REG - Triple Point Energy - Results for the six-months ended 30 September 2022
02/12/2022 07:00
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RNS Number : 3471I Triple Point Energy Transition PLC 02 December 2022
THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION FOR THE
PURPOSES OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.
2 December 2022
Triple Point Energy Transition plc
("TENT" or the "Company" or, together with its subsidiaries, the "Group")
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
The Board of Triple Point Energy Transition plc (ticker: TENT) is pleased to
announce its unaudited results for the six months ended 30 September 2022.
30 September 31 March 2022 30 September 2021
2022
Net Asset Value ("NAV") £100.3m £96.1m £94.5m
NAV per share 100.26 pence 96.12 pence 94.50 pence
Value of the portfolio £84.1m £78.8m £28.5m
Ongoing charges ratio (annualised)(1) 1.89% 1.38% 1.16%
Dividend declared per share 2.75 pence 5.50 pence 2.75 pence
Capital committed awaiting deployment(1) £44.9m £44.9m -
Fully invested portfolio valuation
(including commitments at cost)(1) £129.0m £123.6m £28.5m
(1) Alternative performance measures
Highlights
· Dividends paid, in the six months ended 30 September 2022,
substantially covered, at 0.98x, by cash flows generated from the portfolio,
net of cash expenses and cash finance costs of the Group.
· The Company has declared an interim dividend for the period
from 1 July to 30 September 2022 of 1.375 pence per Ordinary Share, payable on
or around 6 January 2023 to holders of Ordinary Shares on the register on 16
December 2022.
· Total NAV return of 7.2% for the six months ended 30
September 2022 (31 March 2022: 4.9%, 30 September 2021: 0.4%).
· Weighted average project life remaining of 31.3 years,
underpinned by strong contractual cashflows.
· Discount rate in respect of Hydroelectric Portfolio increased
by 50bps.
· No impact expected from Electricity Generator Levy based on
information published to date.
· Robust portfolio performance despite volatile markets.
· Further portfolio diversification via an additional
investment in efficient lighting, completed post the period end.
· On 25 August 2022, shareholders approved an amended
Investment Policy and associated change to the Company's name, which provides
a broader mandate of "energy transition" reflecting better the nature of the
current portfolio of investments and offering a greater number of
opportunities for investment.
· Following the period end, on 28 October 2022, the Company's
shares transferred to trading on the Premium Segment of the Main Market of the
LSE and were admitted to the premium listing segment of the Official List of
the Financial Conduct Authority.
John Roberts, the Company's Chair, commented:
"We are pleased to announce strong results for the six months ended 30
September 2022, which have been delivered during a period of extreme
geo-politcal and economic volatility. The results reflect the strength and
defensive nature of the portfolio, which has been constructed to faciliate the
energy transition and help corporates to reduce their energy costs. "
For further information, please contact:
Triple Point Investment Management LLP +44 (0) 20 7201 8989
Jonathan Hick
Ben Beaton
J.P. Morgan Cazenove (Corporate Broker) +44 (0) 20 7742 4000
William Simmonds / Jérémie Birnbaum (Corporate Finance)
James Bouverat / Liam MacDonald-Raggett (Sales)
Akur Limited (Financial Adviser) +44 (0) 20 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
Sapience Communications (PR Adviser)
Richard Morgan Evans +44 (0) 20 3195 3240
Jamie Gittings +44 (0) 73 0850 9608
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 (1): Funding of c.£1m to a lighting
solutions provider to install efficient lighting and controls at a leading
logistics company - September 2022.
· Energy Efficient Lighting (2): Commitment of c.£1m to a
lighting solutions provider to install efficient lighting and controls at a
leading logistics company, of which £0.3m invested to date - November 2022.
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.
Following its IPO on 19 October 2020, the Company was admitted on the premium
listing segment of the Official List of the Financial Conduct Authority and
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.
CHAIR'S STATEMENT
Introduction
On behalf of the Board, I am pleased to present the interim report of the
Company covering the period from 1 April 2022 to 30 September 2022.
During the period, following approval by shareholders, the Company adopted a
revised investment policy which broadened its scope, to cover the wider energy
transition sector. The Company also changed its name to Triple Point Energy
Transition plc, from Triple Point Energy Efficiency Infrastructure Company plc
to better reflect the nature of our existing portfolio and the revised
investment policy.
Investment Activity
During the period, the Company made an investment of over £1 million into
accounts receivable financing, purchasing the rights to future receivable
payments from a lighting service provider. The transaction funded the
installation of Light Emitting Diodes ("LEDs") at a warehouse operated by one
of the UK's leading logistics businesses.
At a time when many businesses are seeing significant increases in their
energy bills, providing solutions that reduce energy costs and accelerate the
transition to Net Zero are actions the Company is keen to accelerate.
This investment furthers the Company's diversification in the sources of
income and types of technology.
Financial Results
The six months ended 30 September 2022 saw a high level of market volatility,
manifesting at the end of the period in sharp rises in gilt and bond yields,
high levels of inflation and growing concern around the depth and length of a
recession. This has been reflected in bond markets through inverted yield
curves and in equity markets through share price falls.
Despite the deterioration in the macroeconomic environment, the strong
contractual and defensive nature of the Company's investment portfolio has
facilitated a strong financial performance over the period.
We are delighted to have returned a NAV per share of 100.26 pence for the
period ended 30 September 2022 (31 March 2022: 96.12 pence). This combined
with the 2.75 pence per share dividends paid has delivered a total NAV return
of 7.2% over the six months.
An improved outlook for power forecasts, by independent market advisors, along
with the higher inflation expectations, from the Office for Budget
Responsibility, underpinned a £4.8 million increase in the valuation of the
portfolio. This has negated the impact of higher discount rates, which in the
energy sector generally have started to increase following many years of
compression.
Profit before tax was £6.9 million (30 September 2021: £0.4 million), with
earnings per share of 6.88 pence (30 September 2021: 0.004 pence). Revaluation
of the Company's wholly owned subsidiary contributed £5.0m to the profit
before tax, with the balance being represented by earnings from the
Hydroelectric and CHP Portfolios, offset by expenses incurred at Company
level.
The operating expenses for the six months ended 30 September 2022 amounted to
£0.9 million (31 September 2021: £0.6m). The Company's ongoing charges ratio
("OCR") is 1.89% (30 September 2021: 1.16%). In accordance with the Investment
Management Agreement, following deployment of more than 75% of IPO proceeds,
the management fee is now charged on full NAV. This has been the lead driver
of the increase in the OCR versus the corresponding six months ended 30
September 2021, where it was charged in reference to deployed funds as the 75%
threshold was not met until December 2021.
Distributions
Cash dividend cover, represented by cash income from the portfolio, net of
Company and subsidiary expenses and finance costs, increased significantly to
0.98x in the six months ended 30 September 2022. This was facilitated by the
maiden dividend distribution received from the Hydroelectric Portfolio and a
full contribution, over the period, from investments completed in the year
ended 31 March 2022.
As stated previously, the Board is targeting total dividends of 5.50 pence per
share(2) for the year ending 31 March 2023. We remain focused on our ambition
that our dividend should be covered by cash earnings as soon as practicable,
and to that end, note that this financial year will not only benefit from a
full year of earnings from the Hydroelectric and CHP Portfolios, but will also
benefit from income from the BESS Portfolio as the investment commitment is
deployed.
Whilst the Company's share price has fallen along with other energy investment
trusts following recent market turbulence, the substantially covered dividend,
when considered alongside the growth in NAV over the period, shows the strong
underlying fundamentals of the Company in the current operating environment.
The Board continues to closely monitor the Company's share price discount to
NAV and will keep under consideration the best interests of shareholders.
Notes:
(2) The dividend and return targets stated are Pound Sterling denominated
returns targets only and not a profit forecast. There can be no assurance that
these targets will be met, and they should not be taken as an indication of
the Company's expected future results.
Environmental, Social and Governance ("ESG")
The emphasis on energy transition is reflected in the sustainability and ESG
approach adopted by the Investment Manager. Our focus remains on ensuring that
the Investment Manager continues to integrate climate change into its
investment decision making. Taking into account the risks and opportunities
associated with climate change is important for protecting our assets and
maximising their potential. The details of the Investment Manager's approach
to ESG integration, including climate analysis and disclosures in line with
Task Force on Climate related Financial Disclosure ("TCFD") will be reported
in the annual report for the year ending 31 March 2023.
Post Balance Sheet
On 28 October 2022, the Company was admitted to the premium listing segment of
the Official List of the Financial Conduct Authority and migrated to trading
on the Premium Segment of the Main Market of the London Stock Exchange. This
will enable the Company to attract capital from a wider range of investors,
such as retail investors. In addition, admission to the Premium Listing
Segment is a key criterion to facilitate the Company's inclusion in the FTSE
indices. A small number of minor amendments to the investment policy were
approved by the Board following discussions with the FCA regarding the
migration. The investment policy can be found on the Company' website:
https://www.tpenergytransition.com/investors/72/
In November 2022, the Company also committed to further follow-on investments
of, c.£1 million into accounts receivable financing, purchasing the rights to
future receivable payments from a lighting service provider. As at the date of
this report £0.3m of that commitment has been deployed. The investments will
enable the installation of LEDs at additional logistics warehouses, with the
same counterparties as the previous efficient lighting transaction.
£5.5m of the BESS Portfolio facility commitment was deployed following the
commissioning of the first energy storage asset in mid-November 2022.
Outlook
Significant economic volatility, centered around energy markets caused by the
ongoing conflict in Ukraine has manifested itself in both higher wholesale
energy prices in the UK and much of Europe, as well higher rates of inflation
across the wider economy.
Market forecasters expect inflation and energy prices to remain elevated over
the coming 12-24 months, which provides an attractive operating environment
given the nature of its underlying revenues. These two factors have driven
much of the increase in the forecast cashflows for the Group and accordingly
the NAV uplift, as outlined above and covered in further detail in the
Investment Manager's report. Given the forecast contraction in UK Gross
Domestic Product over the coming 6-12 months, the attractiveness of energy
infrastructure assets, where returns are typically not correlated to the wider
economy and benefit from rising inflation, presents an attractive area of
opportunity for investors.
This also facilitates attractive pipeline opportunities across a range of
areas in the Company's target sectors, due to two factors. Firstly, the
expected returns that can be achieved by generation and storage assets have
increased, making more projects commercially viable. Secondly, higher energy
prices are encouraging companies to reduce their energy costs through behind
the meter solutions such as on-site solar and LED lighting to reduce demand.
Driven by these tailwinds, the Company has a pipeline of opportunities
totalling £634m, with assets across a diverse range of transition
technologies including solar, CHP, LED lighting, BESS, hydrogen electrolysers,
electric vehicle charging, biomass and heat pumps.
The Review of Electricity Market Arrangements ("REMA") consultation that was
launched during the period is the largest review of the electricity market for
some decades, as it seeks to review in particular the way that electricity
prices are set and over what geographic regions. Whilst the consultation has
only recently closed, it would be reasonable to assume there will be a range
of impacts on energy infrastructure, which further supports the rationale for
the Company's strategy of owning and operating a diverse range of assets. The
Company will continue to monitor the outcomes of the consultation closely.
The Company is reviewing the recently announced Electricity Generator Levy and
awaits further detailed drafting of the relevant legislation in due course.
Based on the information announced to date, the Company does not expect to be
impacted by this levy.
John Roberts
Chair
1 December 2022
INVESTMENT MANAGER'S REPORT
Portfolio Performance
As at 30 September 2022, the Company had committed capital into 17 different
assets spread across combined heat and power, hydroelectric power, battery
energy storage and LED lighting.
Combined Heat and Power:
The investee companies have benefited from attractive trading conditions
during the period, driven by the higher-than-expected prices seen on the
wholesale electricity markets. The income stream from power trading is
currently exceeding the revenues derived from the behind the meter contracts
through the heat and power supply to the co-located glasshouses. The latest
available projections from the investee companies, based on third party power
market research forecasts, indicate continued attractive trading conditions
over the projection period.
Hydroelectric:
The nine run of the river schemes forming the Hydroelectric Portfolio have
generated a combined power output of 4,893 MWh of green electricity during the
six month period to 30 September 2022.
During the period, the Investment Manager has been working with the
long-standing partner operating the Hydroelectric Portfolio to renegotiate the
operation and maintenance (O&M) contracts. The renegotiated contracts
include more monitoring and reporting on agreed KPIs.
In parallel, the Investment manager has restarted the development of an
optimisation project at the Loch Blair hydroelectric scheme. If consented, the
construction of a small dam upstream of the plant intake will increase the
generation from the newly created attenuation capacity.
BESS:
The development and construction of the Battery Energy Storage System
Portfolio has continued during the period. The first asset reached Commercial
Operations Date ("COD") in mid-November 2022, following sign off by the BESS
operator and the independent technical advisor. This will enable the asset to
benefit from the expected volatility in power markets over the upcoming winter
period. The Investment Manager has been actively working with Field, the
developer and sponsor, on the remaining three assets which are expected to be
commissioned in H2 FY24.
LED:
During the period, the Company's lighting service partner completed the
installation of LED lighting at a logistics warehouse, totalling c.£1m and in
September the Company received the first monthly payment, with income
contracted over the next five years. Since 30 September 2022, further
funding commitments to the lighting specialist to enable the installation of
LEDs at additional warehouses with the same counterparty have been made, with
£0.3m drawn down in the post balance sheet period against these commitments
and a further c.£0.8m expected in respect of further installations by the end
of the financial year.
Pipeline
The Company invests across the energy infrastructure system, from supply to
demand.
The three target segments for the Company are:
· Low Carbon Generation- as the UK moves to a lower carbon,
decentralised, energy system as part of the transition to Net Zero. This will
involve investing in renewable energy assets, rather than centralised fossil
fuel generation.
· Transmission and Storage- the energy from renewables needs to be
available to consumers when required, not based on the availability of wind,
water and solar resources. Balancing the supply and demand for energy is vital
in enabling the transition to Net Zero, for example through BESS.
· Onsite supply and demand reduction - reducing demand through "Behind
the Meter" investments are an important factor in the transition to Net Zero,
particularly at a time of higher energy prices. Technologies like solar PV
enable business and consumers to generate their energy requirement on site,
giving additional security of supply and lower cost energy. Technologies such
as LED lighting enable customers to reduce the amount of energy consumed.
By investing across the energy infrastructure system, the Company enables its
shareholders to benefit from a broad range of different risk and return
profiles, as well as diversifying its exposure away from any one single
technology or part of the power system. Accordingly, the Company has a
pipeline of opportunities totalling £634m, with assets across a diverse range
of transition technologies as demonstrated in the chart below.
Gearing
As at 30 September 2022, the Company had not drawn on the £40m Revolving
Credit Facility ("RCF") that it secured in March 2022 at a fixed all-in drawn
interest rate of 4.5% (excluding drawn monitoring fee of 0.25%). The RCF is
expected to be largely drawn to fund BESS Portfolio commitments during FY24 as
well as other future investments.
The RCF matures in March 2024 and the Company has been in discussions with the
lender in relation to the extension of the facility. These discussions are
expected to successfully conclude prior to 31 March 2023, with the lender
having expressed appetite to extend. Given the rising interest rate
environment, it is anticipated that the interest rate on the extension would
increase when compared to the current borrowing rate. Based on current
benchmark rates as at the date of this report, this is not forecast to alter
the Company's ability to pay a covered dividend.
As at 30 September 2022, the undrawn RCF and group cash balances totalled
£55.6m with remaining investment commitments of £44.9m.
Portfolio Valuation
The Investment Manager is responsible for carrying out the fair market
valuation of the Group's investments. The Company engages Mazars as an
external, independent, and qualified valuer to assess the validity of the
discount rates used by the Investment Manager in the determination of fair
value. Portfolio valuations are carried out on a semi-annual basis on 31 March
and 30 September each year.
For non-market traded investments (being all the investments in the current
portfolio), the valuation is based on a discounted cash flow methodology and
adjusted in accordance with the International Private Equity Valuation
Guidelines, where appropriate, to comply with IFRS 13 and IFRS 10, given the
special nature of portfolio investments.
The valuation for each investment in the portfolio is derived from the
application of an appropriate discount rate to reflect the perceived risk to
the investment's future cash flows to give the present value of those cash
flows. The Investment Manager exercises its judgement in assessing the
expected future cash flows from each investment based on its expected life and
the financial model produced by each project entity. In determining the
appropriate discount rate to apply to a given investment the Investment
Manager considers the relative risks associated with the revenues.
While Gilt yields rose sharply at the end of September 2022, in part, as a
market reaction to the UK Government's mini budget of 23 September 2022,
transaction discount rates, at 30 September 2022, did not reflect a similar
increase. Accordingly, we have seen a smaller incremental change in discount
rates relative to the change in the risk-free rate. The Company's choice of
discount rates also reflects the approach taken to both power price and
inflation forecasting.
For the six months ended 30 September 2022, the discount rates range from
5.50% to 8.25% (31 March 2022: 5.0% to 8.25%) and the weighted average
portfolio discount rate is 6.41% (31 March 2022: 6.11%). This increase was
driven by 50 bps increase in the discount rate used in the Hydroelectric
Portfolio. If the BESS Portfolio had been fully drawn at 30 September 2022,
the weighted average portfolio discount rate would have been c.7%.
The valuation of the portfolio by the Investment Manager and reviewed and
supported by the Directors as at 30 September 2022 was £84.1 million (31
March 2022: £78.8 million).
Valuation movements
The CHP Portfolio has been held at par. The underlying risk-free rate has
increased but conversely there has been a reduction in the in the risk premium
attached to the borrowers. The CHP Portfolio performed strongly in the six
months ended 30 September 2022, contributing to improved debt service cover
ratios, beyond those anticipated at financial close, thereby supporting a par
valuation. The latest forecasts prepared for the Company, by the borrower,
also project an improved operating environment going forward, based on
independent market forecasts for such assets. The CHP assets are in line with
other similar energy assets over the same period and has led to a significant
increase in the cash reserves of the borrowers, given the restrictions on
distribution to shareholders under the terms of our debt.
The initial deployment into the BESS Portfolio continues to be valued at par
as the initial drawdown took place on financial close in March 2022, with fair
value being equal to the upfront costs incurred on the transaction.
The valuation of the energy efficient lighting portfolio has seen a write down
of £0.1m due to an increase in the discount rate applied. The increase has
been made in reference to recent comparable transactional activity, at the
valuation date, being higher than the effective interest rate.
As a result of the majority of the debt investments being valued at or around
par, the fair value movements for the six months ended 30 September 2022 are
principally attributable to the equity investment into the Hydroelectric
Portfolio. A breakdown of the movement in the Directors' valuation is detailed
and explained below.
Valuation Movement in the six months ended 30 September 2022
The opening valuation as at 31 March 2022 was £78.8 million. Allowing for
cash movements relating to investments completed in the six months ended 30
September 2022 (comprising a lighting as a service debt investment into energy
efficient lighting of £1.1 million and £0.6 million of principal repayments
from the CHP Portfolio), the rebased valuation as at 30 September 2022 was
£79.3 million.
Each movement between the rebased valuation of £79.3 million and the 30
September 2022 valuation of £84.1 million is considered, in turn, below:
Inflation
The ongoing crisis in Ukraine, in addition to the multiple primary impacts
felt in Ukraine itself, has driven an increase in energy and commodity prices.
This, along with supply chain bottlenecks has continued to place significant
upward pressure on inflation.
Given the quantum of the increase, consensus amongst the forecasters and broad
increases across prices in multiple sectors, portfolio inflation assumptions
have been updated. The methodology adopted in relation to inflation, for both
RPI and CPI, follows the latest available (November 2022) Office for Budget
Responsibility forecast for the 12 months from the 30 September 2022 valuation
date. Thereafter, a long term 3.00% assumption is made in relation to RPI,
dropping to 2.40% in 2031 to reflect the 0.60% reduction as RPI is phased out
and replaced with CPIH.
Our long-term assumption for CPI remains at 2.25% and stays flat thereafter.
We also model a power curve indexation assumption, as wholesale power prices
are not intrinsically linked to consumers' prices, of 3.00% staying flat
thereafter. The updated inflation assumptions have been accretive to the
valuation of the Hydroelectric Portfolio by £4.1 million.
Power Prices
The valuation as at 30 September 2022 applies long-term, forward looking power
prices from a leading third-party consultant. A blend of the last two
quarters' central case forecasts is taken and applied. Where fixed price
arrangements are in place, the financial model reflects this price for the
relevant time and subsequently reverts to the power price forecast using the
methodology described. The updated power price forecast has been accretive to
the valuation of the Hydroelectric Portfolio by £2.7 million.
Discount Rates
The £2.4m reduction in the valuation of the portfolio, attributable to
movement in discount rates, has been principally due to the Hydroelectric
Portfolio. As at 30 September 2022 a discount rate of 5.50% has been applied
to the Hydroelectric Portfolio (31 March 2022: 5.00%), and a discount rate of
6.50% in respect of the optimisation at the Loch Blair scheme, which is
subject to further planning consents. The increase in the discount rate has
been driven by a combination of a review of discount rates on recently
completed comparable transactions and proprietary information derived from
participation in market transactions and the elevated regulatory / policy
risk.
Balance of Portfolio Return
This refers to the balance of valuation movements in the six months ended 30
September 2022 (excluding the above) which has been accretive to valuations of
£0.4 million. The balance of portfolio return is calculated as the expected
return, reflecting the net present value of future cashflows brought forward
to the valuation date at the prevailing discount rate.
The main driver of the portfolio return has been a combination of the
unwinding of the discount rate as it is brought forward to 30 September 2022,
along with updated cost forecasts reflecting agreements entered, in relation
to the Hydroelectric Portfolio during the six-month period.
Investment Commitment
As at 30 September 2022, the Company had outstanding investment commitments,
in relation to the BESS Portfolio which has a total capacity of 110 MW.
BESS asset Battery hour duration Location Size in MW Operational date
1(st) BESS asset One hour North of England 20 MW November 2022
2(nd) BESS asset Two hours Scotland 50 MW H2 FY24
3(rd) BESS asset Two hours Wales 20 MW H2 FY24
4(th) BESS asset One hour South-East England 20 MW H2 FY24 .
Please refer to Note 11 for further information
Fully Invested Portfolio Valuation
The valuation of the portfolio on a fully invested basis can be derived by
adding the valuation at 31 March 2022 and the expected outstanding commitments
are as follows:
£'000
Portfolio valuation as at 30 September 2022 84,140
Future investment commitments at cost 44,941
Portfolio valuation once fully invested 129,081
Key Sensitivities
The following chart illustrates the sensitivity of the Company's NAV per share
to changes in key input assumptions (with labels indicating the impact on the
NAV in pence per share).
For each of the sensitivities, it is assumed that potential changes occur
independently of each other with no effect on any other base case assumption,
and that the number of investments in the portfolio remains static throughout
the modelled life.
Financial Review
The Company applies IFRS 10 and qualifies as an investment entity. IFRS 10
requires that investment entities measure investments, including subsidiaries
that are themselves investment entities, at fair value except for subsidiaries
that provide investment services which are required to be consolidated.
The Company's single, direct subsidiary, TEEC Holdings, is the ultimate
holding company for all the Company's investments.
It is, itself, an investment entity and is therefore measured at fair value.
NAV
The Company's NAV as well as the valuation of the investment portfolio are
calculated semi-annually on 31 March and 30 September each year. Valuations
are provided by the Investment Manager and are subject to review by Mazars
with the other assets and liabilities of the Company calculated by the
Administrator.
The NAV is reviewed and approved by the Board. All variables relating to the
performance of the underlying assets are reviewed and incorporated in the
process of identifying relevant drivers of the discounted cash flow valuation.
NAV Bridge for the six months ended 30 September 2022
The movement in NAV was driven by the following factors:
Investment income of £2.8 million comprising £1.6 million of interest income
to TENT, via TEEC Holdings, from the interest on the CHP Portfolio and the
shareholder loans to the Hydroelectric Portfolio together with a £1.1 million
of dividend received, via TEEC Holdings, from distributions originating from
the Hydroelectric Portfolio. Fund expenses of £0.9 million and dividends paid
in the period of £2.8 million. The revaluation of the portfolio, via TEEC
Holdings, contributed a further £5.0m to NAV. The aggregated impact of the
investment income earned, company expenses, dividends paid and revaluation of
the portfolio led to a 4.3% increase in NAV from £96.1 million to £100.3
million.
Operating Results
Profit before tax was £6.9 million (30 September 2021: £0.4 million), with
earnings per share of 6.88 pence (30 September 2021: 0.004 pence). Revaluation
of the Company's wholly owned subsidiary contributed £5.0m to the Profit
before tax, with the remainder being represented by earnings from
Hydroelectric and CHP Portfolios offset by expenses incurred at Company
level. The earnings from the BESS Portfolio, which predominantly comprised
non utilisation fees on the commitments awaiting deployment, and Energy
Efficient Lighting Portfolio were recognized in their entirety at the
Company's subsidiary, TEEC Holdings Limited, level together with subsidiary
entity level expenses and finance costs. The portfolio earnings and expenses
at subsidiary level are reflected within the £5.0 million revaluation.
Operating Expense and Ongoing Charges
The operating expenses for the six months ended 30 September 2022 amounted to
£0.9 million (30 September 2021: £0.6m). The Company's ongoing charges ratio
("OCR") for the period is 1.89% (30 September 2021: 1.16%). Management fees
are now charged on full NAV. This has been the predominate driver of the
increase in the OCR, versus the corresponding six months ended 30 September
2021, during which the management fee was charged in reference to deployed
funds in accordance with the Investment Management Agreement until deployment
of IPO proceeds exceeded 75% (from December 2021) .
Cash Dividend Cover(1)
The Company measures dividend cover on a look through basis to include the
income and operating expenses of TEEC Holdings, which is its wholly owned
subsidiary. Summarised below are the cash income, cash expenses and finance
costs incurred by the Company and TEEC Holdings in the six months ended 30
September 2022. The cashflow statement for the Company alone does not capture
the total income and expenses of the Group as the interest income, financing
costs and further expenses are received and paid for by TEEC Holdings.
Operating Cash Income Received from Investments
Six months ended
30 September 2022
£'000
CHP Portfolio - Loan Interest 1,570
Hydroelectric Portfolio - Dividend 1,148
Hydroelectric Portfolio - Loan Interest (Holdco) 613
BESS Portfolio - Non utilisation fees and drawn interest (Holdco) 637
Energy Efficient Lighting Portfolio - Lighting as a service (Holdco) 11
(A) Total Investment Cash 3,979
Operating Cash Expenses and Finance Costs
Company expenses - cash paid (915)
Subsidiary expenses - cash paid (Holdco) (169)
RCF Non utilisation fees - cash paid* (Holdco) (203)
(B) Total Expenses and Finance Costs Cash (1,287)
(C) (A - B) Net Cash 2,692
(D) Dividends Paid (2,750)
(E) (C / - D) Cash Dividend Cover 0.98x
(1)Alternative performance measure
*One off RCF arrangement fee cash paid in the six months ended 30 September
2022 of £454k excluded.
The Company's dividends paid in the six months ended 30 September 2022 of
£2.8 million (2.750 pence per share) have been predominately covered by cash
flows generated from the portfolio net of expenses and finance costs at
company and subsidiary level.
The Company remains focused on dividend cover being in excess of 1.0x and note
the Company, via its subsidiary, will benefit from additional operating cash
contribution from further deployment of the £44.9 million commitments into
the BESS Portfolio.
Sustainability and the approach to Environmental, Social and Governance
Triple Point as Investment Manager remains committed to best practice in
responsible investment.
Sustainability Disclosures
A disclosure for the Company in line with the European Union's Sustainable
Financial Disclosure Regulation ("SFDR") requirements for Article 6 and
Article 8, is publicly available on our website
https://www.tpenergytransition.com/. The Company keeps under review the
Articles against which it discloses.
TENT publishes an annual Task Force on Climate-related Financial Disclosure
(TCFD) report. The next disclosure will appear within the Company's annual
report for the year ending 31 March 2023. Although not presently required to
publish these disclosures, we believe it is important to provide transparency
on our sustainability approach wherever possible.
TENT's approach and alignment to sustainable practices
The Investment Manager continues to review and evolve TENT's sustainability
approach, reflecting the Investment Manager's belief that the process
contributes value to the strategy and presents an opportunity to
differentiate.
As the Company moves forward with its new name, there is a renewed focus on
demonstrating alignment and success in contributing to the energy transition
system. TENT will explicitly track asset selection against the UK Climate
Change Committee ("CCC") 6th carbon budget balanced pathway.
Asset type* TENT universe alignment UK CCC balanced pathway alignment
CHP Portfolio Onsite energy generation & efficient consumption Use of surplus electricity
Hydroelectric Portfolio Distributed energy generation Low carbon & decentralised
BESS Portfolio Energy storage & distribution A more flexible electricity system
Lighting solutions Onsite energy generation & efficient consumption Decarbonise industry
* Based on current portfolio asset exposure
The Company's contribution to this energy transition view will be demonstrated
using lifetime tCO(2)e avoided (to be reported in the annual report).
Transition contribution will include embodied (for assets constructed under
the Investment Manager's exposure) and Scope 3 carbon and this data will be
estimated where it cannot yet be acquired and accounted for according to
current Partnership for Carbon Accounting Financials ("PCAF") standards, or
equivalent best practice if appropriate. On-going consideration of technology
phase-out timelines will also be reflected in decision making and deal
structure, to ensure no more than marginal exposure to technologies after any
known phase out dates. As the Investment Manager identifies opportunities in
Europe, the team will apply equivalent appropriate carbon budgets and phase
out pathways.
Assessment of each investment for operational quality through additional ESG
analysis and asset optimisation
Alongside ascertaining the energy transition alignment and scale for each
investment, the wider operational ESG risks and opportunities associated with
each asset are assessed using a combination of in-house expertise and
materiality-based sustainability frameworks. Where weaker behaviours may be
identified, these results will feed into asset optimisation activity, where
the Investment Manager will look to use its investor influence to improve
behaviours and outcomes (for example improving the avoided carbon, improving
health & safety approaches and outcomes, improving community relations,
identifying opportunities to benefit a just transition). Strong portfolio
asset management is also expected to further increase the quality of the data
available to evidence the outcomes of the assets in relation to the energy
efficiency and transition theme and engagement work. Outcomes will continue to
be reported as tCO2e avoided and an aggregated lifetime tCO(2)e avoided, in
addition to asset specific outcomes including annual reporting of asset
alignment to the Sustainable Development Goals.
Climate analysis
Our ESG analysis also includes climate analysis. Possible impacts of climate
change on the investments are considered through scenario analysis in order to
quantify the possible physical and financial impacts on an asset and establish
a sensible path of mitigation.
The Investment Manager continues to develop and improve its approach to
climate analysis, with a current focus on the development of transitional and
physical risk registers and application of scenario analysis using dedicated
tools. The annual TCFD report will contain details of the refined approach.
Sustainability transparency commitment
In summary, the Investment Manager remains committed to a strong approach to
information sharing and oversight for sustainability across Triple Point and
for TENT, as outlined in the disclosures committed to and the processes
described. The Investment Manager will continue to review alignment to
existing regulation and emergence of new regulation and endeavours to respond
in a timely and appropriate way to all changes.
The Company will also share asset specific performance data which demonstrates
alignment to the carbon transition pathway and contribution the Investment
Manager has had in improving sustainability performance.
All related data and reporting will be provided annually.
Market Review
European energy markets have been going through a very volatile period. The
ongoing conflict in Ukraine and the knock-on impact to the restriction of the
supply of gas from Russia to Europe have pushed gas prices to unprecedented
levels. This has further impacted inflation, which central banks are fighting
through raising interest rates. Financial markets have been in turmoil.
The UK Government announced in October 2022 a new Energy Prices Bill to help
households, businesses and others with energy costs. The Bill puts into law
the support measures that have been announced over the last few months,
including the Energy Price Guarantee for domestic consumers and the Energy
Bill Relief Scheme for businesses and non-domestic properties. The Bill
includes powers to stop volatile and high gas prices setting the cost of
electricity produced by much cheaper renewables. A new Cost-Plus-Revenue Limit
in England and Wales, if enacted would ensure consumers are not paying
significantly more for electricity generated from renewables and nuclear and
it will reduce the impact of the unprecedented wholesale prices on consumers.
However, on 17 November 2022 the UK Government elected to not avail itself of
the provisions of the Energy Prices Bill but instead announced an Electricity
Generator Levy on nuclear, renewables and biomass generation . The levy will
apply to what the government believes to be exceptional generation receipts
over £75 per MWh, albeit mitigated by an allowance, from 2023-2028. Such
exceptional income would be taxed at a rate of 45%. The Company has
considered the announcement and considers this not to impact its tax
liabilities based on its projections, and it notes that the levy only applies
to groups generating more than 100 GWh, which is in excess of the
Hydroelectric Portfolio annual generation.
The UK Government is currently digesting the feedback from the consultation
that took place between July and October 2022 on the Review of Electricity
Market Arrangements to identify reforms needed to transition to a
decarbonised, cost effective and secure electricity system. There are a range
of options being considered to deliver an enduring electricity market
framework that will work for businesses, industry and households. A move
toward different forms of geographic pricing - either regional or nodal - has
been put forward by the Electricity System Operator ("ESO"), National Grid,
and others as a way to accelerate progress towards Net Zero. We consider that
this would create both winners and losers and highlights the importance of a
diversified portfolio of technologies spread across different parts of the UK.
Other potential outcomes could be changes to Short Run Marginal Cost pricing,
where gas generators no longer set the price for the whole generation fleet.
It is expected that many of the complex reforms envisaged by REMA will take
some years to progress and fully implement.
Finally, we are starting to see energy security concerns play a meaningful
role in energy procurement, with a rise in our pipeline segment that focuses
on on-site solutions, such as rooftop solar and battery storage located behind
the meter. Given that some scenario forecasts by the ESO envisage temporary
rota load shedding (blackouts) in January 2023, businesses are seeking to
ensure they are less reliant on energy from the grid. This is in addition to
the more obvious benefits of significantly cheaper and greener energy from
such projects.
We remain confident in the long-term attractiveness of the energy transition
sector, with Net Zero transition commitments enshrined in law in the UK, and
believe TENT is well placed to take advantage of the opportunities that those
commitments necessitate.
Outlook
The positive outlook for the Company is driven by three primary factors:
· Energy prices are forecast, by independent market forecasters, to
remain at elevated levels over the medium term. For the existing portfolio,
this offers the prospect of higher than budgeted returns. In respect of the
Company's pipeline this offers particular opportunities in respect of the
onsite generation and energy efficiency segment as businesses and consumers
look to reduce their energy consumption and bills.
· Inflation is also expected to remain high over the next 12-24 months.
In the event that inflation turns out to be higher than forecast in the
Company's projections, this would be accretive to NAV given the component of
RPI linked revenues in the Company's portfolio.
· The diversified business model of the Company leaves it well placed
in the face of an increasingly uncertain regulatory environment. This has been
evidenced by the recently announced Electricity Generation Levy which, based
on information published to date, will not impact the Company. We also believe
the Company is well placed in the face of further regulatory changes, such as
those that might arise from REMA. The broader government focus on energy
security and resilience, is also expected to benefit the Company's pipeline.
Jonathan Hick
TENT Fund Manager
Triple Point Investment Management LLP
1 December 2022
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties for the Company continue to be those
outlined on pages 67 -73 of the Annual Report for the year ended 31 March 2022
and the Board expects those to remain valid for the remainder of the year.
Below provides an update on any changes to the risks in the period.
Ability to raise additional finance (Net impact: Moderate to High, Likelihood:
Moderate)
The impact and likelihood scores for this risk have increased in the period
for two key reasons. The Company's share price is currently trading below the
Net Asset Value, which impacts the Company's ability to issue shares, and
potentially to fully implement the strategy. In response to the current share
price, the Company continues to issue positive market announcements, to
demonstrate the continued performance of the underlying assets and the
dividend cover. Additionally, a strong pipeline of investment opportunities
has been built, ready for when future capital becomes available.
The Company's RCF matures in March 2024, which presents a refinancing risk.
The Company has been in discussions with the lender in relation to the
extension of the facility. These discussions are expected to successfully
conclude prior to 31 March 2023, with the lender having expressed appetite to
extend. Given the rising interest rate environment, it is anticipated that the
interest rate on the extension would increase when compared to the current
borrowing rate. Based on current benchmark rates as at the date of this
report, this is not forecast to alter the Company's ability to pay a covered
dividend.
Weather changes impacting renewable energy production levels (Net Impact:
Moderate, Likelihood: Moderate to High)
The increased seasonality of rainfall and river flows in the Scottish
Highlands has the potential to improve or worsen the production levels in the
Hydroelectric Portfolio. The Investment Manager has a programme of
optimisation projects to smooth the impact of intermittent rainfall e.g.
through the use of log barriers in key locations to expand the pooling storage
of water reserves.
Since the last Annual Report, the following risks have been removed from the
Principal Risks:
Geopolitical changes causing economic disruption
At the last reporting date, the Company considered the potential disruption to
supply chains and energy markets from the invasion of Ukraine to be a notable
risk. As this development has unfolded, the impact on the Company's portfolio
has been limited.
Significant abortive costs in terms of financial cost and time
The Company does not consider abort costs to be a material risk given the
nature of the assets in its pipeline and the exclusivity arrangements over
pipeline that the Company benefits from.
Emerging risks
The emerging risks identified on page 73 of the Annual Report for the year
ended 31 March 2022, continue to be closely monitored and below provides an
update on how some of the emerging risks have developed in the period.
Change to energy market regulation and policies
On the 18 July 2022 the Government launched the Review of Electricity Market
Arrangements ("REMA") consultation, which closed in October of this year. REMA
could represent a material change in the way that energy prices are set,
including de-coupling gas prices from renewables prices, reforming the
capacity market and considering regional or nodal pricing. The Company
believes its diversified portfolio of assets - with different technologies in
different energy market segments, spread across different regions of the UK -
leave it well positioned to withstand regulatory changes. It will continue to
monitor REMA as it develops, which is expected to be over a number of years,
noting the potential impacts could increase or decrease revenues for different
asset classes.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge this condensed set
of financial statements which have been prepared in accordance with IAS 34 as
adopted by the UK, give a true and fair view of the assets, labilities,
financial position and profit or loss of the Company. The operating and
financial review includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8 of the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority namely: an indication of
important events that have occurred during the period and their impact on the
condensed financial statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and material
related party transactions in the period as disclosed in Note 11.
The Directors, all of whom are independent and non-executive, are:
· Dr John Roberts (Chair)
· Rosemary Boot (Senior Independent Director)
· Sonia McCorquodale
· Dr Anthony White
Shareholder information is as disclosed on the Triple Point Energy Transition
plc website.
Approval
This Directors' responsibilities statement was approved by the Board of
Directors and signed on its behalf by:
John Roberts
Chair
1 December 2022
INDEPENDENT REVIEW REPORT TO TRIPLE POINT ENERGY TRANSITION PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2022 which comprises the Interim Condensed Statement of
Comprehensive Income, Interim Condensed Statement of Financial Position,
Interim Condensed Statement of Changes in Equity, Interim Condensed Statement
of Cash Flows and notes to Interim Financial Statements.
We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of
financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and has been
approved by the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the Company will be
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this interim financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, ''Interim Financial Reporting''.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'', issued by the Financial
Reporting Council for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2022 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting its responsibilities in respect of half-yearly
financial reporting in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London
Date: 1 December 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Interim Condensed Statement of Comprehensive Income
For the six months ended 30 September 2022 (unaudited)
For the six months ended For the six months ended
30 September 2022 30 September 2021
Unaudited Unaudited
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income 3 2,793 - 2,793 1,019 - 1,019
Profit / (loss) arising on the revaluation of investments at the 9 - 5,016 5,016 - (83) (83)
period end
Investment return 2,793 5,016 7,809 1,019 (83) 936
Investment management fees 4 326 109 435 90 30 120
Other expenses 4 482 10 492 418 16 434
808 119 927 508 46 554
Profit/(loss) before taxation 1,985 4,897 6,882 511 (129) 382
Taxation 5 - - - - - -
Profit/(loss) after taxation 1,985 4,897 6,882 511 (129) 382
Other comprehensive income - -
- - - -
Total comprehensive Income / (loss) 1,985 4,897 6,882 511 (129) 382
Basic & diluted earnings / (loss) per share (pence) 6 1.99p 4.90p 6.88p 0.005p (0.001p) 0.004p
The total column of this statement is the Income Statement of the Company
prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the UK. The supplementary revenue return and capital
columns have been prepared in accordance with the Association of Investment
Companies Statement of Recommended Practice (AIC SORP).
Interim Condensed Statement of Financial Position
As at 30 September 2022 (unaudited)
As at 30 September 2022 As at 31 March 2022
Unaudited Audited
Note £'000 £'000
Non-current assets
Investments at fair value through profit or loss 9 84,872 78,952
Current assets
Trade and other receivables 466 453
Cash and cash equivalents 15,348 17,144
15,814 17,597
Total assets 100,686 96,549
Current liabilities
Trade and other payables (417)
(412)
(417) (412)
Net assets 100,269 96,137
Equity attributable to equity holders
Share capital 10 1,000 1,000
Share premium 13 13
Special distributable reserve 90,190 91,444
Capital reserve 8,216 3,319
Revenue reserve 850 361
Total equity 100,269 96,137
Shareholders' funds
Net asset value per Ordinary Share 8 100.26p 96.12p
The statements were approved by the Directors and authorised for
issue on 1 December 2022 and are signed on behalf of the Board by:
Dr John Roberts
Chair
Company registration number: 12693305
Interim Condensed Statement of Changes in Equity
For the six months ended 30 September 2022 (unaudited)
Issued Capital Share Premium Special Distributable Reserve Capital Reserve Revenue Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2022 1,000 13 91,444 3,319 361 96,137
Distributions to / Contributions from owners
Issue of share capital -
- - - - -
Dividends paid (1,254) (1,496) (2,750)
Sub-total - - (1,254) - (1,496) (2,750)
Total comprehensive income for the period - - - 4,897 1,985 6,882
As at 30 September 2022 1,000 13 90,190 8,216 850 100,269
For the six month ended 30 September 2021 (unaudited)
Issued Capital Share Premium Special Distributable Reserve Capital Reserve Revenue Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2021 1,000 - 97,009 (185) (336) 97,488
Distributions to / Contributions from owners
Issue of share capital* - 1 - - - 1
Dividends paid - - (3,375) - - (3,375)
Sub-total - 1 (3,375) - - (3,374)
Total comprehensive income / (loss) for the period - - - (129) 511 382
As at 30 September 2021 1,000 1 93,634 (314) 175 94,496
* - 675 Ordinary 1 pence shares issued for £658
The Company's distributable reserves consist of the Special distributable
reserve, Capital reserve attributable to realised gains and Revenue reserve.
There have been no realised gains or losses at the reporting date.
Interim Condensed Statement of Cash Flows
For the six months ended 30 September 2022
For the six months ended 30 September 2022 (Unaudited) For the six months ended 30 September 2021 (Unaudited)
Note £'000 £'000
Cash flows from operating activities
Profit before taxation 6,882 382
(Gain) / Loss arising on the revaluation of investments at the period end 9 (5,016) 83
Cash flow Generated by operations 1,866 465
Interest income (1,644) (1,019)
Interest received 1,640 605
Dividend income (1,148) -
Dividend received 1,148
(Increase)/decrease in receivables (9) 3
Increase in payables 5 67
Net cash flows from / (used in) operating activities 1,858 121
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss (1,469) (8,232)
9
Loan Principal repaid 565 637
Net cash flows (used in) investing activities (904) (7,595)
Cash flows from financing activities
Issue of shares - 1
Costs of Share Issue - -
Dividends paid (2,750) (3,375)
Net cash flows from financing activities (2,750) (3,374)
Net (decrease) in cash and cash equivalents (1,796) (10,848)
Reconciliation of net cash flow to movements in cash and cash equivalents
Cash and cash equivalents at beginning of period 17,144 76,553
Net (decrease) in cash and cash equivalents (1,796) (10,848)
Cash and cash equivalents at end of the period 15,348 65,705
Notes to the Interim Financial Statements
For the six months ended 30 September 2022
1. General Information
The Company is registered in England and Wales under
number 12693305 pursuant to the Companies Act 2006. The address of its
registered office, which is also its principal place of business, is 1 King
William Street, London EC4N 7AF.
The Company's Ordinary Shares were first admitted to trading on
the Specialist Fund Segment of the Main Market of the London Stock Exchange
under the ticker TEEC on 19 October 2020. On 30 August 2022 following
approval by shareholders at the AGM, held on the 25 August 2022, Triple Point
Energy Efficiency Infrastructure Company plc changed its name to Triple Point
Energy Transition plc, trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange under the ticker TENT. On 28 October 2022
the Ordinary Shares of the Company were admitted to the premium listing
segment of the Official List of the Financial Conduct Authority and were
admitted to the Premium Segment of the Main Market of the London Stock
Exchange.
The Company's Objective is to generate an attractive total return for
investors comprising stable dividend income and capital preservation, with the
opportunity for capital growth through acquiring and realising value from of a
diversified portfolio of energy transition investments in the United Kingdom
and Europe.
The Company currently makes its investments through its sole holding
company TEEC Holdings. The Company controls the investment policy of TEEC
Holdings to ensure it acts in a manner consistent with the investment policy
of the Company.
The Company has appointed Triple Point Investment Management LLP as its
Investment Manager pursuant to the Investment Management Agreement
dated 25 August 2020. The Investment Manager is registered in England and
Wales under number OC321250 pursuant to the Companies Act 2006. The
Investment Manager is regulated by the FCA, number 456597.
2. Basis of Preparation
The interim financial statements included in this report have been prepared in
accordance with IAS 34 Interim Financial Reporting. The interim financial
statements have been prepared under historical cost convention, as modified by
the revaluation of financial assets at fair value through profit or loss.
The interim financial statements have also been prepared as far as relevant
and applicable to the Company in accordance with the Statement of Recommended
Practice: Financial Statements of Investment Trust Companies and Venture
Capital Trusts ("SORP") issued in April 2021 by the Association of Investment
Companies ("AIC").
The interim financial statements are presented in sterling, which is the
Company's functional currency and rounded to the nearest thousand, unless
otherwise stated. The accounting policies, significant judgements, key
assumptions are consistent with those used in the latest audited financial
statements to 31 March 2022 and should be read in conjunction with the
Company's annual audited financial statements for the year ended 31 March
2022.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2023 or 2022 but is derived
from those accounts. Statutory accounts for 2022 and 2021 have been delivered
to the Registrar of Companies. The auditors have reported on those accounts:
their reports were unqualified, did not draw attention to any matters by way
of emphasis and did not contain statements under s498(2
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Basis of Consolidation
The objective of the Company through its subsidiary TEEC Holdings Limited is
to invest, via individual corporate entities for equity investments, or
through advancing proceeds to corporate entities for debt investments, in
Energy Transition Assets. TEEC Holdings typically will issue equity and will
borrow to finance its investments.
The Directors have concluded that in accordance with IFRS 10, the Company
meets the definition of an investment entity having evaluated the criteria
that needs to be satisfied. Under IFRS 10, investment entities are required to
hold subsidiaries at fair value through profit or loss rather than consolidate
them on a line-by-line basis, meaning TEEC Holdings' cash and working capital
balances are included in the fair value of the investment rather than in the
Company's assets and liabilities. TEEC Holdings has one investor which is the
Company. However, in substance, TEEC Holdings is investing the funds of the
investors of the Company on its behalf and is effectively performing
investment management services on behalf of many unrelated ultimate
beneficiary investors.
Going Concern
The Directors, in their consideration of going concern, have reviewed
comprehensive cash flow forecasts prepared by the Company's Investment Manager
and believe that it is appropriate to prepare the financial statements of the
Company on a going concern basis.
In arriving at their conclusion that the Company has adequate financial
resources, the Directors were mindful that the Group had outstanding
commitments in relation to the BESS Portfolio of £44.9 million, unrestricted
cash of £15.6 million as at 30 September 2022 and an undrawn revolving credit
facility ("RCF") (available for investment in new or existing projects and
working capital) of £40.0 million through TEEC Holdings. The heightened
inflationary environment, is a tailwind for the Company by virtue of the
inflation linked revenue from the Hydroelectric Portfolio, which in absolute
terms is greater than the inflation linked costs incurred by the Company.
The Company's net assets at 30 September 2022 were £100.3 million and total
expenses for the period were £0.9 million, which when annualised represented
approximately 1.89% of average net assets during the period.
At the date of approval of this document, based on the aggregate of
investments and cash held, the Company has substantial operating expenses
cover. The Directors are satisfied the Company has sufficient resources to
continue to operate for the foreseeable future, a period of not less than 12
months from the date of this report. Accordingly, they continue to adopt the
going concern basis in preparing these financial statements.
Segmental reporting
The Chief Operating Decision Maker (the "CODM") being the Board of Directors,
is of the opinion that the Company is engaged in a single segment of business,
being investment in Energy Transition Assets.
The Company has no single major customer. The internal financial information
used by the CODM on a quarterly basis to allocate resources, across
performance and manage the Company presents the business as a single segment
comprising the portfolio of investments in Energy Transition Assets.
Seasonal and cyclical variations
The Company's results do not vary significantly during reporting periods.
3. Investment Income
For the six months ended 30 For the six months ended 30
September 2022 (Unaudited) September 2021 (Unaudited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest on cash deposits 7 - 7 4 - 4
Interest income from investments 1,638 - 1,638 1,015 - 1,015
Dividend income from investments 1,148 - 1,148 - - -
2,793 - 2,793 1,019 - 1,019
4. Operating Expenses
For the six months ended 30 For the six months ended 30
September 2022 (Unaudited) September 2021 (Unaudited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment Management fees 326 109 435 90 30 120
Directors' fees 100 - 100 100 - 100
Company's audit fees:
- statutory audit of the group financial statements 38 - 38 38 - 38
- Assurance-related services pursuant to legislation 35 - 35 25 - 25
Other operating expenses 297 10 307 225 10 235
Irrecoverable VAT on Administration fees 12 - 12 30 6 36
808 119 927 508 46 554
The Directors' fees exclude employer's national insurance contribution and
travel expenses which are included as appropriate in other operating expenses.
There were no other emoluments.
5. Taxation
The tax for the period shown in the statement of Comprehensive Income is as
follows.
For the six months ended 30
September 2022 (Unaudited) For the six months ended 30
September 2021 (Unaudited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Profit / (Loss) before taxation 1,985 4,897 6,882 511 (129) 382
Corporation tax at 19% 377 931 1,308 97 (25) 72
Effect of:
Tax relief for dividends designated as interest distributions (312) - (312) (97) - (97)
Dividends not taxable (218) - (218) - - -
Capital losses / (gains) not deductible - (953) (953) - 16 16
Disallowed expenditure - - -
Surrendering of Tax losses to unconsolidated subsidiaries 153 22 175 - 9 9
UK Corporation Tax - - - - - -
6. Earnings Per Share
For the six months ended 30 For the six months ended 30 September 2021 (unaudited)
September 2022 (Unaudited)
Revenue Capital Total Revenue Capital Total
Profit / (Loss) attributable to the equity holders of the Company (£'000) 1,985 4,897 6,882 511 (129) 382
Weighted average number of Ordinary Shares in issue ('000) 100,014 100,014 100,014 100,000 100,000 100,000
Profit / (Loss) per Ordinary Share (pence) - basic and diluted 1.99p 4.90p 6.88p 0.005p (0.001p) 0.004p
There is no difference between the weighted average Ordinary or diluted number
of Shares.
7. Dividends
Interim dividends paid during the Dividend per share Total dividend
period ended 30 September 2022 Pence £'000
With respect to the quarter ended 1.375 1,375
31 March 2022 - paid 8 July 2022
With respect to the quarter ended 1.375 1,375
30 June 2022 - paid 30 September 2022
2.750 2,750
Interim dividends declared after Dividend per share Total dividend
30 September 2022 and not accrued in the period Pence £'000
With respect to the quarter ended 1.375 1,375
30 September 2022
1.375 1,375
Interim dividends paid during the Dividend per share Total dividend
period ended 30 September 2021 Pence £'000
With respect to the quarter ended 2.000 2,000
31 March 2021
2.000 2,000
On 2 December 2022, the Board declared an interim dividend of 1.375 pence per
share with respect to the period ended 30 September 2022. The dividend is
expected to be paid on or around 6 January 2023 to shareholders on the
register on 16 December 2022. The ex-dividend date is 15 December 2022.
8. Net assets per Ordinary share
The basic total assets per ordinary share is based on the total net assets
attributable to equity shareholders as at 30 September 2022 of £100,269,000
(31 March 2022: £96,137,000) and ordinary shares of 100,014,079 in issue at
30 September 2022 (31 March 2022: 100,014,079).
There is no dilution effect and therefore no difference between the diluted
net assets per ordinary share and the basic total net assets per ordinary
share
9. Investments at Fair Value through Profit or Loss
The Company designates its interest in its wholly owned direct subsidiary as
an investment at fair value through profit or loss.
Summary of the Company's valuation is below:
30 September 2022 31 March 2022
(Unaudited) (Audited)
£'000 £'000
Brought forward investment at fair value 78,952 20,883
through profit or loss
Loan advanced to TEEC Holdings Limited - 32,704
Shareholding in TEEC Holdings Limited 1,469 23,315
Capitalised interest - 519
Loan principal repaid (565) (2,103)
Movement in fair value of investments 5,016 3,634
Closing investment at fair value through 84,872 78,952
profit or loss
Reconciliation of movement in fair value:
30 September 2022 31 March 2022
(Unaudited) (Audited)
£'000 £'000
Fair value at the start of the period 78,952 20,883
Loan advanced to TEEC Holdings Limited - 32,704
Shareholding in TEEC Holdings Limited 1,469 23,315
Capitalised interest - 519
Loan principal repaid (565) -
Fair value of portfolio 79,856 75,318
Cash held in intermediate holding company 249 293
Fair value of other net assets in intermediate holding companies 4,767 3,341
Investment at fair value 84,872 78,952
The Company owns five shares in TEEC Holdings Limited, representing 100% of
issued share capital, allotted for a consideration of £24,784,000. The fair
value of the Company's equity in TEEC Holdings on 30 September 2022 is
£33,322,000 (31 March 2022: £26,836,000) and the fair value of the Company's
debt interest in TEEC Holdings at 30 September 2022 is £51,551,000 (31 March
2022: £52,116,000).
Capitalised interest represents interest recognised in the income statement
but not paid. This is instead added to the loan balance on which interest for
future periods is computed. The loan from the Company to TEEC Holdings, which
enabled TEEC Holdings to complete investments into Harvest, Glasshouse and
Spark Steam, carry commensurate terms and repayment profiles. All payments
from the borrower and capitalised interest are in accordance and in line with
the contractual repayments with the respective underlying facility agreements
with Harvest, Glasshouse and Spark Steam as agreed at inception.
Reconciliation of Portfolio Valuation:
30 September 2022 31 March 2022
(Unaudited) (Audited)
£'000 £'000
Portfolio Valuation 84,140 78,787
Intermediate holding company cash 249 293
Intermediate holding company debt* 340 454
Intermediate holding company net working capital 143 (582)
Fair Value of Company's investments 84,872 78,952
as end of period
*Debt arrangement costs of £340,000 (31 March 2022: 454,000) which are
capitalised and expensed to profit or loss under amortised cost. At 30
September 2022 nil debt was drawn (31 March 2022: nil).
Fair Value measurements
The Company accounts for its interest in its wholly owned direct subsidiary,
TEEC Holdings, as an investment at fair value through profit or loss.
IFRS 13 requires disclosure of fair value measurement by level. The level of
fair value hierarchy within the financial assets or financial liabilities is
determined on the basis of the lowest level input that is significant to the
fair value measurement. Financial assets and financial liabilities are
classified in their entirety into only one of the following 3 levels:
· level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
· level 2 - inputs other than quoted prices included within Level 1
that are observable for the assets or liabilities, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
· level 3 - inputs for assets or liabilities that are not based on
observable market data (unobservable inputs).
The determination of what constitutes 'observable' requires significant
judgement by the Company. Observable data is considered to be market data that
is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
The financial instruments held at fair value are the instruments held by the
Group in the SPVs, which are fair valued at each reporting date. The
investments have been classified within level 3 as the investments are not
traded and contain certain unobservable inputs. The Company's investments in
TEEC Holdings are also considered to be level 3 assets.
As the fair value of the Company's equity and loan investments in TEEC
Holdings is ultimately determined by the underlying fair values of the equity
and loan investments, made by TEEC Holdings, the Company's sensitivity
analysis of reasonably possible alternative input assumptions is the same as
for those investments.
There have been no transfers between levels during the period.
Valuations are derived using a discounted cashflow methodology in line with
IPEV Valuation Guidelines and consider, inter alia, the following:
i. due diligence findings where relevant;
ii. the terms of any material contracts including
PPAs;
iii. asset performance
iv. power price forecasts from leading consultants; and
v. the economic, taxation or regulatory environment
The DCF valuation of the Group's investments represents the largest component
of GAV and the key sensitivities are considered to be the discount rate used
in the DCF valuation and assumptions relating to inflation, energy yield and
power prices.
The shareholder loan and equity investments, in TEEC Holdings, are valued as a
single asset class at fair value in accordance with IFRS 13 Fair Value
Measurement.
Sensitivity
Sensitivity analysis is produced to show the impact of changes in key
assumptions adopted to arrive at the valuation. For each of the sensitivities,
it is assumed that potential changes occur independently of each other with no
effect on any other base case assumption, and that the number of investments
in the portfolio remains static throughout the modelled life.
The analysis below shows the sensitivity of the portfolio value (and its
impact on NAV) to changes in key assumptions as follows:
Discount rate
The weighted average valuation discount rate applied to calculate the
portfolio valuation is 6.42% (31 March 22: 6.11%).
An increase or decrease in this rate by 0.5% has the following effect on
valuation
Discount Rate NAV per share impact -0.5% change Total portfolio value +0.5% change NAV per share impact
Pence £'000s £'000s £'000s Pence
Valuation - September 2022 3.34 3,343 84,872 (3,068) (3.07)
Energy yield
The table below shows the sensitivity of the Hydroelectric Portfolio valuation
to a sustained decrease or increase of energy generation by minus or plus 5%
on the valuation, with all other variables held constant. The fair value of
the Hydroelectric Portfolio is assessed on a "P50" level of electricity
generation, representing the expected level of generation over the long term.
A change in the forecast energy yield assumptions by plus or minus 5% has the
following effect.
Energy Yield NAV per share impact -5% Total portfolio value +5% NAV per share impact
change change
Pence £'000s £'000s £'000s Pence
Valuation - September 2022 (3.41) (3,408) 84,872 3,407 3.41
Power Prices
The valuation as at 30 September 2022 applies long-term, forward looking power
prices from a leading third-party consultant. A blend of the last two
quarters' central case forecasts is taken and
applied
Where fixed price arrangements are in place, the financial model reflects
this price for the relevant time and subsequently reverts to the power price
forecast using the methodology described.
The sensitivity considers a flat 10% movement in power prices for all years,
i.e. the effect of adjusting the forecast electricity price assumptions
applicable to the Hydroelectric Portfolio down by 10% and up by 10% from the
base case assumptions for each year throughout the operating life of the
Hydroelectric Portfolio.
A change in the forecast electricity price assumptions by plus or minus 10%
has the following effect.
Power Prices NAV per share impact -10% change Total portfolio value +10% change NAV per share impact
Pence £'000s £'000s £'000s Pence
Valuation - September 2022 (3.14) (3,136) 84,872 3,156 3.16
Inflation
The Hydroelectric Portfolio's income streams are principally subsidy based,
which is amended each year with inflation and power prices, which the
sensitivity assumes will move with inflation. Operating expenses relating to
the Hydroelectric Portfolio, typically move with inflation, but debt payments
on the shareholder loans are fixed. This results in the portfolio returns and
valuations being positively correlated to inflation. The average long-term
inflation assumption across the portfolio is 3.00% for RPI from 1 October 2023
to 2030 and 2.40% thereafter, 2.25% for CPI from 1 October 2023. The Company
also models a Power Curve Indexation set at 3.00% from 2023, as wholesale
power prices are not intrinsically linked to consumer prices, unlike costs of
sales and labour.
The sensitivity illustrates the effect of a 0.5% decrease and a 0.5% increase
from the assumed annual inflation rates in the financial model throughout the
operating life of the portfolio.
Inflation NAV per share impact -0.5% change Total portfolio value +0.5% change NAV per share impact
Pence £'000s £'000s £'000s Pence
Valuation - September 2022 (2.51) (2,515) 84,872 2,747 2.75
10. Share Capital
For the six months ended 30 September 2022 (Unaudited)
Allotted, issued and fully paid: Number of shares Nominal value of shares (£)
Ordinary shares of 1 pence each
Opening balance at 1 April 2022 100,014,079 1,000,141
Ordinary Shares issued - -
Closing balance of Ordinary Shares at 100,014,079 1,000,141
30 September 2022
For the six months ended 30 September 2021 (Unaudited)
Allotted, issued and fully paid: Number of shares Nominal value of shares (£)
Ordinary shares of 1 pence each
Opening balance at 1 April 2021 100,000,000 1,000,000
Ordinary Shares issued (see note 11) 675 6.75
Closing balance of Ordinary Shares at 100,000,675 1,000,006.75
30 September 2021
Shareholders are entitled to all dividends paid by the Company and, on a
winding up, provided the Company has satisfied all its liabilities, the
shareholders are entitled to all of the residual assets of the Company.
11. Related Party Transactions
Directors Fees
The amounts incurred in respect of Directors fees during the period to 30
September 2022 was £100,000 (30 September 2021: £100,000). These amounts
have been fully paid at 30 September 2022. The amounts paid to individual
directors during the period were as follows:
For the six months ended 30 September 2022 For the six months ended 30 September 2021
Dr John Roberts (Chair) £37,500 £37,500
Rosemary Boot £22,500 £22,500
Sonia McCorquodale £20,000 £20,000
Dr Anthony White £20,000 £20,000
Directors Expenses
The expenses claimed by the Directors during the period to 30 September 2022
was £190 (30 September 2021: nil). These amounts were fully paid at 30
September 2022. The amounts paid to individual directors during the period
were as follows:
For the six months ended For the six months ended 30 September 2021
30 September 2022
Dr John Roberts (Chair) £28 -
Rosemary Boot £61 -
Sonia McCorquodale £75 -
Dr Anthony White £26 -
Directors' interests
Details of the direct and indirect interest of the Directors and their close
families in the ordinary share of one pence each in the Company at 30
September 2022 were as follows:
Number of Shares % of Issued share Capital
Dr John Roberts (Chair) 40,000 0.04%
Rosemary Boot 40,000 0.04%
Sonia McCorquodale 10,000 0.01%
Dr Anthony White 40,000 0.04%
The Company and Subsidiaries
During the period interest totalling £1,637,644 was earned on the
Company's long-term interest-bearing loan between the Company and its
subsidiary (30 September 2021: £1,015,370). At the period end, £343,481 was
outstanding (31 March 2022: £344,105).
The loans to TEEC Holdings are unsecured; the underlying loan from TEEC
Holdings to Harvest Generation Limited, Glasshouse Generation Services Limited
and Spark Steam Limited are secured against the assets of the companies by a
fixed and floating charge.
On 13 April 2022, the Company subscribed for 1 ordinary share for a total
consideration of £1,000,000 in TEEC Holdings Limited. The share subscription
was used to fund payment of the subsidiary's arrangement fees in connection
with the revolving credit facility and to partially fund the first drawdowns
into the LED lighting portfolio. A further share subscription of 1 ordinary
share, was executed on 26 August 2022, for a total consideration of £469,281
in TEEC Holdings. The subsidiary used the proceeds to fund the remaining
deployment into the Efficient Energy Lighting Portfolio.
On 22 September 2022, TEEC Holdings paid a £1,148,426 dividend to the
Company. The dividend represented a commensurate dividend received by TEEC
Holdings from the Hydroelectric portfolio in the same period.
The AIFM and Investment Manager
The Company and Triple Point Investment Management LLP have entered into the
Investment Management Agreement pursuant to which the Investment Manager has
been given responsibility, subject to the overall supervision of the Board,
for active discretionary investment management of the Company's Portfolio in
accordance with the Company's Investment Objective and Policy.
As the entity appointed to be responsible for risk management and portfolio
management, the Investment Manager is the Company's AIFM. The Investment
Manager has full discretion under the Investment Management Agreement to make
investments in accordance with the Company's Investment Policy from time to
time.
This discretion is, however, subject to: (i) the Board's ability to give
instructions to the Investment Manager from time to time; and (ii) the
requirement of the Board to approve certain investments where the Investment
Manager has a conflict of interest in accordance with the terms of the
Investment Management Agreement.
Under the terms of the Investment Management Agreement, the Investment Manager
will be entitled to a fee calculated at the rate of:
· 0.9 per cent, per annum of the adjusted NAV in respect of the Net
Asset Value of up to, and including, £650 million; and
· 0.8 per cent, per annum of the adjusted NAV in respect of the Net
Asset Value in excess of £650 million.
The management fee is calculated and accrues quarterly and is invoiced
quarterly in arrears. During the six months ended 30 September 2022,
management fees of £434,840 were incurred (30 September 2021: £119,496) of
which £219,122 (30 September 2021: £65,849) was payable at the period
end.
No annual management fee shall accrue or be changed on any undeployed cash
funds until such time as 75% or more of the IPO proceeds have been deployed.
For these purposes, "deployed" shall mean invested in the acquisition or
development of Energy Transition Assets. The 75% threshold was met in December
2021 following completion of the acquisition of the Hydroelectric Portfolio.
Investment Manager's Interest in shares of the Company
Pursuant to the Investment Management agreement, whereby the Investment
Manager is required to acquire shares in the company for a consideration equal
to 20% of the value of the management fee earned, net of taxes, on 29
September 2022 the Investment Manager purchased, on the secondary market,
41,550 ordinary shares of £0.01 each in the capital of the Company at an
average price of £0.80865 pence per share.
Details of the interests of the Investment Manager, held by an entity within
the Wider Triple Point Group, in the ordinary shares of one pence each in the
Company as at 30 September 2022 were as follows:
Number of Shares % of Issued share Capital
Perihelion One Limited 714,512 0.71%
Perihelion One Limited is a company within the Wider Triple Point Group.
Guarantees and other commitments
The Company is the guarantor of the £40 million RCF between its sole wholly
owned subsidiary TEEC Holdings Limited and TP Leasing Limited. The RCF was
entered into on 29 March 2022 and has remained undrawn since financial
close.
TP Leasing Limited is an established private credit and asset leasing business
which is managed by the Investment Manager and, as a result, is deemed to be a
related party as defined in the Listing Rules. The RCF is deemed to be a
"smaller related party transaction" for the purposes of LR11.1.10R. As set out
in the IPO Prospectus, the Company has adopted a related party policy pursuant
to which, prior to entering into the Facility Agreement, (i) the RCF was
approved by the Directors and (ii) the Company obtained a fair and reasonable
opinion from a qualified, independent adviser. The Board was satisfied with
the conflict management procedures put in place, including team segregation
within the Investment Manager and obtaining independent third-party pricing
validation.
TEEC Holdings entered into a £45.6 million investment commitment, to fund the
build of a portfolio of four geographically diverse BESS assets in the UK.
£44.9 million of the commitment is outstanding and is forecast to be deployed
by the end of 2023. The commitment is expected to be funded via the undrawn
£40 million RCF available to TEEC Holdings and cash reserves of the Company.
12. Events after the Reporting period
On 28 October 2022 the Ordinary Shares of the Company were admitted to the
premium listing segment of the Official List of the Financial Conduct
Authority and were admitted to the Premium Segment of the Main Market of the
London Stock Exchange.
In November, the Company also committed further follow-on investments,
totalling over £1 million of accounts receivable financing, purchasing the
rights to future receivable payments from a lighting service provider. The
transactions will enable the installation of LEDs at additional logistics
warehouses, with the same counterparties as the previous LED transaction.
£5.5m of the BESS Portfolio facility commitment was deployed following the
commissioning of the first energy storage asset in mid-November 2022.
The Company has declared an interim dividend in respect of the period from 1
July 2022 to 30 September 2022 of 1.375 pence per Ordinary share, payable on
or around 6 January 2023 to holders of Ordinary shares on the register on 16
December 2022. The ex-dividend date will be 15 December 2022.
Glossary
The Act Companies Act 2006
AIC Code The AIC Code of Corporate Governance produced by the Association of Investment
Companies
AIFM The alternative investment fund manager of the Company, Triple Point
Investment Management LLP
AIFMD The EU Alternative Investment Fund Managers Directive 2011/61/EU
BESS Battery Energy Storage Systems
BESS Portfolio £45.6 million debt facility to a subsidiary of Virmati Energy Ltd (trading as
Field), to fund a portfolio of four Battery Energy Storage Systems assets
CCC Climate Change Committee
CHP Combined heat and power
CHP Portfolio A total debt investment of £29 million into Harvest and Glasshouse and Spark
Steam
The Company Triple Point Energy Transition plc (company number 12693305).
DCF Discounted Cash Flow
Energy Transition Asset A project which falls within the parameters of the Company's investment
policy
ESG Environmental, Social and Governance
EU European Union
EV Electric Vehicle
FCA Financial Conduct Authority
FRC Financial Reporting Council
GAV Gross Asset Value
GHG Green House Gas
Group The Company and any subsidiary undertakings from time to time
Harvest and Glasshouse Harvest Generation Services Limited and Glasshouse Generation Limited
HVAC Heating, Ventilation and Air Conditioning
Hydroelectric Portfolio Elementary Energy Limited
Green Highland Allt Ladaidh (1148) Limited
Green Highland Allt Choire A Bhalachain (255) Limited
Green Highland Allt Phocachain (1015) Limited
Green Highland Allt Luaidhe (228) Limited
Achnacarry Hydro Limited
ITC Investment Trust Company
Investment Manager Triple Point Investment Management LLP
IPO The admission by the Company of 100 million Ordinary Shares to trading on the
Specialist Fund Segment of the Main Market, which were the subject of the
Company's initial public offering on 19 October 2020
IPO Prospectus The Company's Prospectus for its initial public offering, published on 25
August 2020.
kWh Kilowatt-hour
LED Light-emitting Diode
Listing Rules Financial Conduct Authority Listing Rules
MW Megawatt
MWh Megawatt-hour
NAV The net asset value, as at any date, of the assets of the Company after
deduction of all liabilities determined in accordance with the accounting
policies adopted by the Company from time-to-time.
Net Zero A target of completely negating the amount of greenhouse gases produced by
human activity, to be achieved by reducing emissions and implementing methods
of absorbing carbon dioxide from the atmosphere
OCR Ongoing charges ratio.
PPA Power Purchase Agreement.
PRI Principals for Responsible Investing
Project SPV Special Purpose Vehicle in which energy transition assets are held.
RCF Revolving Credit Facility
RES Renewable Energy Systems
SDG Sustainable Development Goals.
SFDR Sustainable Finance Disclosure Regulation
SONIA Sterling Overnight Index Average
SORP Statement of Recommended Practice
Spark Steam Spark Steam Limited
TCFD Task Force on Climate-related Financial Disclosures.
TEEC Holdings The wholly owned subsidiary of the Company: TEEC Holdings Limited (company
number 12695849).
Wider Triple Point Group Triple Point LLP (company number OC310549) and any subsidiary undertakings
from time to time.
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