TIDMTEEC
RNS Number : 2846U
Triple Point Energy Efficiency
02 December 2021
THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE
INFORMATION FOR THE PURPOSES OF THE UK VERSION OF THE MARKET ABUSE
REGULATION (EU) NO. 596/2014.
2 December 2021
Triple Point Energy Efficiency Infrastructure Company plc
("TEEC" or the "Company" or, together with its subsidiaries, the
"Group")
RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2021
The Board of Triple Point Energy Efficiency Infrastructure
Company plc (ticker: TEEC) is pleased to announce its unaudited
results for the six months ended 30 September 2021.
30 September 2021
---------------------------------------- ------------------
Net Asset Value ("NAV") GBP94.5m
NAV per share 94.50 pence
V alu e of the portfolio GBP28.5m
Ongoing charges ratio (annualised) (1) 1.16%
Dividend declared per s hare 2.75 pence
Highlights
-- In June 2021, the Group announced the completion of a
GBP8.032 million senior debt investment in an operational CHP+
energy centre, Spark Steam Limited ("Spark Steam"), which supplies
heat, electricity and carbon dioxide to APS Salads.
-- The Company expects to deploy further capital in the coming
weeks into projects which should see the Company reach full
deployment.
-- The Company held cash of GBP65.7 million as at 30 September 2021.
-- The Company has circa GBP 289 million of near term pipeline
opportunities of which approximately GBP 48 million have signed
heads of terms.
-- The Company has today declared a dividend of 1.375 pence per
ordinary share in respect of the period from 1 July 2021 to 30
September 2021.
Post balance sheet events
In November 2021, the Group successfully completed investments
totalling GBP26.8m (excluding transaction costs) into a portfolio
of six operational, Feed in Tariff ("FiT") accredited,
hydroelectric power projects in Scotland. Within the next several
weeks we expect to complete a further investment into a portfolio
of three additional, operational, FiT accredited hydroelectric
power projects, valued at up to GBP19.7m (excluding transaction
costs). These investments were identified in the IPO prospectus and
formed part of the original pipeline. Further details of the
investment can be found in the Investment Manager's Report
below.
John Robert s, the Company's Chair, commented:
" I am pleased to present the Company's unaudited interim
results for the six months ended 30 September 2021. We have
continued to focus on implementing our strategy, deploying capital
into attractive Energy Efficiency Projects and have been working
closely with a wide number of counterparties to build our pipeline
for future investments."
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Triple Point Investment Management (via FTI below)
LLP
(Investment Manager)
Jonathan Parr
Jonathan Hick
Akur Capital (Financial Adviser) Tel: 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
RBC Capital Markets (Joint Broker) Tel: 020 7 653 4000
Matthew Coakes
Jill Li
Kathryn Deegan
Winterflood Securities (Joint Broker) Tel: 020 3100 0000
Neil Langford
Hande Derinkok
FTI Consulting
Ed Berry Tel: 07703 330 199
Mitch Barltrop Tel: 07807 296 032
The Company's LEI is 213800UDP142E67X9X28 .
Further information on the Company can be found on its website at www.tpenergyefficiency.com .
NOTES:
The Company is a n investment trust which invests exclusively in
a diversified portfolio of Energy Efficiency Projects in the UK,
which have a positive environmental impact. The Company's
investment strategy focus es on the core sectors of: low carbon
heat distribution; social housing retrofit and industrial energy
efficiency; and distributed generation.
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 generation projects. In
2018, Triple Point was appointed as the Delivery Partner to BEIS, a
department of the UK government, to deliver the GBP320 million Heat
Networks Investment Project ("HNIP").
The Company was admitted to trading on the Specialist Fund
Segment of the Main Market of the London Stock Exchange on 19
October 2020 and was awarded the London Stock Exchange's Green
Economy Mark.
CHAIR'S STATEMENT
Introduction
I am pleased to present the Company's unaudited interim results
for the six months ended 30 September 2021. During the period we
have continued to focus on implementing our strategy, through which
we target NAV total return of 7-8% per annum and contribute towards
the transition to a low carbon economy.
I n the period , we successfully deployed GBP8.032 million of
capital and since then, have deployed an additional GBP 26.8
million into further assets that are well aligned with the
Company's Investment Policy. Following completion of the three
additional hydroelectric power projects valued at up to GBP19.7m,
the IPO proceeds will be substantially deployed.
Investment Activity
Since the Company's IPO in October 2020, the Investment Manager
has reviewed 115 investment opportunities, of which 16 were
reviewed by its Investment Committee and Board.
In June 2021, we announced the completion of a GBP8.032 million
senior debt investment in Spark Steam Limited ("Spark Steam"), a
company that owns and operates a CHP+ asset and which was part of
the pipeline identified at IPO. Spark Steam provides tomato grower,
APS Salads, with its heat and electricity requirements, as well as
supplying carbon dioxide produced by the CHP+ system to enhance
crop yields. The transaction followed on from similar investments
made in March 2021 in Harvest Generation Services Limited
("Harvest") and Glasshouse Generation Limited ("Glasshouse").
The transaction refinanced debt previously provided in part by
investees of other funds under the management of the Investment
Manager and was approved by the Board in line with the Company's
conflict of interest procedures.
In November 2021, we successfully completed investments
totalling GBP26.8m (excluding transaction costs) into a portfolio
of six operational, Feed in Tariff ("FiT") accredited,
hydroelectric power projects in Scotland. Within the next several
weeks we expect to complete a further investment into a portfolio
of three additional, operational, FiT accredited hydroelectric
power projects, valued at up to GBP19.7m (excluding transaction
costs). These investments were identified in the IPO prospectus and
formed part of the original pipeline. Further details of the
investment can be found in the Investment Manager's Report
below.
This opportunity has enabled the Group to acquire an operational
portfolio backed by long-term, inflation-linked FiT revenues,
whilst generating 100% renewable energy.
The portfolio of hydroelectric power projects was owned by
entities advised by the Investment Manager and, as a result, a
potential conflict of interest existed. In accordance with the IPO
Prospectus, the Board were required to approve the transaction and
we were given comfort by the steps taken to manage and mitigate the
conflict, which included separate dedicated buy and sell side teams
within the Investment Manager and third-party valuations.
Since IPO, our Investment Manager has focus ed on the execution
of proprietary projects within the pipeline, demonstrated by our
portfolio comprising three CHP+ projects and six hydroelectric
power projects. As a result of these investments, and the further
investments into the hydroelectric power projects expected to
complete in the next several weeks, the Company has deployed the
majority of the net proceeds from its IPO. As a percentage of the
Net Asset Value ("NAV"), grossed up by the Company's target medium
term gearing of up to 40 percent of Gross Asset Value ("GAV"), CHP+
would represent 18% and hydroelectric power (following the further
investment) would represent 29%, with 11% in cash and the remainder
of the GAV amount representing gearing.
In light of the immediate pipeline, we are looking to put in
place a debt facility to allow for additional investment in
projects from our pipeline once the cash proceeds from the IPO have
been invested. As we deploy more capital into pipeline
opportunities, we will be bringing further diversification to the
portfolio.
Pipeline
We are pleased with the investments made to date and our
Investment Manager continues to target selected opportunities that
will deliver value to shareholders, with several opportunities at
advanced stages.
The Company has circa GBP289 million of pipeline opportunities
of which approximately GBP48 million have signed heads of terms. It
is expected that acquisitions arising from these opportunities will
be funded with the proceeds of the above-mentioned debt facility.
The pipeline is spread across a diverse range of target sectors,
including traditional energy efficiency technologies, combined heat
and power, solar, anaerobic digestion, and energy from waste. It
also includes more emergent areas such as electric vehicle
charging, battery, and fuel cells technologies.
We remain excited by the significant pipeline that the Company's
investment strategy presents.
For further details on the pipeline please see the Investment
Manager's report.
Financial Results
The NAV per share was 94.50 pence on 30 September 2021 (31 March
2021: 97.49 pence). The portfolio, consisting of three secured loan
investments held by the Company's subsidiary TEEC Holdings Limited
("TEEC Holdings"), was valued at GBP28.5 million on 30 September
2021 (31 March 2021: GBP20.9 million) and the Company held cash of
GBP65.7 million at the reporting date.
The performance of our three investments have been in line with
expectations. All payments of interest and capital have been made
on time and in full.
The Company made a profit before tax of GBP0.4 million for the
period (31 March 2021: GBP0.5m loss). The Company's annualised
ongoing charges ratio ("OCR") was 1.16%. The investment management
fee is calculated in reference to deployed funds, until the IPO
proceeds are substantially deployed at which time the management
fee calculation will be by reference to NAV. Hence, as the Company
continues to deploy capital, we expect the OCR to increase. The
Board will continue to monitor the OCR closely as we seek to grow
the Company and deliver value to our shareholders.
Share Price and Distributions
There continues to be significant market opportunity for energy
efficiency investments in the UK, which is reflected in our
pipeline. The Company's shares have traded at a premium to NAV over
the period (and since launch) and the Company has announced it will
pay an interim dividend of 1.375 pence per share in respect of the
period from 1 July 2021 to 30 September 2021.
As stated previously , the Board is targeting total dividends of
5.50 pence per share (2) for the year ending March 2022 . We remain
focused on our ambition that our dividend should be covered by cash
earnings as soon as practicable.
Notes:
(2) The dividend and return targets stated are Pound Sterling
denominated returns targets only and not a profit forecast. There
can be no assurance that these targets will be met, and they should
not be taken as an indication of the Company's expected future
results.
Environmental, Social and Governance ("ESG")
The importance of sustainability continues to grow, and we are
proud that it is at the heart of the Company's Investment
Objective. The Investment Manager has established investment due
diligence processes that assess the most material sustainability
issues that each proposed investment may face. That work has
informed our assessments and investment views and also aligns with
the ESG integration strategy developed by the Investment Manager.
More information on the Investment Man a ger's integration of ESG
into its investment process can be found in the Investment
Manager's Report.
The Company has been awarded the Green Economy Mark by the
London Stock Exchange ("LSE"), which recognises listed companies
and funds which derive 50% or more of their revenues from
environmental solutions.
Outlook
The Government focus on achieiving its Net-Zero targets,
particularly in light of the 26 (th) UN Climate Change Conference
of the Parties ("COP26"), provides an exciting outlook for the
Company and this is supported by our strong pipeline of investment
opportunities.
Energy efficiency has been identified as one of the most
significant levers to achieving N et- Z ero targets and we are
excited to be able to contribute to the achievement of those
targets. We would like to take this opportunity to thank our
shareholders for their continued support over the period.
John Roberts
Chai r
2 December 2021
INVESTMENT MANAGER'S REPORT
Review of the Period
The wider market has experienced some disruption during the
period given the ongoing economic impact from Covid-19 with the
interruption of usual business interaction, disruption to travel,
forced absences from work because of health reasons, and the
knock-on impact throughout society. In addition, we have seen the
continuing impact of Brexit to the economy, backlog to supply
chains, increase in input and administration costs, longer and more
expensive transportation and shortages of workforce.
The challenges from Covid-19 and Brexit have been compounded by
the enormous volatility in energy prices. Individuals, companies
and the government are having to focus their attention on seeking
solutions to mitigate the volatility of energy prices and to seek a
more robust and sustainable supply and use of energy to reduce
costs and the impact to the environment.
Although Covid-19, Brexit, and the volatile energy markets make
for a challenging environment, the Company has not been directly
impacted. The Company does not have its own employees and at the
Investment Manager, we have continued to perform our role through
taking the necessary precautionary measures and using technology to
replace physical meetings where appropriate. The supply chain
issues caused by Brexit have also not noticeably impacted the
Company given the relatively low level of replacement items needed
for the existing projects. As for energy prices, b y targeting
opportunities which have limited exposure to the price volatility
of energy markets and by securing revenues through long term
contracts we have experienced minimal direct impact to the value of
investments or to the opportunities in the pipeline. We target
long-term contracts so that short-term market volatility is
smoothed out through the life of the project.
Despite the challenges faced, t he Company has now completed
investments in three CHP + projects and six hydroelectric power
projects and, a s a result of these investments, and the further
investments into the hydroelectric power projects expected to
complete in the next several weeks, the Company will have deployed
the majority of the net proceeds from its IPO.
Looking forward, we see many opportunities to continue to
deliver on our pipeline and create value for shareholders.
Market Review
It is a good time to be investing in Energy Efficiency
Projects.
First, there is the policy imperative, led by government support
for energy efficiency measures, and which has been borne out of
funding by government for example into heat networks and energy
efficiency. Second, there is the sheer size of the opportunity, for
example the need to decarbonise buildings across the UK. Third,
there is the ever-accelerating drive towards N et- Z ero and the
requirement to decarbonise and improve efficiency and
productivity.
In addition, with the possibility of inflation hanging over the
economy as the recovery gathers pace, Energy Efficiency Projects
can provide a degree of protection in this environment through
contracted and inflation-linked cash flows, which offer investors
an attractive yield.
COP26 has focused minds on the importance of mitigating climate
change. Energy efficiency is a key lever to use to reduce the
impact from the use of energy by making it cleaner, more
efficiently used and less expensive. We are having active
discussions with a number of technology providers and developers
who are seeing a growing demand for carbon reduction and better use
of energy both for climate change reasons but also for creating a
more robust infrastructure. This includes already widely used
technologies such as solar, both ground mounted and rooftop PV, but
also for newer technologies such as battery energy storage
solutions. The latter is also seeing increasingly large projects
being developed in order to take advantage of the need to balance
out the growing level of reliance on renewable generation. This is
also an opportunity for the Company to grow with the expanding
demand for climate change solutions.
Pipeline
The investments we target typically range from GBP5m to GBP30m
and are diversified across a range of sectors .
The Company has an immediate pipeline of GBP289 million, of
which GBP48 million have signed heads of terms . The Company
continues to see attractive opportunities across a variety of
technologies including energy from waste, combined heat and power
plants, battery storage, solar, electric vehicle charging
infrastructure and other energy efficiency technologies. We have
witnessed a significant inflow of opportunities driven by the
recent volatility in energy prices, with some intensive energy
users being charged as much as 26p/kWh. These users are
increasingly seeing the benefit of onsite power and heat
generation, for example through containerised combined heat and
power, or rooftop solar. Energy users in our pipeline projects
could benefit from electricity prices in single digit p/kWh over a
15-year period, providing stability and affordability for those
companies. At the same time, energy users are keen to ensure that
this onsite energy generation is low carbon. The Company has also
witnessed a number of sizeable opportunities in the energy from
waste sector driven by rising landfill prices and restrictions on
shipping waste overseas. More broadly, the Company believes that
the recent turbulence in energy markets will drive companies to
take an interest in their energy consumption in a way that they
have not done previously, for example further investigating energy
efficiency measures to reduce the volume of power consumed.
The Company continues to build on its strategy of establishing
strong relationships with developers and equipment manufacturers to
order establish proprietary pipeline. Given the yield compression
witnessed in some segments of the distributed generation market,
for example subsidy - backed solar, we believe that this will
enable the Company to achieve more attractive risk - adjusted
returns .
Investment Review
On 1 June 2021, the Group announced that it had completed an
investment in Spark Steam Limited ("Spark Steam"), a company that
owns and operates a CHP+ asset and which was part of the pipeline
identified at IPO. Under the terms of the investment, the Group has
provided GBP8m of senior debt finance secured against Spark Steam,
the underlying assets, equipment, and contracts. The interest rate
is 7.375% per annum, and the loan carried a term of 10.5 years,
amortising over the term. Spark Steam owns an operational,
established energy centre located in Teesside, supplying heat,
electricity, and also carbon dioxide to the UK's largest tomato
grower, APS Salads ("APS"), pursuant to an energy services
agreement, with a remaining term of approximately 15.5 years. Spark
Steam also has the potential to sell electricity to other energy
users under private wire connections. APS is also a customer of our
initial two investments, Harvest Generation Services Limited and
Glasshouse Generation Limited.
APS is responsible for approximately one third of the country's
tomato production and has over 65 years of operational experience.
APS owns and operates over six million sq. ft. of glasshouses and
distributes to all major UK food retailers including: Aldi,
Iceland, Lidl, M&S, Ocado, Morrisons, Sainsbury's, Tesco, and
Waitrose. APS has itself faced its own challenges, which include
navigating through the impacts of Brexit and Covid-19 on working
arrangements, distribution, and the supply of workers generally.
All of this has had an impact on APS's near-term profitability, but
we are assured by the high-quality glasshouses and premium
distribution enjoyed by APS from its growing facilities.
An additional benefit of the Spark Steam CHP+ facility, much
like previous CHP+ investments made by the Company, is that the
main waste product from combustion, carbon dioxide, is used to
enhance crop yields on site rather than being vented into the
atmosphere. The energy centre comprises two state of the art
Jenbacher gas engines and heat/carbon dioxide recovery and
distribution equipment.
The transaction is aligned with the Company's targeted
risk/return profile and objective of delivering secure investments
that generate a total return for investors. It also supports the
transition to a low carbon economy in accordance with the UK
government's overall environmental targets.
In November 2021 , we successfully completed investments into a
portfolio of six operational, FiT accredited, hydroelectric power
projects in Scotland for an aggregate consideration of GBP26.8
million (excluding transaction costs) . Within the next several
weeks we expect to complete a further investment into a portfolio
of three additional, operational, FiT accredited hydroelectric
power projects, valued up to GBP19.7m (excluding transaction
costs). Th ese investment s were identified in the IPO prospectus
and formed part of the original pipeline.
Distributed renewable energy projects deliver greater efficiency
through proximity to both the source of energy and the point of
grid connection, which reduces the transmission losses and increase
s the efficiency of such projects. Hydroelectric power projects are
efficient as the inputs required to generate electricity (potential
energy of water) would not otherwise be used and no additional
energy is required to access them. As well as the benefits of the
more efficient generation of energy and the associated
decarbonisation of the grid, small-scale hydroelectric power
projects also benefit from well-understood technology with a long
track record of performance.
Th ese investment opportunit ies enable the Company to deploy a
large portion of its remaining IPO proceeds by acquiring an
operational portfolio backed by long-term, inflation-linked FiT
revenues, whilst generating 100% renewable energy.
The investments are generally supported by long-term and low
volatility contracts providing a predictable yield for
investors.
The Company has found that the deployment of capital into
housing association energy efficiency to be a smaller market
opportunity than expected. This is partly because of c heap
alternative funding or self-funding and also because project sizes
can be relatively small. That said, there may be opportunities that
do come in the future which may be of an attractive size, so we
will assess those opportunities when they arise. Similarly, the
market opportunity for projects in the heat networks sector is more
of a medium-term opportunity rather than near-term, given the long
development timescales, lack of committed offtake, and the
availability of public funding meaning that there is less need in
the near-term for private funding. We continue to monitor the heat
network sector closely and to discuss opportunities for funding
where appropriate. Although housing association energy efficiency
and heat networks may be less attractive than originally expected,
the wider energy efficiency and distributed energy market
opportunities are increasing in attractiveness given the growing
demand for widespread and deep decarbonisation solutions.
Gearing
At the reporting date, the Company had not utilised any gearing.
I n the interests of capital efficiency and to enhance income
returns and long-term capital growth, the Company expects to
utilise gearing in the near term and has a maximum gearing level of
45% of GAV under the Investment Policy. We are, therefore, in the
process of seeking suitable debt financing which will provide the
Company with the flexibility to deploy capital into the pipeline of
investment opportunities.
Financial Review
The investment portfolio currently comprises three secured loan
investments commanding an attractive weighted average return on
capital of 7.65%. This contributed to a Profit before tax of GBP0.4
million for the period (31 March 2021: GBP0.5 million loss), equal
to 0.004 pence per share (31 March 2021: 0.009 pence per share
loss).
During the period, the Company' NAV per share fell by 2.99 pence
to 94.50 (31 March 2021: 97.49 pence). The reduction in NAV was
primarily driven by dividend payments totalling 3.375 pence per
share being partially offset by 0.382 pence per share of
income.
The Company continues to maintain discipline and only deploy
funds into risk-adjusted Energy Efficiency Projects. Until the IPO
proceeds are substantially deployed, the Investment Manager fee
will continue to be calculated by reference to deployment,
following which it will then revert to a NAV based measurement.
The Company remains focused on its ambition to provide a
dividend fully covered by cash earnings as soon as practicable.
The Company applies IFRS 10 and qualifies as an investment
entity. IFRS 10 requires that investment entities measure
investments, including subsidiaries that are themselves investment
entities, at fair value except for subsidiaries that provide
investment services which are required to be consolidated.
The Company's single, direct subsidiary, TEEC Holdings, is the
ultimate holding company for all the Company's investments.
It is, itself, an investment entity and is therefore measured at
fair value.
Sustainability and the approach to Environmental, Social and
Governance measures
Triple Point as Investment Manager has been develop ing and has
started to implement t he Company's approach to ESG in its
investment and asset management processes . Refinement of this
process has taken place over the period, and we will continue to
monitor it to ensure effectiveness. The full process is captured in
the Company's "ESG Framework" process documentatio n .
The key steps of this process are as follows:
Step 1: Screening
-- The energy efficiency credentials of the project are checked
with a high-level assessment to confirm the investment would save
carbon dioxide equivalents compared to a counterfactual.
-- Any potential deal is screened to ensure it does not present
an unacceptable ESG risk. Reputational risk is a particular
consideration, where the counterparty/off-taker sector are
reviewed.
Step 2: Heads of Terms
-- The main counterparty and/or end user is made aware that t he
Company will require reporting of certain data. It is important a
counterparty understands these expectations early in the process,
as this helps to align expectations and values.
Step 3: Pre-Investment Due Diligence
-- Carbon Analysis: A full counterfactual analysis is conducted
to establish a more detailed understanding of the carbon dioxide
equivalent s avings from the project .
-- ESG Assessment: An ESG r isk and o pportunities r eview is
conducted. The parameters of the assessment are set according to
the type of project, ensuring a focus on material topics of
assessment. Areas of concern receive a red flag resulting in
further scrutiny or their selection as future areas of engagement
for improvement.
-- Scenario Analysis: An investigation of the physical and
transitional risks which may impact project success takes place.
The investment is tested on multiple scenarios which are used as an
overlay to the financial risks of the projects, which are adjusted
accordingly.
Results from the pre-investment due diligence analysis are
included in Investment Committee papers.
Step 4: Execution
Detail of the KPIs required, reporting frequency and areas of
ESG improvement (with financial incentive if appropriate) are
incorporated into the investment documentation.
Step 5: Monitoring and Reporting
Our approach to ESG KPI reporting is shaped by our commitment to
energy efficiency, our approach to ESG analysis and engagement, and
our desire to meet the wider needs of the market for growing
transparency on these matters. ESG data reporting will be
annual.
-- Energy Efficiency:
The Company should contribute to a more energy efficient
economy, and this will be demonstrated by reporting on avoided
emissions, collected through a counterfactual assessment process.
We will also separately report on the absolute emissions, for
appropriate transparency and as a means to track and monitor carbon
exposure and potentially drive further carbon savings.
-- ESG assessment and engagement:
The Company will draw on the red flags identified during the ESG
a ssessment in due diligence to focus and
report subsequently on areas where improvements were needed.
-- Commitment to transparency:
T he Company, and the Investment Manager as responsible
investors, ensure that we take a best practice approach to any
regulation . We are working towards t he annual disclosure of the
Group's portfolio according to the requirements of TCFD (Task Force
on Climate-related Financial Disclosure), SFDR (Sustainable
Financial Disclosure Regulation) and SECR (Streamlined Energy and
Carbon reporting). We also closely monitor the emergence of any
further regulation and will apply the same transparency-led
approach.
Valuation
The Investment Manager is responsible for carrying out the fair
market valuation of the Company's investment in TEEC Holdings ,
which is presented to the Board for its consideration and comment
in advance of its formal approval. The valuation of the portfolio
held by TEEC Holdings and of the Company's investment in TEEC
Holdings itself is to be carried out on a six-monthly basis at 31
March and 30 September each year.
At the period end, the Group's portfolio comprised three debt
investments in Harvest, Glasshouse, and Spark Steam totalling GBP29
million.
Investments made by the Company through TEEC Holdings are
expected to be predominantly non-market traded investments, such
that these investments are valued using a discounted cash flow
analysis of the forecast investment cash flows from each
project.
When valuing equity investments, the key macro-economic and
fiscal factors expected to affect the forecast of each portfolio
company's cash flows are inflation rates, interest rates, power
price assumptions, and corporation tax rates. The Investment
Manager makes forecast assumptions for each of these external
metrics, based on market data and relevant economic forecasts where
available.
When valuing debt investments, a discount rate is applied to
future cash flows. Determination of the discount rate is through
consideration of the expected internal rate of return over the life
with an appropriate adjustment with reference to market discount
rates.
The Investment Manager exercises judgement in assessing the
expected future cash flows from each investment, based on the
detailed financial models produced for each portfolio company and
adjusting where necessary to reflect the broader macro-economic and
fiscal assumptions as well as any specific operating assumptions
that may be relevant to the individual projects.
The fair value for each investment is then derived from the
application of an appropriate market discount rate. Due to the
Company investing solely in projects based in the United Kingdom,
there are no foreign exchange assumptions required. The discount
rate used considers risks associated with the financing of an
investment such as investment risks (e.g., liquidity, inflation,
interest rate risks, market appetite) and any risks to the
investment's earnings (e.g., predictability of the revenues and
factors affecting these), all of which may be differentiated by the
phase of the investment's life (e.g., in development/construction
or in the operational phase).
The Investment Manager uses I ts judgement in arriving at the
appropriate discount rate. This is based on its knowledge of the
market, considering insights gained from its investment activities,
discussions with its financial advisers and publicly available
information on relevant transactions.
Outlook
The Government continues to be highly committed to achieving its
N et -Z ero targets and the Company continues to be well positioned
to assist in the achievement of those goals. We are also confident
in our pipeline, which includes a wide range of low carbon and
energy efficient technologies.
Jonathan Parr
Partner and Head of Energy
2 December 2021
PRINCIPAL RISKS AND UNCERTAINTIES
In the period , the Company has continued to develop its risk
management processes and as a result the principal risks and
uncertainties presented on pages 32-36 of the Annual Report for the
period ended 31 March 2021 have been reviewed and updated.
We have provided a summary below, highlighting the changes to
the risks in the period.
Exposure to power prices and risk to hedging power prices
On assessing the risk of exposure to power prices, the decision
was taken to increase the likelihood score from low to moderate.
This was done in order to rebalance the risk as we believed a
likelihood score of low did not appropriately represent the
environment in which we operate.
The mitigants described in the Annual Report remain unchanged
and are still considered appropriate as the risk has been
rebalanced as opposed to the environment materially changing in the
period.
Counterparties' ability to make contractual payments
In light of the challenges faced in the market and economy more
broadly as a result of Brexit and Covid-19, the likelihood score
for the risk of counterparties' ability to make contractual
payments has been increased from low to moderate.
The Group has received all its capital and interest payments for
its three senior debt investments in line with expectation.
In addition to the mitigations disclosed in the Annual Report,
the Investment Manager has in place processes to monitor the
financial health of counterparties and reports any concerns to the
Board.
Construction risk for certain Energy Efficiency Projects
The impact score has been reduced from moderate to high to
moderate, whilst the likelihood score has increased from low to
moderate. The reduction in the impact score reflects the position
of the Group, as it has substantially deployed its IPO proceeds
into operational assets, therefore reducing the impact of
construction risk on the portfolio. On the other hand, the
likelihood score has been increased, acknowledging that there are
some construction projects within the pipeline.
To the extent that the Group enters into Energy Efficiency
Projects with construction risk, it will engage third party EPC
contractors and build into the contracts provisions against
construction associated losses.
Raising additional finance
The risk of expensive or lack of debt finance has been revised
to the risk of raising additional finance. In reviewing the risk
register, it was acknowledged that the risk was broader than just
the Company's ability to raise debt finance and that difficulty in
raising additional finance, be that debt or equity, could limit our
ability to grow and achieve a fully covered dividend.
In respect of mitigants, the Investment Manager will adopt a
flexible approach when raising debt financing and keep liquidity
under constant review. The decision to seek to raise further equity
would be subject to multiple factors and only be undertaken at such
time as the Company were confident in its ability to raise
equity.
Emerging risks
The emerging risks identified on page 37 of the Annual Report
for the period ended 31 March 2021 have been updated to reflect the
changing landscape in which we operate.
The United Kingdom's withdrawal from the European Union and the
Covid-19 and global pandemic risk have both been removed as
emerging risks. In each case, the risk has existed since the
Company's inception but has not resulted in a material impact. The
Board will continue to monitor both situations and implement the
appropriate controls and processes to mitigate any potential impact
on the Group.
The risk of physical effects of climate change remains an
emerging risk and continues to be closely monitored.
The following have been characterised as emerging risks in the
period:
Supply chain pressures
As a result of both COVID-19 and Brexit , global supply chains
are showing increasing signs of pressure. This could result in
delays in the supply of key hardware required to maintain or
improve assets. As part of our ongoing monitoring of investments
and assessment of new opportunities, supply chain pressures will be
considered and, where necessary, mitigating plans will be put in
place.
Disruptive Technology
The energy efficiency sector is constantly evolving. As a
result, there is a risk that disruptive technology emerges which
results in current assets becoming obsolete. The Board continue to
monitor the emerging trends within Energy Efficiency to ensure new
investment opportunities are accurately assessed.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge this
condensed set of financial statements which have been prepared in
accordance with IAS 34 as adopted by the UK, give a true and fair
view of the assets, labilities, financial position and profit or
loss of the Company. T he operating and financial review on pages
22 to 39 includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8 of the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority namely:
an indication of important events that have occurred during the
period and their impact on the condensed financial statements and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and material related
party transactions in the period as disclosed in Note 11 .
The Directors, all of whom are independent and non-executive,
are:
-- Dr John Roberts (Chair)
-- Rosemary Boot (Senior Independent Director)
-- Dr Anthony White
-- Sonia McCorquodale
Shareholder information is as disclosed on the Triple Point
Energy Efficiency Infrastructure Company plc website.
Approval
This Directors' responsibilities statement was approved by the
Board of Directors and signed on its behalf by:
John Roberts
Chair
2 December 2021
INDEPENT REVIEW REPORT TO TRIPLE POINT ENERGY EFFICIENCY
INFRASTRUCTURE COMPANY PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2021 which comprises of Interim
Condensed Statement of Comprehensive Income, Statement of Financial
Position, Statement of Changes in Equity, Statement of Cash Flow
and notes to Condensed Financial Statements.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Company will be prepared in accordance with UK adopted
international accounting standards. The condensed set of financial
statements included in this interim financial report has been
prepared in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2021 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability
Peter Smith
BDO LLP
Chartered Accountants
London
2 December 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Interim Condensed Statement of Comprehensive Income
For the Six Month period ended 30 September 2021
23 June 2020 to
1 April 2021 to 3 0 23 June 2020 to 31
30 September 2021 September 202 0 March 2021
Unaudited Unaudited Audited
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
income 3 1,019 - 1,019 - - - 57 - 57
Loss arising
on
the
revaluation
of
investments
at the period
end 9 - (83) (83) - - - - (113) (113)
Investment
return 1,019 (83) 936 - - - 57 (113) (56)
------- -------- ------- ------------------ ------------ ----------- ------- ------- ---------
Investment
management
fees 4 90 30 120 - - - 5 1 6
Other expenses 4 418 16 434 - - - 388 71 459
508 46 554 - - - 393 72 465
Profit/(loss)
before
taxation 511 (129) 382 (336) (185) (521)
------- -------- ------- ------------------ ------------ ----------- ------- ------- ---------
Taxation 5 - - - - - - - - -
Profit/(loss)
after
taxation 511 (129) 382 - - - (336) (185) (521)
------- -------- ------- ------------------ ------------ ----------- ------- ------- ---------
Other
comprehensive - -
income - - - - - - -
Total
comprehensive
profit/
(loss) 511 (129) 382 - - - (336) (185) (521)
------- -------- ------- ------------------ ------------ ----------- ------- ------- ---------
Basic &
diluted
earnings per
share
(pence) 6 0.005p (0.001p) 0.004p - - - (0.01p) (0.00p) (0.01p)
------- -------- ------- ------------------ ------------ ----------- ------- ------- ---------
The total column of this statement is the Income Statement of
the Company prepared in accordance with IAS in conformity with the
requirements of the Act and in accordance with IFRS adopted by the
UK. The supplementary revenue return and capital columns have been
prepared in accordance with the Association of
Investment Companies Statement of Recommended Practice (AIC SORP).
All revenue and capital items in the above statement derive from
continuing operations.
This Income Statement includes all recognised gains and losses.
The accompanying Notes are an integral part of this statement.
Interim Condensed Statement of Financial Position
As at 30 September 2021
Company Number: 12693305
30 September 31 March 30 September
2021 2021 2020
Unaudited Audited Unaudited
Note GBP'000 GBP'000 GBP'000
Non-current assets
Investments at fair value
through profit o r loss 9 28,499 20,883 -
------------ ------------- ------------
Current assets
Trade and other receivables 509 201 50
Cash and cash equivalents 65,705 76,553 -
66,214 76,754 50
------------ ------------- ------------
Total assets 94,713 97,637 50
------------- ------------
Current liabilities
Trade and other payables ( 217 ) (149) -
Current taxation payable - - -
( 217 ) (149)
------------ ------------- ------------
Net assets 94, 496 97,488 50
============ ============= ============
Equity attributable to
equity holders
Share capital 10 1,000 1,000 50
Share premium 1 - -
Special distributable reserve 93,634 97,009 -
Capital reserve (314) ( 185) -
Revenue reserve 175 ( 336) -
Total equity 94, 496 97,488 50
============ ============= ============
Shareholders' funds
Net asset value per Ordinary
Share 8 94.5 0 p 97.49p 100 p
The statements were approved by the Directors and authorised for
issue on 2 December 2021 and are
signed on behalf of the Board by:
Dr John Roberts
Chair
2 December 2021
The accompanying Notes are an integral part of this statement.
Interim Condensed Statement of Changes in Equity
For the Six Month period ended 30 September 2021 (Unaudited)
Special
Issued Share Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2021 1,000 - 97,009 ( 185) ( 336) 97,488
-------- -------- -------------- -------- -------- -------
Issue of share capital* - 1 - - - 1
Total comprehensive
income/(loss) for the
period - - - (129) 5 11 382
Dividends paid - - (3,375) - - (3,375)
As at 30 September
2021 1,000 1 93,634 (314) 175 94, 496
======== ======== ============== ======== ======== =======
* - 675 Ordinary 1 pence shares issued for GBP658
For the period from 23 June to 30 September 2020 (Unaudited)
Special
Issued Share Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 23 June 2020 - - - - - -
--------- -------- -------------- -------- -------- -------
Issue of share capital
* 50 - - - - -
As at 30 September
2020 50 - - - - -
========= ======== ============== ======== ======== =======
For the period from 23 June to 31 March 2021 (Audited)
Special
Issued Share Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 23 June 2020 - - - - - -
-------- -------- -------------- -------- -------- -------
Issue of share capital
* 1,000 99,000 - - - 100,000
Cost of issue of shares - (1,991) - - - (1,991)
Transfer to special
distributable reserve - (97,009) 97,009 - - -
Total comprehensive
(loss) for the period - - - ( 185) ( 336) (521)
As at 31 March 2021 1,000 - 97,009 ( 185) ( 336) 97,488
======== ======== ============== ======== ======== =======
*The Company allotted 50,000 Management shares and 1 Ordinary
share at the date of incorporation 23 June 2020. The Management
shares were redeemed on 19 October 2021 upon issue of 999,999
ordinary shares following the Company's GBP100.0 million initial
public offer. Please see note 10.
The capital reserve represents the proportion of Investment
Management fees and other expenses, where applicable, charged
against capital and realised/unrealised gains or losses on the
disposal/revaluation of investments. The unrealised element of the
capital reserve is not distributable. The special distributable
reserve was created on court cancellation of the share premium
account. The revenue, special distributable
and realised capital reserves are distributable by way of dividend.
The accompanying Notes are an integral part of this
statement.
Interim Condensed Statement of Cash Flows
For the Six Month period ended 31 March 2021
1 April to 23 June to 23 June to
30 September 30 September 31 March
2021 202 0 2021
Unaudited Una udited Audited
Note GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit / (Loss) before taxation 382 - (521)
Loss arising on the revaluation
of investments at the period
end 9 83 - 113
Cash flow Generated by/(used
in) operations 465 - (408)
Interest income ( 1,019 ) - (57)
Interest received 605 4
(Increase) in receivables 3 - ( 148 )
Increase in payables 67 - 149
Net cash flows from / (used
in) operating activities 121 - (460)
------------ ------------ ----------------------------
Cash flows from investing
activities
Purchase of financial assets
at fair value through profit
or loss 9 (8,232) - (20,996)
Loan Principal repaid 637 - -
Net cash flows from / (used
in) investing activities (7, 595 ) - (20,996)
------------ ------------ ----------------------------
Cash flows from financing
activities
Issue of shares 1 - 100,000
Costs of Share Issue - - (1,991)
Dividends paid (3,375) - -
Net cash flows from financing
activities (3,374) - 98,009
------------ ------------ ----------------------------
Net (decrease)/ increase
in cash and cash equivalents (10,848) - 76,553
Reconciliation of net cash
flow to movements in cash
and cash equivalents
Cash and cash equivalents
at beginning of period 76,553 - -
Net (decrease)/ increase
in cash and cash equivalents (10,848) - 76,553
------------ ------------ ----------------------------
Cash and cash equivalents
at end of the period 65,705 - 76,553
============ ============ ============================
The accompanying Notes are an integral part of this
statement.
1. General Information
The Company is registered in England and Wales under number
12693305 pursuant to the Companies Act 2006. The address of its
registered office, which is also its principal place of business,
is 1 King William Street, London EC4N 7AF.
The Company's Ordinary Shares were first admitted to trading on
the Specialist Fund Segment of the Main Market of the London Stock
Exchange under the ticker TEEC on 19 October 2020.
The Company's Objective is to generate an attractive total
return for investors comprising stable dividend income and capital
preservation, with the opportunity for capital growth through
acquiring and realising value from of a diversified portfolio of
energy efficiency investments in the United Kingdom.
The Company currently makes its investments through its sole
holding company TEEC Holdings. The Company controls the investment
policy of TEEC Holdings to ensure it acts in a manner consistent
with the investment policy of the Company.
The Company has appointed Triple Point Investment Management LLP
as its Investment Manager (the "Investment Manager") pursuant to
the Investment Management Agreement dated 25 August 2020. The
Investment Manager is registered in England and Wales under number
OC321250 pursuant to the Companies Act 2006. The Investment Manager
is regulated by the FCA, number 456597.
2. Basis of accounting
These condensed interim financial statement s do not comprise
statutory accounts as prescribed in section 434 of the Companies
Act 2006. Statutory accounts for the period ended 31 March 2021
were approved by the Board of Directors on 2 June 2021 and
delivered to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain any emphasis of
matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
On the 31 December 2020, IFRS as adopted by the European Union
at that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Company
applied IAS in conformity with the requirements of the Act and in
accordance with IFRS adopted pursuant to Regulation (EC) No
1606/2002, as it applies in the EU in its maiden annual report for
period end 31 March 2021. The Company transitioned to UK-adopted
International Accounting Standards in its consolidated financial
statements on 1 April 2021.There is no impact on recognition,
measurement or disclosure in the period reported as a result of the
change in the framework.
The financial information set out in this report covers the six
months to 30 September 2021 , with comparative numbers amounts
shown for the year to 31 March 2021 and the period from
incorporation on 23 June 2020 to 30 September 2021 . These
condensed financial statements are unaudited and the financial
information for the six months ended September 2021 contained
herein does not constitute statutory accounts for as defined in
section 434 of the Companies Act 2006. The statutory accounts for
the year ended 31 March 2021 have been delivered to the Registrar
of Companies. The independent auditors' report on those accounts
was unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under sections 498(2) or
498(3) of the Companies Act 2006.
This condensed interim financial statement for the half-year
reporting period ended 30 September 2021 has been prepared in
accordance with the UK-adopted International Accounting Standard
IAS 34, 'Interim Financial Reporting' and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority . The interim financial statements have also been
prepared as far as is relevant and applicable to the Company in
accordance with the Statement of Recommended Practice: Financial
Statements of Investment Trust Companies and Venture Capital Trusts
("SORP") issued in October 2019 by the Association of Investment
Companies ("AIC") .
The interim report does not include all of the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the Annual Report for the
period ended 31 March 2021, which has been prepared in accordance
with IFRSs adopted by the European Union and applicable law, and
any public announcements made by the Company during the interim
reporting period. The Company uses the historical cost basis,
except for certain investments and financial instruments measured
at fair value through the Statement of Comprehensive income.
The Company applies IFRS 10 and qualifies as an investment
entity. IFRS 10 requires that investment entities measure
investments, at fair value, except for those that provide
investment related services and are not themselves investment
entities.
The Company's single, direct subsidiary, TEEC Holdings, is the
ultimate holding company for all the Company's investment. It is,
itself, an investment entity and is therefore measured at fair
value.
The condensed interim financial information has been prepared on
the same basis of the accounting policies, significant judgements,
key assumptions & estimates and presentation and methods of
computation as compared to the Company's annual financial
statements for the period ended 31 March 2021 where they are
described in detail.
The Company's financial performance does not suffer materially
from seasonal fluctuations.
The condensed interim financial statements are presented in
pounds sterling because that is the currency of the economic
environment in which the Company operates and is the Company's
functional currency.
The condensed interim financial statements have been reviewed by
the Company's independent auditor but not audited.
Segmental Reporting
The Chief Operating Decision Maker ("CODM") being the Board of
Directors, is of the opinion that the Company is engaged in a
single segment of business, being investment in in energy
efficiency projects to generate investment returns while preserving
capital. The financial information used by the CODM to manage the
Company presents the business as a single segment.
Going Concern
The Directors have adopted the going concern basis in preparing
the Interim Report. In reaching this conclusion, the Directors have
taken into consideration cash flows generated from operations, the
cash position, income and expense flows of the Company . As at 30
September 2021, the Company had net assets of GBP94.5 million
including cash balances of GBP65.7 million . After post balance
sheet events, the Company's cash position totalled GBP40.2 million
.
The Directors have reviewed detailed financial forecasts (in
which a number of general and specific assumptions were adopted)
and cash flows that project twelve months beyond the date of
approving the financial statements.
The Company was admitted to trading on the Specialist Fund
Segment of the Main market of the London Stock Exchange on 19
October 2020, which was after the UK had been in its first lockdown
in response to the COVID-19 pandemic. As a result, the Investment
Manager and Administrator had already successfully implemented
business continuity plans to ensure business disruption was
minimised and had been operating effectively whilst working
remotely. All staff we are able to assume their day-to-day
responsibilities.
Based on the evaluation outlined above, including various risk
mitigation measures in place, the Directors do not consider that
the effects of Covid-19 have created a material uncertainty over
the assessment of the Company as a going concern.
On the basis of this review, and after making due enquiries, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least 12 months from the date of approval of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
3. Investment Income
23 June 2020 to For the period ended
1 April 2021 to 30 30 September 2020 31 March 2021 (Audited
September 2021 (Unaudited) (Unaudited ) )
------------------------------- ---------------------------------------------- -------------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Interest
on cash
deposits 4 - 4 - - - 4 - 4
Interest
income from
investments 1,015 - 1,015 - - - 53 - 53
1,019 - 1,019 - - - 57 - 57
------- ------------- ------- ---------------- ------------- ------------- ------- ------------- -------
4. Operating Expenses
For the period
ended 31 March 2021
1 April 2021 to 23 June 2020 to (Audited)
30 September 2021 30 September 2020
(Unaudited) (Unaudited)
------------------------- -------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
Management
fees 90 30 120 - - - 5 1 6
Directors' fees 100 - 100 - - - 91 - 91
Company's audit
fees:
- statutory
audit of the
group financial
statements 38 - 38 - - - 60 - 60
-
Assurance-related
services pursuant
to legislation 25 - 25 - - -
Other operating
expenses 225 10 235 - - - 225 71 296
Irrecoverable
VAT on
Administration
& Management
fees 30 6 36 - - - 12 - 12
508 46 554 - - - 393 72 465
------- ------- ------- ------- -------- --------- ------- ------- -------
The Directors' fees exclude employer's national insurance
contribution and travel expenses which are included
as appropriate in other operating expenses. There were no other emoluments.
5. Taxation
The tax for the period shown in the statement of Comprehensive
Income is as follows.
23 June 2020 to 30
September 2020 For the period
1 April 2021 to (Unaudited)
30 September 2021 ended 31 March
(Unaudited) 2021 (Audited)
-------------------------- --------------------------------------------------------- -------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit / (Loss)
before taxation 5 11 (129) 382 - - - (336) (185) (521)
------- ------- ------- ------------------- ----------------- ----------------- ------- ------- -------
Corporation tax
at 19% 97 (25) 72 - - - (64) (35) (99)
Effect of:
Tax relief for
dividends
designated
as interest ( 97
distributions ( 97) - ) - - - - - -
Capital losses
not deductible - 16 16 - - - - 22 22
Disallowed
expenditure - - - - - - - 12 12
Surrendering of
Tax losses to
unconsolidated
subsidiaries - 9 9 - - - 64 1 65
------- ------- ------- ------------------- ----------------- ----------------- ------- ------- -------
UK Corporation
Tax - - - - - - - - -
------- ------- ------- ------------------- ----------------- ----------------- ------- ------- -------
6. Earnings Per Share
1 April 2021 to 23 June 2020 to
30
30 September 2020
September 2021 (Unaudited) For the period
ended 31 March
(Unaudited) 2021 (Audited)
-------------------------- -------------------------- --------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit / (Loss)
attributable
to the equity
holders of the
Company (GBP'000) 5 11 (129) 382 - - - (336) (185) (521)
Weighted average
number of Ordinary
Shares in issue
('000) 100,000 100,000 100,000 - - - 58,156 58,156 58,156
Profit / (Loss)
per Ordinary
share (pence)
- basic and
diluted 0.005p (0.001p) 0.004p - - - (0.01p) (0.00p) (0.01p)
There is no difference between the weighted average Ordinary or
diluted number of Shares.
7. Dividends
On 2 June 2021, the Company announced an interim dividend of
2.00 pence per share with respect to the period ending 31 March
2021 which was paid on 30 June 2021 to shareholders on the register
on 11 June 2021 .
On 2 September 2021, the Company announced a first quarter
interim dividend of 1.375 pence per share, which was paid on 30
September 2021 to shareholders on the register on 10 September
2021.
Dividends paid on equity shares during the period were:
23 June 2020
1 April 2021 to 30 September For the period
to 30 September 2020 (Unaudited ended 31 March
2021 (unaudited) ) 2021 (audited )
GBP'000 GBP'000 GBP'000
Interim dividend for
the period ended 31
March 2021 of 2.00 pence
per ordinary share 2,000 - -
First quarter interim
dividend for the year
ending 31 March 2022
of 1.375 pence per ordinary
share 1,375 - -
----------------- ---------------- -----------------------
3, 3 75 - -
----------------- ---------------- -----------------------
8. Net assets per Ordinary share
30 September 31 March 30 September
2021 2021 2020
(Unaudited) (Audited) (Unaudited)
-------------- ------------ ------------
Total Net Assets (GBP'000) 94, 496 97,488 50
Number of Ordinary Shares
in issue ('000) 100,000 100,000 50
Net asset value per Ordinary
Share (pence) 94. 50 p 97.49p 100.00 p
9. Investments at Fair Value through Profit or Loss
As set out in Note 2, the Company designates its interest in its
wholly owned direct subsidiary as an investment at fair value
through profit or loss.
Summary of the Company's valuation is below :
30 September 30 September
2021 31 March 2021 2020
(Unaudited) (Audited) (Unaudited)
------------- ------------------- -----------------------------
GBP'000 GBP'000 GBP'000
Brought forward investment
at fair value through
profit or loss 20,883 - -
New investments in the
period 8,232 20,996 -
Capitalised interest 104 - -
Loan principal repaid
in period ( 637 ) - -
Movement in fair value (83) (113) -
Closing investment at
fair value through profit
or loss 28,499 20,883 -
--------------------------- ------------- ------------------- -----------------------------
Reconciliation of movement in fair value :
30 September 3 1 March 30 September
2021 2021 2020
( Una udited) (Audited) (Unaudited)
---------------------------------- ------------ --------------------------------------
GBP'000 GBP'000 GBP'000
Opening Balance 20,883 - -
Investments made * 8,232 20,996 -
Capitalised interest
** 104 - -
Loan principal
repaid in
period ( 637 ) - -
Fair value of
portfolio 28,582 20,996 -
Cash held in
intermediate
holding company 85 80 -
Fair value of other
net
assets in
intermediate
holding companies (168) (193) -
Investment at fair
value 28,499 20,883 -
-------------------- ---------------------------------- ------------ --------------------------------------
*Investments made in the period represent the loan investment to
TEEC Holding limited to enable the debt investment in Spark Steam
limited of GBP8.032m and a GBP0.200 million working capital loan to
TEEC Holdings Limited.
**Capitalised interest represents, interest recognised in the
income statement but not paid. This is instead added to the loan
balance on which the interest for future periods are computed. All
payments from the borrower are in accordance with facility
agreement.
Valuation methodology
The Directors have satisfied themselves as to the methodology
used and the discount rates and key assumptions applied in
producing the valuations. All investments are at fair value through
profit or loss.
For non-market traded investments, the valuation is based on a
discounted cash flow methodology and adjusted in accordance with
the IPEV (International Private Equity and Venture Capital)
valuation guidelines where appropriate to comply with IFRS 13 and
IFRS 9. Where an investment is traded in an open market, a market
quote is used.
IFRS 13 'Fair Value Measurement' requires disclosure of fair
value measurement by level. The level of fair value hierarchy
within the financial assets or financial liabilities ranges from
level 1 to level 3 and is determined on the basis of the lowest
level input that is significant to the fair value measurement.
The fair value of the Company's investments is ultimately
determined by the underlying net present values of the investments.
Due to their nature, they are always expected to be classified as
level 3 as the investments are not traded and contain unobservable
inputs.
There have been no transfers between levels during the period.
The fair value hierarchy consists of the following three
levels:
-- Level 1 - Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
-- Level 2 - Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from
prices).
-- Level 3 - Inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
The Investment Manager exercises its judgment in assessing the
expected future cash flows from each investment based on the
project's expected life and the financial models produced for each
project company and adjusts the cash flows where necessary to
consider key external macro-economic assumptions and specific
operating assumptions.
The fair value for each investment is then derived from the
application of an appropriate market discount rate to reflect the
perceived risk to the investment's future cash flows to give the
present value of those cash flows. The discount rate considers
risks associated with the financing of an investment such as
investment risks (e.g. liquidity, interest rate risks, market
appetite), and any risks to the investment's earnings (e.g.
predictability and covenant of the income) and a thorough
assessment of counterparty credit risk, all of which may be
differentiated by the phase of the investment.
The key unobservable input in relation to the portfolio
valuation as at 30 September is the discount rate. The discount
rate has been determined by separating the market and credit spread
on the debt investments. Market rate has been determined with
reference to a comparable risk free rate such a Gilt with an
equivalent maturity. This is then deducted from the internal rate
of return at inception to determine the credit spread. There was no
material move in the period. As the investments are GBP denominated
fixed rate loans, inflation and tax rate are not applicable. Given
the proximity of the balance sheet date to the inception of the
loans, and the fact that there has not been a perceived change in
risk profile associated with the loans since inception, there is
not considered to be a reasonable alternative discount rate that
could be applied that would have a significant impact on their
valuation. As such no sensitivities are included .
The Company records the fair value of TEEC Holdings by
calculating its N et A sset V alue. The aggregate fair value of
each of the individual investments held by TEEC Holdings
constitutes the majority of the fair value attributed to the
Company's investment in TEEC Holdings.
10. Share Capital
For the Six Month period ended 30 September 2021 (Unaudited)
Number of Nominal value of shares
Allotted, issued and fully paid: shares (GBP)
Ordinary shares of 1 pence each
Opening balance at 1 April 2021 100,000,000 1,000,000
Ordinary Shares issued (see note
11) 675 6.75
Closing balance of Ordinary
Shares at 30 September 2021 100,000,675 1,000,00 6.75
----------------------------------- ------------- ---------------------------------------
For the period from 23 June to 31 March 2021 (Audited)
Number of Nominal value of shares
Allotted, issued and fully paid: shares (GBP)
Ordinary shares of 1 pence
each
Opening balance at 23 June
2020 - -
Allo tte d upon incorporation
Ordinary Shares of 1p each
(see
note 11) 1 0.01
Management shares 50,000 50,000.00
Allo tte d / redeemed
following
admission to LSE
Ordinary shares issued 99,999,999 99,999,999.99
Management shares redeemed (50,000) (50,000.00)
Closing balance of Ordinary
Shares a t 31 March 2021 100,000, 000 1,000,00 0.00
-------------------------------- --------------------------- -----------------------------------------------------
Shareholders are entitled to all dividends paid by the Company
and, on a winding up, provided the Company has satisfied all its
liabilities, the shareholders are entitled to all of the residual
assets of the Company.
11. Related Party Transactions
During the period interest totalling GBP1,015,370 was earned on
the Company's long-term interest-bearing loan between the Company
and its subsidiary. At the period end, GBP363,967 was
outstanding.
During the period the Company loaned GBP8,031,524 to its wholly
owned subsidiary TEEC Holdings. The proceeds were used by TEEC
Holdings to complete the commensurate senior debt investment to
Spark Steam Limited. A further GBP200,000 was advanced to TEEC
Holdings for working capital purposes.
The loan s to TEEC Holdings are unsecured ; the underlying loan
from TEEC Holdings to Harvest Generation Limited , Glasshouse
Generation Services Limited and Spark Steam Limited are secured
against the assets of
the companies by a fixed and floating charge.
On 18 June 2021, the Company issued 675 Ordinary Shares to the
Investment Manager in accordance with the terms of the Investment
Management Agreement pursua nt to which 20 per cent. of the
investment management fee paid is used to acquire new ordinary
shares of GBP0.01 each in the capital of the Company. The issue
price per Investment Management Ordinary Share was GBP0.9749 (being
the prevailing Net Asset Value per share), in accordance with the
terms of the Investment Management Agreement.
The AIFM and Investment Manager
The Company and Triple Point Investment Management LLP have
entered into the Investment Management Agreement pursuant to which
the Investment Manager has been given responsibility, subject to
the overall supervision of the Board, for active discretionary
investment management of the Company's Portfolio in accordance with
the
Company's Investment Objective and Policy.
As the entity appointed to be responsible for risk management
and portfolio management, the Investment Manager is the Company's
AIFM. The Investment Manager has full discretion under the
Investment Management Agreement to
make investments in accordance with the Company's Investment Policy from time to time.
This discretion is, however, subject to: (i) the Board's ability
to give instructions to the Investment Manager from time to time;
and (ii) the requirement of the Board to approve certain
investments where the Investment Manager has a conflict of interest
in accordance with the terms of the Investment Management
Agreement.
Under the terms of the Investment Management Agreement, the
Investment Manager will be entitled to a fee calculated at the rate
of:
-- 0.9 per cent, per annum of the adjusted NAV in respect of the
Net Asset Value of up to, and including, GBP650 million; and
-- 0.8 per cent, per annum of the adjusted NAV in respect of the
Net Asset Value in excess of GBP650 million.
The management fee is calculated and accrues monthly and is
invoiced monthly in arrears. During the period ended 30 September
2021, management fees of GBP119,496 w ere incurred (30 September
2020: nil) of which GBP6 5 ,849 (30 September 2020: nil) was
payable at the period end.
No annual management fee shall accrue or be charged on any
undeployed cash funds until such time as
75% or more of the IPO proceeds have been deployed.
For these purposes, "Deployed" shall mean invested in the
acquisition or development of Energy Efficiency Projects.
12. Events after the Reporting period
On 26 November 2021, the Company completed investments totaling
GBP26.8m (excluding transaction costs) and including a GBP0.2m
working capital loan into a portfolio of six operational, Feed in
Tariff ("FiT") accredited, hydroelectric power projects in
Scotland.
The Company will pay an interim dividend in respect of the
period from 1 July 2021 to 30 September 2021 of 1.375 pence per
Ordinary share, payable on 23 December 2021 to holders of Ordinary
shares on the register on 10 December 2021. The ex-dividend date
will be 9 December 2021.
GLOSSARY AND DEFINITIONS
The Act Companies Act 2006
AIC Code The AIC Code of Corporate Governance produced
by the Association of Investment Companies.
--------------------------------------------------------
AIFM The alternative investment fund manager of the
Company, Triple Point Investment Management
LLP.
--------------------------------------------------------
AIFMD The EU Alternative Investment Fund Managers
Directive 2011/61/EU.
--------------------------------------------------------
CCC Climate Change Committee
--------------------------------------------------------
CHP+ Combined heat and power
--------------------------------------------------------
The Company Triple Point Energy Efficiency Infrastructure
Company plc (company number 12693305).
--------------------------------------------------------
DCF Discounted Cash Flow
--------------------------------------------------------
Energy Efficiency A project which falls within the parameters
Project of the Company's investment policy
--------------------------------------------------------
ESG Environmental, Social and Governance
--------------------------------------------------------
EU European Union
--------------------------------------------------------
FCA Financial Conduct Authority
--------------------------------------------------------
FiT Feed in Tariff
--------------------------------------------------------
FRC Financial Reporting Council
--------------------------------------------------------
GAV Gross Asset Value
--------------------------------------------------------
GHG Green House Gas
--------------------------------------------------------
Group The Company and any subsidiary undertakings
from time to time
--------------------------------------------------------
Harvest and Glasshouse Harvest Generation Services Limited (company
number 09353790) and Glasshouse Generation Limited
(company number 09352996)
--------------------------------------------------------
ITC Investment Trust Company
--------------------------------------------------------
IPO The admission by the Company of 100 million
Ordinary Shares to trading on the Specialist
Fund Segment of the Main Market, which were
the subject of the Company's initial public
offering on 19 October 2020.
--------------------------------------------------------
kWh Kilowatt-hour
--------------------------------------------------------
LED Light-emitting Diode
--------------------------------------------------------
NAV The net asset value, as at any date, of the
assets of the Company after deduction of all
liabilities determined in accordance with the
accounting policies adopted by the Company from
time-to-time.
--------------------------------------------------------
Net-Zero A target of completely negating the amount of
greenhouse gases produced by human activity,
to be achieved by reducing emissions and implementing
methods of absorbing carbon dioxide from the
atmosphere
--------------------------------------------------------
OCR Ongoing charges ratio. Represents operating
costs, excluding acquisition costs and other
non-recurring items divided by the average published
undiluted NAV in the period, calculated in accordance
with Association of Investment Companies guidelines.
--------------------------------------------------------
PPA Power Purchase Agreement.
--------------------------------------------------------
Project SPV Special Purpose Vehicle in which energy efficiency
assets are held.
--------------------------------------------------------
SDG Sustainable Development Goals.
--------------------------------------------------------
SORP Statement of Recommended Practice.
--------------------------------------------------------
TCFD Task Force on Climate-related Financial Disclosures.
--------------------------------------------------------
TEEC Holdings The wholly owned subsidiary of the Company:
TEEC Holdings Limited (company number 12695849).
--------------------------------------------------------
Wider Triple Point Triple Point LLP (company number OC310549) and
Group any subsidiary undertakings from time to time.
--------------------------------------------------------
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