Half-year Report

RNS Number : 0909J

Gore Street Energy Storage Fund PLC

18 December 2020

 

18 December 2020

Gore Street Energy Storage Fund Plc

('Gore Street' or the 'Company')

Half Year Results

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 Half Year Unaudited results for the six-month period to 30 September 2020.

Financial Highlights for the period of 30 September 2020

· NAV increased substantially from £50.0 million in March 2020 to 75.0 million as at September 2020

· Share price increase to 105.0 pence as at 30 September 2020 (31 March 2020: 97.3 pence)

· Net income of £2.8 million (31 March 2020: £4.7million)

· NAV per ordinary share of 97.3 pence, an increase of 2.9% increase compared with the full-year period (31 March 2020: 94.6 pence)

· Dividend declared for the period of 2.0 pence per share. Committed to delivering annual dividend in line with target of 7% of NAV, or a minimum of 7.0 pence per share.

· Following the issuance of further shares in July 2020, Issued Share Capital (ISC) increased to 77.2 million shares (31 March 2020: 52.5 million)

Operational Highlights for the period of 30 September 2020

· Total portfolio increased substantially to 239 MW as at 30 September 2020 (31 March 2020: 189 MW)

· A successful fundraise of £23.7m was completed during period. An additional £15.5m in equity from ISIF remains available to the Company for projects in Ireland. Neither the fundraise nor drawdown facility are reflected in AUM of £75.0m

· Further significant strategic investment partner secured: Eneos Corporation (formerly known as JXTG Nippon Oil & Energy Corporation), Japan's largest energy company, as part of its long-term strategy to diversify from oil and broaden its range of power sources and reduce its carbon footprint

· Four operational assets producing income in Great Britain (GB):

o 4 MW project in Cenin, Swansea

o 6 MW site in Boulby, North Yorkshire

o 9 MW project at London's Port of Tilbury

o 10 MW project in Lower Road, Essex

· 50 MW of capacity added with the acquisition in June of a construction-ready project at Ferrymuir, Scotland  

· All operational assets continued to perform within expectations, delivering our steady source revenue for the Company. Sites under construction remain on schedule.

Post Period-end Highlights

· Acquisition of 81 MW portfolio across 5 operational projects in Great Britain. Four of these companies comprise single sites - Larport, Lascar, Hulley and Breach - each with installed capacity ranging from 10 MW to 20 MW. One Company, Ancala, is comprised of ten smaller sites ranging between 1.0 MW - 1.2 MW, totalling 11.0 MW installed capacity.

· The 81 MW acquisition of operational assets increased operational assets from 29 MW to 110 MW

· Portfolio increased to 14 projects with a total capacity of 320 MW of which 110 MW is operational

· Number of ordinary shares in issue increased to 143.9 million following (i) new ordinary shares issued as part of the consideration in relation to the Anesco portfolio acquisition in October 2020 and (ii) the successful oversubscribed fundraise of £60 million completed in December 2020 as part of a 12-month placing programme, in place until 29 November 2021

· Pipeline of c.1.3 GW, located in GB, Ireland, Continental Europe and United States

Net Asset Value

As at 30 September 2020, the unaudited estimated NAV per Ordinary Share had increased to 97.3 pence representing a total return including dividends of 3.9% from March 2020. Compared to 30 September 2019, NAV per share increased by 1.8 pence from 95.5 pence, and total returns including dividends were 9.2%. 

Dividend Payment

The 2.0 pence per share declared dividend will be paid on or around 15 January 2021 to shareholders on the register on 4 January 2021. The ex-dividend date will be 31 December 2020.

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

"Gore Street has had another exceptional period of successful growth and we continue to deliver on the commitments we made to shareholders at IPO. We have grown substantially and the portfolio now has projects of 320 MW in aggregate of which 110 MW is operational, delivering strong cashflows for the company, underpinning dividends to our shareholders. In the half-year, we successfully raised £23.7m and post-period end, completed an oversubscribed placing of £60 million in December 2020. In addition,  7.1m of shares were issued as part of the consideration for the Anesco portfolio acquisition, showing our ability to use both cash and equity to enable transformational deals to take place. We would like to thank our shareholders for their continued support during the global pandemic crisis.

Gore Street is well set to continue to grow at the same pace with c.1.3 GW in our pipeline of which 80 MW is expected to be executed in the near term.

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 will enable that transition, whilst creating significant value for our shareholders. I look forward to updating Shareholders on our continued progress during 2021."

The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.

The person responsible for releasing this announcement is Susan Fadil.

For further information:

Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso		Tel: [phone]
Shore Capital (Joint Broker)
Anita Ghanekar / Darren Vickers / Hugo Masefield (Corporate Advisory)		Tel: [phone]
Henry Willcocks / Fiona Conroy (Corporate Broking)
J.P. Morgan Cazenove (Joint Broker)
William Simmonds / Edward Gibson-Watt / Jérémie Birnbaum (Corporate Finance)		Tel : [phone]
Buchanan (Media Enquiries)
Charles Ryland / Henry Wilson / George Beale		Tel: [phone]
		Email: [e-mail]
JTC (UK) Limited, Company Secretary		Tel: [phone]

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

 

1  OVERVIEW

As at 30 September 2020:

Market Capitalisation £81.0million	Share Price 105.0 pence	Annual Dividend 4.0 pence for the period*
NAV £75.1 million	NAV per share 97.3 pence	Total Returns since IPO (on a share price basis) 16%

 *1.0 pence was paid during the period in relation to 31 March 2020. 4.0 pence was declared for the period; 2.0 pence was paid post period end in October 2020 with the remaining 2.0 pence to be paid in January 2021.

  Corporate Purpose

Gore Street Energy Storage Fund plc ("Gore Street" or the "Company") aims to deliver 7 per cent income yield per annum and long-term capital growth to its investors from its portfolio of utility-scale energy storage assets located in the UK and the rest of the OECD.

Gore Street Energy Storage Fund Plc (or the "Company) is the first pure-play energy storage fund listed on the London Stock Exchange and targets a 7 per cent income yield alongside long-term capital growth from its portfolio of utility-scale energy storage assets located in the UK, Ireland and other OECD countries.

  Investment Highlights

During the period, the Company acquired the development rights for 100 per cent of Ferrymuir Energy Storage Limited for a total of £1.3m, bringing the total portfolio size to 239 MW, from 189 MW. The 50 MW acquisition of Ferrymuir marks the Company's first investment in Scotland, and the project is expected to be operational by Q4 2022.

  Post-Period Investment Highlights

On 30 October 2020, the Company acquired Anesco's operational portfolio comprising five companies totaling 80.7 MW, located across the United Kingdom.  Four of these single sites (Larport, Lascar, Hulley and Breach) have a total installed capacity ranging between 10.0 MW - 20.0 MW, and one ("Ancala") is comprised of ten smaller sites with total installed capacity ranging between 1.0 MW - 1.2 MW.

 

  Key Metrics for the Period

Table 1: Key Metrics

	31 March 2020	30 September 2020
Net Asset Value (NAV)	£49.7 m	£75.1 m
NAV per share**	94. 6 p	97.3 p
Number of issued Ordinary shares	52.5 m	77.2 m
Share price based on closing price of indicated date	97.3 p	105.0 p
(Discount)/ Premium to NAV*	2.9%	7.9%
Market capitalisation based on closing price at indicated date	£51.1 m	£81.0 m
Portfolio's installed capacity	189.0 MW	239.0 MW
Dividends paid***	7.0 p	1.0 p

*Premium/(Discount) to NAV calculated as difference between closing price on 30 September of 2020 to NAV on 30 September of 2020 divided by 30 September NAV.  This is an alternative performance measure.

** NAV per share of 97.3 pence excludes dividend paid in October 2020 and dividend declared in December 2020. 

*** Dividends paid relates to the financial year 31 March 2020 and for the six months period to 30 September 2020. 

Chairman's Statement

I am pleased to present the Company's Interim report and an update on the progress achieved during the period to 30 September 2020. In particular I would like to thank our Gore Street Capital staff for their continued commitment and shareholders for their continued support during the global pandemic crisis.

Financial Performance

The Company continued to meet its annual dividend target by paying a total of 7.0 pence to its investors relating to year ended 31 March 2020. The final 1.0 pence (£0.77m) payment in relation to the Q4 period, 1 January 2020 to 31 March 2020, was paid on 23 July 2020. 2.0 pence has been declared for each of the following two quarters to 30 September. The 2.0 pence (£1.54m) relating to 1 April to 30 June was paid post the period on 30 October 2020, and 2.0 pence relating to 1 July to 30 September will be paid in January 2021.

Despite the COVID-19 pandemic, the Company continued to grow and further increased the number of shares in issue to 143.9 million as of the date of publication, (31 March 2020: 52.5 million shares).

The share price as at 30 September 2020 was 105.0 pence, representing a 7.9 per cent premium to NAV. The total shareholder returns since IPO is 16%.

Review of Investment Policy

The Board and the Investment Manager are undertaking a review of the Company's gearing policy to ensure that it is accretive to shareholders and in line with the financing needs of the Group's increasing size and expanding portfolio.  Any proposed changes to the gearing policy will require shareholder approval.

The maximum gearing level allowable at the Company presently is 15 per cent of Gross Asset Value at the time of borrowing.

Principal Risks and Uncertainties

The Company's principal risks and uncertainties were set out in detail in the 30 March 2020 Annual Report and were reassessed and continue to remain relevant as of 30 September 2020. They are as follows:

· Operational Risks

· Market Risks

· Technology Manufacturer Risks

· Liquidity Risks

· Valuation Risks

· Emerging Risks

· Construction Risks

· Impact of COVID-19

To date the COVID-19 pandemic has not had a material impact on the Company's day to day operations. The principal risks outlined above remain the most likely to affect the Company in the second half of the year.

 

Conclusion

The Company has grown its portfolio substantially during the half-year, from a capacity under construction or in operation of 189 MW to 239 MW. Since the period end, the portfolio has been further expanded to 320MW of capacity by adding five operational projects and one asset under development. A significant pipeline of projects with a total capacity of 1.3 GW has been identified by the Manager as being of interest. Given that our capital base, since the reporting period, has been expanded by £60 million through an initial placing that was significantly oversubscribed, we expect a substantial further increase in total capacity from assets that meet our investment return criteria in 2021. Despite the pandemic, the operational assets have continued to generate revenues broadly in line with expectations and construction activities have had no major disruptions. We are all committed to ensuring that the operational assets are managed efficiently and that those in the pre- construction and construction phase are completed and brought into operation on time and on budget in order to deliver a combination of income and long-term capital growth to our investors.

Patrick Cox

Chairman

Date: 17 December 2020

 

Investment Manager's Report

Portfolio Update

At the publication date of this report, the Group's portfolio comprised 14 projects with a total capacity of 320 MW including projects under construction. All of the assets within the Group's existing portfolio are situated in the UK and the Republic of Ireland, of which operational assets represent 110 MW. The Investment Manager has selected assets that deliver portfolio diversification from multiple revenue streams, geographical location, EPC contractors, O&M counterparties and developers whilst meeting its return criteria of delivering IRRs of 10%+. Details of the assets within the Group's current portfolio are summarised below:

Project	Location	Capacity	% Owned by the Company	Site Type	Status	Commissioning/ Expected commissioning	Battery provider
Boulby	North Yorkshire UK	6.0 MW	100%	Industrial Mining	Operational	-	NEC ES
Cenin	Wales UK	4.0 MW	49%	Renewable Generation	Operational	-	TESLA
Lower Road	Essex UK	10.0 MW	100%	Greenfield	Operational	-	NEC ES
Port of Tilbury	London UK	9.0 MW	100%	Port	Operational	-	NEC ES
Mullavilly	Northern Ireland	50.0 MW	51%	Greenfield	Under construction	Q1 2021	NEC ES
Drumkee	Northern Ireland	50.0 MW	51%	Greenfield	Under construction	Q1 2021	NEC ES
Kilmannock	Republic of Ireland	30.0 MW	51%	Greenfield	Pre-construction	Q1 2022	FLUENCE
Porterstown	Republic of Ireland	30.0 MW	51%	Greenfield	Pre-construction	Q3 2021	FLUENCE
Ferrymuir	Scotland UK	50.0 MW	100%	Greenfield	Pre-construction	Q4 2022	To be confirmed
Lascar*	Manchester UK	20.0 MW	100%	Greenfield	Operational	-	BYD
Hulley*	Cheshire UK	20.0 MW	100%	Greenfield	Operational	-	BYD
Larport*	Derbyshire UK	19.5 MW	100%	Greenfield	Operational	-	BYD
Ancala*	Various UK	11.2 MW	100%	Renewable Generation	Operational	-	BYD
Breach*	Derbyshire UK	10.0 MW	100%	Greenfield	Operational	-	BYD

*Assets acquired post period end

Summary of Recent Portfolio Acquisitions

Recent Acquisitions

In the period ending 30 September 2020, the Company acquired development rights for 100 per cent stake of Ferrymuir Energy Storage Limited for a total of £1.3m, bringing the total portfolio size from 189 MW to 239 MW. The 50 MW acquisition of Ferrymuir marks the Company's first investment in Scotland, and the project is expected to be operational by Q4 2022.

Post period end, the Company acquired Anesco's operational portfolio on 30 October 2020. This comprised of 5 companies totaling 81 MW located across the United Kingdom. Of the Anesco Projects, four are single sites: Larport; Lascar; Hulley; and Breach, with installed capacity ranging between 10.0 MW - 20.0 MW, and one ("Ancala") is comprised of ten smaller sites: Blue House; Hermitage; High Meadow; Grimsargh; Heywood Grange; Brookhall; Low Burntoft; Fell View; Hungerford; and Beeches, with installed capacity ranging between 1.0 MW - 1.2 MW.

Ferrymuir, Great Britain
Voting rights	100%
Major Revenue Stream	Frequency Services
Battery Duration	TBC
Site Type	Front-of-Meter

Post the period, the below projects were acquired from Anesco:

Lascar, Great Britain			Larport, Great Britain
Voting rights	100%		Voting rights	100%
Major Revenue Stream	Frequency Services		Major Revenue Stream	Frequency Services
Battery Duration	1 hour		Battery Duration	1 hour
Site Type	Front-of-Meter		Site Type	Front-of-Meter

Breach Farm, Great Britain			Hulley, Great Britain
Voting rights	100%		Voting rights	100%
Major Revenue Stream	Frequency Services		Major Revenue Stream	Frequency Services
Battery Duration	1 hour		Battery Duration	1 hour
Site Type	Front-of-Meter		Site Type	Front-of-Meter

Ancala, Great Britain
Voting rights	100%
Major Revenue Stream	Frequency Services
Battery Duration	Multiple
Site Type	Multiple Sites

At the publication date of the report, the Company has successfully increased the size of the portfolio by more than 69%. The increase has been mainly driven by the increase in the operational portfolio from Anesco.

Health & Safety

Of the portfolio companies all Health Safety and Environment (HSE) policies, including daily task trackers and inspection records are in place. There were no Health or Safety incidents in the period pertaining to the report.

 

Market Outlook

The energy industry continues to undergo change. With the ongoing integration of more variable renewable forms of electricity generation onto power systems (including wind, solar, electric vehicles stations and other technologies), there is greater complexity in managing demand and supply and ensuring stability in power systems. Energy storage remains a critical tool of national power systems to support the successful transition to a net-zero economy.

Despite turbulent global markets caused by the Covid-19 pandemic, market projections for the global energy storage market remain optimistic across all regions, with significant growth in energy storage capacity expected and with annual revenue predicted to reach US$546 billion by 2035.

The Company also continues to evaluate the commercial viability of flow battery technology alongside other long duration storage technologies in order to best optimise technology it uses within its portfolio. The Company is technology agnostic.

  The GB Market

The GB market remains a key focus, with the fundamental drivers for storage remaining strong, including the UK Government's target of net zero emissions by 2050. The GB market has seen significant increases in renewable generation.  For example, in 2020, the UK Government reported statistics on the performance of the industry over the previous year.  In that document it set out that renewable generation in GB and Northern Ireland reached 44.6 per cent in Q2 2020, growing from 35.6 per cent in Q2 2019.

With regards to energy costs of operating the Group's assets in GB, the fundamental market changes in the economy in response to the Covid-19 pandemic, such as the need for remote working and reduced use of transport, has resulted in reduced demand for electricity, which, when coupled with the favourable weather conditions that facilitated greater renewable energy generation, has resulted in more frequent periods of negative electricity pricing since March 2020. National Grid resorted to paying renewable power generators to reduce output to limit excess supply on the grid as well as to maintain inertia on the system. These factors introduced new challenges to managing the grid, as the system became less resilient to sudden changes in frequency, inducing greater grid balancing ("BSUoS") charges. In this scenario, energy storage is well placed to support the electricity system.

The Company is in a position to take advantage of multiple revenue streams available in the GB market as summarised below:

(a)  Frequency Services:

Frequency services, which balance supply and demand of electricity to ensure that frequency remains at 50 Hz (+/- 1%), are currently a major revenue source for energy storage systems in GB and a key component in the National Grid's objective of a zero-carbon system by 2025. Prices for frequency services in 2020 have remained consistent with those seen in 2019 with contracts awarded at an average of £8/MW/hour for the past twelve months with the Company's portfolio assets in Great Britain benefiting from the same.

(b)  Capacity Market:

The Company's asset, Boulby, has also received Capacity Market payments over the period with the Port of Tilbury expected to fulfill the obligations of its Capacity Market contract starting Q4 2020. The other operational assets in Great Britain, including Cenin and Lower Road, have contracts commencing in 2021. The next Capacity Market auction will be in January 2021 for the T-1 (1 year advance procurement) and February 2021 for T-4  (4 year advance procurement) contracts which the Company may use for procurement of contracts for other GB portfolio based assets. Based on reports from Aurora (A third party energy consultant), the demand for capacity is unlikely to fall in the coming decade as renewable energy generation does not have a large impact on firm capacity requirements, and capacity requirements may increase as heat and transport becomes electrified.

  The Irish Market

The Company's assets in Northern Ireland (NI) and Republic of Ireland (ROI) will participate in the Delivering a Secure, Sustainable Electricity System' program ("DS3"program) and the Integrated Single Energy Market ("I-SEM").

The I-SEM primarily covers revenue streams which are similar to the ones in Great Britain, namely:

(a)  Energy Trading

(b)  Capacity Market

The DS3 program has multiple services that can be provided by storage systems to the grid operators, including frequency regulation similar to GB.

The NI assets will participate in the DS3 uncapped program (Non fixed renumeration) and the ROI assets within the DS3 capped program (Fixed renumeration) as detailed within the Company's Annual Report.

  The Impact of COVID- 19

In the short term, there has been limited interruption in the Company's business activities due to the Covid-19 pandemic.

There were delays in the early weeks of the initial lockdown resulting in a five-week suspension of construction activities relating to two assets located in Northern Ireland but they did not impact on the expected commercial operation start date, due to this having been conservatively set. The Company does not currently anticipate that the delays will impact the ability of the assets to meet market deadlines for commencement of service. However, the longer-term economic impact of the Covid-19 pandemic and resulting lockdowns on the Group and its portfolio remains difficult to assess. 

  New Market Services

The National Grid in Great Britain has started introducing new frequency response services, namely: Dynamic Containment, Dynamic Moderation and Dynamic Regulation. These new services will initially run in parallel with existing Frequency services with the intention to replace monthly frequency services by Q4 2021/22. The first Dynamic Containment auction procurement was launched on 1 October 2020.The Investment Manager has started engaging with potential providers of this service having observed promising return opportunities.

Outside of Reserve and Response, the National Grid has also published roadmaps in the areas of Reactive Power and Black Start, which the Company continues to evaluate as potential future revenue opportunities for its storage assets.

  Pipeline Update

The Investment Manager continues its assessment of opportunities within its core markets of GB and Ireland, and is also assessing opportunities in other OECD markets, particularly Western Europe and North America. The Investment Manager is actively engaged with developers on specific opportunities in line with the Company's investment policy.

As of September 2020, the Company had exclusivity on one project of 80 MW in Great Britain and is actively reviewing opportunities in GB, Ireland, Continental Europe and US. The total pipeline stands at 1.3 GW.

In line with the Company's investment policy, the focus remains to acquire the project rights from developers with grid connections and planning permits secured, land options in place, and with visibility on revenue streams. The Investment Manager will also consider the acquisition of fully operational portfolios if these are aligned with its investment policy and meet the Company's target return.

  Environmental, Social and Corporate Governance

The Company has joined GIIN (The Global Impact Investing Network) to enable it to measure effectively and contribute to the growing knowledge base of impact investors worldwide that would enable it to maximise impact across the target UN SDG principles.

The Company has also been awarded the London Stock Exchange's Green Economy Mark, acknowledging that it derives greater than 50% of its revenues from environmentally friendly sources and continues to optimize its portfolio to drive increasing amount of revenue from green sources.

2  DIRECTORS' STATEMENT

2.1  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.

Going Concern

The Company's ability to generate revenue from its operational assets continues and remains unaffected by the pandemic. The going-concern analysis further assumes continued annual expenditure at the rate of current expenditure and continued discretionary dividend payments to shareholders at the target annual rate of 7 pence per ordinary share.  With expenditure and discretionary dividends assumed unchanged over the next 12 months, the Company will continue to be operational and will have excess cash after payment of its liabilities over the next 12 months from when the Interim Report is issued.

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 and we don't currently see any material disruption.

As at 30 September 2020, the Company had net current assets of £38.6 million and had cash balances of £34.29 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 had no outstanding debt as of 30 September 2020.

The Directors have acknowledged their responsibilities in relation to the financial statements for the Interim period ended 30 September 2020 and the preparation of the financial statements on a going concern basis remains appropriate and the Company expects to meet its obligations as and when they fall due for the foreseeable future. 

2.2  Directors' Responsibility Statement

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

i. 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

ii. 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 2020

 

3  INTERIM CONDENSED FINANCIAL STATEMENTS

3.1  Interim Condensed Statement of Comprehensive Income 

For the Period Ended 30 September 2020

	Notes	1 April 2020 to 30 September 2020				1 April 2019 to 30 September 2019
		Revenue	Capital	Total		Revenue	Capital	Total
		(£)	(£)	(£)		(£)	(£)	(£)
Net gain on investments at fair value through profit and loss		-	3,692,663	3,692,663		-	2,219,191	2,219,191
Interest income		67,685	-	67,685		236,065	-	236,065
Administrative and other expenses		(904,273)	-	(904,273)		(568,130)	-	(568,130)
Profit / (loss) before tax		(836,588)	3,692,663	2,856,075		(332,065)	2,219,191	1,887,126
Taxation	4	-	-	-		-	-	-
Profit / (loss) after tax for the period		(836,588)	3,692,663	2,856,075		(332,065)	2,219,191	1,887,126
Total comprehensive income / (loss) for the period		(836,588)	3,692,663	2,856,075		(332,065)	2,219,191	1,887,126
Profit / (loss) per share (basic and diluted) - pence per share	5			4.45				5.86

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.

The notes on pages 24 to 40 form an integral part of these financial statements.
 

3.2  Interim Condensed Statement of Financial Position 

As at 30 September 2020

Company Number 11160422

	Notes		30 September 2020 (£)		31 March  2020 (£)
Non - Current Assets
Investments at fair value through profit or loss	6		36,450,807		30,412,493
			36,450,807		30,412,493
Current assets
Cash and cash equivalents			34,292,745		15,028,142
Trade and other receivables	7		5,124,906		4,963,527
			39,417,651		19,991,669
Total assets			75,868,458		50,404,162
Current liabilities
Trade and other payables			794,646		713,659
			794,646		713,659
Total net assets			75,073,812		49,690,503
Shareholders equity
Share capital	10		771,762		525,488
Share premium	10		42,759,780		19,707,058
Special reserve	10		186,656		186,656
Capital reduction reserve	10		24,744,738		25,516,500
Capital reserve	10		8,713,121		5,020,458
Revenue reserve	10		(2,102,245)		(1,265,657)
Total shareholders equity			75,073,812		49,690,503
Net asset value per share	9		0.97		0.95

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

Patrick Cox

Chairman

Date: 17 December 2020

The notes on pages 24 to 40 form an integral part of these financial statements.
 

           3.3  Interim Condensed Statement of Changes in Equity 

           For the Period Ended 30 September 2020

	Share capital (£)	Share premium reserve (£)	Special reserve (£)	Capital reduction reserve (£)	Capital reserve (£)	Revenue reserve (£)	Total shareholders equity (£)
As at 1 April 2020	525,488	19,707,058	186,656	25,516,500	5,020,458	(1,265,657)	49,690,503
Profit/(loss) for the period	-	-	-	-	3,692,663	(836,588)	2,856,075
Total comprehensive income/(loss) for the period	-	-	-	-	3,692,663	(836,588)	2,856,075
Transactions with owners
Ordinary shares issued at a premium during the year	246,274	23,420,624	-	-	-	-	23,666,898
Share issue costs	-	(367,902)	-	-	-	-	(367,902)
Dividends paid	-	-	-	(771,762)	-	-	(771,762)
As at 30 September 2020	771,762	42,759,780	186,656	24,744,738	8,713,121	(2,102,245)	75,073,812

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

           Interim Condensed Statement of Changes in Equity

           For the Period Ended 30 September 2019

	Share capital (£)	Share premium reserve (£)	Special reserve (£)	Capital reduction reserve (£)	Capital reserve (£)	Revenue reserve (£)	Total shareholders equity (£)
As at 1 April 2019	306,000	67,476	186,656	28,590,177	(565,064)	(469,408)	28,115,837
Profit/(loss) for the period	-	-	-	-	2,219,191	(332,065)	1,887,126
Total comprehensive income/(loss) for the period	-	-	-	-	2,219,191	(332,065)	1,887,126
Transactions with owners
Ordinary shares issued at a premium during the period	69,621	6,265,934	-	-	-	-	6,335,555
Share issue costs	-	(160,135)	-	-	-	-	(160,135)
Dividends paid	-	-	-	(306,000)	-	-	(306,000)
As at 30 September 2019	375,621	6,173,275	186,656	28,284,177	1,654,127	(801,473)	35,872,383

The notes on pages 24 to 40 form an integral part of these financial statements.

3.4  Interim Condensed Statement of Cash Flows 

For the Period Ended 30 September 2020

		Notes	1 April 2020 to 30 September 2020 (£)		1 April 2019 to 30 September 2019 (£)
Cash flows used in operating activities
Profit for the period			2,856,075		1,887,126
Net gain on investments at fair value through profit and loss			(3,692,663)		(2,219,191)
Increase in trade and other receivables			(161,380)		(454,057)
Increase in trade and other payables			80,988		13,472
Net cash used in operating activities			(916,980)		(772,650)
Cash flows used in investing activities
Purchase of investments			(2,345,651)		(11,783,400)
Net cash used in investing activities			(2,345,651)		(11,783,400)
Cash flows from / (used in) financing activities
Proceeds from issue of ordinary shares at a premium			23,666,898		6,335,555
Share issue costs			(367,902)		(160,135)
Dividends paid			(771,762)		(306,000)
Net cash inflow from financing activities			22,527,234		5,869,420
Net increase / (decrease) in cash and cash equivalents for the period			19,264,603		(6,686,630)
Cash and cash equivalents at the beginning of the period			15,028,142		17,223,770
Cash and cash equivalents at the end of the period			34,292,745		10,537,140

During the period, interest received by the Company totaled £nil (2019: £38,092).

The notes on pages 24 to 40 form an integral part of these financial statements.
 

Notes to the Interim Condensed Financial Statements

For the Period Ended 30 September 2020

1.  General information

Gore Street Energy Storage Fund plc (the "Company") was incorporated in England and Wales on 19 January 2018 with registered number 11160422. The registered office of the Company is The Scalpel 18th Floor, 52 Lime Street, London, England, EC3M 7AF

Its share capital is denominated in Pound Sterling (GBP) and currently consists of ordinary shares. The Company's principal activity is to invest in a diversified portfolio of utility scale energy storage projects primarily located in the UK and the Republic of Ireland, although the Company will also consider projects in North America and Western Europe

2.  Basis of preparation

Statement of compliance

The half yearly condensed financial statements for the period 1 April 2020 to 30 September 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting, and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. The half yearly financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as at 31 March 2020. The financial statements have been prepared on a historical cost basis except for the investments which are accounted for at fair value through the profit or loss. The Company is an investment entity in accordance with IFRS 10 which holds all its subsidiaries at fair value and therefore prepares separate accounts only and does not prepare consolidated financial statements for the Company The financial information for the year ended 31 March 2020 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The Independent Auditor's Report on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The financial information contained in this Half Year Report does not constitute statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 30 September 2020 and 30 September 2019 has not been audited by the Company's external auditor.

Functional and presentation currency

The currency of the primary economic environment in which the Company operates (the functional currency) is Pound Sterling ("GBP or £") which is also the presentation currency.

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

2.  Basis of preparation (continued)

Going concern

Since the year end, there has been reduced restrictions on travel and lockdown, but the full human and economic impact of the COVID-19 pandemic still remains difficult to assess.

The Company's ability to generate revenue from its operational assets continues and remains unaffected by the pandemic. The going concern analysis assumes continued annual expenditure at the rate of current expenditure and continued discretionary dividend payments to shareholders at the target annual rate of 7 pence per ordinary share. With expenditure and discretionary dividends assumed unchanged over the next 12 months, the Company will continue to be operational and will have excess cash after payment of its liabilities over the next 12 months.

As at 30 September 2020, the Company had net current assets of £38.6 million and had cash balances of £34.29 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 has no outstanding debt as at 30 September 2020.

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 Directors acknowledge their responsibilities in relation to the financial statements for the half year ended 30 September 2020 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 the foreseeable future.

3.	Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
During the period the Directors considered the following significant judgements, estimates and assumptions:

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

3.  Significant accounting judgements, estimates and assumptions (continued)

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them unless they provided investment related services to the Company. To determine that the Company continues to meet the definition of an investment entity, the Company is required to satisfy the following three criteria:

a). the Company obtain funds from one or more investors for the purpose of providing those investors with investment management services;

b). the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

c). the Company measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Company meets the criteria as follows:

-  the stated strategy of the Company is to deliver stable returns to shareholders through a mix of energy storage investments:

-  the Company provides investment management services and has several investors who pool their funds to gain access to infrastructure related investment opportunities that they might not have had access to individually; and

-  the Company has elected to measure and evaluate the performance of all of its investments on a fair value basis. The fair value method is used to represent the Company's performance in its communication to the market, including investor presentations. In addition, the Company reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance.

Having assessed the criteria above and in their judgement, the Directors are of the opinion that the Company has all the typical characteristics of an investment entity and continues to meet definition in the standard. This conclusion will be reassessed on an annual basis.

 

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

3.  Significant accounting judgements, estimates and assumptions (continued)

Valuation of Investments
Significant estimates in the Company's financial statements include the amounts recorded for the fair value of the instruments. By their nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Company's financial statements of changes in estimates in future periods could be significant. These estimates are discussed in more detail in note 8.

4.	Taxation
The Company is recognised as an Investment Trust Company ("ITC") for accounting periods beginning on or after 25 May 2018 and is taxed at the main rate of 19%.
		30 September 2020 (£)		30 September 2019 (£)
(a)	Tax charge in profit and loss account			(a)
	UK Corporation tax	-
(b)	Reconciliation of the tax charge for the period			(b)
	Profit before tax	2,856,075
	Tax at UK standard rate of 19%	542,654
Effects of:
Unrealised gain on fair value investments		(701,605)		(421,646)
Expenses not deductible for tax purposes		4,217		-
Group relief surrendered		-		-
Changes in tax rate		-		6,641
Deferred tax not recognised		154,734		56,541
Tax charge for the period		-		-
Estimated losses not to be recognised due to insufficient evidence of future profits		1,454,531		692,406
Estimated deferred tax thereon (19%: 17%)		276,361		117,709
As at 30 September 2020, the Company has excess management expenses that are available to offset future tax revenues. A deferred tax asset, measured at the prospective corporate rate of 19% (2019: 17%) of £276,361 (2019: £117,709) has not been recognised in respect of these expenses since they are recoverable only to the extent that the Company has sufficient future taxable revenue.

 

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

5.	Earnings per share
Earnings per share (EPS) amounts are calculated by dividing the profit or loss for the period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period. As there are no dilutive instruments outstanding, basic and diluted earnings per share are identical
				30 September 2020		30 September 2019
Net gain attributable to ordinary shareholders				£ 2,856,075		£ 1,887,126
Weighted average number of ordinary shares for the period				64,151,689		32,197,870
Profit per share - Basic and diluted (pence)				4.45		5.86
6.	Investments
		Place of business	Percentage  ownership	30 September 2020		31 March 2020
GSES1 Limited ("GSES1")		England & Wales	100%	36,450,807		30,412,493
The Company meets the definition of an investment entity. Therefore, it does not consolidate its subsidiaries or equity method account for associates but, rather, recognises them as investments at fair value through profit or loss. The Company is not contractually obligated to provide financial support to the subsidiaries and associate and there are no restrictions in place in passing monies up the structure.
The investment in GSES1 is financed through equity and a loan facility available to GSES1. The facility may be drawn upon, to any amount agreed by the Company as lender, and is available for a period of 20 years from 28 June 2018. The rest is funded through equity. The amount drawn on the facility at 30 September 2020 was £27,742,132, (31 March 2020: £25,396,482). The loan is interest bearing and attracts interest at 5% per annum. Investments in the indirect subsidiaries are also structured through loan and equity investments and the ultimate investments are in energy storage facilities.
Realisation of increases in fair value in the indirect subsidiaries will be passed up the structure as distributions on the equity investment. GSES1 controls Albion, England and GSF IRE as listed below which in turn hold an interest in project companies as disclosed in the in table below.

 

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

6.

Investments (continued)

Immediate Parent

Place of business

Percentage Ownership

Investment

GSF Albion Limited ("Albion) *

GSES1

England & Wales

100%

NK Boulby Energy Storage Limited

Albion

England & Wales

99.998%

Boulby

Kiwi Power ES B

Albion

England & Wales

49%

Cenin

GSF England Limited ("England") **

GSES1

England & Wales

100%

OSSPV001 Limited

England

England & Wales

100%

Lower Road Port of Tilbury

GSF IRE Limited

GSES1

England & Wales

100%

Ferrymuir Energy Storage Limited ***

Albion

England & Wales

100%

Ferrymuir

Mullavilly Energy Limited

GSF IRE

Northern Ireland

51%

Mullavilly

Drumkee Energy Limited

GSF IRE

Northern Ireland

51%

Drumkee

Porterstown Battery Storage Limited

GSF IRE

Republic of Ireland

51%

Kilteel

Kilmannock Battery Storage Limited

GSF IRE

Republic of Ireland

51%

Kilmannock

* NK Energy Storage Solutions Limited changed its name to GSF Albion Limited with effect from 16 June 2020.

** GSC LRPOT Limited changed its name to GSF England Limited with effect from 11 June 2020.

*** The acquisition of Ferrymuir Energy Storage Limited was completed on the 19 June 2020.

 

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
7.	Trade and other receivables
The Company advanced to NEC ES an advance of £4,500,000 on the date at which it was admitted to the Premium segment of the London Stock Exchange. The advance remains to be used in conjunction with the Company's purchase of products, equipment and / or services from NEC ES for the projects in which the Company is to be invested. The Company's purchase of such products and equipment from NEC ES is conditional upon NEC ES' ability to meet the requirements of the Company's projects and subject to the terms and pricing of the products, equipment and/or services being provided on market standard terms (as defined by the Company). The advance will be paid against the amount of value of products and equipment of which the Company takes possession / ownership of from NEC ES. If for example the value of the products and equipment is £4.5 million, the fund will not pay any more.
The advance letter provided that if NEC ES did not sell to the Company, products, equipment and / or services on terms agreeable to the Company to the value of the Company's advance within 12 months from the date of the Company's admission on the London Stock Exchange, NEC ES would within 14 days of the end of such period pay to the Company: a)  the balance of the advance payment less the amount of value that has been supplied to the Company in that period; and b)  interest on the balance accrued from the date of admission at a rate of 3 per cent, per annum.
At the end of the 12 month term in May 2019, the Company and NEC ES had not completed a sale of products, equipment and/or services. As at 30 September 2020, NEC ES has not paid back the amounts nor the interest amounts due. Under two EPC contracts signed between NEC (UK) Limited and certain of the Company's SPV entities, with a contract value in excess of Euros 34 million, the Company, via its SPVs, has the option (in its discretion) to set off the original £4.5 million advance against amounts payable by the SPVs to NEC (UK) Limited upon completion of construction in the first quarter of 2021. As these contracts are with the SPVs, these amounts payable are included in the fair value of the investments on the Company's balance sheet and not shown as obligations of the Company.

 

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
8.	Fair Value measurement
Valuation approach and methodology
There are three traditional valuation approaches that are generally accepted and typically used to establish the value of a business; the income approach, the market approach and the net assets approach. Within these three approaches, several methods are generally accepted and typically used to estimate the value of a business. The Company has chosen to utilise the income approach, which indicates value based on the sum of the economic income that an asset, or group of assets, is anticipated to produce in the future. Therefore, the income approach is typically applied to an asset that is expected to generate future economic income, such as a business that is considered a going concern. Free cash flow to total invested capital is typically the appropriate measure of economic income. The income approach is the DCF approach and the method discounts free cash flows using an estimated discount rate (WACC).
Valuation approach and methodology
The International Valuation Standards Council ("IVSC") issued guidance in March 2020 in response to the COVID-19 pandemic.
It notes that one of the main issues when dealing with valuation is uncertainty and that valuation is not a fact, but an estimate of the most probable of a range of possible outcomes based on the assumptions made in the valuation process.
Valuation uncertainty can be caused by various factors, including market disruption, input availability and the choice of method or model of valuation
The guidance issued by the IVSC was considered by the Investment Advisor in the determination of the valuations disclosed at 30 September 2020.
Valuation process
In the period, the Company acquired a 100% interest in one asset with a total capacity of 49.9 Megawatt ("MW"), bringing the Company's portfolio of lithium-ion energy storage investments to a total capacity of 239.0 MW.  As at 30 September 2020, 110.0 MW were operational and 129.0 MW pre-operational (the "Investments") through its subsidiary companies. The Investments comprise nine projects: Boulby, Cenin (49% owned by the Company), Lower Road, Port of Tilbury, operational and Mullavilly, Drumkee, Kilteel, Kilmannock and Ferrymuir, pre-operational.

Notes to the Interim Condensed Financial Statements (continued)

For the Period Ended 30 September 2020

8.

Fair Value measurement (continued)

All of these investments are based in the UK and the Republic of Ireland. The Directors review and approve these valuations following appropriate challenge and examination. The current portfolio consists of non-market traded investments and valuations are analysed using forecasted cash flows of the assets and used the discounted cash flow approach as the primary approach for the purpose of the valuation.The Company engages external, independent and qualified valuers to determine the fair value of the Company's investments or fair values are produced by the office of the Investment Advisor.

As at 30 September 2020, the fair value of the investment in NK Boulby Energy Storage Limited, (which owns the Boulby project), OSSPV001 Limited (Lower Road and Port of Tilbury), Mullavilly Energy Limited, Drumkee Energy Limited and Ferrymuir Energy Storage Limited (Mullavilly, Drumkee and Ferrymuir respectively), and Kilmannock Battery Storage Limited and Porterstown Battery Storage Limited (Kilmannock and Kilteel respectively) have been determined (presented by the Investment Advisor and reviewed) by BDO LLP The fair value of the associate company, Kiwi ES B Limited, (which owns the Cenin project) has been determined by the Investment Advisor.

Quantitative information

The below table summarises the significant unobservable inputs to the valuation of investments.

Investment Portfolio

Valuation technique

Significant Inputs

Fair Value

Description

Range

30 September 2020 (£)

31 March 2020 (£)

Great Britain

DCF

Discount Rate

6% - 8%

10,394,058

6,732,557

Revenue / MWH

£5.5 - £40

Northern Ireland

DCF

Discount Rate

9% - 10%

19,565,027

16,138,800

Revenue / MWH

£8 - £21

Republic of Ireland

DCF

Discount Rate

10%

4,653,969

5,739,200

Revenue / MWH

€6 - €15

Holding Companies

NAV

1,837,753

1,801,936

Total Investments

36,450,807

30,412,493

The fair value of the holding companies represents the net assets together with any cash held within those companies in order to settle any operational costs.

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
8.	Fair value measurement (continued)
Sensitivity Analysis
The below table reflects the range of sensitivities in respect of the fair value movements of the Company's investments.
Investment Portfolio		Valuation technique	Significant Inputs			Estimated effect on Fair Value
			Description		Sensitivity	30 September 2020 (£)		31 March 2020 (£)
Great Britain		DCF	Revenue		+ 10%	4,200,000		2,000,000
					- 10%	(4,300,000)		(2,200,000)
			Discount rate		+1%	(2,000,000)		(600,000)
					-1%	2,500,000		800,000
Northern Ireland		DCF	Revenue		+ 10%	3,900,000		3,400,000
					- 10%	(3,900,000)		(3,500,000)
			Discount rate		+1%	(3,200,000)		(2,400,000)
					-1%	3,800,000		2,800,000
Republic of Ireland		DCF	Revenue		+ 10%	2,200,000		1,900,000
					- 10%	(4,000,000)		(3,400,000)
			Discount rate		+1%	(3,000,000)		(1,900,000)
					-1%	3,500,000		2,300,000
High case (+10%) and low case (-10%) revenue information used to determine sensitivities are provided by third party pricing sources.

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
8.	Fair value measurement (continued)
Valuation of financial instruments
The investments at fair value through profit or loss are Level 3 in the fair value hierarchy and the reconciliation in the movement of Level 3 investments is presented below. No transfers between levels took place during the period.
Reconciliation		30 September 2020 (£)		31 March 2020 (£)
Opening balance		30,412,493		6,482,964
Purchases during the period / year		2,345,651		18,344,007
Proceeds from investments - return of capital		-		-
Total fair value movement through the profit and loss		3,692,663		5,585,522
		36,450,807		30,412,493
A minority shareholder of Boulby has a right to receive a certain share of Boulby distributions once GSF Albion Limited realises excess return over an agreed hurdle return from its investment into Boulby. Based on free cash flow forecast used to compute the net asset value of Boulby for this period, it is not expected to reach the threshold return and thus no payment to the minority shareholder is taken into account. However, if the actual cash flow significantly exceeds the forecast cash flow used for current net asset value, a part of the excess cash flow may be distributed to the minority shareholder, impacting the ultimate fair value.

 

Notes to the Interim Condensed Financial Statements (continued) For the Period Ended 30 September 2020 9. Net asset value per share Basic NAV per share is calculated by dividing the Company's net assets as shown in the Statement of Financial Position that are attributable to the ordinary equity holders of the Company by the number of ordinary shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic and diluted NAV per share are identical 30 September 2020 31 March 2020 Net assets per Statement of Financial Position £ 75,073.812 £ 49,690,503 Ordinary shares in issue as at 30 September / 31 March 77,176,180 52,548,815 NAV per share - Basic and diluted (pence) 0.97 0.95 10. Share capital and reserves
Share capital Share premium reserve Special reserve Capital reduction reserve Capital reserve Revenue reserve Total (£) (£) (£) (£) (£) (£) (£) At 1 April 2020 525,488 19,707,058 186,656 25,516,500 5,020,458 (1,265,657) 49,690,503 Issue of ordinary £0.01 shares: 28 June 2020 30,000 2,853,000 - - - - 2,883,000 Issue of ordinary £0.01 shares: 8 July 2020 216,274 20,567,624 - - - - 20,783,898 Share issue costs - (367,902) - - - - (367,902) Dividends paid - - - (771,762) - - (771,762) Profit for the period - - - - 3,692,663 (836,588) 2,856,075 At 30 September 2020 771,762 42,759,780 186,656 24,744,738 8,713,121 (2,102,245) 75,073,812
Notes to the Interim Condensed Financial Statements (continued) For the Period Ended 30 September 2020 10. Share capital and reserves (continued) Share capital Share premium reserve Special reserve Capital reduction reserve Capital reserve Revenue reserve Total (£) (£) (£) (£) (£) (£) (£) At 1 April 2019 306,000 67,476 186,656 28,590,177 (565,064) (469,408) 28,115,837 Issue of ordinary £0.01 shares: 19 August 2019 69,621 6,265,934 - - - - 6,335,555 Issue of ordinary £0.01 shares: 14 October 2019 101,066 9,378,934 - - - - 9,480,000 Issue of ordinary £0.01 shares: 23 October 2019 12,641 1,173,058 - - - - 1,185,699 Issue of ordinary £0.01 shares: 11 February 2020 36,160 3,417,106 - - - - 3,453,266 Share issue costs - (595,450) - 13,199 - - (582,251) Dividends paid - - - (3,086,876) - - (3,086,876) Profit for the year - - - - 5,585,522 (769,249) 4,323,262 At 31 March 2020 525,488 19,707,058 186,656 25,516,500 5,020,458 (1,265,657) 49,690,503                                 Share Issues On 28 June 2020, the Company issued 3,000,000 ordinary shares at a price of 96.10 pence per share, raising gross proceeds from the Placing of £2,883,000. On 8 July 2020, the Company issued 21,627,365 ordinary shares at a price of 96.10 pence per share, raising gross proceeds from the Placing of £20,783,898.
Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
11.	Dividends
		Dividend per share	30 September 2020			30 September 2019
			(£)			(£)
Dividends paid during the period
For the 3 month period ended 31 March 2019		1 pence	-			306,000
For the 3 month period ended 31 March 2020		1 pence	771,762			-
			771,762			306,000
An interim dividend of 2 pence for the period 1 April 2020 to 30 June 2020 was proposed by the Directors, and subsequently paid on the 30 October 2020. An interim dividend of 2 pence for the period 1 July to 30 September is proposed by the Directors and due to be paid in January 2021
12.	Transactions with related parties
Following admission of the ordinary shares (refer to note 10), the Company and the Directors are not aware of any person who, directly or indirectly, jointly or severally, exercises or could exercise control over the Company. The Company does not have an ultimate controlling party.
Details of related parties are set out below:
Directors
Patrick Cox, Chairman of the Board of Directors of the Company, is paid director's remuneration of £37,000 per annum,Caroline Banszky is paid director's remuneration of £25,000 per annum, with the remaining directors being paid directors' remuneration of £21,000 per annum. Total director's remuneration and associated employment costs of £49,559 were incurred in respect of the period, there were no outstanding amounts payable at the period end.

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 30 September 2020
12.	Transactions with related parties (continued)
Investment Advisor
The Investment Advisor, Gore Street Capital Limited (the "Investment Advisor"), is entitled to advisory fees under the terms of the Investment Advisory Agreement amounting to 1/4th of 1% of Adjusted Net Asset Value. The advisory fee will be calculated as at each NAV calculation date and payable quarterly in arrears.
For the avoidance of doubt, where there are C Shares in issue, the advisory fee will be charged on the Net Asset Value attributable to the Ordinary Shares and C Shares respectively.
For the purposes of the quarterly advisory fee, Adjusted Net Asset Value means:
(i)	for the four quarters from First Admission, Adjusted Net Asset Value shall be equal to Net Asset Value;
(ii)	for the next two quarters, Adjusted Net Asset Value shall be equal to Net Asset Value minus Cash on the Company's Statement of Financial Position, plus any committed Cash on the Company's Statement of Financial Position;
(iii)	thereafter, Adjusted Net Asset Value shall be equal to Net Asset Value minus Cash on the Company's Statement of Financial Position.
Investment advisory fee of £376,416 (30 September 2019: £150,389) was incurred during the period, with £178,095 still outstanding as at 30 September 2020, (31 March 2020: £31,175).
In addition to the advisory fee, the Advisor is entitled to a performance fee by reference to the movement in the Net Asset Value of Company (before subtracting any accrued performance fee) over the Benchmark from the date of admission on the London Stock Exchange.
The Benchmark is equal to (a) the gross proceeds of the Issue at the date of admission increased by 7 per cent. per annum (annually compounding), adjusted for: (ii)  any increases or decreases in the Net Asset Value arising from issues or repurchases of Ordinary Shares during the relevant calculation period; the amount of any dividends or distributions (for which no adjustment has already been made under (i)) made by the Company in respect of the Ordinary Shares at any time from date of admission; and (b) where a performance fee is subsequently paid, the Net Asset Value (after subtracting performance fees arising from the calculation period) at the end of the calculation period from which the latest performance fee becomes payable increased by 7 per cent. per annum (annually compounded).
The calculation period will be the 12 month period starting 1 April and ending 31 March in each calendar year with the first year commencing on the date of admission on the London Stock Exchange.

 

Notes to the Interim Condensed Financial Statements (continued)
For the Period Ended 31 March 2020
12.	Transactions with related parties (continued)
Investment Advisor (continued)
The performance fee payable to the Investment Advisor by the Company will be a sum equal to 10 per cent. of such amount (if positive) by which Net Asset Value (before subtracting any accrued performance fee) at the end of a calculation period exceeds the Benchmark provided always that in respect of any financial period of the Company (being 1 April to 31 March each year) the performance fee payable to the Investment Advisor shall never exceed an amount equal to 50 per cent of the Advisory Fee paid to the Investment Advisor in respect of that period. Performance fees are payable within 30 days from the end of the relevant calculation period. No performance fees were accrued as at 30 September 2020.
During the period the Investment Advisor provided operations management services to SPV companies resulting in charges in the amount of £nil (30 September 2019: £106,289) being paid by the SPV companies to the Investment Advisor.
Significant Shareholders
NEC ES is a related party to the Company by virtue of also being a significant shareholder within the structure and details of transactions with each party can be found in note 7. During the period, OSSPV001 Limited, a 100% indirectly owned subsidiary of the Company entered into an interest bearing loan arrangement with Eneos Emea Limited, an indirect subsidiary of Nippon Oil, a significant shareholder of the Company. This loan arrangement is three and half years, ending 31 March 2024.
13.	Capital commitments
The Company had no contingencies and significant capital commitments at the reporting date (31 March 2020: £7.8m).
14.	Post balance sheet events
The Directors have evaluated the need for disclosures and / or adjustments resulting from post balance sheet events through to 17 December 2020, the date the financial statements were available to be issued.
The Company continues to grow despite COVID-19, and on 30 October 2020 acquired operational projects from Anesco which comprised of five companies for the consideration of £21 million cash payments and a £7.1 million share issuance. In December 2020, the Company completed an oversubscribed placing of £60 million which further increased the total share issued to 143.9 million (30 September 2020: 77.2 million). Notes to the Interim Condensed Financial Statements (continued) For the Period Ended 31 March 2020 14. Post balance sheet events (continued) Up to the date of publication NEC ES has not paid back the advance nor the interest amounts due (refer to note 7). There were no adjusting post balance sheet events and as such no adjustments have been made to the valuation of assets and liabilities as at 30 September 2020.

 

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