Gresham House Energy Storage H2 Earnings Call Highlights

Strong 2025 operational turnaround: Portfolio revenue rose ~30% and EBITDA ~33% as capacity topped 1 GW, while NAV per share increased a modest 3.7% but was weighed down by a GBP 0.16 haircut and weaker forward curve assumptions late in the year.

De-risking and balance-sheet progress: Contracted revenues climbed from 25% to 39%, supporting an upsized, lower-cost, longer-dated debt facility that unlocks capital for upgrades; gross debt stands at GBP 220m (GBP 210m drawn) with net debt to NAV of about 25%.

Growth and upside initiatives: The three-year plan focuses on augmentations and new builds to push average duration toward ~1.9–2.0 hours (adding several hundred MWh) and trials of "alternative revenues" aim to deliver up to GBP 25m of incremental EBITDA if scalable across the portfolio.

Gresham House Energy Storage (LON:GRID) reported a sharp improvement in operating performance in 2025 as the battery storage fund advanced the first year of a three-year plan outlined at its November 2024 Capital Markets Day. Management highlighted higher revenues, expanding capacity, a refinancing that unlocked funding for upgrades, and a continued push to increase contracted income amid volatile market conditions.

2025 results: revenue and EBITDA growth alongside a modest NAV rise

Rupert Robinson, Managing Director at Gresham House, said 2025 was “a highly productive year” as the company executed on multiple fronts. He pointed to a “strong turnaround” in financial performance and noted GRID’s share price rose by “a little over 70%” during 2025.

Robinson said portfolio revenue rose 30% and portfolio EBITDA increased 33% year-over-year. He also reported NAV per share increased 3.7%, though he noted this was “even allowing for a GBP 0.16 haircut from the forward curves,” a topic later addressed by Assistant Fund Manager James Bustin.

Ben Guest, Managing Director of Gresham House’s Energy Transition Business and lead fund manager of GRID, said 2025 marked “significant growth” for the company, with capacity rising to “over 1 GW.” He reported total portfolio revenue of GBP 60 million in 2025 and EBITDA of GBP 38.8 million, noting EBITDA was achieved “despite having certain assets offline,” which affected margins.

Shift toward contracted revenues to de-risk cash flows

Bustin emphasized that a key portfolio trend during 2025 was a move toward contracted revenues, intended to improve risk-adjusted returns and support financing. He said contracted revenues increased from 25% in 2024 to 39% in 2025, and management expects that share to rise further as floor contracts become more prominent and as the pipeline develops.

Bustin said the current contracted revenue mix reflected “tolling and the Capacity Market,” and that tolling revenues will begin to taper as contracts roll off. He added that as battery duration increases, the revenue mix is expected to shift further toward trading rather than frequency response, with the assets’ flexibility allowing optimization across different revenue sources.

Balance sheet actions, debt facility, and valuation headwinds from forward curves

Guest said the fund concluded a refinancing and “set the groundwork” for the three-year plan, with contracted revenues helping support an “upsized debt facility” that unlocks capital for augmentations and equity for new projects. He described the refinancing as achieving “a lower interest rate and a longer-dated facility.”

On leverage, Guest reported gross debt of GBP 220 million, with GBP 210 million drawn, and net debt to NAV of GBP 159 million, which he said equated to 25% of NAV (or around 20% of gross asset value).

However, Guest said NAV “dropped slightly in the year,” with the decline occurring in the fourth quarter due to “a significant further haircut in revenue assumptions” from third-party forecasters.

Bustin expanded on the NAV drivers, describing a “reduction in revenue forecasts” as a meaningful offset to operational and portfolio improvements. He presented a comparison of 2024 year-end versus 2025 year-end forward curves, stating that the curves “have all fallen quite substantially.” He added that the combination of lower curves and a greater proportion of contracted revenues results in “a much more conservative revenue assumption,” which “significantly de-risks the revenue assumptions in the business and therefore the valuations.”

Bustin also said the fund maintained its discount rate approach, which he described as the “highest weighted average discount rate in this sector for such a portfolio.” He argued there could be upside to valuations over time because current valuations do not include potential benefits from “alternative revenues,” new pipeline assets, and further augmentation potential.

Portfolio upgrades, pipeline progress, and alternative revenues

Management reiterated that the three-year plan is centered on (1) augmentations, (2) new build projects, and (3) alternative revenues. Guest said the fund added 330 MWh of augmentations in 2024 and 2025 and expects to add another 350 MWh in 2026, taking the portfolio toward “close to two hours in duration.” Guest said two augmentations were already completed with six more in progress, and the work is being staggered to avoid taking too many assets offline at once.

On new projects, Guest said the industry has been delayed by NESO’s connection queue reform (“Gate 2”). He said the fund had received 594 out of 694 MW of connection offers, with one project still outstanding, which he expects to be a 2027 connection.

Guest said three projects have already been signed for the initial tranche—57 MW, 100 MW, and 240 MW, totaling 397 MW—with additional projects expected to follow. He provided a broad view of financing expectations, including that senior debt could represent about 70% of total project cost, and said an export credit facility sitting junior to senior debt is “very close to being concluded,” alongside an equity layer.

Alternative revenues were framed as a major potential incremental earnings driver. Guest said the fund ran formal trials from December through March and generated “significant revenue per MW” during that period. He said the objective is to increase revenue per MW per hour by “GBP 5–GBP 10,” and management is targeting GBP 25 million of incremental EBITDA from alternative revenues as part of the three-year plan. The trial ran on 4 MW, which Guest described as scalable, though he said rollout would be gradual.

In Q&A, Guest said a “reasonable rule of thumb” is that alternative revenues could eventually apply to “somewhere in the region of 50% of operational capacity,” though he characterized the effort as still a work in progress.

Q&A: discount to NAV, battery duration, and policy backdrop

Asked about the gap between the valuation model and share price, Guest described NAV as the discounted cash flow of the asset base (with higher discount rates applied during construction) and acknowledged the share price continues to trade at a discount. He said management views GRID as a growth company and believes proving out funding strategy, growth delivery, and the alternative revenue initiative will be key to improving investor confidence.

On battery duration, Guest said the fund is upgrading shorter-duration assets, noting the portfolio is expected to reach an average of 1.9 hours by the end of the current year. He cited Glastonbury as an example where older short-duration batteries were replaced with a roughly 2.2-hour system, with scope for further duration increases.

Guest said the fund uses lithium-ion technology, “lithium-ion phosphate, to be exact,” while acknowledging some older assets use nickel manganese cobalt chemistries. He added that most of the portfolio has migrated to LFP due to cost, life, and safety characteristics.

On government policy, Guest said the fund is benefiting from electrification trends and continued support for renewables through the CFD regime, citing strong results from AR7. He also referenced recent policy discussions including removing a portion of ROC subsidy impacts from electricity prices and the planned removal of carbon price support from 2028 as “very positive.” When asked about de-linking gas and electricity prices, Guest said there would be “none” or “next to none” impact on GRID’s trading because “there’s no intention to change the wholesale market system” and gas would continue to set the price.

Management said a Capital Markets Day is scheduled for May 28 and will be held as a webinar, where the company expects to provide additional detail on capital allocation and the next stages of its growth plans.

About Gresham House Energy Storage (LON:GRID)

Gresham House Energy Storage Fund plc (GRID or the Fund) seeks to capitalise on the growing intraday supply and demand imbalances caused by Great Britain's ever increasing reliance on renewable energy. The Fund aims to provide investors with an attractive and sustainable dividend by investing in a portfolio of utility-scale Battery Energy Storage Systems (BESS) located in Great Britain, which primarily use batteries to import and export power, accessing multiple revenue sources available in the power market. Gresham House Asset Management Limited (GHAM), is the investment Manager for Gresham House Energy Storage Fund plc.