Important information

Gore Street Energy Storage Fund plc (ticker: GSF), London's first listed energy storage fund investing in income producing assets in the UK and internationally, today announces its Half-Year Unaudited results for the six-month period to 30 September 2021.

Financial Highlights for the period of 30 September 2021

• NAV increased significantly from £145.1 million in March 2021 to £285.3 million as at September 2021
• NAV per share increased 2.4% to 103.3 pence (31 March 2021: 100.9 pence)
• Total shareholder return of 26.5% since inception as of 30 September 2021
• Quarterly dividend for the period of 4.0 pence per share
• Following the issuance of further shares in April 2021, Issued Share Capital (ISC) increased to 276.2 million shares (31 March 2021: 143.9 million shares)
• Earnings per share (basic and diluted) of 4.20 pence (31 March 2021: 16.06 pence)

Operational Highlights for the period of 30 September 2021

• Total portfolio (inclusive of grid expansion grants) increased to 516.5 MW as of 30 September 2021 (31 March 2021: 440 MW).
  • Acquired an 80MW construction ready energy storage project in Milton Keynes, scheduled to become operational in Q1 2023, for c.£30 million.
  • Acquired a 57MW in construction energy storage project in Leicester, scheduled to become operational in 2023, for c.£22 million.
• A successful fundraise of £135 million was completed during the period.  £15.3m in equity from ISIF is available to the Company for the expansion projects in Ireland. This equity drawdown facility is not reflected in AuM of £285 million.
• 10 operational companies in Great Britain (GB) (holding 21 assets) generate 210 MW of capacity of which 100.0 MW in Northern Ireland, 106.0 MW in England and 4 MW in Wales, continue to perform within expectations.
• The Company’s 306.8 MW of construction and pre-construction assets include two projects totalling 137 MW acquired during the period in England and 60 MW grid expansion rights for the 30 MW Porterstown project in the Republic of Ireland (ROI).

Post Period-end Highlights

• The Company has raised gross proceeds of £73.6 million in an oversubscribed capital raise post-Period End (Admission date of 4^th October 2021) through the issue of 68,811,220 new Ordinary Shares, bringing the number of ordinary shares in issue to a total of 345.0 million.
• Total market cap following the post-Period placing (as of 4th October 2021), represents a 145% increase when compared to 31st March 2021.
• As at 19 November 2021, Kilmannock, one of the Company's ROI assets, has secured a 90MW increase in its allocated grid connection capacity, bringing the Company’s total grid capacity to over 600MW.
• In Ireland, the Company’s grid allocation is now 310 MW, the largest portfolio of Irish assets available to investors.
• The Company is actively reviewing opportunities in GB, Ireland, Australia, Continental Europe and the US. The total pipeline stands at 1.2 GW.

Net Asset Value

As at 30 September 2021, the unaudited estimated NAV per Ordinary Share had increased to 103.3 pence representing a total return, including dividends, of 3.37% from March 2021. NAV per share increased from 30 September 2020 by 6 pence, and total returns including dividends were 13.4%. 

Dividend Payment

The 2.0 pence per share declared dividend will be paid on or around 14 January 2022 to shareholders on the register as of 31 December 2021. The ex-dividend date will be 30 December 2021.

CEO of Gore Street Capital, the investment adviser to the Company, Alex O'Cinneide commented:

“I am delighted to report that Gore Street has had another exceptional period of successful growth as we continued to consistently deliver against our strategy and targets, providing attractive returns to our investors in an important sector, underpinned by significant environmentally-focused tailwinds. We grew substantially during the period, with our portfolio of assets totalling over 600 MW in aggregate post-period, of which 210 MW is already operational, delivering strong cashflows for the Company.

During the period, we delivered target quarterly dividends to our shareholders.  We successfully raised a total of £135 million in April, and post period-end raised a further £73.6 million in October 2021. This reflects the ongoing momentum of attractive opportunities in our pipeline. In May 2021, we acquired Stony Energy Storage Limited, an 80 MW project, followed by the acquisition of Enderby Energy Storage Limited, a transmission connected asset. Gore Street is well positioned to continue to grow not only in GB and Ireland but also internationally, with approximately 1.2 GW of attractive opportunities in our acquisition pipeline, of which over 100 MW in North America and Europe is now under exclusivity. The global transition to clean and renewable energy generation remains a leading priority for governments in the UK and Ireland, as well as further afield, and our assets play a major role in enabling that transition, whilst creating significant value for our shareholders. I would like to thank our shareholders for their support and look forward to updating investors on our continued good progress.”

The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.

The person responsible for releasing this announcement is Susan Fadil.

For further information:

Notes to Editors

About Gore Street Energy Storage Fund plc

Gore Street is London's first listed energy storage fund and seeks to provide Shareholders with a significant opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.

The Company targets an annual dividend of 7.0% of NAV per Ordinary Share in each financial year, subject to a minimum target of 7.0 pence per Ordinary Share. Dividends are paid quarterly.

https://www.gsenergystoragefund.com

Overview

As of 30 September 2021:^*

^{*  Note on Market Capitalisation: Closing Share Price of 108.5 pence as of September 30, 2021. The total number of shares of 276.2 million does not include shares issued post-reporting period of September 30, 2021.}

^{Note on Interim Dividend: A total of 4.0 pence in dividends was paid in the period between March and September 2021. Note on Total Returns since IPO: On a share price basis. This is an alternative performance measure.}

^{Note on NAV per Share: Calculated as Total NAV divided by the total number of shares.}

^{Note on NAV Total Returns since IPO: Calculated as the difference between the closing NAV as at 30 September 2021 and opening NAV IPO, plus dividends paid since IPO divided by opening NAV at IPO ((103.3-97.7+18)/97.7)*100. This is an alternative performance measure.}

Corporate Purpose:

Gore Street aims to deliver long-term capital growth to its investors from utility-scale energy storage assets located in the UK, Ireland, and other attractive markets within the OECD. The Company has made discretionary dividend payments to shareholders at a target annual rate of 7 per cent of NAV (and a target minimum rate of 7p per Ordinary Share), which is supported by 10-12 per cent unlevered project target IRR^**.

^{**  Target IRR before fees and expenses. Past performance is not indicative of future returns.}

Investment Highlights

DEPLOYMENT OF CAPITAL

In the 6 months since 31^st March 2021, the Company has successfully completed the acquisition of 137 MW of energy storage assets within Great Britain (GB).

The first acquisition was a 100 per cent interest in Stony, a combined 79.9 MW site at pre-construction stage in Milton Keynes. The transaction was completed in May 2021.

The second acquisition was a 100 per cent interest in Enderby, a 57.0 MW site at pre-construction stage in Leicester, which was completed in September 2021.

These acquisitions, together with the Company’s grid capacity expansion offer for its asset in the Republic of Ireland (ROI), increased the Company’s portfolio capacity from 380 MW, as of March 2021, to 516.5 MW at period end.

FUNDRAISE

During the reporting period, the Company raised £135.0 million in April 2021, following a £60.0 million raise in December 2020. A further £73.6 million was raised post the reporting period in an oversubscribed capital raise in October 2021 ^*. As a result, post-period end, the Company completed its November 2020 Placing Programme of 250 million shares to full capacity, underpinned by strong investor appetite.

^{*  The capital raise closed post period end with Admission effective on 4 October 2021.}

Key Metrics

Table 1: Key Metrics

^{**  Note on NAV per Share: Calculated as Total NAV divided by the total number of shares outstanding within the respective period.} 

^{***  Note on NAV Total Return: Calculated as the difference between the closing NAV at 30 September 2021 and opening NAV at 30 September 2020, plus dividends paid for the period divided by opening NAV at 30 September 2021 ((103.3 – 97.3+7)/97.3)*100).}

^{****  Note on Premium to NAV: Calculated as the difference between the closing share price on 30 September 2021 to NAV on 31 March of 2021 (108.5-103.3/103.3)*100).}

^{*****  The 516.5 MW includes an additional 60 MW of grid capacity approved for Porterstown (January 2021). A further 90 MW of capacity was approved for the Kilmannock site in November 2021, bringing the portfolio grid capacity to 606.5 MW.}

^{******  A total of 4.0 pence in dividends was paid in the period.}

The Company’s market capitalisation has increased 93 per cent since the end of last fiscal year (31st March 2021) with capital raised in April 2021. (The Company’s market capitalisation has increased by 145 per cent, as of the date of publication).

The Company has paid 7.0 pence per dividend per share for the fiscal year, with a 4.0 pence dividend per share announced and paid for this reporting period.

An overview of the increase in Total NAV during the reporting period is illustrated in the bridge figure below. The key drivers of the increase in NAV from £145.1 million (March 2021) to £285.3 million in September 2021 were: (i) the £135m fundraise in April; (ii) commercial operation of 2 x 50MW assets in Northern Ireland (NI) (operational since March 30, 2021); and (iii) reduction in discount rates used for some of the portfolio’s assets currently under construction.

On a NAV per share basis, the Company experienced an increase of 2.4 pence for the period. From IPO to the reporting period, the Company has delivered a Net Asset Total return of 24.2 per cent inclusive of dividends paid thus far. 

Market Share

The Company is a leader in the energy storage market, with a significant portfolio of 296.5 MW across GB and 220 MW in Ireland. As of the date of publication, the Company has received authorisation to increase its grid capacity in Ireland by up to an additional 150 MW.

About 95 per cent of the Company’s GB-based portfolio is actively delivering Dynamic Containment services (DC)^* with the remainder of the portfolio delivering revenues from Firm Frequency Response (FFR) services^**. For this reporting period, the Company’s services accounted for 13 per cent^*** of the DC market in GB.

^{* One of National Grid’s frequency response services designed to operate post-fault i.e., for deployment after a significant frequency deviation to meet the immediate need for faster-acting frequency response.}

^{** An ancillary service for providing a proportional power response based on measured network frequency. In GB this is procured by National Grid and known as Firm Frequency Response. In NI/ROI this is procured by EirGrid/SONI as part of the DS3 services and known as Fast Frequency Response.}

^{*** Note this market share is based on GSF awarded MW out of the total awarded MW for DC in Great Britain for the reporting period.}

The Company’s Northern Irish assets represent an ongoing 100.0 MW commitment to delivering fast-acting Delivering a Secure Sustainable Electricity System (DS3)^* services to the Irish network – managed by SONI^** and EirGrid ^***. The Company’s operational projects represent a 5 per cent market share of these DS3 services for uncapped^****agreements. The Company also holds contracts for 60.0 MW of capped DS3 agreements for its two assets in the ROI, representing a 55 per cent market share of the Irish storage projects under development. Combined, the Company’s four Irish projects are expected to represent an 8 per cent market share of capped and uncapped DS3 services.

Company’s DC and DS3 Market Share: [refer to page 9 of interim report]

^{* Delivering a Secure Sustainable Electricity System (DS3) is a programme designed by EirGrid/SONI to procure high availability reserve services to the Irish system.}

^{** System Operator for Northern Ireland.}

^{*** EirGrid plc, the state-owned electric power transmission operator in Ireland.}

^{**** The DS3 system services are procured by EirGrid and SONI under two separate procurement routes: (i) volume uncapped procurement, also known as the regulated arrangements; and (ii) volume capped procurement, also known as fixed contract procurement.}

The Company’s growth and its delivery against projected revenue streams is reflected in its half year Net Revenue and EBITDA performance, illustrated in figure 4 of the interim report [page 9], which shows a Net EBITDA Growth of circa 17x and Net Revenue Growth of 16x since Q3 2018^*.

^{* Past performance is not a guarantee of future results.}

CHAIR’S STATEMENT

I am pleased to present the Company’s Interim report for the twenty-six weeks ending 30 September 2021. It affords me an opportunity to thank my fellow directors and the management and staff of our Investment Manager and our suppliers for their successful navigation of the challenges presented by the Covid 19 pandemic, which to date have had no material or dilatory impact on our commercial activities, operational integrity or ability to grow.

The energy storage market has evolved significantly since IPO, and now constitutes 1.3GW of operational capacity in the GB electricity market, which provides for 4 per cent of the GB average generation capacity share. At IPO, the Company’s first acquisition of NK Boulby, a 30-minute duration 6 MW battery, represented one of the largest battery storage assets of its kind in the UK. The Fund’s average project acquisition size in the reporting period was approximately 65 MW with an average one hour in duration. 

The Company’s market capitalisation increased by 93 per cent in the period, with a capital raise of £135 million in April 2021, reflecting market recognition of the importance of energy storage as a vital tool for grid balancing, as renewables are increasingly integrated into our infrastructure.

The Company performed strongly over the period, contributing 13 per cent^* of the Dynamic Containment services in Great Britain (the National Grid’s prime frequency service) and its operational projects represent an 8% market share of capped and uncapped DS3 services in the Irish grids. 

NAV, as at 30 September 2021, was 103.3 per share increasing by 2.4 pence since year end, improved over the past six months by generating revenues at our two Northern Irish sites, delivering 100 MW of balancing capacity since they began commercial operation in March 2021. 

The Company increased its portfolio by 136.9 MW to 0.52 GW, representing a twenty-six percent period growth. Our forward-looking Investment Management team has developed a pipeline focused on further diversification of the portfolio outside of the UK and Irish markets, and into regional markets in North American and certain Western European states where we anticipate substantial growth over the coming years. The Investment Manager’s deal pipeline stands at 1.2 GW with 581 MW actively under negotiation as of the date of publication. 

^{*  Note this market share is based on GSF awarded MW out of the total awarded MW for DC in Great Britain for the reporting period.}

Financial Performance

The share price as at 30 September 2021 was 108.5 pence, representing a 5 per cent premium to NAV.

The Company declared dividends of 4.0 pence per share during the reporting period, of which 2.0 pence per share declared and approved at the post-period board meeting will be paid in January 2022.

Fundraising

The Company was oversubscribed in its April 2021 fundraise, raising £135m during the reporting period and completed its November 2020 Placing Programme to full capacity after the period end, in October 2021. The post-period fundraise was again, oversubscribed, as only £73.6 million remained available for subscription on the 2020 Prospectus.

We are encouraged by the increasing investor focus and support of the efforts of the Fund and other companies that support the effort towards net-zero in the markets in which we operate.

The amounts raised during the reporting period are allocated for the payment of construction activities at Ferrymuir, Enderbly and Stony and the 150MW expansion of the Irish assets (all with 1-hour duration).

Operational Performance

I am pleased to note that there were zero major or minor health and safety incidents on our sites in the period.

The Company’s availability for trading and delivery of ancillary services throughout the reporting period was strong, with an average availability across regions of 94 per cent.  

A high proportion of portfolio revenues were generated through the delivery of high-value services, in the form of dynamic containment in GB and uncapped DS3 services in the Irish grids. 

The Manager anticipates frequency services to remain attractive over the next reporting period until the market is able to meet grid demand for such services. 

Environmental Sustainability

The Company’s assets provide a critical service to national and regional grids, balancing electricity supply and demand, in the face of the inherently intermittent electric generation from renewable sources. Consequently, the Company’s investments facilitate the integration of renewable energy into power grids, ultimately contributing to the decarbonisation goals.

The Company is committed to assessing and monitoring data on the impact and effectiveness of its systems in supporting the net zero ambitions of the grid systems that we support and is on track to begin external reporting of its performance in accordance with SFDR frameworks in the 2022 fiscal year. 

Although not a mandatory requirement for the Company, it intends to become SFDR Article 8 Compliant in 2022. As part of this commitment, it will measure, in addition to all 14 main metrics under Article 8 SFDR Regulation, six additional environmental and social impact indicators which are relevant to the Company’s business processes. These include the monitoring of any emissions of ozone depletion substances, water usage and non-recycled waste ratios, and working with equipment manufacturers to identify and monitor the labour conditions across their supply chain.

COVID 19 and Other Risks

The Investment Management team continues to predominantly work remotely, as we strive to minimise the impact of COVID on the Company’s day to day operations. There is increased complexity in supply chain management across the globe and in light of this, the Investment Manager is working closely with its engineering and procurement partners to seek to ensure timely and efficient delivery in line with construction schedules. The Investment Manager does not expect any delays in the timelines of its pre-construction and construction projects as of the date of publication.

The Company’s other principal risks were set out in detail in the 31 March 2021 Annual Report, have been reassessed and continue to remain unchanged for the reporting period.^**

^{** Principal risks constitute Operational Risks, Market Risks, Technology Manufacturer Risk, Valuation Risks, COVID-19 Disruption Risks, Brexit Risks, Construction Risks, Currency Risks, and Cyber-Security Risks.}

Outlook

As of the date of publication, Kilmannock, one of the projects under development in Ireland, secured authorisation to increase its grid capacity by an additional 90MW, which will raise portfolio capacity to 0.62 GW. We anticipate that the Investment Manager will complete its assessment of how much of the available capacity to build out in Ireland in the coming months. As of the reporting period end, the Company contributed 110MW per annum to the British grid, 100MW in NI and has an additional 246.8MW under development in the United Kingdom and Ireland. It currently contributes 210MW ancillary services per annum to GB and Ireland and by the end of 2023, will contribute as much as 597 MW per annum in GB and Ireland.

The Company’s pipeline will be predominantly focused overseas over the next reporting period, where pipeline projects range between 50MW and 250MW (and average 110 MW) with longer battery duration of between 2 and 4 hours, as appropriate for merchant market trading in the United States. The increase in the volume of energy available per MW per site will not only result in lower CapEx per unit of energy but will also allow the Company to capture trading opportunities available in these markets.

We are encouraged by the aggressive growth of renewables in several regional operating systems in the United States and the resulting market opportunities for energy storage.  Notably, the Company could reach 1GW capacity by year end with the acquisition of as few as four new projects in the coming months.

Patrick Cox
Chair
Date: 17 December 2021

INVESTMENT MANAGER’S REPORT

Summary of Recent Portfolio Developments

The Company currently has an interest in 25 assets held within 15 portfolio companies. During the reporting period, the Company increased its total portfolio to 516.5 MW comprised of 210 MW of operational assets and 246.8 MW of pre-construction and construction phase projects, and EirGrid authorisation to increase grid capacity at its Porterstown site by a further 60 MW.  This represents a 60 per cent increase in portfolio development capacity since March 2021. Post Period, the Company was one of a few to receive consent to increase grid capacity at its sites, obtaining consent to increase the Kilmannock site capacity from 30.0 MW to 120.0 MW. In the coming months, the Investment Manager will complete its assessment of how much of the available extended capacity to build out in Ireland.   

The Stony (79.9 MW) and Enderby (57.0 MW) assets acquired in April and September, respectively, are expected to become commercially operational in 2023.  

By period-end, around 95 per cent of the Company’s operational portfolio in GB was delivering Dynamic Containment services, which provided the highest frequency services pricing available to storage sites during the reporting period.^*

^{*  Past performance is not a guarantee of future results.}

[refer to figure 5 of interim report]

The Company’s portfolio of energy storage assets is made up of operational projects, projects undergoing design and contracting (“pre-construction” assets) and projects under construction. The operational assets make up over one-third of the overall portfolio of 516.5 MW^*.

The Company has increased the size of its energy storage portfolio since IPO by circa 18x.^**

^{* The 516.5 MW includes EirGrid’s approval of a further 60 MW capacity expansion for Porterstown (January 2021). Post-period end, EirGrid approved a capacity expansion of Kilmannock’s grid connection by 90 MW in November 2021, bringing the portfolio capacity to 606.5 MW.} 

^{**  Calculated based on the figures of 29 MW at the end of 2018 and 516.5 MW at the end of the reporting period.} 

Asset Performance

[Refer to figure 6 in the Interim Report]

The Company’s availability throughout the reporting period was strong, with an average availability across regions of 94 per cent.

Asset availability in June reduced to 89 percent in NI as the newly commercial projects were taken offline to improve inverter stability.  In GB, the Lower Road and Port of Tilbury sites were taken offline for cable replacements during the month of June. All sites have returned to full operational capacity.

Health & Safety

We are proud to report zero major or minor Health and Safety incidents at our sites in the reporting period to September 2021.

Revenue Stacking During the Reporting Period

The Investment Manager is constantly assessing options for revenue optimisation, and profitability maximisation remains a key aspect of Gore Street's revenue stacking strategy.

All portfolio assets provide frequency services (FFR and DC, DS3) that reward the Company for fast response services to the grid.

The Company continues to benefit from higher-than-anticipated frequency revenues in GB, due to delivery of DC, a service introduced in October 2020. This service has achieved prices capped at £17/MWh, compared to averages of £10.6/MWh experienced for FFR, for the reporting period.^*

The Investment Manager seeks to continuously exploit its early participation in service delivery and capture competitive pricing whilst National Grid’s demand for services remains higher than supply.

^{*  Past performance is not a guarantee of future results.}

The GB storage market was further incentivised by changes to market regulations in the form of reduced levies on stand-alone storage facilities and a reduction in capacity charges of approximately 30 per cent (location-dependent). Storage is also now also exempt from variable ‘BSUoS’ charges.^**

^{**  System charges related to National Grid’s balancing of the demand and generation on the transmission system.}

[Refer to figure 7 in the Interim Report] 

The Investment Manager looks to participate in wholesale trading when appropriate to exploit spikes in market volatility, particularly when revenue trading opportunities deliver payments higher than the available suite of frequency response revenue, giving due consideration to the cost of degradation of the assets.

After the reporting period, the National Grid changed the method of procurement for DC from a 24-hour procurement period to four-hour EFA blocks. This change could provide the assets with greater flexibility to participate in grid balancing and trading services.

The Company’s projects are well-positioned to mitigate the risks associated with renewable energy penetration in the energy generation mix. Although low wind penetration can negatively impact revenues from ancillary services, the Company can take advantage of resulting price volatility by capitalising on trading opportunities. In GB, periods of high wind generation may lead to increased ancillary service revenue in DC (for as long as additional procurement is required by the National Grid).

The Company’s assets in NI and the ROI participate in the complex DS3 program and the Integrated Single Energy Market (“I-SEM”) providing revenue streams which are substantively similar to the ones in GB. The Company’s projected revenues from the DS3 market are in excess of the 10 per cent IRR target^***. In March 2021, the system operator announced a 12-month extension of the DS3 service to 30 April 2024.

The Capacity Market (CM) is a contract with a duration between one to fifteen years, designed to deliver power to the grid, at times of peak demand. All the assets of the GB portfolio have a capacity agreement. In Ireland, where CM is procured on both SONI and EirGrid networks, the Company currently possesses CM contracts for both of its assets in NI.

^{***  Projections are not indicative of future results.}

Pipeline

The Investment Manager’s current pipeline focuses heavily on North America and Western Europe.  These markets generally mirror the same essential grid balancing, capacity market and trading opportunities that characterise the GB and Irish markets. The Investment Manager will leverage on its experience to secure new assets in accordance with the Company’s investment policy, so that the Company does not assume early state risks associated with obtaining land, planning and grid connection rights.

As of date of publication, the Company is actively reviewing opportunities in GB, Ireland, Continental Europe, and the US. The total pipeline stands at 1.2 GW with transactions actively under negotiation amounting to a total of 581 MW as of the date of publication.

The U.S. energy market is highly stratified, with several independent system operators (each an "ISO”) independently operating regional transmission networks. The Company’s pipeline focuses on market opportunities underpinned by the incorporation of considerable wind and solar capacity into regional grids in California (CAISO)^*, Texas (ERCOT)^** New York (NYISO)^*** and New England (ISO New England).

The US markets differ from the UK and Ireland in that they tend to favour longer duration batteries, ranging from 1 to 4-hour duration. The increase in the volume of energy available per MW per site in the United States, will not only result in lower CapEx per unit of energy, but will also allow the Company to capture trading opportunities available in these markets.

^{* California Independent System Operator (CAISO)}

^{** Electric Reliability Council of Texas (ERCOT)}

^{*** New York Independent System Operator (NYISO)}

Environmental, Social and Governance Performance

Our Commitment to Sustainability

The Investment Manager understands that sustainability-related factors incorporated into the investment processes, can support better investment decisions. Therefore, the Investment Manager believes that sustainability risks should be addressed as a central part of its investment decision-making processes.

The Company is committed to the continuous integration of ESG assessments into its investment, construction, and operational decision-making processes, and strives to transparently communicate its progress through participation in the following initiatives: [Refer to page 20 of the interim report]

Furthermore, through its investments in energy storage, the Company supports the UN’s Sustainable Development Goals, helping to direct funds to the above four critical themes: [Refer to page 20 of the interim report]

The Company’s role in energy storage has been recognised by the Exchange Green Economy Mark, awarded by the London Stock Exchange’s Green Economy Mark. The award recognises companies that derive 50 per cent or more of their revenues from environmental solutions.

How ESG relates to us

The Environmental Impact of our Work

The Company’s assets provide a critical service to national and regional grids, balancing electricity supply and demand with energy storage solutions, in the face of the inherently intermittent electric generation by renewables. Consequently, the Company’s investments facilitate the integration of renewable energy into power grids, ultimately contributing to the decarbonisation goals.

The Company is committed to assessing the impact and effectiveness of its systems in supporting the net zero ambitions of the grid systems that the Company’s assets support. The Investment Manager will begin external reporting of the Company’s performance in accordance with the SFDR framework in the 2022 fiscal year.

EU Sustainable Finance Disclosure Regulation (SFDR) compliance is not mandatory for UK domiciled funds. However, the Company has decided to adopt the relevant SFDR Article 8 requirements because it is engaged in cross-border EU business. The Investment Manager aims to commence ESG monitoring and reporting by the EU’s 2022 deadline for SFDR. There are 14 metrics required to be compliant with Article 8 of the SFDR (Table 2 – page 22 of the interim report). The Investment Manager intends to extend its monitoring to include certain emissions, water waste, and social impact metrics (Table 3 – page 24 of the interim report) which may be relevant to the Company’s business processes, as further detailed below.

Furthermore, the Company is a signatory of the UN PRI and intends to participate in the next submission period, which will be in 2023. Regarding the TCFD Framework, the Company will comply with its financial reporting and climate-related financial disclosures, in line with FCA regulatory expectations.

Our approach to Health and Safety

Gore Street’s objective is that its sites are safe for staff and contractors. We are proud to report zero major or minor Health and Safety incidents at our sites in the fiscal year to September 2021.

Gore Street takes adequate precautions for safe design in its layout for batteries and is currently working with its partners and industry specialists, including leading insurers, to establish a framework for fire safety and accident planning protocols to better assess fire safety in the industry. The Company demands strict compliance with all applicable health and safety regulations from its partners.

Our work with Suppliers

The Company encourages its suppliers and partners to work in an environmentally and socially responsible manner. The Investment Manger’s Supplier Code of Conduct states that all its suppliers must establish policies, due diligence frameworks, and management systems, consistent with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, in order to ensure that parts and products supplied to projects and assets managed by the Investment Manager are "conflict-free," meaning that such minerals are sourced according to industrywide standards and do not fuel wars or benefit rebel movements. 

As part of its data collection initiative, the Investment Manager will work with the Company’s suppliers in what is expected to be a multi-year effort to start to evaluate its supply chain for key social and governance risks, including risks associated with the potential integration of conflict minerals into the supply chain.   

The Sustainability of our Batteries

Whilst the portfolio is at an early stage of its lifecycle, with the oldest project in the portfolio at less than one-sixth of its projected lifecycle, the Company is aware of the need to reduce waste and is exploring opportunities to integrate a circular economy approach^* for when we eventually decommission our batteries. The Investment Manager’s valuations assume the assets have a useful life of up to 30 years.

Furthermore, the Company critically assesses the revenue streams in which it chooses to operate and the impact this decision may have on a battery’s lifecycle, seeking to maximise battery efficiency.

Our approach to the Community

The Company aims to always operate in a manner that safeguards public health, property and the environment and is proud to report zero major or minor Health and Safety incidents at our sites in the fiscal year to September 2021.

Its partners’ protocols and system designs are developed to ensure minimal disruption to communities (including noise pollution and power system interruption) during construction and operations.

Local Communities

The Company supports FareShare, the UK’s national network of charitable food redistributors, whose purpose is to take good quality surplus food across the food industry and redistribute it to frontline charities and community groups.

The Company has recently given a donation to FareShare Northern Ireland which will cover the salary of one of its van drivers for 16 months, thus helping deliver 213 tonnes of food, equivalent to over half a million meals.

FairShare’s socio-economic impact confirms that by collecting food that would otherwise go to waste and redistributing it to good causes, it saves the UK economy approximately £51 million every year^**.

Global Communities

Post-period, the Company’s Board has approved a donation to UNICEF, matching personal contributions at the Investment Manager. The donation will cover about half of the cost of constructing and installing a multi-use solar powered water supply system in Nampula province in Mozambique, intended to provide access to safe and reliable water to circa 1500 people (including 500 children).

Diversity and Inclusion

The Investment Manager does not tolerate harassment, discrimination or offensive behaviour of any kind and is committed to promote and select individuals without concern for factors such as gender, race, ethnicity, sexual orientation, religion, age, or disability.

We are committed to reporting our workforce diversity data bi-annually. At the 30 September 2021, two-thirds of the Investment Manager’s executive team are from non-white (majority) ethnicities and nearly half of the Investment Manager’s team are women.

At GSF’s Board level, the proportion of women in executive leadership roles is 25 per cent.

^{* The circular economy is based on the concept that products are designed to last longer and to be reused, repurposed or recycled.}

^{** Impact Report carried out by NEF Consulting. Further details available at: ‘Our impact fighting hunger and food waste 2019/20 | FareShare}

DIRECTORS’ RESPONSIBILITIES

Going Concern

We have prepared this half year report on a going concern basis and the Company’s business activities, together with the factors likely to affect its future development performance and position, are set out in the Investment Manager’s Review.

The Directors have assessed the ability of the Company to continue as a going concern, below is the summary of the analysis.

Since 31^st March 2021, there have been reduced restrictions on travel and lockdown, but the full human and economic impact of the COVID-19 pandemic remains difficult to assess. 

The Company’s ability to generate revenue from its operational assets continues and remains largely unaffected by the pandemic. A potential key risk facing the Company is that Covid-19 may affect the ability of operators to adequately ensure operational integrity of the projects, particularly in terms of operations and maintenance. The Company and the Investment Manager have worked closely and liaised with the operators to ensure that commercial activities remain operational, and, in their view, power generation will remain essential to the UK’s infrastructure.

The going-concern analysis assumes continued annual expenditure at the rate of current expenditure and continued discretionary dividend payments to shareholders at a target annual rate of 7 per cent of NAV (and a target minimum rate of 7 pence per Ordinary Share). With expenditure and discretionary dividends assumed unchanged, the Company will continue to be operational and will have excess cash after payment of its liabilities for at least 12 months until 31 December 2022.

As at 30 September 2021, the Company had net current assets of £285.30 million and had cash balances of £172.56 million (excluding cash balances within investee companies), which are sufficient to meet current obligations as they fall due.  The major cash outflows of the Company are the payment of dividends and costs relating to the acquisition of new assets, both of which are discretionary.  The Company is a guarantor to GSES1 Limited’s £15m revolving credit facility with Santander. There are no other outstanding debts as at 30 September 2021.

The Directors considered the following scenario:

The Company and the portfolio assets for at least 12 months until 31 December 2022. We have assumed the Company’s rate of expenditure over the year will remain unchanged, that there are no contractual capital commitments at Company level, that there is an intercompany loan from the Company to its subsidiaries to finance EPC capex of portfolio assets, and that there are no loan repayments received from operational companies over the time frame and any loans from the Company to the subsidiaries are not repayable on short notice.

The Directors acknowledge their responsibilities in relation to the financial statements for the half year ended 30 September 2021 and the preparation of the financial statement on a going concern basis remains appropriate and the Company expects to meet its obligations as and when they fall due for at least 12 months until 31 December 2022.

Directors’ Responsibilities

The Directors confirm that to the best of their knowledge:

The unaudited interim condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and give a true and fair view of the assets, liabilities and financial position and the profit of the Company as required by DTR 4.2.4R; and

The Chair’s Statement, Investment Manager’s Report and the notes to the condensed financial statements include a fair review of the information required by:

1. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the unaudited interim condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
2. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the period and that have materially affected the financial position and performance of the Company during that period.

Signed on behalf of the Board of Directors

Patrick Cox
Committee Chair
Date: 17 December 2021

Interim Condensed Statement of Comprehensive Income
For the Interim period ended 30 September 2021

All Revenue and Capital items in the above statement are derived from continuing operations.

The Total column of this statement represents Company’s Income Statement prepared in accordance with IFRS. The return on ordinary activities after taxation is the total comprehensive income and therefore no additional statement of other comprehensive income is presented.

The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issue by the Association of Investment Companies.

Interim Condensed Statement of Financial Position
As at 30 September 2021

Interim Condensed Statement of Financial Position (continued)
For the Period Ended 30 September 2021

The annual financial statements were approved and authorised for issue by the Board of directors and are signed on its behalf by;

Patrick Cox

Chair

Date: 17 December 2021

The notes on pages 37 to 55 form an integral part of these financial statements.

Capital reduction reserve and revenue reserves are available to the Company for distributions to Shareholders as determined by the Directors.

The notes on pages 37 to 55 form an integral part of these financial statements.

Interim Condensed Statement of Changes in Equity
For the Period Ended 30 September 2020

Interim Condensed Statement of Cash Flows
For the Period Ended 30 September 2021

The notes on pages 37 to 55 form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

The notes are available in the printable pdf of the results. To download it, please click here