh@kl-communications.com (mailto:gh@kl-communications.com)

Charles Gorman
 
+44 (0) 20 3882 6644

Charlotte Francis

Effie Aye-Maung-Hider

JTC (UK) Limited as Company Secretary
               GHEnergyStorageCoSec@jtcgroup.com
(mailto:GHEnergyStorageCoSec@jtcgroup.com)
Christopher
Gibbons
+44 (0) 20 7409 0181

 

LEI: 213800MSJXKH25C23D82

 

About the Company and the Manager:

Gresham House Energy Storage Fund plc seeks to provide investors with an
attractive and sustainable dividend over the long term by investing in a
diversified portfolio of utility-scale battery energy storage systems (known
as BESS) located in Great Britain and internationally. In addition, the
Company seeks to provide investors with the prospect of capital growth through
the re-investment of net cash generated in excess of the target dividend in
accordance with the Company's investment policy.

The Company targets an unlevered Net Asset Value total return of 8% per annum
and a levered Net Asset Value total return of 15% per annum, in each case
calculated net of the Company's costs and expenses.

Gresham House Asset Management Ltd is the FCA authorised operating business of
Gresham House Ltd, a specialist alternative asset manager. Gresham House is
committed to operating responsibly and sustainably, taking the long view in
delivering sustainable investment solutions.

www.greshamhouse.com (http://www.greshamhouse.com)

 

Definition of utility-scale battery energy storage systems (BESS)

Utility-scale battery energy storage systems (BESS) are the enabling
infrastructure that will support the continued growth of renewable energy
sources such as wind and solar, essential to the UK's stated target to reduce
carbon emissions. They store excess energy generated by renewable energy
sources and then release that stored energy back into the grid during peak
hours when there is increased demand.

 

DISCLAIMERS

This announcement has been prepared for information purposes only. This
announcement does not constitute a prospectus relating to the Company and does
not constitute, or form part of, any offer or invitation to sell or issue, or
any solicitation of any offer  to subscribe for, any shares in the Company in
any jurisdiction nor shall it, or any part of it, or the fact of its
distribution, form the basis of, or be relied on in connection with or act as
any inducement to enter into, any contract therefor. The merits or suitability
of any securities must be independently determined by the recipient on the
basis of its own investigation and evaluation of the Company. Any such
determination should involve, among other things, an assessment of the legal,
tax, accounting, regulatory, financial, credit and other related aspects of
the securities.

 

This announcement may not be used in making any investment decision in
isolation. This announcement on its own does not contain sufficient
information to support an investment decision and investors should ensure that
they obtain all available relevant information before making any investment.
This announcement does not constitute or form part of and may not be construed
as an offer to sell, or an invitation to purchase or otherwise acquire,
investments of any description, nor as a recommendation regarding the possible
offering or the provision of investment advice by any party. No information in
this announcement should be construed as providing financial, investment or
other professional advice and each prospective investor should consult its own
legal, business, tax and other advisers in evaluating the investment
opportunity. No reliance may be placed for any purposes whatsoever on this
announcement or its completeness.

 

The information and opinions contained in this announcement are provided as at
the date of the announcement and are subject to change without notice and no
representation or warranty, express or implied, is or will be made in relation
to the accuracy or completeness of the information contained herein and no
responsibility, obligation or liability or duty (whether direct or indirect,
in contract, tort or otherwise) is or will be accepted by the Company, the
Manager, Jefferies, Peel Hunt or any of their affiliates or by any of their
respective officers, employees or agents to update or revise publicly any of
the statements contained herein. No reliance may be placed for any purpose
whatsoever on the information or opinions contained in this announcement or on
its completeness, accuracy or fairness. The document has not been approved by
any competent regulatory or supervisory authority.

 

Any investment in Company is speculative, involves a high degree of risk, and
could result in the loss of all or substantially all of their investment.
Results can be positively or negatively affected by market conditions beyond
the control of the Company or any other person. Any data on past performance
contained herein is no indication as to future performance and there can be no
assurance that any targeted or projected returns will be achieved or that the
Company will be able to implement its investment strategy or achieve its
investment objectives. Any target returns published by the Company are targets
only. There is no guarantee that any such returns can be achieved or can be
continued if achieved, nor that the Company will make any distributions
whatsoever. There may be other additional risks, uncertainties and factors
that could cause the returns generated by the Company to be materially lower
than the target returns of the Company.

 

The information in this announcement may include forward-looking statements,
which are based on the current expectations, intentions and projections about
future events and trends or other matters that are not historical facts and in
certain cases can be identified by the use of terms such as "may", "will",
"should", "expect", "anticipate", "project", "estimate", "intend", "continue",
"target", "believe" (or the negatives thereof) or other variations thereof or
comparable terminology. These forward-looking statements, as well as those
included in any related materials, are not guarantees of future performance
and are subject to known and unknown risks, uncertainties, assumptions about
the Company and other factors, including, among other things, the development
of its business, trends in its operating industry, and future capital
expenditures and acquisitions. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not occur and
actual results may differ materially from those expressed or implied by such
forward looking statements. Given these risks and uncertainties, prospective
investors are cautioned not to place undue reliance on forward-looking
statements.

 

Jefferies International Limited and Peel Hunt LLP, which are authorised and
regulated by the Financial Conduct Authority in the United Kingdom, are acting
only for the Company in connection with the matters described in this
announcement and are not acting for or advising any other person, or treating
any other person as their client, in relation thereto and will not be
responsible for providing the regulatory protection afforded to clients of
Jefferies or Peel Hunt (as applicable), or advice to any other person in
relation to the matters contained herein. Neither Jefferies, Peel Hunt, nor
any of their directors, officers, employees, advisers or agents accept any
responsibility or liability whatsoever for this announcement, its contents or
otherwise in connection with it or any other information relating to the
Company, whether written, oral or in a visual or electronic format. Each of
the Company, the Manager, Jefferies, Peel Hunt and their affiliates and their
respective officers, employees and agents expressly disclaim any and all
liability which may be based on this announcement and any errors therein or
omissions therefrom.

No representation or warranty is given to the achievement or reasonableness of
future projections, management targets, estimates, prospects or returns, if
any. Any views contained herein are based on financial, economic, market and
other conditions prevailing as at the date of this announcement. The
information contained in this announcement will not be updated.

 1  Melksham excluded from calculation due to outage whilst augmentation works
are completed

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