REG - Triple Point Energy - Quarterly Portfolio Update

Triple Point Energy TransitionAnnouncement

01/09/2023 07:15

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RNS Number : 0249L  Triple Point Energy Transition PLC  01 September 2023

1 September 2023

Triple Point Energy Transition plc

("TENT" or the "Company" or, together with its subsidiaries, the "Group")

QUARTERLY PORTFOLIO UPDATE

Triple Point Energy Transition plc (ticker: TENT), the London Stock
Exchange listed investment company focused on building a portfolio of
diversified infrastructure investments that support the energy
transition, announces its unaudited Net Asset Value ("NAV") at 30 June 2023
of £97.1m (97.10 pence per share), a decrease of 2.33 pence per share
compared to the Company's last announced audited NAV as at 31 March 2023,
largely driven by the impact on valuations of rising interest rates and higher
UK long-term gilt yields.

 

                                               Quarter ended  Year ended

                                               30 June 2023   31 March 2023

                                               (unaudited)    (audited)

 Net asset value ("NAV")                       £97.1m         £99.4m
 Investment portfolio valuation                £94.6m         £87.7m
 NAV per share                                 97.10 pence    99.44 pence
 Dividend declared per share                   1.375 pence    5.50 pence
 Capital committed awaiting deployment(1 2 )   £35.5m         £44.4m

 (1) alternative performance measures

 (2) portfolio commitments will be fully funded by the Group's undrawn
Revolving Credit Facility ("RCF")

 

Financial Update

The key drivers of the movement in Net Asset Value pence per share are
summarised below with further details following:

 

 NAV as at 31 March 2023 (pence per share)      99.44
 Dividends paid                                 (1.37)
 Valuation adjustments:
 -       Power prices                           (0.51)
 -       Discount rate                          (1.82)
 -       Inflation                              0.69
 -       Other                                  (0.47)
 Other movement (including actual performance)  1.15
 NAV at 30 June 2023 (unaudited)                97.10

 

Valuation adjustments

The change in valuation for the quarter is primarily attributed to a 40 bps
increase in the unlevered discount rate of the Hydroelectric Portfolio from
5.6% to 6.0%, coupled with the downward revisions in power price forecasts by
external power market consultants. The 40bps increase in the discount rate for
the Hydroelectric Portfolio reflects the ongoing trend of rising interest
rates and higher UK long-term gilt yields. This is partially offset by a
higher inflation outlook than was previously forecast.

The weighted average unlevered discount rate in respect of investments
deployed as at 30 June 2023 has increased to 7.0% (31 March 2023: 6.6%).

Once the Battery Energy Storage System ("BESS") portfolio has been fully
deployed in 2024 the earnings generation of the portfolio is expected to
increase, producing a levered portfolio return of c.8.6% based on the RCF
current rate of debt. These earnings will further bolster the rate of return
generated by the portfolio's distinctive investment composition, driven by
contracted cash flows, with 94% underpinned by contracts extending over the
next ten years.

Dividend

Further to the dividend declaration RNS announced today, the Company has
declared a 1.375 pence per share dividend for the quarter ended 30 June 2023,
against the target annual distribution to shareholder of 5.5 pence per share.
This represents a dividend yield of 9.4% on the share price as at 30 August
2023.

 

Deployment and investment activity

The Company continued to deploy capital into its committed portfolio, with a
further £8.9m being deployed during the quarter:

-      £5m debt investment in Innova Renewables to help fund its
development pipeline of solar, battery and energy storage systems across the
UK. The facility has a 12-month term and delivers contractual returns that are
materially higher than the Group's target return of 7-8%.

-      £3.9m into the Group's Battery Energy Storage System (BESS)
Portfolio, resulting in a total deployment to date of 22% of its overall
commitment. This subsector continues to offer compelling investment
opportunities and returns.

 

Portfolio Update

Income from the debt investments was in line with expectations. The underlying
trading performance of the Combined Heat and Power ("CHP") Portfolio was
marginally ahead of expectations.

The build-out of the second BESS asset in the portfolio at Gerrards Cross
remains on track for Commercial Operations in Q3 of this year. The remaining
two BESS assets are also proceeding in line with previous updates and are set
to become operational in 2024.

The Hydroelectric Portfolio performance was lower than forecast due to reduced
precipitation. This has already been partially offset by out-performance in
July, with generation being 97% ahead of budget for the month. The majority of
hydro generation falls between October and March, being 72% of the total
budgeted generation, and accordingly the quarter ended 30 June 2023 is not
indicative of annual performance.

The Company agreed fixed price power purchase agreements ("PPAs") in respect
of its nine hydroelectric power assets. Accordingly, 100% of the earnings from
these assets are underpinned by contract until March 2025.

 

Capital Markets Day

TENT will host a Capital Markets Day on 28 September 2023, at which analysts
and investors will be afforded the opportunity to hear from the Investment
Manager and asset managers about the Group's portfolio in greater detail. For
further information, please contact Buchanan at tent@buchanancomms.co.uk.

 

 

For further information, please contact:

 Triple Point Investment Management LLP   +44 (0) 20 7201 8989

 Jonathan Hick

 Christophe Arnoult

 Chloe Smith

 J.P. Morgan Cazenove (Corporate Broker)  +44 (0) 20 3493 8000

 William Simmonds

 Jérémie Birnbaum

 Akur Limited (Financial Adviser)         +44 (0) 20 7493 3631

 Tom Frost

 Anthony Richardson

 Siobhan Sergeant

 Buchanan (Financial PR)                  +44 (0) 20 7466 5111

 Helen Tarbet

 Henry Wilson

 Hannah Ratcliff

 Verity Parker

 

LEI: 213800UDP142E67X9X28

 

Further information on the Company can be found on its
website: http://www.tpenergytransition.com/
(https://eur03.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.tpenergytransition.com%2F&data=05%7C01%7CRebecca.Lillington%40triplepoint.co.uk%7C5d7dc58447154d71da6108da8a648af1%7Ccde8812e0dbd4dc3b4463655beb81efb%7C0%7C0%7C637974461674664827%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=Qxux6XDdRNrDI2LBUqkiVrj0UyfH30KOouLRCg%2FPxmY%3D&reserved=0)

 

NOTES:

The Company is an investment trust which aims to invest in assets that support
the transition to a lower carbon, more efficient energy system and help the UK
achieve Net Zero.

Since its IPO in October 2020, the Company has made the following investments
and commitments:

·    Harvest and Glasshouse: provision of £21m of senior debt finance to
two established combined heat and power ("CHP") assets, located on the Isle of
Wight, supplying heat, electricity and carbon dioxide to the UK's largest
tomato grower, APS Salads ("APS") - March 2021

·    Spark Steam: provision of £8m of senior debt finance to an
established CHP asset in Teesside supplying APS, as well as a further power
purchase agreement through a private wire arrangement with another food
manufacturer - June 2021

·    Hydroelectric Portfolio (1): acquisition of six operational, Feed in
Tariff ("FiT") accredited, "run of the river" hydroelectric power projects in
Scotland, with total installed capacity of 4.1MW, for an aggregate
consideration of £26.6m (excluding costs) - November 2021

·    Hydroelectric Portfolio (2): acquisition of a further three
operational, FiT accredited, "run of the river" hydroelectric power projects
in Scotland, with total installed capacity of 2.5MW, for an aggregate
consideration of £19.6m (excluding costs) - December 2021

·    BESS Portfolio: commitment to provide a debt facility of £45.6m to a
subsidiary of Virmati Energy Ltd (trading as "Field"), for the purposes of
building a portfolio of four geographically diverse Battery Energy Storage
System ("BESS") assets in the UK with a total capacity of 110MW - March 2022

·    Energy Efficient Lighting: Funding of c.£2.2m to a lighting
solutions provider to install efficient lighting and controls at a leading
logistics company - March 2023

·    Innova: Provision of a £5m short term development financing facility
to Innova Renewables, building out a portfolio of Solar and BESS assets across
the UK - March 2023

 

The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority.
Triple Point manages private, institutional, and public capital, and has a
proven track record of investment in Energy Efficiency and decentralised
energy projects.

Following its IPO on 19 October 2020, the Company was admitted to trading on
the Premium Segment of the Main Market of the London Stock Exchange on 28
October 2022. The Company was also awarded the London Stock Exchange's Green
Economy Mark.

 

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