Gore Street Energy Storage posts solid set of results

15th Jul 2024 11:21

(Sharecast News) - Gore Street Energy Storage Fund reported a strong set of audited results for the financial year ended 31 March on Monday, with robust revenue generation, increased operational capacity, and a solid balance sheet.

The London-listed company's net asset value (NAV) stood at £541m as of the end of March, translating to a NAV per share of 107p, down from 115.6p a year earlier.

That represented a NAV total return of 48.4% since its initial public offering.

The fund generated £41.4m in revenue during the financial year - a 5.5% increase from £39.3m in the prior year, and achieved an operational EBITDA of £28.4m, slightly up from £27.8m.

GSF's financial position remained strong, with £60.7m in cash and cash equivalents and £58.6m in available debt headroom, sufficient to meet all contractual obligations and support further portfolio expansion to over 750 MW.

The company maintained low gearing at 6.5% of its gross asset value (GAV) as of 31 March, with plans to increase net debt to approximately 15% of GAV as it drew on available debt lines to support near-term portfolio growth.

Dividends declared for the period amounted to 7.5p per share, reflecting a dividend yield of 11.6%, up from 6.9% in the prior year.

Operational dividend cover was 0.78x, with a fund-level dividend cover of 0.56x.

The weighted average discount rate increased slightly to 10.2%.

Operationally, GSF's energised capacity rose 45% to 421.4 MW, driven by the successful activation of the Stony and Ferrymuir projects, both of which were now generating revenue.

The company also saw a 7% increase in average operational capacity to 311.5 MW over the year.

On the Irish grid, GSF expanded its asset base to 385 MW, including a new 51% stake in the 75 MW pre-construction Project Mucklagh in the Republic of Ireland.

GSF raised around £27m through share issuance to strategic partners Nidec and Low Carbon.

The operational portfolio avoided 15,178 tonnes of carbon dioxide equivalent, and stored 26,232 MWh of renewable electricity during the reporting period.

Looking ahead, GSF said it was set to energise 332 MW of assets over the next seven months, with 275 MW eligible for significant investment tax credits under the US Inflation Reduction Act.

That included the 200 MW Big Rock asset in California, expected to significantly support the CAISO grid.

The company anticipated a cash inflow of $60m to $80m from those developments.

GSF also updated its dividend policy, targeting a dividend of 7p per share for the financial year ending 31 March 2025, aligning distributions more closely with operational cash flows and reflecting market conditions and financial performance.

"Despite challenging market conditions, the company has achieved significant growth by raising new funds and expanding our diversified energy storage portfolio to approximately 1.25 GW across five markets," said chair Pat Cox.

"The company met its dividend target, taking total NAV returns since IPO to 48.4%, and with £60.7m in cash and £58.6m in debt headroom, we are well-positioned to support the construction of the priority assets over the coming months."

Cox said that with 332 MW of new capacity expected to be added to the energised portfolio, which reached 421.4 MW in the reporting period, by the end of the current financial year in the US and elsewhere, the company was poised to take "another significant step forward" in scale.

"I remain fully confident that this diversified approach will continue to deliver strong and sustainable returns to investors while contributing to the decarbonisation needed across the global energy system."

At 1055 BST, shares in Gore Street Energy Storage Fund were down 4,56% at 65.09p.

Reporting by Josh White for Sharecast.com.