12 March 2024 

Gore Street Energy Storage Fund plc? 

(the "Company" or "GSF")? 

Unaudited Quarterly Net Asset Value and Dividend Declaration

Highlights

·      The Company continued to deliver against its strategy and dividend objectives for shareholders.  

·      The Company's Board of Directors has approved a dividend of 2.0 pence per share for the December-end quarter. The ex-dividend date will be 21 March 2024, followed by a record date of 22 March 2024. The dividend will be paid on or around 12 April 2024.

·      The aggregate portfolio has continued to generate sustainable and diversified revenues.

·      The Company's Q3 Net Asset Value (NAV) per share decreased by 1.7% to 111.0 pence per ordinary share at December-end 2023 (112.9 pence per ordinary share as at September-end 2023). Inclusive of the 2.0 pence dividend paid during the period, the quarterly NAV total return was 0.12%, bringing NAV total return since IPO to 49%.

·      Revenue curves are updated and disclosed to the market biannually during the audited interim and annual reporting periods. However, the Investment Manager has taken the prudent approach of updating the near-term GB revenue curves. The updated curves reflect actual revenue achieved over the past 12 months and the Investment Manager's view of the GB market for the coming months. These more conservative curves have been used in the December-end quarter valuations and are the primary driver of the reduction in NAV.

·      As of the date of publication, the Company reports a 45% increase in energised capacity compared to its previous reported period (September-end 2023)

·      As part of its portfolio buildout, the Company's GB exposure as a percentage of its operational capacity is expected to fall to c.30% on a MWh basis by the end of 2024.

·      All other long-term assumptions remain unchanged.

December-end NAV Bridge

Operational & Portfolio Update

·      As previously reported on 10 January, the Company continued to achieve strong and consistent revenue in line with the averages of Q1 and Q2 FY. The Company's consolidated portfolio generated an estimated average of £15.1[2] per MW/hr during the Company's third financial quarter (ending 31-December 2023).

·      The Company's estimated operational dividend cover for the December-end quarter was in line with the reported dividend cover for the six-month period ending in September 2023. The consistency in dividend cover was expected, given that there was no change in the revenue-generating asset base between periods. As assets are brought online throughout 2024, dividend cover is expected to be positively impacted.

·      The Company's GB portfolio contributed an estimated 15% of total revenue during the December-end quarter.

·      Post-period, the Company generated an estimated average hourly revenue of £16.1[3] per MW/hr in January and February 2024, demonstrating the resilience of the Company's diversified portfolio.

·      Post-period, the Company's energised capacity increased by 49.9 MW to reach 421.4 MW, following the successful energisation of Ferrymuir on 12 February. The Company remains on track to increase its operational capacity above 800 MW over the next 12 months.

·      Upcoming milestones for projects where construction is currently mobilised include:

·      the energisation of the 57 MW Enderby project (May 2024) and;

·      275 MW in the US energised by year-end, including the 200 MW Big Rock asset in California, further increasing the Company's portfolio diversification to a fifth distinct grid.

Strong Balance Sheet:

·      The Company maintains a strong financial position, with £66m in cash or cash equivalents as of 31 December 2023.

·      Available credit facilities include the Santander RCF of £50m and the $60m project-level debt facility on the Big Rock asset from First Citizens Bank. As at 31 December 2023, c.$15.8m had been drawn down from the Big Rock facility and the Santander facility remained undrawn.

·      As previously announced, the Company issued 14,000,000 new ordinary shares in the capital of the Company during the December-end quarter, to Nidec Motor Corporation at 112.9p (Net Asset Value as at 30 September 2023).

The Company intends to utilise its debt to c.15% of GAV by December-end 2024 to build out its prioritised portfolio; this conservative level of debt will enable accretive projects to become operational.

GB Capacity Market Contracts

The Capacity Market was introduced by the UK Government and serves to ensure sufficient and dependable capacity to meet consumer demand. This is achieved by offering compensation to dependable capacity providers, such as energy storage assets. Capacity from a range of technologies is secured through annual T-1 and T-4 auctions, with contracts spanning between 1 and 15 years. These multi-year, indexed-linked contracts typically contribute c.10% of the Company's GB revenue.

In the February 2024 auctions, the Company secured:

·      T-1 Auction: contracts for four of its projects at a clearing price of £35.79/kW for delivery in 2024/25.

·      T-4 Auction: additional contracts for five projects at £65/kW, scheduled for delivery in 2027/28.

·      These new contracts have a combined value of c.£1.7 million.

·      Further details are available on the National Grid website.

While these results represent newly contracted revenues, forecast assumptions for these contracts were in place, as is common practice in discounted cash flow valuations for the purpose of NAV calculation. The impact on valuations is, therefore, minimal.

Dividend Declaration

The Company's Board of Directors has approved a dividend of 2.0 pence per share for the December-end quarter. The ex-dividend date will be 21 March 2024, followed by a record date of 22 March 2024. The dividend will be paid on or around 12 April 2024.

Any such dividend payment to Shareholders may take the form of either dividend income or "qualifying interest income", which may be designated as an interest distribution for UK tax purposes and, therefore, subject to the interest streaming regime applicable to investment trusts. Of this dividend declared of 2.0 pence per share, 1.76 pence is treated as qualifying interest income.

The Board would like to take the opportunity to reaffirm to investors that it remains committed to the Company's 7.0% of NAV dividend target for the fiscal year.

Factsheets

The Company produces a monthly factsheet, in addition to quarterly updates, to communicate developments from across the portfolio and markets in which it operates. The publications, including the quarterly factsheet for the quarter ended 31 December, are available on the Company's website here.

Alex O'Cinneide,?CEO of Gore Street Capital, the Investment Manager of the Company, commented:?

"I am proud to provide an update for the three months ending 31 December which, despite a small reduction in NAV, continued to deliver the consistently strong returns achieved by the diversified portfolio over the financial year.

"The collapse of pricing in the GB market has affected the whole sector, but the market is realising the value in the resilience of the Company's international portfolio and strength of the Investment Manager's active management strategy. This value was showcased over the December-end quarter, with the consolidated portfolio delivering estimated average returns of £15.1/MW/hr, consistent with the previous six months and more than double that of GB alone. The Northern Ireland portfolio was particularly strong, providing record estimated revenues of £31.4/MW/hr over the latest quarter to maintain performance during seasonal variations within the portfolio.

"The estimated average of £16.1/MW/hr we've seen in January and February continues this momentum and remains well above what could be achieved just with a GB portfolio. These broadly consistent revenues over the financial year illustrate the strengths of our multi-jurisdictional approach.

"Energy storage is a complex but profitable asset class, and these returns have been made possible due to a correct understanding of energy markets, coupled with the appropriate investment and financial rigour. We have built a geographically diversified portfolio with a focus on achieving the lowest possible installed cost to maximise returns from a broad pool of revenue streams, all with a balance sheet utilising the correct level of debt. Those decisions are delivering for investors while making a material contribution to the decarbonisation of grids around the world.

"As we move towards the end of the financial year and beyond, we have already energised more capacity and look forward to updating the market with regular updates of our construction projects, which are fully funded to take the Company's operational capacity to above 800 MW over the next 12 months. The macro-environment has led to a massive decline in the pricing of cells and we are, therefore, able to upgrade our assets where most advantageous to longer duration at a fraction of the prices seen a year ago, opening new profitable revenue streams. Completion of these assets will further reduce our exposure to the weaknesses of the GB market and ensure we continue to lead the sector through a turbulent period."

For further information:£ 

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Gore Street Capital Limited££££• 

Alex O'Cinneide / Paula Travesso£££££££                                                    Tel: +44 (0) 20 3826 0290£ 

Shore Capital (Joint Corporate Broker)  £ 

Anita Ghanekar / Rose Ramsden / Iain Sexton (Corporate Advisory)        Tel: +44 (0) 20 7408 4090£ 

Fiona Conroy (Corporate Broking)£££££££ 

J.P. Morgan Cazenove (Joint Corporate Broker)                                                     

William Simmonds / Jérémie Birnbaum (Corporate Finance)                    Tel: +44 (0) 20 3493 8000£ 

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Buchanan (Media Enquiries)££££ 

Charles Ryland / Henry Wilson / George Beale                                        Tel: +44 (0) 20 7466 5000£ 

Email: gorestreet@buchanan.uk.com£ 

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Notes to Editors£ 

About Gore Street Energy Storage Fund plc£ 

Gore Street is London's first listed and internationally diversified energy storage fund dedicated to the low-carbon transition. It seeks to provide Shareholders with sustainable returns from their investment in a diversified portfolio of utility-scale energy storage projects. In addition to growth through increasing operational capacity and a considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.£ 

https://www.gsenergystoragefund.com?