In a stock exchange notice today (5 February), the trust reaffirmed its dividend target of 7% of NAV for the fiscal year and noted the dividend was “fully covered” in the last reported quarter to the end of September 2023.
The update follows the the suspension of Q4 dividends from peers Gresham House Energy Storage and Harmony Energy Storage last week, which both cited a weak environment for revenues.
Harmony Energy Income cuts Q4 dividend and weighs up asset sales to pay down debt
GSC noted the turbulence in the market but reconfirmed its “healthy” balance sheet with “low debt”, and reaffirmed its commitment to a diversification strategy which has so far insulated the trust from the current dynamics of the GB market.
As at 31 December 2023, the trust had £66m cash or cash equivalent, with $15.8m of $60m Big Rock facility drawn and no drawdowns on £50m fund-level RCF. Total undrawn credit lines totalled £83m.
“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 board said.
Gresham House Energy Storage scraps Q4 dividend and outlines share buyback plans
In a research note, Liberum analysts said the diversification of geographic markets remains positive for the portfolio, allowing poor revenue performance in GB markets to be partially offset by strong performance in the US market in Q2 and the Irish market in Q3.
The analysts said the trust’s revenues remain low relative to the size of the portfolio, but “significant progress” is expected during the 2024 calendar year. According to the firm, around 69% of the portfolio will be operational by the end of 2024, compared to 25% at H1 23.
GSC is currently trading at a 38.7% discount to NAV, according to data from the Association of Investment Companies.
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