NAV & Valuation Assumptions

Net Asset Value

 

The Company’s NAV is calculated quarterly and based on the valuation of the investment portfolio provided by the Investment Adviser and the other assets and liabilities of the Company calculated by the Administrator. The NAV is reviewed and approved by the Investment Manager and the Board. All variables relating to the performance of the underlying assets are reviewed and incorporated in the process of identifying relevant drivers of the discounted cash flow valuation.

 

Updates to Net Asset Value (“NAV”) assumptions

 

The Company has made the following updates to its valuation assumptions for the 30 September 2024 NAV calculation:

• Updated inflation assumptions to reflect the latest available third-party inflation data from HM Treasury Forecasts and long-term implied rates from the Bank of England for its UK assets.  For international assets, IMF forecasts are used.
• Updated power price forecasts capturing the latest available third-party advisor long-term power curves.

 The updated NAV assumptions are disclosed in the relevant sections below.

 

 

NAV Bridge

	NAV p/share	NAV
At 31 March 2024	104.7p	£618.6m
Time value	4.7p	£28.0m
Project actuals	(2.1p)	(£12.1m)
Power price forecasts	(3.0p)	(£17.8m)
Changes in short-term inflation	(0.1p)	(£0.7m)
Revaluation of NPIII investment	0.1p	£0.5m
Cash dividends paid	(5.0p)	(£29.5m)
Sale of Whitecross	0.6p	£3.3m
Share buyback	0.2p	(£4.6m)
Capital movements (no net NAV impact)
New assets at cost	1.0p	£5.8m
Repayment of RCF using cash on hand	2.1p	£12.2m
Cash on hand, used to fund investments	(3.1p)	(£18.0m)
Other movements in residual value	(2.3p)	(£13.5m)
At 30 September 2024	97.8p	£572.2m

 

The movement in the NAV over the period was driven primarily by the following factors:

• Increase due to time value, reflecting the change in the valuation as a result of changing the valuation date, prior to adjusting for any outflows of the Company.  The increase in value is attributable to the unwinding of the discount applied to cash flows for the period when calculating the DCF.
• Shares purchased in the period as part of the Company’s Share Buyback Programme of up to £20m.
• The sale of Whitecross, a 36MW operating solar asset for £27m, to a third-party private fund managed by Downing LLP.
• A decrease in short-term (2024-2029) UK power price forecasts provided by consultants, mainly as a result of falling gas prices and reduced short-term power demand expectations.
• The valuation incorporates revisions to short-term inflation forecasts from external third parties.
• The dividends declared and operating costs incurred during the year, including both ordinary and preference share dividend payments.
• The share buyback programme used £4.6m of cash on hand to purchase 5,642,709 ordinary shares in the period resulting in an increase in the NAV per share of 0.2p.
• Other movements in residual value include changes in FX rates, fund operating expenses, and other non-material movements.