JLEN ENVIRONMENTAL ASSETS GROUP LIMITED

Net Asset Value and Dividend Announcement

Net Asset Value

JLEN Environmental Assets Group Limited (“JLEN” or the “Company“), the listed environmental infrastructure fund, announces that its unaudited Net Asset Value (“NAV“) at 31 December 2023 was £777.7m (117.6 pence per share). This reflects a decrease of 2.1 pence per share since 30 September 2023 after paying the quarterly dividend of 1.9 pence per share.

Highlights in the period

·    Solid operational performance with continued strong cash generation from investments

·    Near term price fixes achieved in excess of valuation assumptions, partially mitigating downward movements from updated power price forecasts and actual inflation

·    Continued focus on asset enhancements in the portfolio to increase operational efficiencies

·    Acquisition of the remaining 30% shareholding in Bio Collectors Holdings Limited creating the potential for JLEN to deliver operational synergies across its portfolio of food waste anaerobic digestion plants

·    Steady progress on development and construction assets in line with expectations

·    Prudent balance sheet management maintaining low levels of gearing

Summary of changes in NAV:

ItemPence per share movement
NAV at 30 September 2023119.7p
Dividends paid in the period-1.9p
Power prices (downward revision from forecasts offset by value accretive price fixes)-1.5p
Battery storage revenue forecasts-0.6p
Actual inflation-0.7p
Other movements (including actual performance)+2.6p
NAV at 31 December 2023117.6p


Valuation factors

Key valuation movements include the negative impact from reductions in independent power forecasts (-2.3p), partially offset by the subsequent Electricity Generator Levy movement and favourable price fixes secured in the period (+0.8p). In addition to this, reductions in the gross margin forecasts for battery storage assets, prompted by independent consultants reappraising the available revenue opportunities, led to a -0.6p reduction. Lastly, there was also downward revision from the recognition of actual quarterly inflation finishing the calendar year below forecasts (-0.7p). The Investment Manager continues to monitor macroeconomic markers, including UK gilt yields, and consequently discount rates remain unchanged this period.

Gearing

At 31 December 2023 project level gearing was 17% and overall fund gearing was 30%, with the Company’s Revolving Credit Facility (“RCF“) £148.1m drawn from a total facility size of £200m. The Company continues to maintain sufficient headroom in its RCF to finance its firm commitments relating to construction assets held within the portfolio and earmarked follow-on investments.


Capital allocation strategy

The Investment Manager continues to make good progress on selective asset disposals with several credible opportunities being pursued, in line with the Company’s capital allocation strategy.

As stated in previous announcements, surplus capital generated from the portfolio and from asset sales will be prioritised towards existing commitments, compelling follow-on investments and value enhancements, alongside managing the RCF to maintain a robust balance sheet and the potential for share buybacks.

Dividend

The Company also announces a quarterly interim dividend of 1.9 pence per share for the quarter ended 31 December 2023, in line with the dividend target of 7.57p per share for the year to 31 March 2024, as set out in the 2023 Annual Report.

Dividend timetable

Ex-dividend date:    29 February 2024

Record date:            1 March 2024

Payment date:         22 March 2024