Our daily roundup includes results and updates from Tritax Big Box, Impax Environmental Markets and Target Healthcare.

GRID signs last “floor” agreement

Gresham House Energy Storage Fund (GRID) says the revenue “floor” deals it has arranged in the past month will increase the proportion of revenues it pays to insurers and counterparties from 6% to 10%. The £446m battery fund says this is an “acceptable incremental cost” given the protection the contracts provide while leaving upside exposure to higher merchant prices.  The company, whose shares trade on a 29% discount after cutting its dividend last year, made the disclosure announcing a further floor arrangement with Markel Bermuda in relation to the operational UK Enderby 50MW project. It follows agreements on 377MW of projects struck with the reinsurer and EdF and Statkraft in recent weeks. This completes a revenue contracting process which will help GRID finalise its debt refinancing. Stifel analyst Will Crighton said the cost was “reasonably fair” to avoid a repeat of the slump in UK revenues at the start of last year. “However, the Markel deal, which covers 300MW of projects, is structured as a swap where a premium is paid by GRID rather than a revenue share. Therefore, we think this 10% of revenue figure might not fully represent the amount GRID is paying for these floors.”

FGEN posts small quarterly decline

Foresight Environmental Infrastructure (FGEN), a £517m, 9.5%-yielding renewables fund on a 23% discount, points to the resilience of its diversified portfolio with a smaller decline in net asset value of 1.8% than rivals. NAV fell to £659.1m at 30 June from £678.7m at 31 March with NAV per share of 104.6p down 1.9p from 106.5p three months earlier. With the quarterly dividend of 1.95p included, the total investment return was flat at 0.05% for the quarter. Like other renewables funds, lower power price forecasts from independent third-party consultants were the main factor in the decline, knocking 1.6p from NAV per share. Reductions in valuation of battery storage projects accounted for a 0.3p fall. Underperformance in the wind portfolio was partly offset by strong performance from the solar and anaerobic digestion assets with overall generation in the three months to 30 June 4.8% below budget but with quarterly dividends still forecast to be 1.2 times covered by cash. Ashley Thomas, analyst at Winterflood, FGEN’s corporate broker, said it was a “solid result”. “While FGEN’s high level of contracted revenues and asset diversification reduces its overall sensitivity to energy (power and gas) assumptions, the average 2.2% reduction to long-term curves is a smaller adjustment that that experienced by other generators such as Greencoat UK Wind (UKW) and Renewables Infrastructure Group (TRIG).” You can read our recent report on FGEN here.

Big Box earnings rise 6.4%

Half-year results from Tritax Big Box REIT (BBOX) reflect the benefit of acquiring UK Commercial Property last year with a 17.3% increase in net rental income to £149.2m for the six months to 30 June from the £6.8bn logistics portfolio. Adjusted earnings per share rose 4.6% to 4.29p from 4.1p to cover a 4.9% increase in first half dividends of 3.83p. Net tangible assets per share rose 1.4% to 188.17p with property yields stable at 5.72% as the company seeks additional £83.8m of future rent, 77% of it in the next three years. The company continues to seek growth through acquisitions but last month saw the board of Warehouse Reit (WHR) withdraw its recommendation for a bid from Big Box to a higher offer from Blackstone. Winterflood analyst Emma Bird said while the 5.4% yield was lower than peers, the dividend was sustainable under its payout ratio driven policy and the 24% share price discount was attractive. “In addition, its exposure to development assets and its recent entry into the data centre market offer opportunities for capital growth,” she said. Winterfloods recent added BBOX to its recommended list.

ASLI announces second £50m payout

Abrdn European Logistics Income (ASLI) is accelerating its wind-down by announcing a second distribution of at least £50m next month after selling a warehouse in Zeewolde, the Netherlands, for €27.2m at a 2.5% discount to the 31 March valuation. This is in addition to the £49.5m 12p per share payment being made on 16 July following recent disposals in Germany and the Netherlands.

Target finds new tenants to pay rent

Target Healthcare (THRL) says it will refinance its £170m short-term borrowing facility expiring in November before next month’s annual results. The £616m care home owner saw net tangible assets (NTA) per share rise 1.6% to 114.8p at 30 June from 113p at 31 March, reflecting the uplift from inflation-linked rent reviews, property sales and other asset management initiatives. Net initial yields were unchanged at 6.2%. Adjusted earnings per share of 1.48p per share covered the quarterly dividend of 1.471p per share and are expected to improve after a new tenant agreed to pay higher rent for a property where no rent was being paid. A further three properties accounting for 3.2% of rent roll are being re-leased to a single tenant after no rent was paid in the quarter. The shares, up 1p to 100.4p today, yield 5.9% and stand on a 12.5% discount to NAV. The company is the only listed fund in its sector following the £448m acquisition of Care REIT in March.

AIRE hits dividend target

Alternative Income REIT (AIRE), a £55m UK generalist commercial property portfolio standing on an 18% discount, declares a fourth interim dividend of 1.55p per share to meet its target of cash-covered dividends of 6.2p for the year to 30 June. Net asset value rose 0.6% in the three months to 30 June to £67.3m, or 83.6p per share, offering a total return of 2.5% with the dividend included. The company has agreed terms with six lenders over the refinancing of its £41m loan facilities expiring in October.

Other news

Impax Environmental Markets (IEM) reports a first half fall in net asset value of 3% as tariff volatility made short-term conditions difficult for its global portfolio of small- and mid-cap companies delivering cleaner and more efficient resource management solutions. This decline underperformed the 0.6% gain in the MSCI World although the £801m company takes comfort from the strong growth in underlying earnings from its stocks and the fact it passed its triennial continuation vote in May with a convincing majority of shareholder support. Shares that trade on a 10% discount to NAV fell 2.1% in the half-year period. We published a report on IEM in May.

Third Point Investors (TPOU), the hedge fund facing a shareholder revolt over its plan to buy Malibu reinsurance company, returned 4.5% growth in net asset value last month, beating the 1.3% MSCI World return and the 2.2% rise in the S&P 500. The main contributors wer financial company CoStar, chip maker Nvidia and Amazon. The share price returned 3.5% as the discount, or gap to NAV, widened from 20.2% to 21%.