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Gore Street Energy Storage Fund increases NAV 45%


As a cold wind blows in from the East, and Europe shivers through an energy crisis exacerbated by the conflict between Russia and Ukraine, opinion across the continent is solidifying around national governments gaining energy independence.

One solution many governments are turning to is building up their national renewable energy infrastructure – onshore and offshore wind, solar and hydro – but one of the conundrums that has stymied the development of renewables globally has been the storage issue. The sun will shine, and the wind will blow when they want to, but that might not be when the power they generate is needed.

Battery technology is advancing

The key to renewables is storage – the ability to capture energy and release it at peak times is critical to the development of the sector. Without storage, the fall-back is looking to provide power from baseload systems – primarily, coal, oil, gas and nuclear. This baseload is where the problem lies, as not only are there severe global environmental issues with all these options; but there are security issues as unfriendly partners can cut electricity or heat off with the turn of a dial or bar a ship from leaving port with fuel.

Battery technology has advanced leaps and bounds in the last decade, as have novel, innovative storage systems like salt, or kinetic energy held in bodies of water. It is the storage part of the puzzle that the Gore Street Energy Storage Fund PLC [LON:GSF] seeks to solve.

The fund published its half-year unaudited results for the six-month period to 30th September 2022 today (16th December).

The company reported that net-asset value (NAV) had increased 45% between March and September 2022 to GBP534.8m, and NAV per share was up 3.7% to 111.1p compared to end-March.

The fund’s NAV Total Return was 4.65% and the fund increased it market cap to GBP529.5m by the end of September. The fund offered quarterly dividends of 4p per share – in line with 7% of NAV target and paid out 3p per share during the period.

The fund successfully raised GBP150m in an oversubscribed placement in April increasing issued share capital to 481.4 million.

Total capacity reaching 900MW

The company’s CEO, Alex O’Cinneide said in a statement to the market this morning: “I am pleased to report another successful period of growth as we continue to deliver on our strategic objectives of providing an attractive level of returns to shareholders despite the changing macro inflationary environment through providing an essential service enabling the renewable transition and enhancing energy security. The portfolio grew significantly during the period, with total capacity reaching nearly 900MW in aggregate post-period end, of which 291MW is operational and generating strong cash flow for the company.”

The fund, founded in 2015’s, mandate is to acquire, develop and manage global renewable energy assets. Gore Street said the investment manager’s investment, technical and operating team has a wealth of combined experience in sourcing, structuring the acquisition of, and managing the construction and operation of energy assets worldwide.

The fund’s objective is to make a gross asset return of a minimum of 10% and is targeting a 7% dividend yield (minimum target of 7p per ordinary share) and charges an advisory fee of 1.0% of Adjusted NAV per annum (minus uncommitted cash). The fund is seeking opportunities in mainland UK, Ireland, Germany and the US.

The fund opened trading today (16th December) at 111.4p. The fund has offered a year-to-date return of -4.9% and a one-year return of -3.3% with the company’s shares ranging between 101p to 123.8p. In line with the company’s dividend policy, it will pay a 2p per share dividend on or around 13th January 2023 to shareholders on the register on 30th  December 2022. The ex-dividend date will be 29th December 2022.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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