RM Funds has said it will call another extraordinary general meeting of Gore Street Energy Storage (GSF) shareholders if the company does not improve levels of disclosure.
Responding to last week’s annual general meeting when the company acknowledged that an estimated £5m of annual payments to fund manager Gore Street Capital had not been disclosed, Pietro Nicholls of RM Funds said he was “gravely concerned” and urged the company to seek advice on UK listing rules and how they applied to related party transactions.
Edinburgh-based RM Funds holds a 6% stake in the £273m battery fund striving to reassure investors after a volatile three years in the renewable energy market.
Nicholls, manager of the VT RM Alternative Income fund, said he was also “dismayed” to hear at the AGM that its directors “do not get paid” to review the company’s monthly factsheets.
“Such a comment is unacceptable and underscores a fundamental disconnect between the board and its shareholders. Investors expect directors to exercise oversight regardless of remuneration specifics,” he said in a statement.
“The fact that the current factsheets contain no operational KPIs [key performance indicators] only compounds the issue,” he added, calling for the company to provide monthly updates on revenues and costs, including those in subsidiaries, dividend cover and a breakdown in movements in net asset value (NAV).
He warned that should Gore Street Energy Storage not improve its earnings per share growth, share price performance and sustainable NAV growth in the next six months, RM Funds would consider “calling for a further EGM to hold the company and investment manager to account”.
The company has already said it will speak to shareholders after 18%-27% of votes at the AGM last Thursday were against the reappointment of chair Patrick Cox, senior independent director Caroline Banszky and other non-executive directors.
This followed an EGM earlier in August called by RM Funds to refresh the fund’s board when around 30% of votes were cast to remove Cox and Banszky.
GSF shares have fallen 43% in the past three years and stand 47% below asset value. At 53.9p they have rallied nearly 12% this year but have lagged the 56% share price recovery in its UK-focused rival Gresham House Energy Storage (GRID). GSF launched at 100p in 2018 and peaked at 123p three years ago. It disappointed investors with a dividend cut in July but followed this with the conclusion of its strategic review in which it promised to sell construction assets accounting for 8% of its portfolio to fund upgrades to raise revenues from its operational projects.
