Gresham House Energy Storage Fund pins hope on future growth as earnings crumble
The Gresham House Energy Storage fund has seen its net asset value (NAV) per share plunge 17 per cent in the past year amid a tough time for the energy storage market.
In its final results for the year ended December, UK’s largest utility-scale battery energy storage fund said its portfolio of battery storage assets reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £25.8m for the year, down 47 per cent compared to 2022.
Meanwhile, at the end of the year, its NAV per share stood at 129.07p, down 17 per cent compared to the prior year period’s 155.5p. The decline in NAV reflected: “The application of significant reductions to 2024 to 2026 revenue forecasts from third parties.“
The trust paid a total dividend of 5.51p per share in 2023 but has said no dividend will be paid in 2024.
It repurchased 4.4m shares in the year. Management said these buybacks delivered an “immediate NAV per share improvement of 0.6p per share.”
Gresham House Energy Storage built its portfolio from 598 megawatt hours (MWh) at the end of 2022 to 788MWh at the end of 2023. It has planned further growth in 2024. Management has today laid out the plan to build the portfolio of 1,696MWh by the end of 2024.
The fund said it would use the remaining funds on its credit facility, which amounted to £65m, to complete its current construction programme. It has fully hedged drawn debt at an interest rate of 3.70 per cent with a blended cost of debt of 6.70 per cent.
John Leggate CBE, chair of Gresham House Energy Storage Fund plc, said: “The board and the manager are acutely aware that this period has been disappointing and has required patience from our investors. We appreciate our intention not to pay dividends for 2024 is very unwelcome news.
“However, given the competing priorities for the company, the board and the manager believe this is the right decision: using cash generation from the portfolio, along with available financing, towards completing the current project pipeline and duration extensions is key in order to maximise shareholder value,” he added.