Battery firm Gore Street feels bite of investment cooldown as profits plunge
The battery energy storage firm has struggled with NAV and profit slumps since March
Profits for Gore Street Energy Storage Fund have plunged across the fiscal first half as the market continues to sit on the fence with investment firm futures.
Profit before tax for the six months between 30th March and 30th September fell from £22.6m to around £3.8m and NAV fell from £556.3m at 31 March to £543.3m at end of September.
NAV per share also fell 115.6p to 112.9p and the total NAV return for the six month period was just 0.7 per cent, down from 4.6 per cent at September’s end 2022.
Grid connections issues continue to dog the company, waiting for connection to its 49.9MW Ferrymuir project. The company noted: “it remains unclear why energy storage assets are skipped in favour of larger, higher carbon assets.
“Energy storage market participants continue to face these barriers and are, therefore, unable to properly factor opportunities within the Balancing Mechanism into their commercial strategy.”
The company’s position in respect to NAV became an even stronger discount, more than doubling from -12.8 per cent to -30.2 per cent. which were correlated to “adjustments to short-term inflation and discount rates”.
Total portfolio revenue per MW per hour was £15.10, with non-GB assets achieving 2.6x more revenue than the GB portfolio, showcasing the benefits of the diversification strategy;
The company carries an operational EBITDA of £8.3m and a dividend cover of 1.15x.
The report states it has energised 80 MW during the period, with 50 MW expected to follow through the next two years, with a total mobilisation of 442 MW by the end of 2024, including expanding assets in Ireland and the United States.
Dr Alex O’Cinneide, chief executive of the fund’s investment manager, Gore Street Capital, said:
“I am pleased to report that the Company’s strategy, enabled by the active role of the Investment Manager, has ensured the business continued to overachieve during a challenging period.”
“With a NAV Total Return of 48.8% since IPO, an excellent balance sheet given our minimum level of debt, and a strong cash position, the company remains in a compelling and sustainable position,” he said.
