In QuotedData’s morning briefing 24 April 2024:
- Apax Global Alpha (APAX) is investing about €8m (through its investment in Apax Digital II) into IANS, “a leading provider of tech-enabled research and advisory services in the information security industry”. The transaction is expected to close in Q2 2024.
- Octopus Renewables Infrastructure (ORIT) has signed a power purchase agreement (PPA) with SKY UK in relation to power produced by the 46MW Crossdykes wind farm in Lanarkshire (in which ORIT has a 51% stake). The PPA will enable the sale of 69% of the output to Sky at a CPI-linked fixed price for a period of 10 years, commencing in April 2025. It will increase the percentage of ORIT’s forecast revenue which is fixed over the two years to 31 December 2025 from 81% to 82%, and the percentage of forecast revenue which is index-linked over the 10 years to 31 December 2033 from 51% to 53%. The PPA is NAV-accretive when compared with the power price assumptions included in the NAV as at 31 December 2023.
- CATCO Reinsurance (CAT) which is in run off, saw a big jump in NAV over 2023 (from positive developments on the 2018 and 2019 reinsurance portfolios plus interest income – the total ordinary share NAV jumped from $1.5m to $2.4m and the C share (CATC) NAV went from $7.5m to $12.1m). There are still nine contracts in the 2018 and 2019 risk portfolios to run off, plus some side pockets (where specific loss events were ringfenced – Hurricanes Michael and Florence, Typhoon Jebi and the 2018 California Wildfires in 2018 and Hurricane Dorian, Typhoons Faxai and Hagibis and the Australian bushfires in 2019).
- Gresham House Energy Storage (GRID) says battery storage revenues have recovered so far in April (echoing Harmony’s statement from the other day) to £71,100/MW/yr from £47,400 in March. The new Balacing Reserve is helping a bit, although volumes available are still small, battery storage can now be drawn on 30 minute rather than 15 minute packages, and intraday power prices have been much more volatile with prices going negative at times (this is a weather-related thing). The manager believes that, in due course, the revenue opportunity in the balancing mechanism may be more attractive as ‘skip rates’ (times when the grid goes elsewhere for balancing power) come down. [GRID’s share price is up 3.5% so far today and almost 25% higher than the level last Thursday when Harmony published its positive trading update. we’d be wary of extrapolating too much from a few week’s trading data, but this is encouraginging nonetheless.]
- Oakley Capital Investments (OCI) has published a trading update for Q1 2024. Despite adverse foreign exchange movements, the NAV continues to climb, hitting 693p at end March (from 682p at end December 2023). The company invested £27m in the quarter (Alerce, new investments by Touring Capital and PROfounders, as well as bolt-on deals for Liberty Dental Group and Affinitas) and a further £95m since (Steer Automotive Group and Horizons Optical – see our most recent note for more detail on these businesses). There were no divestments during the period. [Steady positive progress is welcome. Oakley has a Capital Markets Day on 15 May which should give some interesting insights into the portfolio and we’ll report back on that.]
- Ground Rents Income Fund (GRIO) has reported a 24.6% drop in the value of its portfolio to £81.5m in the year to 31 March 2024. The majority (97%) of the portfolio valuation is subject to the industry-wide Material Valuation Uncertainty Clause because of uncertainty relating to both leasehold reform and building safety reform. The valuation reduction follows the November 2023 government consultation regarding restricting the level of ground rent which leaseholders in England and Wales pay for existing residential leases, including the government’s stated intention not to pay compensation to freeholders. This consultation represented a significant shift in the government’s approach to leasehold reform and has led to a pause in market activity and negatively impacted values.