JLEN: Half Year Report

27th November 2023 | JLEN Environmental Assets (FTSE 250)

Half-year results for the period to 30 September 2023

JLEN Environmental Assets Group Limited, the listed environmental infrastructure fund, is pleased to announce the Company’s half-year results to 30 September 2023.

Resilient earnings and Net Asset Value

  • NAV per ordinary share of 119.7 pence (31 March 2023: 123.1 pence), a decrease of 3.4 pence from 31 March 2023
  • NAV total return of 1.4% over the first six months of the year
  • NAV total return since IPO of 122.9%, which is 8.8% annualised (31 March 2023: 119.9% / 9.1% annualised)
  • Portfolio valuation remains flat at £898.9m (31 March 2023: £898.5m)

Healthy cash generation from underlying assets

  • Second consecutive period of record distributions received from investments, underpinning a dividend cover of 1.32 times for the first six months of the financial year, or 1.54 times before payment of the Electricity Generator Levy (31 March 2023: 1.51 times)
  • Total dividends declared for the six months to 30 September 2023 of 3.78 pence, on track to meet full year target of 7.57 pence set out in the 2023 Annual Report
  • Prudent project level gearing of 17.7% and overall fund gearing of 28.7% after inclusion of JLEN’s revolving credit facility (31 March 2023: 18.3% and 27.3% respectively)

Diversified portfolio reduces risk and enhances returns

  • 42 assets across ten principal sectors
  • Acquisitions in the period include the securing of rights to fund a second German green hydrogen investment opportunity through JLEN’s development partner, HH2E, with final investment decision due in the coming months
  • Progress made on asset disposals to recycle capital in line with the Company’s approach to capital allocation
  • Weighted average discount rate 9.4% (31 March 2023: 8.4%) following an average increase of 0.75% since 31 March 2023, providing real return of 6.9% above average long-term inflation assumption
  • Good progress made on JLEN’s development and construction stage investments, which now account for at 9.0% of portfolio value and provide potential for capital growth as they progress through the construction stage and become operational
  • The renewable energy generating portion of the portfolio delivered 660GWh, an increase year on year (30 September 2022: 655GWh)

Key Metrics (at 30 Sep 2023):

NAV: £792.1m  (31 March 2023: £814.6m)

NAV Per Share: 119.7p  (31 March 2023: 123.1p )

Gross Asset Value:£1,109.8bn  (31 March 2023: £1,119.8bn )

Total Dividend Per Share: 3.78p (30 Sep 2022: 3.57p)

Weighted Avg Discount Rate: 9.4% (31 March 2023: 8.4%)

Overall Portfolio Gearing: 28.7% (31 March 2023: 27.3%)

Annualised Total NAV Return since IPO: 8.8% (31 March 2023: 9.14%)

Dividend timetable

Ex-dividend date 7 December 2023

Record date 8 December 2023

Payment date 29 December 2023

Ed Warner, Chair of JLEN, said:

“As JLEN approaches its tenth anniversary, the Board is encouraged by the prospects for the portfolio and proud of its track record of delivering consistent dividend and NAV growth over its life. Our valuation during the period has been resilient in the face of macro-economic headwinds and cash generation from our underlying assets has been healthy.

“The Board and the Investment Manager believe that the discount to NAV at which JLEN’s shares are currently trading materially undervalues the Company, and so represents an attractive investment opportunity. The outlook for sustainable infrastructure investment remains positive as the UK and European economies decarbonise to meet net zero emissions targets and find ways to live more sustainably. We will be suitably cautious in our approach given the prevailing uncertainties, but considering this is a long-term asset class, we view the future with confidence.”

Below is an interview with Foresight Group, the manager behind the Trust who talk us through the highlights from JLEN’s Half Year Report, an outlook and why the case for investment in sustainable infrastructure has never been stronger.