SDCL Energy Efficiency Income Trust (SEIT) has published a trading update for the period from 1 September 2024 to 31 March 2025, reporting stable operational performance across its portfolio and confirming that the company remains on track to deliver its target dividend of 6.32p per share, representing a double-digit yield at current share price levels.
Jonathan Maxwell, CEO of the investment manager, SDCL, said the portfolio is “well positioned to maintain performance and secure NAV-accretive opportunities” while the manager remains focused on reducing the share price discount to NAV, cutting costs, and improving capital efficiency.
Portfolio performance
Operational results were largely in line with expectations:
- Primary Energy met its budgeted EBITDA for 2024, with recent US tariff changes expected to benefit demand.
- RED-Rochester posted EBITDA ahead of mid-year projections, supported by cost controls and new leadership. Tariff discussions with Eastman Kodak are ongoing and a delayed but fully funded expansion by Li-Cycle offers long-term upside.
- Onyx brought 53MW of commercial solar capacity to mechanical completion in H2 2024, up from 14MW previously.
- EVN, the UK EV charging business, increased operational sites to 31, with EBITDA on track.
- Oliva ended the year on budget, with improved feedstock pricing and regulatory clarity in Spain.
- Driva (formerly Vartan Gas) delivered solid EBITDA growth and launched an Energy-as-a-Service initiative with early success.
Capital deployment and financing
SEIT invested c.£165m into organic portfolio growth during the year, particularly in Onyx. These investments were funded via capital recycling and debt, with project-level refinancing progressing for Oliva and Zood (EVN’s asset company).
In March 2025, SEIT refinanced its RCF, increasing the facility to £240m (currently £235m drawn), with a new three-year term and a 2.75% margin over SONIA.
Disposals and strategic initiatives
The manager continues to pursue asset sales to reduce gearing and recycle capital. The sale of Onyx remains a key focus, with Lazard managing the process and bidders now in second-round due diligence. A conclusion is expected ahead of SEIT’s full-year results.
A potential disposal of EVN was also explored, though the manager is now favouring project-level financing for Zood as the likely near-term capital solution.
Valuation outlook and discount rate
SEIT expects discount rates used for the 31 March 2025 valuation to remain broadly in line with those applied at March 2024. While risk-free rates declined in late 2024, the manager had opted not to adjust discount rates at the time, instead increasing risk premiums. With rates normalising, some of that risk premium could now be unwound.
Management fee structure review
The board remains in active dialogue with the manager and advisers in light of the sustained share price discount to NAV and challenging market backdrop. A review of the management fee structure is underway, with the Board stating it is “alert to all potential opportunities to deliver value for shareholders.”
[QD comment MR: SEIT has had a solid half year and shareholders will likely be pleased that the dividend target has been reaffirmed – which is a c13% yield at SEIT’s current share price, reflecting the c 46% discount to NAV that its shares are currently trading at. Achieving a decent exit for Onyx that hopefully validates SEIT’s NAV is key. This could give it scope to reduce its debt and potentially consider share repurchases, which would provide liquidity for exiting shareholders and be highly NAV accretive for remaining shareholders at current discount levels.]
