Quarterly Portfolio Update

Triple Point Energy Transition PLC

01 September 2023

 

1 September 2023

Triple Point Energy Transition plc

("TENT" or the "Company" or, together with its subsidiaries, the "Group")

QUARTERLY PORTFOLIO UPDATE

Triple Point Energy Transition plc (ticker: TENT), the London Stock Exchange listed investment company focused on building a portfolio of diversified infrastructure investments that support the energy transition, announces its unaudited Net Asset Value ("NAV") at 30 June 2023 of £97.1m (97.10 pence per share), a decrease of 2.33 pence per share compared to the Company's last announced audited NAV as at 31 March 2023, largely driven by the impact on valuations of rising interest rates and higher UK long-term gilt yields.

	Quarter ended 30 June 2023 (unaudited)	Year ended 31 March 2023 (audited)
Net asset value ("NAV")	£97.1m	£99.4m
Investment portfolio valuation	£94.6m	£87.7m
NAV per share	97.10 pence	99.44 pence
Dividend declared per share	1.375 pence	5.50 pence
Capital committed awaiting deployment1 2	£35.5m	£44.4m

 ¹ alternative performance measures

 ² portfolio commitments will be fully funded by the Group's undrawn Revolving Credit Facility ("RCF")

Financial Update

The key drivers of the movement in Net Asset Value pence per share are summarised below with further details following:

NAV as at 31 March 2023 (pence per share)	99.44
Dividends paid	(1.37)
Valuation adjustments:
-       Power prices	(0.51)
-       Discount rate	(1.82)
-       Inflation	0.69
-       Other	(0.47)
Other movement (including actual performance)	1.15
NAV at 30 June 2023 (unaudited)	97.10

Valuation adjustments

The change in valuation for the quarter is primarily attributed to a 40 bps increase in the unlevered discount rate of the Hydroelectric Portfolio from 5.6% to 6.0%, coupled with the downward revisions in power price forecasts by external power market consultants. The 40bps increase in the discount rate for the Hydroelectric Portfolio reflects the ongoing trend of rising interest rates and higher UK long-term gilt yields. This is partially offset by a higher inflation outlook than was previously forecast.

The weighted average unlevered discount rate in respect of investments deployed as at 30 June 2023 has increased to 7.0% (31 March 2023: 6.6%).

Once the Battery Energy Storage System ("BESS") portfolio has been fully deployed in 2024 the earnings generation of the portfolio is expected to increase, producing a levered portfolio return of c.8.6% based on the RCF current rate of debt. These earnings will further bolster the rate of return generated by the portfolio's distinctive investment composition, driven by contracted cash flows, with 94% underpinned by contracts extending over the next ten years.

Dividend

Further to the dividend declaration RNS announced today, the Company has declared a 1.375 pence per share dividend for the quarter ended 30 June 2023, against the target annual distribution to shareholder of 5.5 pence per share. This represents a dividend yield of 9.4% on the share price as at 30 August 2023.

Deployment and investment activity

The Company continued to deploy capital into its committed portfolio, with a further £8.9m being deployed during the quarter:

-      £5m debt investment in Innova Renewables to help fund its development pipeline of solar, battery and energy storage systems across the UK. The facility has a 12-month term and delivers contractual returns that are materially higher than the Group's target return of 7-8%.

-      £3.9m into the Group's Battery Energy Storage System (BESS) Portfolio, resulting in a total deployment to date of 22% of its overall commitment. This subsector continues to offer compelling investment opportunities and returns.

Portfolio Update

Income from the debt investments was in line with expectations. The underlying trading performance of the Combined Heat and Power ("CHP") Portfolio was marginally ahead of expectations.

The build-out of the second BESS asset in the portfolio at Gerrards Cross remains on track for Commercial Operations in Q3 of this year. The remaining two BESS assets are also proceeding in line with previous updates and are set to become operational in 2024.

The Hydroelectric Portfolio performance was lower than forecast due to reduced precipitation. This has already been partially offset by out-performance in July, with generation being 97% ahead of budget for the month. The majority of hydro generation falls between October and March, being 72% of the total budgeted generation, and accordingly the quarter ended 30 June 2023 is not indicative of annual performance.

The Company agreed fixed price power purchase agreements ("PPAs") in respect of its nine hydroelectric power assets. Accordingly, 100% of the earnings from these assets are underpinned by contract until March 2025.

Capital Markets Day

TENT will host a Capital Markets Day on 28 September 2023, at which analysts and investors will be afforded the opportunity to hear from the Investment Manager and asset managers about the Group's portfolio in greater detail. For further information, please contact Buchanan at [e-mail].

For further information, please contact:

Triple Point Investment Management LLP Jonathan Hick Christophe Arnoult Chloe Smith	[phone]
J.P. Morgan Cazenove (Corporate Broker) William Simmonds Jérémie Birnbaum	[phone]
Akur Limited (Financial Adviser) Tom Frost Anthony Richardson Siobhan Sergeant	[phone]
Buchanan (Financial PR) Helen Tarbet Henry Wilson Hannah Ratcliff Verity Parker	[phone]

LEI: 213800UDP142E67X9X28

Further information on the Company can be found on its website: http://www.tpenergytransition.com/

NOTES:

The Company is an investment trust which aims to invest in assets that support the transition to a lower carbon, more efficient energy system and help the UK achieve Net Zero.

Since its IPO in October 2020, the Company has made the following investments and commitments:

·    Harvest and Glasshouse: provision of £21m of senior debt finance to two established combined heat and power ("CHP") assets, located on the Isle of Wight, supplying heat, electricity and carbon dioxide to the UK's largest tomato grower, APS Salads ("APS") - March 2021

·    Spark Steam: provision of £8m of senior debt finance to an established CHP asset in Teesside supplying APS, as well as a further power purchase agreement through a private wire arrangement with another food manufacturer - June 2021

·    Hydroelectric Portfolio (1): acquisition of six operational, Feed in Tariff ("FiT") accredited, "run of the river" hydroelectric power projects in Scotland, with total installed capacity of 4.1MW, for an aggregate consideration of £26.6m (excluding costs) - November 2021

·    Hydroelectric Portfolio (2): acquisition of a further three operational, FiT accredited, "run of the river" hydroelectric power projects in Scotland, with total installed capacity of 2.5MW, for an aggregate consideration of £19.6m (excluding costs) - December 2021

·    BESS Portfolio: commitment to provide a debt facility of £45.6m to a subsidiary of Virmati Energy Ltd (trading as "Field"), for the purposes of building a portfolio of four geographically diverse Battery Energy Storage System ("BESS") assets in the UK with a total capacity of 110MW - March 2022

·    Energy Efficient Lighting: Funding of c.£2.2m to a lighting solutions provider to install efficient lighting and controls at a leading logistics company - March 2023

·    Innova: Provision of a £5m short term development financing facility to Innova Renewables, building out a portfolio of Solar and BESS assets across the UK - March 2023

The Investment Manager is Triple Point Investment Management LLP ("Triple Point") which is authorised and regulated by the Financial Conduct Authority. Triple Point manages private, institutional, and public capital, and has a proven track record of investment in Energy Efficiency and decentralised energy projects.

Following its IPO on 19 October 2020, the Company was admitted to trading on the Premium Segment of the Main Market of the London Stock Exchange on 28 October 2022. The Company was also awarded the London Stock Exchange's Green Economy Mark.

 

END