REG - Gresham HouseRE VCT2 - Half Year Results
25/06/2025 14:00
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RNS Number : 4132O Gresham House Renewable EnergyVCT2 25 June 2025
25 June 2025
Gresham House Renewable Energy VCT 2 PLC
("VCT 2", the "Company")
Half Year Results
The Company is pleased to announce its half-year results for the period ended
31 March 2025 ("Half Year Results").
The Half Year Results are available on the Company's website at
https://greshamhouse.com/real-assets/new-energy/gresham-house-renewable-energy-vct-2-plc
(https://greshamhouse.com/real-assets/new-energy/gresham-house-renewable-energy-vct-2-plc)
.
In accordance with UK Listing Rule 6.4.1, copies of these documents will also
be available for viewing shortly at the National Storage Mechanism
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
LEI: 213800GQ3JQE2M214C75
For further information, please contact:
Gresham House Asset Management renewablevcts@greshamhouse.com (mailto:renewablevcts@greshamhouse.com)
Investor Relations Tel: 020 3837 6270
JTC (UK) Limited GreshamVCTs@jtcgroup.com (mailto:GreshamVCTs@jtcgroup.com)
Company Secretary
Tel: 020 7409 0181
SHAREHOLDER INFORMATION
Performance summary
23 June 31 Mar 2025 30 Sep 31 Mar
2025 2024 2024
Pence Pence Pence Pence
Net asset value per Ordinary Share 35.7 37.9 45.6
Net asset value per 'A' Share 0.1 0.1 0.1
Cumulative dividends * 83.1 83.1 83.1
Total Return * 118.9 121.1 128.8
Share Price - Ordinary (GV2O) 35.0p 35.0p 44.4p 48.0p
Share Price - A Shares (GV2A) 5.05p 5.05p 5.05p 5.05p
* for a holding of one Ordinary Share and A Share
Dividends
Ordinary 'A' Total
Shares Shares
2011 Final 30 March 2012 3.5 - 3.5
2012 Final 28 March 2013 5.0 - 5.0
2013 Special 28 February 2014 7.3 3.7 11.0
2013 Final 28 March 2014 5.0 - 5.0
2015 Interim 18 September 2015 5.0 - 5.0
2016 Interim 16 September 2016 5.0 - 5.0
2017 Interim 15 September 2017 5.0 - 5.0
2018 Interim 14 December 2018 5.5 0.5 6.0
2019 Interim 20 December 2019 5.3 0.5 5.8
2020 Interim 31 December 2020 5.3 0.5 5.8
2022 Interim 27 January 2023 2.0 - 2.0
2023 Interim 28 July 2023 16.5 - 16.5
2023 Interim 21 December 2023 7.5 - 7.5
77.9 5.2 83.1
Dividends are paid by the registrar, MUFG Corporate Markets, on behalf of the
VCT. Shareholders who wish to have dividends paid directly into their bank
account and did not complete these details on their original application form
can complete a mandate form for this purpose. Forms can be obtained from MUFG
Corporate Markets, whose contact details are shown in the Interim Report.
Shareholder information is continued in the Interim Report.
CHAIRMAN'S STATEMENT
I am pleased to present the Half-Yearly Report of Gresham House Renewable
Energy VCT2 plc (VCT) for the period ended 31 March 2025.
The Board appointed Jones Lang LaSalle (JLL) in late 2023 to assist with the
sale of the solar assets of the VCT, the sale being the key element of the
Managed Wind Down process. The assets continue to be managed by the Investment
Adviser with the focus on delivering the best possible yield whilst minimising
costs ahead of the sale process. The Investment Adviser has also been
diligently supporting the Boards of the VCTs and JLL in progressing the
ongoing sale process. The sale process has been challenging given the tough
market conditions and specifically large discounts to Net Asset Values for
listed renewable energy funds.
Whilst the exclusivity period agreed in 2024 with the original preferred
bidder has expired and the offer withdrawn, further non-binding offers have
now been received for the remaining solar assets by the date of signing of the
half-yearly report for the six months ended 31 March 2025 at the end of June
2025. The original preferred bidder's offer reduced as the projections could
not be agreed. JLL, the Boards of both VCTs and the Investment Adviser are
continuing to engage with the new bidders to clarify certain aspects of the
offers.
As of writing, good progress is being made towards the conclusion of the sale
process but until the transaction completes, there is no certainty, as
evidenced by the late withdrawal of the previous preferred bidder. The VCT
Board's current view is that a transaction has a reasonable prospect of being
agreed before the end of the summer.
The technical performance of the solar assets has been positive following
maintenance and repowering works carried out. However, given the age of the
portfolio, further equipment maintenance has been necessary during the first
half-year which has impacted generation. Total revenue was also affected by
poor irradiation, resulting in a shortfall for the whole portfolio of 5.3%,
versus budget in the six month period ended 31 March 2025.
In determining the Company's fair value at 31 March 2025, the Board used a
similar approach to the valuation exercise undertaken at year end September
2024, i.e. the Board considered the current market conditions and the NBO made
in the current sale process. Poor market conditions for realising these types
of mature solar assets have continued into 2025 with the value of the
Company's assets, and the Company's NAV, being adjusted downwards. At the
period end, the Company's NAV per 'pair' of shares (one Ordinary Share and one
'A' Share) was 35.8p compared to 38.0p at 30 September 2024.
Investment portfolio
At 31 March 2025, the VCT held a portfolio of ten investments, which were
valued at £13.1mn. There have been no follow-on acquisitions. No investments
were disposed of during the six month period.
The portfolio is analysed (by value) between the different types of assets as
follows:
Ground mounted solar 97.0%
Small wind 3.0%
Non-renewable assets 0.0%
The Board has reviewed the investment valuations at the half-year end and
notes that the valuation of the renewables' portfolio has decreased by £1.0mn
or 7.1%, largely due to the passing of time reducing the future cash flows
and, as the current market conditions remain challenging, a further market
value adjustment of the solar and wind assets.
The portfolio still benefits from having locked in PPAs at attractive power
prices which have generated strong returns over the first six months of this
financial year.
As referred to in previous reports, there was a concern in relation to the
connection of the South Marston solar park to the grid, arising from the
decision by Honda to close its site and sell the land to a third party. It
took considerable time and effort to reach an agreement with the new owner of
the site. The documentation was finally completed in April 2025 having gained
lender consent beforehand as required. This removes what was seen as an
impediment to a sale of this asset.
Kingston and Lake Farm, two of the large solar assets, have been impacted by
the deterioration of some of their solar panels. This allows moisture to enter
the panels, which in turn causes electrical faults. These faults have an
impact on the sites' capacity, leading to circa 9% of Kingston and 11% of Lake
Farm being disconnected. The Investment Adviser has been pursuing warranty
claims against the manufacturers of these solar panels for some time. These
have progressed well during the six month period and offers have been made for
compensation which the Investment Adviser has accepted. One manufacturer has
provided replacement panels whilst the other will be making a cash settlement.
The replacement panels from the first manufacturer were received during May
2025 and preparatory work ahead of their installation is underway. The
Investment Adviser is therefore working to restore the lost output from the
9-11% of the sites' capacity that was disconnected. This should significantly
improve the output and revenues from both sites.
In order to maintain VCT status, the Company needs to ensure that it maintains
certain percentages of qualifying investments within its portfolio. The Board
anticipates that the Company will fall below these required percentages by
mid-September 2025. Therefore, to avoid a breach of VCT status, the Board has
been advised that the Company may need to enter a members' voluntary
liquidation by beginning of September 2025 which would involve delisting the
Company's shares. However, the Board is seeking to take other steps that are
available to avoid a technical breach. It is the Boards intention to make
every effort to have agreed a sale of assets before the need to go into
liquidation.
Venture Capital investments
The VCT holds one investment that is not in renewable energy. The company,
bio-bean Limited, went into administration in April 2023 and is in the process
of liquidation. No recovery of any value is expected. The value of the venture
capital investment was marked down to £nil at 31 March 2023.
Further detail on the investment portfolio is provided in the Investment
Adviser's Report.
Net asset value and results
At 31 March 2025, the NAV per Ordinary Share stood at 35.7p and the NAV per
'A' Share stood at 0.1p, producing a combined total of 35.8p per 'pair' of
shares. The movement in the NAV per share during the half-year is detailed in
the table below:
Pence per 'pair' of shares
NAV as at 30 September 2024 38.0
Realised losses on assets still held (2.5)
Valuation decrease on assets still held (1.3)
Income less expenses 1.6
NAV as at 31 March 2025 35.8
The NAV Total Return (NAV plus cumulative dividends) has decreased by 1.8% in
the last six months and now stands at 118.9p excluding the initial 30% VCT tax
relief, compared to the cost to investors in the initial fundraising of £1.00
or 70.0p net of income tax relief.
The loss on ordinary activities after taxation for the half-year was £0.6mn
(31 March 2024: £0.6mn), comprising a revenue profit of £0.4mn (31 March
2024: £1.1mn) and a capital loss of £1.0mn (31 March 2024: £1.7mn) as shown
in the Income Statement.
Dividends
At 31 March 2025, dividends of 83.1p per 'pair' of shares had been paid. No
dividends were paid during the six month period. Once the assets have been
sold, the intention is to return all sale proceeds to shareholders through
dividend distributions or, if the VCT has since entered voluntary liquidation,
via capital distributions.
2025 Annual General Meeting (AGM)
The VCT's fourteenth AGM was held on 18 March 2025 at 4:00 p.m. All
resolutions were passed by way of a poll.
Share Buybacks
As noted in previous Reports, no share buybacks are envisaged for the
foreseeable future.
Outlook
The two positive developments regarding the Company's assets namely the
resolution of the South Marston grid connection agreement with the new Honda
factory site owner and the agreed warranty claims for replacement equipment at
two projects will make the Company's assets more attractive to interested
parties which the Board is in discussion with. The Board is determined to
ensure the sales process achieves maximum value for shareholders and
anticipates agreeing a sale in late summer.
Once again, I would like to thank Shareholders for their patience and
continued interest and support.
Christian Yates
Chairman
25 June 2025
Investment Adviser's Report
Portfolio highlights
Gresham House Renewable Energy VCT2 plc (VCT) remains invested in the
renewable energy projects that the VCT and Gresham House Renewable Energy VCT1
plc (VCT1) have co-owned for a period of between eleven to fourteen years,
depending on the asset. The total generation capacity of assets co-owned by
the VCT is 21.3MWp, made up of 20.3MWp from six ground mounted solar FIT
projects and 1MWp of micro-wind projects spread across approximately 200
sites. At 31 March 2025, the VCT also owned one venture capital investment
which is in the process of liquidation.
Work to sell the remainder of the VCT's assets has continued, with JLL as the
Corporate Finance Adviser who launched a sale process at the end of 2023 which
ultimately stalled at the end of 2024, with the preferred buyer eventually
withdrawing in March 2025. Given the time that has lapsed, JLL have refreshed
the marketing material to update it for the significant improvements in both
South Marston and the successful warranty claims before issuing the materials
to other interested parties who have recently expressed an interest in the
acquisition. The Investment Adviser continues to manage the assets and
deliver the best possible yield from them, whilst also supporting the Boards
of the VCTs and JLL in advancing the sale process.
For the purpose of determining the Net Asset Value (NAV) for the Company's
portfolio, the Investment Adviser has reviewed the fair market value for the
six month period to 31 March 2025 on the same basis as the last valuation. It
is the VCT Directors who have the responsibility of valuing the Company's
assets based on input from the Investment Adviser. The valuation presented in
this half-yearly report reflects the Directors' view of the fair market value
of the Company's assets.
During the half year, the total revenue from renewable energy generation was
£3.3mn (31 March 2024: £3.6mn). 82.7% of this revenue is from Feed-in-
Tariff revenues which are set by the UK Government. The total revenue from the
renewable assets was 5.3% below forecast budget, primarily due to lower than
forecast solar irradiation in the period and technical issues related to the
age of the assets. Only March 2025 exceeded its monthly forecast whilst
November 2024, December 2024 and February 2025 saw particularly low solar
irradiation (sun) compared to previous years.
Due to the age of the VCT's assets, additional maintenance is required to keep
them operating effectively. Wychwood and Parsonage benefitted from a program
of inverter replacement during the period enabling improved technical
performance for those sites. Lake Farm and Kingston will need warranty claims
to be implemented over the coming months in order to reverse the decline in
their output as a result of failed components.
The VCT holds an investment in what was expected to be growth business:
bio-bean Limited. As highlighted in the last annual report, the business
regrettably went into administration and as such its holding value was written
down to zero.
Portfolio composition
31 March 2025 30 September 2024
Asset type kWp VCT 2 Value** % of Value VCT 2** % of
£'000
Portfolio
£'000
Portfolio
value
value
Ground mounted solar (FiT)* 20.292 £12,689 97.0% £13,040 92.7%
Wind assets (FiT)* 985 £391 3.0% £1,033 7.3%
Venture Capital investments N.A. £0 0.0% £0 0.0%
TOTAL 21.277 £13,080 100.0% £14,073 100.0%
*Feed in Tariff (FiT)
** The investment values above are gross and include loans
owed by the VCT to the investment portfolio companies of £4.0mn at 31 March
2025 (30 September 2024: £4.3mn) as reflected in the net assets on the VCT's
balance sheet.
The 21.3 MWp of renewable energy projects held in the portfolio of the VCT and
VCT1 as 31 March 2025 generated 5,053MWh of electricity over the half year,
sufficient to meet the annual electricity consumption of circa 1,871 homes(1).
The Investment Adviser estimates that generating this output from renewable
energy sources such as solar and wind, rather than coal or gas-fired power
stations, saves 2,208 tonnes of CO(2).
(1) Assuming an average annual electricity usage per household of 2.7MWh, as
quoted by Ofgem May 2023. "Homes powered" calculated using Renewable UK
methodology: MWh divided by average annual domestic electricity consumption.
Household power consumption dropped in 2023 due to high power prices.
(2) Assuming an "all non-renewable fuels" emissions statistic of 437tCO(2)/GWh
of electricity supplied, BEIS statistics July 2024, Digest of UK Energy
Statistics, Table 5.14 ("Estimated carbon dioxide emissions from electricity
supplied"). "Carbon avoided" calculated using Renewable UK methodology: Carbon
reduction is calculated by multiplying the total amount of electricity
generated by solar and wind per year by the number of tonnes of carbon which
fossil fuels would have produced to generate the same amount of electricity.
Portfolio summary:
Renewable Energy Revenue By Asset Type
Ground Mounted Solar (FIT) 94.4%
Wind Assets 5.6%
The performance against budget for the half year period is shown below:
1 October 2024 - 31 March 2025
Asset type Budgeted revenue Actual revenue Revenue performance
Ground mounted solar (FiT) 3,197,388 3,122,149 97.7%
Micro-wind assets 294,667 185,049 62.8%
Total 3,307,198 94.7%
3,492,055
The revenue is affected by:
renewable energy resources (solar irradiation & wind);
the technical performance of the assets; and
the revenue per unit of energy generated.
The difference between budgeted and actual revenue is due only to the
difference between forecast generation and actual generation as power prices
and tariff levels were known at the time of setting the budget.
Renewable energy resources
The portfolio is heavily weighted to solar (95.4% by capacity of the renewable
assets, and 97.0% by value of the portfolio).
Technical performance
The table below shows the technical performance, (including in the case of
solar, the impact of the lower irradiation), for each of the groups of assets.
1 October 2024 - 31 March 2025 1 October 2023 -
31 March 2024
Asset type Budgeted Actual % of Actual output
output kWh output kWh Technical kWh (in the
performance* same period
last year)
Ground mounted solar (FiT) 5,483,635 5,052,581 92.1% 5,011,043
Micro-wind assets 632,571 397,251 62.8% 561,154
TOTAL 6,116,206 5,449,833 89.1% 5,572,197
* Technical performance is a measure of the percentage of actual output over
budgeted output.
Three of the six ground-mounted solar projects have been repowered and other
repairs have been carried out following successful warranty claims. This has
led to improved performance across the portfolio. Two of the sites, Kingston
and Lake Farm are experiencing faults due to the early deterioration of solar
panels which in turn leads to water ingress. The Investment Adviser has raised
warranty claims against the two manufacturers, both of which have now accepted
the faults and offered compensation. One of the manufacturers has provided
replacement solar panels which were delivered during May 2025. The other will
be providing cash compensation. The Investment Adviser is in the final stages
of concluding the agreement with the second manufacturer. Preparation work has
begun, to plan the replacement of faulty panels in the most cost-effective
way.
Two smaller sites, Wychwood and Parsonage, had some inverters that no longer
functioned. These inverters are now obsolete. Wychwood had all its inverters
repowered during the period. Some of its original inverters that still work
were used to replace the failed inverters at Parsonage. The remainder of the
functional original inverters have been placed in storage and will continue to
be used as spares to replace future failed inverters at Parsonage if
required. This approach is cost effective and should extend the economic
life of Parsonage by a few years as well as boosting the technical performance
of Wychwood.
South Marston (4.97MW) has historically sold all of its power to the Honda
plant in Swindon. The Honda plant was closed in 2021 and the site was sold to
Panattoni, a commercial real estate/logistics developer, in February 2024.
Panattoni have been granted planning permission to redevelop the site,
creating 10 buildings to be used as manufacturing sites and distribution
warehouses. This transfer of ownership and redevelopment required changes to
the South Marston grid connection arrangements and the implementation of an
independent Distribution Network Operator (iDNO) solution. iDNOs are similar
to DNOs in that they also own, operate and maintain electricity
infrastructure. The networks they adopt are typically new installed assets,
such as connections to new developments, which will connect back onto the
DNO's network. Unlike DNOs, iDNOs do not have a specific geographic area. The
Investment Adviser has been liaising with Honda, Panattoni, and various
advisers to ensure the viability of the solar park and continuity to power
export. The new contracts between South Marston Renewables Ltd, Honda and
Panattoni were granted lender consent and were completed in April 2025.
The micro-wind portfolio performed 37.2% lower than budget (12.7% lower than
budget in the corresponding period last year). The Investment Adviser
attributes the lower performance to a combination of inverter failures and
general wear and tear which leads to turbines being off for refurbishment,
where applicable. Micro-wind assets account for less than 5% of the
portfolio in terms of capacity, so the Investment Advisor seeks to balance
performance against considerable refurbishment costs, given the current sales
process. During the period, two turbines which were deemed uneconomical to
repair, were handed over to their landowner. The entire wind portfolio is
composed of R9000 turbines, which have generally performed satisfactorily and
have the support of an experienced O&M contractor with access to spare
parts and maintenance crews.
Revenue per MWh of renewable energy generated
The VCT's assets benefit from revenues linked to the Retail Price Index (RPI),
with c.83.0% of total revenues generated in the period earned from government
backed incentives for generating renewable electricity. This income is fixed
by the government, is RPI linked and is a significant driver of value in the
portfolio. The rest of the revenue is based on wholesale price which has
dropped significantly since its peak following Russia's invasion of Ukraine.
Total revenues per MWh generated by the solar assets were almost £620 during
the period, compared to £650 during the six months prior.
The high proportion of income that is fixed by the FiT scheme is RPI linked
and not exposed to wholesale power prices and is a significant driver of value
in this portfolio. This enables the portfolio to be largely insulated from any
significant reductions in the wholesale price of electricity whilst allowing
it to benefit from increases such as those experienced in 2022.
The significance of the government backed incentives to revenues is shown by
the following chart.
VCT portfolio revenue profile during period 1 October 2024 - 31 March 2025
Private Wire (Ground Mounted) 0.1%
Other (Ground Mounted) 1.0%
FIT (Ground Mounted) 77.8%
FIT (Wind Assets) 4.9%
Export (Ground Mounted) 15.5%
Deemed Export (Wind Assets) 0.7%
Operating costs
The majority of the cost base is fixed and/or contracted under long-term
contracts and includes rent, business rates, and regular O&M costs. Many
of these costs have also risen in line with inflation.
The most material variable cost item is for repair and maintenance. Repair and
maintenance expenditure for the remaining ground mounted solar panels is
largely covered by cash held in the maintenance reserve account as part of the
debt facility totalling £456k at the end of the half year.
Outlook
The Investment Adviser's continued focus is to maximise generation and
therefore revenues from the remaining assets, whilst supporting the Board's
efforts to realise the maximum exit value for Shareholders.
The assets that were enhanced through inverter and transformer replacements
demonstrate a sustained improvement in performance. The generation outlook at
Lake Farm and Kingston remains challenging until the faulty components are
replaced, which will be a focus for the Investment Advisor over the coming
period or until the sale of these asset. The Investment Adviser remains
vigilant for signs of further degradation so that the impact on availability
can be managed and reduced.
The Investment Adviser is working alongside JLL to facilitate the due
diligence process currently underway with potential buyers.
Gresham House Asset Management Limited
25 June 2025
UNAUDITED INCOME STATEMENT
for the six months ended 31 March 2025
Year
Six months ended Six months ended ended
31 March 2025 31 March 2024 30 September
2024
Revenue Capital Total Revenue Capital Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Income 687 - 687 1,445 - 1,445 1,695
(Losses)/gains on investments - (993) (993) - (1,596) (1,596) (3,552)
687 (993) (307) 1,445 (1,596) (151) (1,857)
Investment advisory fees (58) (19) (77) (73) (24) (97) (172)
Other expenses (188) (1) (189) (214) (98) (312) (555)
Profit/ (loss) on ordinary 441 (1,013) (572) 1,158 (1,718) (560) (2,584)
activities before taxation
Tax on total comprehensive income and ordinary activities - - - - - - -
Profit/ (loss) attributable to 441 (1,013) (572) 1,158 (1,718) (560) (2,584)
equity Shareholders
Earnings per Ordinary Share 1.7p (3.9)p (2.2)p 4.4p (6.5)p (2.1)p (9.9p)
Earnings per 'A' Share - - - - - - - -
The above results arise from activities classified as continuing operations,
however as described in Note 1, the VCT is in a Managed Wind Down process. The
total column within the Income Statement represents the Statement of Total
Comprehensive Income of the VCT prepared in accordance with Financial
Reporting Standards (FRS 102). The supplementary revenue and capital return
columns are prepared in accordance with the Statement of Recommended Practice
issued in November 2014 (updated in July 2022) by the Association of
Investment Companies (AIC SORP).
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains and losses are recognised in the Income Statement as noted above.
UNAUDITED BALANCE SHEET
as at 31 March 2025
31 March 31 March 30 September
2025 2024 2024
£'000 £'000 £'000
Current assets
Investments (Note 9) 13,080 16,104 14,074
Costs incurred on sale of VCT's assets 368 237 305
Debtors 50 47 51
Cash at bank and in hand 12 2 1
13,510 16,390 14,431
Creditors: amounts falling due within one year (4,140) (4,424) (4,489)
Net current assets 9,370 11,966 9,942
Creditors: amounts falling due after more than one year - - -
Net assets 9,370 11,966 9,942
Capital and reserves
Called up Share capital 71 71 71
Treasury Shares (Note 8) (3,404) (3,403) (3,404)
Special reserve (Note 8) 8,736 8,733 8,736
Revaluation reserve (Note 8) 9,479 10,025 9,830
Capital reserve - realised (Note 8) (5,980) (3,462) (5,318)
Revenue reserve (Note 8) 468 2 27
Equity shareholders' funds 9,370 11,966 9,942
Net asset value per Ordinary Share 35.7p 45.6p 37.9p
Net asset value per 'A' Share 0.1p 0.1p 0.1p
35.8p 45.7p 38.0p
The financial statements of Gresham House Renewable Energy VCT2 plc were
approved and authorised for issue by the Board of Directors and were signed on
its behalf by:
Christian Yates
Chairman
Company number: 07378395
Date: 25 June 2025
UNAUDITED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2025
Called up Treasury Special Revaluation Capital Reserve -realised Revenue Total
Share capital Shares reserve reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 October 2023 71 (3,403) 9,713 11,546 (3,265) (176) 14,486
Dividend paid - - (980) - - (980) (1,960)
Total comprehensive (loss)/profit (1,717) (2,052) 1,184 (2,584)
- - -
As at 30 September 2024 71 (3,403) 8,736 9,830 (5,318) 27 9,942
Total comprehensive (loss)/profit - - - (351) (662) 441 (572)
As at 31 March 2025 71 (3,404) 8,736 9,479 (5,980) 468 9,370
UNAUDITED STATEMENT OF CASH FLOWS
for the six months ended 31 March 2025
31 March 31 March 30 September
2025 2024 2024
£'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) on ordinary activities before taxation (572) (560) (2,584)
Losses on investments 993 1,596 3,552
Cost incurred on sale of VCT's assets write off - - 98
Dividend income (679) (1,425) (1,667)
Interest income (8) (20) (28)
(Increase)/decrease in other debtors (1) 9 1
(Decrease)/ increase in other creditors (350) 608 608
Net cash (outflow)/ inflow from operating activities (617) 208 (20)
Cash flows from investing activities
Net proceeds from sale of investments/ loan note redemptions - (75) 338
Costs incurred on sale of VCT's assets (62) 22 (84)
Interest received 11 40 56
Dividend income received 679 1,425 1,667
Net cash inflow from investing activities 628 1,412 1,977
Net cash inflow before financing activities 11 1,620 1,957
Cash flows from financing activities
Equity dividends paid - (1,960) (1,960)
Redemption of loan notes - 338 -
Net cash outflow from financing activities - (1,622) (1,960)
Net increase/ (decrease) in cash 11 (2) (3)
Cash and cash equivalents at start of period 1 4 4
Cash and cash equivalents at end of period 12 2 1
Cash and cash equivalents comprise:
Cash at bank and in hand 12 2 1
Total cash and cash equivalents 12 2 1
SUMMARY OF INVESTMENT PORTFOLIO AND MOVEMENTS
for the six months ended 31 March 2025
Operating sites Sector Cost Valuation Valuation movement % of portfolio
Investment Portfolio as at 31 March 2025 in period by value
Qualifying and partially qualifying investments
£'000 £'000 £'000
Lunar 2 Limited ¹(,4) South Marston, Beechgrove Ground solar 1,330 11,208 (293) 85.6%
Lunar 1 Limited ¹(,4) Kingston Farm, Lake Farm Ground solar 124 623 (24) 4.8%
New Energy Era Limited(4) Wychwood Solar Farm Ground solar 884 452 (18) 3.5%
Vicarage Solar Limited(4) Parsonage Farm Ground solar 871 406 (16) 3.1%
HRE Willow Limited(3) HRE Willow Small wind 875 199 (283) 1.5%
Minsmere Power Limited(3) Minsmere Small wind 975 76 (121) 0.6%
Tumblewind Limited(3) Tumblewind Small wind 850 59 (155) 0.5%
Small Wind Generation Limited(3) Small Wind Generation Small wind 975 56 (83) 0.4%
bio-bean Limited ² Cambridgeshire Clean energy 695 - - 0.0%
Lunar 3 Limited ¹(,4) Ground solar 1 - - 0.0%
7,580 13,080 (993) 99.9%
Cash at bank and in hand 12 0.1%
Total investments 13,092 100.0%
¹ Partially qualifying investment
(2) bio-bean Limited was permanently impaired as at 31 March 2023. At the date
of signing the VCTs half-yearly report 31 March 2025, bio-bean's liquidation
is ongoing
(3) £0.6mn of the valuation movement has been recognised as a realised loss
at 31 March 2025.
(4) The individual portfolio company valuations are based on the estimated
realisation proceeds from the ongoing sales process allocated by MWh per solar
investment and number of turbines per wind investment. Lunar 2 Limited holds a
higher beneficial interest in other solar companies within the group structure
resulting in a higher allocated proportion of the estimated realisation
proceeds.
All venture capital investments are incorporated in England and Wales.
Gresham House Renewable Energy VCT1 plc, of which Gresham House Asset
Management Limited (GHAM) is the Investment Adviser, holds the same
investments as above.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. General information
Gresham House Renewable Energy VCT2 plc (VCT) is a Venture Capital Trust
established under the legislation introduced in the Finance Act 1995 and is
domiciled in the United Kingdom and incorporated in England and Wales (Company
No. 07378395). The Company's principal activity is that of a VCT which invests
in renewable energy investments. The registered office of the Company is The
Scalpel 18th floor, 52 Lime Street, London, EC3M 7AF. Its share capital is
denominated in Pound Sterling (GBP) and consists of Ordinary shares and 'A'
shares.
At the general meeting on 13 July 2021, the proposed special resolution was
approved by Shareholders, resulting in the VCTs entering a Managed Wind Down
and a new investment policy replacing the existing investment policy. The
VCT's principal objective is to manage the VCT with the intention of realising
the sale or monetisation otherwise of all remaining assets in the portfolio in
a prudent manner consistent with the principles of good investment management
and with a view to returning value to Shareholders in an orderly manner. Given
that a formal decision has been made to wind up the VCT, the Directors intend
to liquidate the VCT.
The VCT will pursue its investment objective by effecting an orderly
realisation of its assets in a manner that seeks to achieve a balance between
maximising the value received from those assets and making timely returns of
capital to Shareholders. This process includes sales of individual assets. The
VCT will enter members' voluntary liquidation, anticipated by mid-September
2025, or will take other steps that are available to avoid a technical breach
of VCT status.
Since the start of the Managed Wind Down in July 2021, the Directors do not
consider it to be appropriate to adopt the going concern basis of accounting
in preparing the financial statements. On this basis, the Directors have
prepared the VCT's financial statements on a basis other than going concern.
As a result, the investments held at fair value through profit or loss were
transferred from fixed assets to current assets in the 30 September 2021
annual financial statements and subsequent periods. No additional adjustments
have been made to the unaudited half-yearly results covering the six months to
31 March 2025 as a result of them being prepared on a basis other than going
concern.
2. Accounting policies - Basis of accounting
The unaudited half-yearly results cover the six months to 31 March 2025 and
have been prepared in accordance with the accounting policies set out in the
annual accounts for the year ended 30 September 2024 which were prepared under
FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of
Ireland" and in accordance with the Statement of Recommended Practice (SORP)
"Financial Statements of Investment Trust Companies and Venture Capital
Trusts" issued by the Association of Investment Companies (AIC) in November
2014 (updated in July 2022) (SORP) as well the Companies Act 2006.
3. All revenue and capital items in the Income Statement
derive from continuing operations, however as described in Note 1, the VCT is
in a Managed Wind Down process.
4. The VCT has only one class of business and derives its
income from investments made in shares, securities and bank deposits.
5. Net asset value per share at the period end has been
calculated on 26,133,036 Ordinary Shares and 39,463,845 'A' Shares, being the
number of shares in issue at the period end, excluding Treasury Shares.
6. Return per share for the period has been calculated on
26,133,036 Ordinary Shares and 39,463,845 'A' Shares, being the weighted
average number of shares in issue during the period, excluding Treasury
Shares.
7. Dividends
Period ended Year ended
31 March 2025 30 September 2024
Special reserve Capital Total Total
£'000 £'000 £'000 £'000
Dividends paid
2023: Interim Ordinary - 7.5p - - - 1,960
- - - 1,960
8. Reserves
Period ended Year ended
31 March 2025 30 September 2024
£'000 £'000
Treasury shares (3,404) (3,404)
Special reserve 8,736 8,736
Revaluation reserve 9,479 9,830
Capital reserve-realised (5,980) (5,318)
Revenue reserve 468 27
9,299 9,871
The Special reserve is available to the VCT to enable the purchase of its own
shares in the market. The Special reserve, Capital reserve - realised and
Revenue reserve are all distributable reserves for the purposes of dividend
payments to Shareholders. At 31 March 2025, distributable reserves were
£3.2mn (30 September 2024: £3.4mn).
9. Investments
The fair value of investments is determined using the detailed accounting
policies as referred to in note 2.
The VCT has categorised its financial instruments using the fair value
hierarchy as follows:
Level 1 Reflects financial instruments quoted in an active market;
Level 2 Reflects financial instruments that have prices that are observable either
directly or indirectly; and
Level 3 Reflects financial instruments that use valuation techniques that are not
based on observable market data (unquoted equity investments and loan note
investments).
Level 1 Level 2 Level 3 31 March 2025 Level 1 Level 2 Level 3 30 September 2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Unquoted loan notes - - 330 330 - - 330 330
Unquoted equity - - 12,750 12,750 - - 13,744 13,744
- - 13,080 13,080 - - 14,074 14,074
Reconciliation of fair value for Level 3 financial instruments held at the
period end:
Unquoted loan notes Unquoted equity Total
£'000 £'000 £'000
Balance at 30 September 2024 330 13,744 14,074
Movements: (351) (351)
Unrealised losses in the income statement
-
Impairment realised during the period - (642) (642)
Balance at 31 March 2025 330 12,751 13,080
10. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required in the
VCT's half-year results to report on principal risks and uncertainties facing
the VCT over the remainder of the financial year.
The Board has concluded that the key risks facing the VCT over the remainder
of the financial period are as follows:
(i) Asset diversification risk associated with a Managed Wind Down, the value of
the portfolio will be reduced as investments are realised and concentrated in
fewer holdings, and the mix of assets exposure will be affected accordingly;
(ii) market risk in respect of the various assets held by the investee companies;
(iii) failure to maintain approval as a VCT;
(iv) risk surrounding the sale of the VCT's solar assets; and
(v) economic risk due to several geo-political events.
The VCT's compliance with the VCT regulations is continually monitored by the
VCT Status Adviser, who reports regularly to the Board on the current
position. The VCT has appointed Philip Hare & Associates LLP as VCT Status
Adviser, who will work closely with the Investment Adviser and provide regular
reviews and advice in this area. The Board considers that this approach
reduces the risk of a breach of the VCT regulations to a minimal level. In
order to maintain VCT status, the Company needs to ensure that it maintains an
excess over a % threshold of qualifying investments within its portfolio. The
Board anticipates that the Company may fall below these percentages as the
asset realisation process continues. Therefore, to avoid a breach of VCT
status, the Board has been advised that the Company may in due course need to
start the process of a members' voluntary liquidation which would involve
delisting of the Company's shares.
There is a risk that the VCT's solar assets may not be realised at their
carrying value, and the sale commissions, such as liquidation costs and other
costs associated with the realisation of the VCT's assets, may reduce cash
available for distribution to Shareholders. Furthermore, there is a risk that
the sale of the VCT's assets may prove materially more complex than
anticipated which may delay distribution of proceeds to Shareholders. To
mitigate these risks, the VCT's Board has engaged several experts in this
field to ensure an appropriate sale price is reached. The Directors will
ensure that the sale price reflects the best available offer for the Company's
assets taking into account future income generation by the portfolio and the
age and condition of the assets. In addition, the Board reviews quarterly cash
flow forecasts, prepared by the Investment Adviser, and has considered the
impact of additional costs likely to be incurred during the Managed Wind Down
of the VCT.
The Board has considered the several geo-political events and the impact of
the higher interest rates on the VCT. Where investments in loan stock attract
interest, this is predominately charged at fixed rates.
11. Going concern
At the General Meeting on 13 July 2021 a formal decision was made to wind the
VCT up.
In assessing the VCT as a going concern, the Directors have considered the
forecasts which reflect the proposed strategy for portfolio investments and
the results of the continuation votes at the AGM and General Meeting held on
22 March 2021 and 13 July 2021 respectively.
Although the continuation vote was passed by VCT1 at the AGM, there were a
significant number of votes against this resolution and the shareholders of
this VCT voted against continuation. This required the VCTs to draw up
proposals for voluntary liquidation, reconstruction or other re-organisation
for consideration by the members at the General Meeting held on 13 July 2021.
At this meeting the proposed special resolution was approved by shareholders,
resulting in the VCT entering a managed wind-down and a new investment policy
replacing the existing investment policy. The Board agreed to realise the
VCT's investments in a manner that achieves balance between maximising the net
value received from those investments and making timely returns to
shareholders. This process includes sales of individual assets. The VCT will
enter members' voluntary liquidation, anticipated by mid-September 2025, or
will take other steps that are available to avoid a technical breach of VCT
status. The board and the Investment adviser have consulted the VCTs status
and legal advisers on Members Voluntary Liquidation actions and timing to
ensure that the VCTs will enter voluntary liquidation timely.
Since the start of the Managed Wind Down in July 2021, the Directors do not
consider it to be appropriate to adopt the going concern basis of accounting
in preparing the financial statements. On this basis, the Directors have
prepared the VCT's financial statements on a basis other than going concern.
The Board notes that the VCT has adequate resources from its investments to
be moved up to the VCT as and when required to pay its liabilities, during the
managed wind-down, and to continue in business until the formal liquidation
and wind-up commences.
12. Events after the end of the reporting period
No significant events have occurred between the statement of financial
position date and the date when the financial statements have been approved,
which would require adjustments to, or disclosure in the financial statements.
13. The unaudited financial statements set out herein do not
constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006 and have not been delivered to the Registrar of Companies.
14. The Directors confirm that, to the best of their knowledge,
the half-yearly financial statements have been prepared in accordance with the
"Statement: Half-Yearly Financial Reports" issued by the UK Accounting
Standards Board and the Half-Yearly Report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period, and any changes in the related
party transactions described in the last annual report that could do so.
Copies of the Half-Yearly Report can be obtained from the VCT's registered
office or can be downloaded from www.greshamhouse.com/real-assets
(http://www.greshamhouse.com/real-assets) .
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