TIDMTENT
RNS Number : 0249L
Triple Point Energy Transition PLC
01 September 2023
1 September 2023
Triple Point Energy Transition plc
("TENT" or the "Company" or, together with its subsidiaries, the
"Group")
QUARTERLY PORTFOLIO UPDATE
Triple Point Energy Transition plc (ticker: TENT), the London
Stock Exchange listed investment company focused on building a
portfolio of diversified infrastructure investments that support
the energy transition, announces its unaudited Net Asset Value
("NAV") at 30 June 2023 of GBP97.1m (97.10 pence per share), a
decrease of 2.33 pence per share compared to the Company's last
announced audited NAV as at 31 March 2023, largely driven by the
impact on valuations of rising interest rates and higher UK
long-term gilt yields.
Quarter ended Year ended
30 June 2023 31 March 2023
(unaudited) (audited)
---------------------------------------- --------------- ---------------
Net asset value ("NAV") GBP97.1m GBP99.4m
Investment portfolio valuation GBP94.6m GBP87.7m
NAV per share 97.10 pence 99.44 pence
Dividend declared per share 1.375 pence 5.50 pence
Capital committed awaiting deployment(1
2) GBP35.5m GBP44.4m
(1) alternative performance measures
(2) portfolio commitments will be fully funded by the Group's
undrawn Revolving Credit Facility ("RCF")
Financial Update
The key drivers of the movement in Net Asset Value pence per
share are summarised below with further details following:
NAV as at 31 March 2023 (pence per share) 99.44
Dividends paid (1.37)
Valuation adjustments:
* Power prices (0.51)
* Discount rate (1.82)
* Inflation 0.69
* Other (0.47)
Other movement (including actual performance) 1.15
NAV at 30 June 2023 (unaudited) 97.10
Valuation adjustments
The change in valuation for the quarter is primarily attributed
to a 40 bps increase in the unlevered discount rate of the
Hydroelectric Portfolio from 5.6% to 6.0%, coupled with the
downward revisions in power price forecasts by external power
market consultants. The 40bps increase in the discount rate for the
Hydroelectric Portfolio reflects the ongoing trend of rising
interest rates and higher UK long-term gilt yields. This is
partially offset by a higher inflation outlook than was previously
forecast.
The weighted average unlevered discount rate in respect of
investments deployed as at 30 June 2023 has increased to 7.0% (31
March 2023: 6.6%).
Once the Battery Energy Storage System ("BESS") portfolio has
been fully deployed in 2024 the earnings generation of the
portfolio is expected to increase, producing a levered portfolio
return of c.8.6% based on the RCF current rate of debt. These
earnings will further bolster the rate of return generated by the
portfolio's distinctive investment composition, driven by
contracted cash flows, with 94% underpinned by contracts extending
over the next ten years.
Dividend
Further to the dividend declaration RNS announced today, the
Company has declared a 1.375 pence per share dividend for the
quarter ended 30 June 2023, against the target annual distribution
to shareholder of 5.5 pence per share. This represents a dividend
yield of 9.4% on the share price as at 30 August 2023.
Deployment and investment activity
The Company continued to deploy capital into its committed
portfolio, with a further GBP8.9m being deployed during the
quarter:
- GBP5m debt investment in Innova Renewables to help fund its
development pipeline of solar, battery and energy storage systems
across the UK. The facility has a 12-month term and delivers
contractual returns that are materially higher than the Group's
target return of 7-8%.
- GBP3.9m into the Group's Battery Energy Storage System ( BESS)
Portfolio, resulting in a total deployment to date of 22% of its
overall commitment. This subsector continues to offer compelling
investment opportunities and returns.
Portfolio Update
Income from the debt investments was in line with expectations.
The underlying trading performance of the Combined Heat and Power
("CHP") Portfolio was marginally ahead of expectations.
The build-out of the second BESS asset in the portfolio at
Gerrards Cross remains on track for Commercial Operations in Q3 of
this year. The remaining two BESS assets are also proceeding in
line with previous updates and are set to become operational in
2024.
The Hydroelectric Portfolio performance was lower than forecast
due to reduced precipitation. This has already been partially
offset by out-performance in July, with generation being 97% ahead
of budget for the month. The majority of hydro generation falls
between October and March, being 72% of the total budgeted
generation, and accordingly the quarter ended 30 June 2023 is not
indicative of annual performance.
The Company agreed fixed price power purchase agreements
("PPAs") in respect of its nine hydroelectric power assets.
Accordingly, 100% of the earnings from these assets are underpinned
by contract until March 2025.
Capital Markets Day
TENT will host a Capital Markets Day on 28 September 2023, at
which analysts and investors will be afforded the opportunity to
hear from the Investment Manager and asset managers about the
Group's portfolio in greater detail. For further information,
please contact Buchanan at tent@buchanancomms.co.uk.
For further information, please contact:
Triple Point Investment Management LLP
Jonathan Hick
Christophe Arnoult
Chloe Smith +44 (0) 20 7201 8989
J.P. Morgan Cazenove (Corporate Broker)
William Simmonds
Jérémie Birnbaum +44 (0) 20 3493 8000
Akur Limited (Financial Adviser)
Tom Frost
Anthony Richardson
Siobhan Sergeant +44 (0) 20 7493 3631
Buchanan (Financial PR)
Helen Tarbet
Henry Wilson
Hannah Ratcliff
Verity Parker +44 (0) 20 7466 5111
LEI: 213800UDP142E67X9X28
Further information on the Company can be found on its website:
http://www.tpenergytransition.com/
NOTES:
The Company is an investment trust which aims to invest in
assets that support the transition to a lower carbon, more
efficient energy system and help the UK achieve Net Zero.
Since its IPO in October 2020, the Company has made the
following investments and commitments:
-- Harvest and Glasshouse : provision of GBP21m of senior debt
finance to two established combined heat and power ("CHP") assets,
located on the Isle of Wight, supplying heat, electricity and
carbon dioxide to the UK's largest tomato grower, APS Salads
("APS") - March 2021
-- Spark Steam : provision of GBP8m of senior debt finance to an
established CHP asset in Teesside supplying APS, as well as a
further power purchase agreement through a private wire arrangement
with another food manufacturer - June 2021
-- Hydroelectric Portfolio (1) : acquisition of six operational,
Feed in Tariff ("FiT") accredited, "run of the river" hydroelectric
power projects in Scotland, with total installed capacity of 4.1MW,
for an aggregate consideration of GBP26.6m (excluding costs) -
November 2021
-- Hydroelectric Portfolio (2) : acquisition of a further three
operational, FiT accredited, "run of the river" hydroelectric power
projects in Scotland, with total installed capacity of 2.5MW, for
an aggregate consideration of GBP19.6m (excluding costs) - December
2021
-- BESS Portfolio : commitment to provide a debt facility of
GBP45.6m to a subsidiary of Virmati Energy Ltd (trading as
"Field"), for the purposes of building a portfolio of four
geographically diverse Battery Energy Storage System ("BESS")
assets in the UK with a total capacity of 110MW - March 2022
-- Energy Efficient Lighting: Funding of c.GBP2.2m to a lighting
solutions provider to install efficient lighting and controls at a
leading logistics company - March 2023
-- Innova: Provision of a GBP5m short term development financing
facility to Innova Renewables, building out a portfolio of Solar
and BESS assets across the UK - March 2023
The Investment Manager is Triple Point Investment Management LLP
("Triple Point") which is authorised and regulated by the Financial
Conduct Authority. Triple Point manages private, institutional, and
public capital, and has a proven track record of investment in
Energy Efficiency and decentralised energy projects.
Following its IPO on 19 October 2020, the Company was admitted
to trading on the Premium Segment of the Main Market of the London
Stock Exchange on 28 October 2022. The Company was also awarded the
London Stock Exchange's Green Economy Mark.
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END
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