Category: Uncategorized (Page 350 of 375)

I’ve bought for the portfolio 11055 shares

in Next Energy NESF for 9k.

The price is still falling but the buying yield is 10%.

Dividend:

·     Dividend of 4.18p per ordinary share for the period ended 30 September 2023 (30 September 2022: 3.76p).

·     Target dividend of 8.35p per ordinary share for the year ended 31 March 2024 (a year-on-year increase of 11%).

·     Forecasted target dividend cover remains c.1.3x for the financial year ending 31 March 2024.

·     Total dividends declared since IPO of £318m or 63.7p per share.

22 Nov 2023

Custodian Property Income REIT plc

(“Custodian Property Income REIT” or “the Company”)

Third quarter trading update shows rental growth supporting fully covered dividends

Custodian Property Income REIT (LSE: CREI), which seeks to deliver an enhanced income return by investing in a diversified portfolio of smaller, regional properties with strong income characteristics across the UK, today provides a trading update for the quarter ended 31 December 2023 (“Q3” or the “Quarter”).

Leasing activity continues to support rental growth and underpin fully covered dividends

• 1.375p dividend per share approved for the Quarter, fully covered by unaudited EPRA earnings, in line with target of at least 5.5p for the year ending 31 March 2024, representing a 8.0% yield based on the prevailing 69p share price
• EPRA earnings per share of 1.4p for the Quarter (FY24 Q2: 1.4p, Q1: 1.5p)
• Passing rent increased to £43.4m (FY24 Q2: £43.2m) driven by continued occupier demand for space across all sectors in the Company’s portfolio, with four rent reviews settled during the Quarter, on average, in line with ERV and 21% above previous passing rent.  Four new leases also signed securing £0.5m of annual rent.  These initiatives have increased property capital value by £1.0m
• Like-for-like ERV has increased by 0.8% since 30 September 2023, driven primarily by rental growth in the industrial sector.  Portfolio ERV (£50.1m) exceeds passing rent by 15% (30 Sept 2023: 15%) demonstrating the portfolio’s significant reversionary potential
• EPRA occupancy has remained at 91% (30 Sept 2023: 91%).  1.0% of ERV is vacant subject to refurbishment or redevelopment with 3.1% of ERV vacant but under offer to let or sell

 
Valuations

• The valuation of the Company’s diversified portfolio of 158 assets decreased on a like-for-like basis by 1.7% (£10.5m) to £602.4m, net of a £1.0m valuation increase from active asset management activity (FY24 Q2: £4.5m increase from asset management)
• Q3 net asset value (“NAV”) total return per share[5] of -1.3%
• NAV per share of 93.3p (30 Sept 2023: 95.9p) with a NAV of £411.2m (30 Sept 2023: £422.8m)

Investment Manager’s commentary

UK property market

2023 saw rising interest rates, weak investor sentiment and low transaction volumes.  This was in contrast to occupier demand which delivered rental growth and has further improved the reversionary potential in Custodian Property Income REIT’s portfolio, which is now greater than it was at the start of 2023.

Investor sentiment towards real estate appears to have been closely correlated with the expected trajectory of interest rates, as determined by inflation data.  Consensus opinion and the interest rate forward curve suggest that the next move for interest rates will be down, with the potential for a number of base rate cuts in late 2024 and into 2025, subject of course to an improving geopolitical environment.  This should be positive for real estate investors and occupiers.

Asset management

Over the 12 months to 31 December 2023 the passing rent of the Company’s portfolio has grown by c.3% to £43.4m and ERV has grown from £48.4m to £50.1m, an increase of c.3.5%, demonstrating the continued prospects for strong rental performance which will support earnings and the companies aim of paying fully covered dividends.

The Investment Manager has remained focused on active asset management during the Quarter, completing four rent reviews at an aggregate 21% increase in annual rent from £1.1m to £1.4m, and re-gearing four leases which secured £0.5m of annual rent. These initiatives increased property capital value by £1.0m.  The new leases had a weighted average unexpired term to first break or expiry (“WAULT”) of five years, with the overall portfolio WAULT remaining at 4.8 years.

Details of these asset management initiatives are shown below:

Rent reviews

• Restore plc at an industrial unit in Salford with annual rent increasing by 33% to £605k.
• West Midlands Ambulance Service at an industrial unit in Erdington with annual rent increasing by 12% to £186k.
• National Timber Group at an industrial unit in Grangemouth with annual rent increasing by 13% to £438k.
• Starbucks at a drive-through unit in Maypole with annual rent increasing by 17% to £140k.

New leases

• A 20-year lease with a tenth year break to Andrew Sykes Hire at an industrial unit in Farnborough, Hampshire, at an annual rent of £226k, a 22% increase on the previous passing rent, increasing valuation by £0.8m (28%).
• A five-year lease over a smaller floor-plate with 18 and 36 month break options to Liverpool University Hospitals NHS Foundation Trust in Liverpool at an annual rent of £125k, increasing valuation by £0.1m (3.6%).
• A five-year lease renewal with a third year tenant only break option to ITM Power at an industrial asset in Sheffield, with an annual rent of £141k reflecting a 36% increase on previous passing rent, increasing valuation by £0.1m (5%).
• A 10-year lease renewal with fifth year break option on a retail unit in Dunfermline let to Greggs at an annual rent of £26k in line with ERV, an 11% increase on the previous passing rent.

Since the Quarter end the Company has completed seven further asset management initiatives, including:

• Letting a vacant office unit in Edinburgh and a vacant retail unit in Liverpool with aggregate annual rent of £161k; and
• Completing the comprehensive refurbishment of David House offices in Leeds which has seen the tenant, First Title Limited, take a 10.5 year lease without break at an annual rental of £462k, a 49% increase on the previous passing level.  This refurbishment has resulted in the EPC rating of the building improving from C to A, with refurbishment works now commencing to the adjoining building let to the same tenant.

Since the Quarter end the Company has also settled the following rent reviews at an aggregate 29% ahead of previous passing rent with:

• Chicken Cabins at a drive-through unit in York Clifton Moor with annual rent increasing by 42% to £118k;
• Listers Group at a motor dealership in Loughborough, with annual rent increasing by 13% to £181k; and
• Acorn Web Offset at an industrial unit in Normanton, with annual rent increasing by 42% to £155k.

Disposals

Acknowledging the higher cost of variable rate debt, of which the company currently has £50m drawn under its Lloyds Bank revolving credit facility (“RCF”), steps have been taken to advance a number of property sales, where special purchasers can unlock prices ahead of valuation, but more importantly ahead of the cost of the RCF, in order to enhance earnings per share.

During the Quarter a children’s day nursery in Chesham was sold for £0.55m at valuation.

Since the Quarter end, an industrial unit in Milton Keynes and an office building on Pride Park, Derby have been sold for an aggregate £10.1m.  Two further properties in Redhill (former car dealership) and Castle Donington (offices), which are both vacant, are under offer to sell for an aggregate £4.4m.  These disposals are expected to complete during the quarter ending 31 March 2024 and proceeds are expected to be used to reduce variable rate borrowings.

Fully covered dividend

The Company paid an interim dividend of 1.375p per share on 30 November 2023 relating to the quarter ended 30 September 2023.  The Board has approved an interim dividend per share of 1.375p for the Quarter, fully covered by EPRA earnings, payable on 29 February 2024.  The Board is targeting aggregate dividends per share of at least 5.5p for the year ending 31 March 2024.  The Board’s objective is to grow the dividend on a sustainable basis, at a rate which is fully covered by net rental income and does not inhibit the flexibility of the Company’s investment strategy.

Borrowings

On 10 November 2023 the Company and Lloyds Banking Group agreed to extend the RCF for a term of three years, with options to extend the term by a further year on each of the first and second anniversaries of the renewal.  The RCF includes an ‘accordion’ option with the facility limit initially set at £50m, which can be increased up to £75m subject to Lloyds’ consent.  The headline rates of annual interest now include a LIBOR transition fee previously applied separately, increasing by 12bps to between 1.62% and 1.92% above SONIA, determined by reference to the prevailing LTV ratio.  As a result there is no change to the aggregate margin from the renewal.

At 31 December 2023 the Company had £190.0m of debt drawn at an aggregate weighted average cost of 4.3% with no expiries until August 2025 and diversified across a range of lenders.  This debt comprised:

• £50m (26%) at a variable prevailing interest rate of 6.9% and a facility maturity of 2.9 years; and
• £140m (74%) at a weighted average fixed rate of 3.4% with a weighted average maturity of 6.3 years. 

At 31 December 2023 the Company’s borrowing facilities are:

Variable rate borrowing

• A £50m RCF with Lloyds Bank plc (“Lloyds”) with interest of between 1.62% and 1.92% above SONIA, determined by reference to the prevailing LTV ratio of a discrete security pool of assets, and expiring on 10 November 2026.  The facility limit can be increased to £75m with Lloyds’ approval. 

Fixed rate borrowing

• A £20m term loan with Scottish Widows plc (“SWIP”) repayable on 13 August 2025 with interest fixed at 3.935%;
• A £45m term loan with SWIP repayable on 5 June 2028 with interest fixed at 2.987%; and
• A £75m term loan with Aviva comprising:
  • A £35m tranche repayable on 6 April 2032 with fixed annual interest of 3.02%;
  • A £25m tranche repayable on 3 November 2032 with fixed annual interest of 4.10%; and
  • A £15m tranche repayable on 3 November 2032 with fixed annual interest of 3.26%.

Each facility has a discrete security pool, comprising a number of individual properties, over which the relevant lender has security and covenants:

• The maximum LTV of the discrete security pools is either 45% or 50%, with an overarching covenant on the property portfolio of a maximum of 35% or 40% LTV; and
• Historical interest cover, requiring net rental receipts from the discrete security pools, over the preceding three months, to exceed either 200% or 250% of the associated facility’s quarterly interest liability.

Recommended all-share merger with abrdn Property Income Trust Limited (“API”)

On 19 January 2024 the Company announced a recommended all-share merger with API and on 1 February 2024 published an associated combined circular and prospectus incorporating notice of a General Meeting to be held on 27 February 2024.  The Board believes that the merger would bring together two complementary portfolios to create a differentiated REIT with enhanced diversification and share liquidity and a fully covered and sustainable dividend for the combined group’s shareholders.

JCGI

“The big story on the markets was the sharp rally in Chinese stocks after a state-backed initiative to stir up interest in equities,” says Russ Mould, Investment Director at AJ Bell.

“The Hang Seng advanced 4% and the SSE jumped 3.2%, some of the biggest one-day gains we’ve seen on the Chinese market in a long time. The Hang Seng Tech index did even better, soaring by 7%.

“A state-owned investment fund indicated it would continue to buy up shares in what looks like a concerted effort to breathe some new life back into Chinese equities after they fell out of favour. The securities regulator also pledged to encourage more long-term funds to buy shares and to encourage companies to buy back more of their own shares.

“A clampdown by the Chinese government on regulation and data protection previously caused jitters on the market and that was followed up by a flop post-Covid economic reopening. With signs the country is finding it harder to sustain strong levels of economic growth, it’s no wonder investors lost interest in the country.

“Investment wisdom suggests the best time to buy equities is when everyone has lost interest, so we’ve seen a few brave outfits take a contrarian view on China in recent months and they will certainly welcome today’s price action. The big unknown is whether this effective stimulus initiative is just a short-term boost or enough to trigger a sustained revival in Chinese markets.

I’ve sold the portfolio shares in HFEL for a profit of

£73.00 including the dividend earned but not received.

The plan is to re-invest the proceeds in NESF where

the similar dividend looks secure but the shares are trading

at a wider discount to NAV, which could improve overall

returns in the long run.

A portfolio buy one day, today is not one day.

Thursday 8 February

Ex-dividend payment date

Aberforth Smaller Cos Trust PLC
Aberforth Split Level Income Trust PLC

Abdrn Property Income
Atrato Onsite Energy PLC
Baronsmead Second Venture Trust PLC
Baronsmead Venture Trust PLC
BlackRock Income & Growth Investment Trust PLC
Bluefield Solar Income Fund Ltd
Chenavari Toro Income Fund Ltd
CVC Income & Growth Ltd – EUR
CVC Income & Growth Ltd – GBP
EJF Investments Ltd
GCP Infrastructure Investments Ltd
Henderson Smaller Cos Investment Trust PLC
Impact Healthcare REIT PLC
Keystone Positive Change Investment Trust PLC
LXi REIT PLC
Octopus Renewables Infrastructure Trust PLC
Picton Property Income Ltd
Residential Secure Income PLC
Taylor Maritime Investments Ltd

Risk/reward if u are going to take the risk of lending your money

it’s better to be well rewarded for the risk.

Although the market is stating the safer lone rangers are the Trusts

trading around Net Asset, is the market right ?

As always best to DYOR.

Gore Street Energy Storage Fund plc 

(the “Company” or “GSF”) 

Further Portfolio and Trading Update

Gore Street Energy Storage Fund plc (“the Company” or “GSF”) notes the turbulence in the market and reconfirms its strong liquidity and its commitment to the current dividend policy. The Company also reconfirms its commitment to a diversification strategy, which has insulated it from the current dynamics of the GB market.

Overview:

Dividend policy

·    GSF reaffirms its dividend target of 7% of NAV for the fiscal year. It has met its dividend target since listing.

·    The Company’s dividend cover has been trending upward and was fully covered in the last reported quarter (September-end 2023).

Revenue generation

·    Further to the Company’s update on 10 January, the reported portfolio average revenue across all assets for the fiscal year-to-date stands at £15.1 per MW/hr (H1 & Q3), given its effective diversification strategy.

Liquidity

·    The Company maintains a healthy balance sheet with low debt. As previously disclosed, the Company had £66 million in cash or cash equivalents as of 31 December 2023. Of the available $60 million in the Big Rock Facility, approximately $15.8 million had been drawn down as of 31 December 2023, and there were no draws on the Company’s £50 million RCF with Santander.

Portfolio

·    The Company’s construction program is progressing per the schedule outlined on page 11 of its Interim Report .  

·    The Company’s operational fleet is on track to more than double by the end of 2024.

·    Based on the build-out schedule, by the end of 2024, the Company’s US assets will account for 55% of total operational capacity, while GB will account for less than 30% on a MWh basis.

Background:

The Company has been at the forefront of the energy storage sector since becoming the first energy storage fund to list on the Premium Segment of the London Stock Exchange in May 2018.

From inception, the Company’s strategy prioritised diversification as a critical pillar of success. This led the Company to expand its portfolio into the Irish market in 2019, followed by expansion into mainland Europe, Texas, and California in the United States. This unique portfolio composition across five uncorrelated markets significantly reduces reliance on any single revenue stream, market dynamic, or regulatory regime, positioning the Company to achieve its long-term investment objective of sustainable growth and consistent dividend payments.

The Company has maintained strict control over capital expenditure to achieve a competitive build cost per MW. Through a comprehensive understanding of each market, each system is currently optimally sized for the market in which it operates. Augmentation has also been built into the design assumptions, allowing for upsizing when revenue signals (and capex pricing) dictate an increase in duration. This efficient deployment, including around duration, is a key variable in capex costs and ultimately a determining factor in the IRR of an asset.

Storage investors have relied on forward-looking revenue curves to make capital deployment decisions and determine asset values. The revenue curves employed in valuing GSF’s assets have proven to be the closest to actuals amongst those disclosed in the market, avoiding Net Asset Value volatility.

Liquidity and Dividends:

The Board seeks to reassure shareholders and address any potential concerns on liquidity management and dividends. While these are recognised as valid in light of recent sector news, the Board wishes to provide comfort to investors. The Company maintains a strong balance sheet, with sufficient cash to meet its contractual obligations and undrawn lines of credit totalling c.£83 million. In line with its prudent investment policy on leverage, the Company has a low debt burden and, consequently, a low refinancing risk. The Company also continues to generate a healthy operational cash flow and fully covered its dividend during the last reported quarter (September-end 2023).

The Company continues to follow its mandate to deliver sustainable long-term returns for its investors. Based on the current year’s performance, GSF reaffirms its commitment to a dividend target of 7% of NAV for the fiscal year.

Revenue Generation:

The Board and  Investment Manager of the Company share the concerns expressed regarding the current challenges posed by low revenue generation in the GB market.  The Company’s portfolio diversification serves as the primary driver of the Company’s stable revenue and profit profile and has allowed the Company’s portfolio to generate a consistent revenue profile on a consolidated basis. The Company’s active management strategy continually adapts to navigate the cyclical fluctuations in the GB market while taking full advantage of the portfolio’s broad exposure to much higher growth markets that are able to deliver increased profitability.

Pat Cox, Chair of Gore Street Energy Storage Fund, commented:  

“In this challenging period for the GB energy storage industry, it is crucial to acknowledge the resilience and fundamentally differentiated strategy employed by our Company. The GB market’s cyclical nature has posed significant hurdles, yet we remain well-positioned to navigate these challenges – largely thanks to our investment policy and Investment Manager’s foresight and strategic understanding.

“Fundamentally, the importance of energy storage as a critical asset in driving the energy transition and ensuring the sustainability of the grid remains true. The current headwinds the sector faces in GB highlight some of the more complex aspects unique to this asset class, which require long-term planning and experienced management. We have long recognised the cyclical dynamics of the energy storage sector in GB, which is why we took proactive measures beginning in 2019 to diversify our portfolio across five grids to mitigate consolidated cash flow volatility.

“Today, we can see that this differentiated strategy has proven effective and contributed significant resilience. Our unique portfolio structure allows us to access a diverse selection of revenue streams, including highly contracted ones, such as the Resource Adequacy Contract currently being negotiated for our largest asset to date, which will provide further consistency to portfolio income. Even during periods of low revenue generation, such as the current downturn in the GB market, our portfolio has demonstrated resilience thanks to the far-sighted decisions made five years ago.

“Looking ahead to the coming quarters and years, it is evident that effective capital allocation and our unique diversification strategy have shielded us from the severe impacts others in the industry face. The Company remains well-positioned to weather the current challenges and continue to lead the sector.”

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

“Energy storage is and will remain a critical asset for our transition to a low-carbon society and, I believe, an essential part of every investor’s portfolio. The asset class does, however, require expert knowledge of multiple energy markets, renewables construction and management experience, clear investment execution around capital allocation, correct use of leverage, and, essentially, revenue diversity across multiple geographies. Without that skill set, experience and discipline, energy storage is a challenging asset class.

“We have raised the correct amount of capital when appropriate to do so at a fair price. The GSF portfolio has been built up over multiple years, with the careful addition of new markets and new revenue streams whilst keeping capital expenditure low and leverage correctly managed. This has led to our growing dividend coverage and increasing cash flow, and that consistency will see us through valid concerns over the sector’s performance.

“We continue to be well positioned to capitalise on this growing sector and will benefit as the market leader.”

SDCL Energy Efficiency Income Trust plc
(“SEEIT” or the “Company”)

 Company update

Contract Renewal

SEEIT is pleased to announce that Cokenergy, a project within its Primary Energy portfolio, has renewed its long term contract with Cleveland Cliffs at the Indiana Harbor Works East steel mill in the US. The contract provides for the onsite supply of steam and electricity which is generated by Primary Energy’s facility from waste heat from the onsite coke ovens. 

Final terms align with the assumptions included in the September 2023 valuation and reflect the in principle agreement reported in the interim accounts published in December 2023 (“Interim Accounts”). The renewal will also de-risk elements of the contract by passing through certain costs and introducing improved inflation correlation of revenues.

Portfolio Trading Update

The Company is pleased to report that in aggregate the operational cashflows being generated in the final quarter of the calendar year 2023 have remained in line with the Investment Manager’s expectations, continuing the progress outlined in the Interim Accounts, notwithstanding there has been some variability in individual asset performances in the period. The Investment Manager continues to monitor project specific KPI’s carefully and actively engage with the different management teams as required. Further project specific updates will be provided in its 31 March 2024 results.

Portfolio Disposals

The pursuit of selected disposals from the portfolio is a priority for the Investment Manager and it has now received a number of credible proposals in relation to multiple assets which are within its range of pricing expectations and thereby support the most recently published net asset value. Whilst there can be no certainty that these proposals will result in a sale, the Investment Manager is focused on progressing these processes expediently and will provide further updates in due course. 

Appendix: Q3 Investor Presentation Extract

Key Quarter Updates

•     Portfolio

‒    Total NAV Return for the quarter: -0.6% / Total NAV Return to Q3 2023 : +4.1%

‒    During the quarter, one UK loan fully repaid, realising net proceeds of £9.4m, and providing headroom to invest in new deals at enhanced IRRs

‒    Rotation of market bond portfolio into strong senior loans with attractive returns

•     Cash

–    Cash reserves remain targeted at between 5% to 10% of NAV

–    As at 31 December 2023, cash was £12.1m / 3.7% of NAV

•     Dividend

–    Dividends maintained at 3p per quarter, annualised 9.3% yield, based on share price as at 31 December 2023

–    Dividends predominantly covered by net interest income generated from RECI’s assets. The aim is for dividend cover to totally come from net interest income

•     Opportunities

–    The present macroeconomic backdrop is set to continue through 2024, resulting in further constraints in bank lending and alternative sources of capital. The opportunity to provide senior loans at low risk points, for higher margins, is increasingly evident

–    The Company expects to deploy its currently available cash resources to its near term commitments and towards a compelling emerging opportunity set in senior loans

•     Citywire Investment Trust Awards 2023

–    RECI won the Best Performance award for Specialist Debt at Citywire’s London-listed Investment Companies awards held on 01 November 2023. The performance awards are given to investment companies judged to have delivered the best underlying return in terms of growth in NAV in the three years to 31 August 2023.