Gresham House Energy Storage Fund has issued its second trading update of the year, revealing a decline in unaudited net asset value (NAV) per share as of December 31, 2023.
The battery asset owner expects an unaudited NAV per share of 129.07 pence, marking an 11.64% reduction from the previous quarter ending September 30, 2023, ahead of its annual results announcement on April 29.
John Leggate, Chair of Gresham House Energy Storage Fund, commented on the challenging operating environment: “The BESS sector, the company, and its shareholders are going through the most challenging operating environment since the Company's inception in 2018.”
The trading update reflects a more cautious revenue outlook for the next three years, with the company stating that the trading environment in January and February 2024 was challenging but has improved since March 2024. This improvement is attributed to increased efforts by the GB Electricity System Operator (ESO) to utilize battery energy storage systems (BESS).
Operational capacity increased to 740MW/864MWh as of March 31, 2024, up from 690MW/788MWh as of December 31, 2023. The company expects the remainder of its construction program to be completed by the end of October 2024, increasing operational capacity to 1072MW/1696MWh.
Due to a focus on cash preservation and debt reduction, and considering the challenging revenue environment, the board does not anticipate paying dividends or conducting further share buybacks in 2024.
Leggate elaborated on the board's strategic decisions: “The board is taking a series of steps to put the business on a stable footing in a volatile market so that we can best capture what we continue to think is a significant strategic opportunity in the BESS sector.”
He continued, “This has led to the difficult decision to suspend dividend payments and share buybacks for the balance of 2024 but will enable us to complete our ongoing construction program which will drive our near-term cash flow potential and inform our future dividend policy.”
