Gresham House Energy Storage Fund (GRID) H1 2024 earnings summary

Executive summary

• NAV per share declined to 109.16p as of 30 June 2024, down from 129.07p in December 2023, reflecting lower revenue forecasts and challenging market conditions.

• Operational capacity increased 34% year-over-year to 790MW, with significant project augmentations and new projects nearing completion, targeting 1,072MW by year-end.

• EBITDA for H1 2024 was £10.4m, down 23.9% year-over-year, but run rate improved in July and August.

• A landmark two-year tolling agreement with Octopus Energy covers 568MW/920MWh, securing over 50% of portfolio revenues and providing revenue stability.

• Dividend payments were suspended in early 2024 to preserve capital, with plans to reinstate a sustainable policy in 2025 as earnings and contracted revenues recover.

Financial highlights

• NAV per share dropped from 129.07p at Dec 2023 to 109.16p at Jun 2024; total NAV fell from £740.1m to £621.2m.

• EBITDA for H1 2024 was £10.4m, down from £13.8m in H1 2023; operational revenues fell 12.8% to £17.9m.

• Share buybacks in H1 2024 contributed positively to NAV, with 4.38m shares repurchased at an average price of 45.6p.

• Debt facilities reduced from £335m to £225m, with £120m drawn as of 30 June 2024; further £30m cancelled post-period.

• Portfolio-level revenue scenario for 2025: c.£65.7m, with EBITDA of c.£45.7m under central assumptions.

Outlook and guidance

• Targeting completion of 1,072MW/1,701MWh portfolio by end of 2024, representing 55% MW and 116% MWh growth from start of year.

• All projects under the tolling agreement expected to be onboarded by end of 2024, with annualised contracted revenues projected at c.£43m during the tolling period.

• Second half trading is substantially above the first half, with improved revenue run rates and portfolio expected to exceed 1GW operational capacity.

• Three-year plan (2025–2027) to be detailed at Capital Markets Day in November 2024, focusing on maximising capacity, revenues, and cashflow.

• Plans to reinstate dividends in 2025 as contracted revenues and earnings improve, with a focus on sustainability and reinvestment opportunities.