Gresham House Energy Storage mulls international opportunities as it seeks approval to change investment policy – Gresham House Energy Storage (GRID) has published its full-year results for the 12 months to 31 December 2021. During the period under review the trust achieved a NAV total return of 20.3% and a share price total return of 23%. This compares with an 18.3% return from its benchmark index.
Operational Portfolio revenues were up 170% to £51.4m while underlying Operational Portfolio EBITDA was up 172% to £42.5m. Dividends of 7p per share were paid for the year with operational dividend cover as 1.32x. Over the year, GRID invested £49m into 110MW of operational capacity, taking the total to 425MW and raised gross equity funds of £100m. As at 31 December 2021, the trust had 8 projects, totalling a further 415MW, under construction, with an additional 717MW due to enter construction.
The board reaffirms a target dividend of 7.0p for 2022 and expects full Operational Dividend Cover from underlying earnings in the portfolio.
Meanwhile, the trust has outlined plans to update its investment policy and strategy in order to invest up to 30% of GAV in certain international markets, among other changes.
Proposals
The company intends to seek all relevant approvals (from shareholders and lenders) for certain changes to its investment policy. As such, the company intends to issue a circular during April. The principal proposed amendments are as follows:
To invest up to 10% of GAV in shovel-ready project rights which is expected to:
- Simplify and accelerate acquisition processes
- Reduce the total acquisition cost by a further 5-10%
- Eliminate related party transactions with the Gresham House group
- Facilitate the option of a premium listing on the Main Market of the London Stock Exchange
To invest up to 30% of GAV in certain international markets replacing the existing ability to invest up to 10% of GAV in Ireland which is expected to:
- Increase EBITDA and NAV growth over time by exporting core competencies including scale advantages, business model and operational capabilities to international markets
- Diversify into major OECD markets with similarities to the UK in terms of wholesale market structure, renewables growth and penetration where the market is often at an early stage resulting in stronger target returns compared with the UK
To invest in the land under new or existing projects which is expected to:
- Significantly increase the duration of a project
- Increase asset backing while eliminating an index-linked cost
Statement from the chair:
2021, our third full calendar year since IPO in November 2018, has seen GRID delivering key milestones and gain significant momentum, with robust and rising dividend cover backed by strong increases in profitability and net asset value as projects become operational.
The Board and Investment Manager are closely following the global response to Russia’s military intervention in Ukraine, and the ensuing humanitarian crisis, as well as considering the potential impact on financial markets, energy security considerations, power price volatility and the Company’s business model. In terms of impact on the Company’s longer-term outlook, for the moment, the indications are pointing towards a much faster rollout of renewable energy globally with an associated increasing demand for energy storage projects.
GRID : Gresham House Energy Storage mulls international opportunities as it seeks approval to change investment policy