JLEN Environmental Assets Group Ltd (LON: JLEN) increased its NAV in the year to March 2023, helped by higher power prices and inflation.
The Foresight managed investment trust riased NAV by 7% to 123.1p a share. The shut down of the Cramlington bioenergy plant held back the growth in the group valuation, but the time was used to implement improvements to the plant.
Cash flow from operations was £70.5m. JLEN is using £103.5m of its £200m bank facility. There are commitments to development assets and also scope for further acquisitions. It would be difficult to raise additional funds from a share issue in current market conditions.
Five acquisitions helped the portfolio valuation increase 13% to £898.5m. That means that there are 42 assets over seven sectors. Wind is the biggest sector accounting for 28% of gross assets and waste and bioenergy accounts for 26%.
Medium-term power prices are slightly higher. The fund manager has fixed a significant proportion of the prices of its power producing portfolio for up to two years.
The first battery storage investment is up and running. The West Gourdie 50MW lithium-ion plant started operations at the beginning of June and the 50%-owned Sandridge plant could be operational within 12 months. There are two other ready to build sites in the UK. The European market is less developed and has potential.
Three CNG refuelling stations are under construction. Overall, the assets under construction make up 10% of the portfolio.
There are plans to move into green hydrogen. The Foresight group already has interests in hydrogen and relevant infrastructure. JLEN has preferential rights to five projects under development in Germany. JLEN believes that the potential hydrogen operations could have higher returns than its other assets.
There were total dividends of 7.14p a share last year – covered 1.5 times – and the plan is to increase them to 7.57p a share this year. At 114p, that provides a forecast yield of 6.6%.
