LEGAL ENTITY IDENTIFIER ('LEI'): 213800AJ3TY3OJCQQC53
AQUILA ENERGY EFFICIENCY TRUST PLC
Aquila Energy Efficiency Trust Plc (the "Company" or "AEET") is pleased to announce its audited results for the year ended
Investment Objective
FOLLOWING THE ADOPTION OF A NEW INVESTMENT POLICY AT THE 2023 AGM, AQUILA ENERGY EFFICIENCY TRUST PLC IS BEING MANAGED WITH THE INTENTION OF REALISING ALL REMAINING ASSETS IN THE PORTFOLIO IN A PRUDENT MANNER CONSISTENT WITH THE PRINCIPLES OF GOOD INVESTMENT MANAGEMENT AND WITH A VIEW TO RETURNING CASH TO SHAREHOLDERS IN AN ORDERLY MANNER.
Management
The Company has appointed
The AIFM has appointed Aquila Capital Investmentgesellschaft mbH as its Investment Adviser ("
The Board comprises four non-executive Directors, all of whom are independent of the Investment Adviser, from relevant and complementary backgrounds offering experience in the management of listed funds, as well as in the energy efficiency and infrastructure sectors.
Capital Structure
As at
Highlights (Consolidated figures)
|
|
As at |
As at |
|
|
31 December |
31 December |
|
Financial information |
2024 |
2023 |
|
NAV per Ordinary Share (pence) |
85.55 |
94.28 |
|
Ordinary Share price (pence) |
52.00 |
57.25 |
|
Ordinary Share price discount to NAV1 (%) |
(39.2) |
(39.3) |
|
Dividend per Ordinary Share (pence)2 |
6.139 |
- |
|
Net assets (£ million) |
69.67 |
94.28 |
|
Ongoing charges1 (%) |
3.8 |
3.5 |
|
|
For the year |
For the year |
|
|
ended |
ended |
|
|
31 December |
31 December |
|
|
2024 |
2023 |
|
Performance summary |
% change |
% change |
|
NAV total return per Ordinary Share1,3 |
(2.7) |
0.3 |
|
Share price total return per Ordinary Share1,3 |
1.6 |
(17.6) |
1 Alternative Performance Measures ("APMs"), as defined by the
2 Dividend declared and paid in respect of the financial year.
3 Adjusted for dividends paid during the financial year.
CHAIR'S STATEMENT
ON BEHALF OF THE BOARD, I AM PLEASED TO PRESENT THE ANNUAL REPORT (THE "ANNUAL REPORT") FOR AQUILA ENERGY EFFICIENCY TRUST PLC, FOR THE YEAR ENDED
Investment Performance
The Company's NAV per share as at
The Group's investments continue to produce income. In 2024, total investment income was
In line with the Company's investment policy, on
Following an extensive asset sale process run on behalf of the Company, by its financial advisors, and which ended in
Return of Capital
On
The Board intends to continue returning capital to Shareholders, either through the payment of dividends or by means of Tender Offers as soon as sufficient realisation proceeds are received. We have engaged with the majority of our largest Shareholders who have expressed a preference for returns of capital to occur in meaningful tranches, and we will continue with that strategy, if appropriate. However, if realisations are either delayed or it takes longer to make sizeable returns of capital, the Board will still consider the payment of dividends which provide a much more cost‑effective return of capital. As noted, a dividend of 6.139p per share was paid on
Significant Developments since
In the 3 months ended
· In January and
· In February and
The repayments of the Superbonus investments were made after negotiation by two of the three developers of these projects (the "ESCOs"), and not from proceeds received from the purchasers of the tax credits generated from these projects, which was the expected source of repayment when these investments were initially made. The return from the Superbonus projects was in two parts, payments for the tax credits and an interest element calculated by reference to the delay in receiving payment. In order to mitigate the significant delayed interest cost, which was being borne by ESCOs, a repayment plan was proposed to reduce the impact of late payment interest accruing on these investments. To accelerate the realisation of these Superbonus investments, which has been significantly slower than originally anticipated, the Company accepted a modest discount of the full late payment interest due on these investments. These investments achieved internal rates of return of greater than 9% p.a.
The Board is in discussions whether an early repayment plan for the two other Superbonus investments is feasible and in Shareholders' interests, taking into account the contractual arrangements.
Costs
The Board continues to be very mindful of the costs incurred in the running of the Company whilst it is in Managed Run-Off. The unintended and unhelpful consequences of the Managed Run-Off are numerous. In particular, some investment counterparties and service providers no longer have the same incentives and motivation to cooperate with the Company and this is, in some cases, leading to additional costs being incurred. We will remain focused on cost recovery and reduction, in particular, where additional costs have been incurred as a consequence of underperformance of particular services provision.
Return of Capital post year end
Given the recent substantial repayments of investments and the accumulated cash position at
The Board of Directors has declared a special interim dividend of
Miriam Greenwood OBE DL
Chair of the Board
INVESTMENT ADVISER'S REPORT
Overview
During 2024, the Investment Adviser continued to support the Managed Run-Off of the Company's Portfolio by, (i) limiting new investment activity to the execution of commitments agreed up to the date of the continuation vote in
During 2024, the Company invested the second and final tranches of two investments, a rooftop Solar PV project in
During 2024, the Company realised two Solar PV investments in
During 2024, the Company received
The Investment Adviser is in discussions whether an early repayment plan for the two remaining Superbonus investments is feasible and in Shareholders' interests, taking into account the contractual position.
The Investment Adviser continues to closely monitor the performance of all of the Company's investments and, in particular, the receipt of cash payments, which are due on a monthly, quarterly and annual basis. In 2024, the large majority of the Company's other (i.e. non-Superbonus) investments and, in particular, all of the larger investments, performed in accordance with their contractual terms. However, there are investments in the portfolio which continue to be problematic:
· Two Solar PV investments in
· The two wind investments in the
It has also been necessary in 2024 to make further provisions of
· The German sub-metering investment, which had a book value of
· The
· A Solar PV project in
As at
As at
Portfolio Overview
As at
Approximately 84% of the Company's investments by value as at
For projects which are non-investment grade, there are typically additional protections. These protections include the ability to export power to the grid, and to extend the maturity of a contract with the ESCO and the underlying counterparty to recover missed payments. The latter is possible because the Company's financing agreements are of a shorter duration than the useful life of equipment installed and, in many cases, of a shorter duration than the contract between the ESCO and the counterparty. The credit quality and performance of the Company's portfolio is discussed further below in respect of valuations and Expected Credit Loss ('ECL').
The Company's portfolio comprises largely fixed return cash flows. Following a renegotiation of the terms of the German Bio-LNG investment, 95% of the total investment value provides a fixed rate of return from contracted cash flows (84% as at
The Company's portfolio of investments is expected to achieve an overall unlevered average return of 9.2% per annum, an increase from the yield of 8.1% per annum reported in the Half-Yearly Financial Report for the six months ended
Investments in
In 2024, the Company invested
1) Investments in Italian "Superbonus" projects (
In 2024, the Company received
"Superbonus" is an incentive measure introduced by the Italian Government through Decree "Rilancio Nr. 34" on
2 The Italian Government has made various modifications to Superbonus, including the value of tax credits awarded and how these tax credits can be utilised.
2) Solar PV investments for self-consumption in
As at
2.i) Projects with Noleggio Energia
Of the eight Solar PV projects which the Company has committed to finance, seven projects have been developed by the ESCO Noleggio Energia, which was established in 2017 and is an Italian company that specialises in providing operating leases for energy efficiency and renewable energy projects for commercial and industrial clients in
2.ii) Project with CO-VER Power Technologies
In
CO-VER has a successful 20-year history in developing industrial projects in the areas of energy storage systems, co/tri-generation plants and renewable energies. Futura is the owner of the PV plant which benefits from feed-in tariffs payable by Gestore dei Servizi Energetici ("GSE"). GSE is a joint stock company managed by the Italian Government which is responsible for promoting and developing the growth of renewable assets in
Investments in
In 2024, the Company deployed no further capital into investments in
1) Solar PV investments in
During 2024, the Company completed the sale of two Solar PV projects, generating cash proceeds of
As reported earlier in the Investment Adviser's Report, there are operational issues with three Solar PV projects in
2)
The Spanish Government has established incentive schemes to promote energy efficiency measures in buildings, including the "Programa de Rehabilitacion Energetica de Edificios" ("PREE"). PREE is a
Investments in
In 2024, the Company invested
All of the investments in
As reported earlier in the Investment Adviser's Report, the Company completed the sale of the Bio-LNG investment in
Investments in the
In 2024, the Company deployed no further capital into investments in the
The lighting and CHP investments are fixed return investments although one of the lighting investments benefits from annual inflation adjustments to the income. The wind investments are variable return investments due to the variability of operation and maintenance costs, power production and export tariffs, which are renewed each year, although a significant percentage of revenue is based on feed-in tariffs which benefit from annual inflation adjustments.
The fixed return investments performed satisfactorily. However, the wind investments, which had a value of
Valuations and ECL Provisions as at
As at
The investments held at amortised cost are net of ECL provisions of
· an increase for Superbonus investments to reflect the credit risk moving to the ESCOs themselves rather than the purchasers of the tax credits generated by these investments; and
· additional provisions against the three investments which were fully impaired as at
Apart from these projects, the Company has not experienced payment issues of material significance on the receivables from amortised cost investments due to be paid to it in 2024.
As at
· The German Bio-LNG investment with a value of
· four Solar PV projects in
· two wind projects in the
· a Solar PV project in
The change in valuation of the investments held at fair value through profit or loss, as reported above, was impacted primarily by operational issues with the wind investments in the
· The two wind investments in the
· Two Solar PV investments in
These operational issues have resulted in negative changes to the forecast cash flowsand resulted in a negative change of -11.9%. Other negative impacts on valuation were:
· An overall increase in the discount rates applied to the valuations, which had a negative effect of -3.7%
· FX effects, -3.7%;
· Distributions from these investments, -10.1%; and
· Changes to forecast power price and inflation assumptions, -0.1%.
These impacts were offset by valuation timing, that is the time value of money effect between the two valuation dates, which had a positive effect of +7.1%. In addition, the Company benefited from gains from forward foreign exchange contracts which mitigated the negative FX effects reported above.
Summary of Investments as at
|
Description |
Receivables Weighted Avg. Credit Ratings |
Term Years |
Technology |
Status |
Country |
Value |
Commitment o/s |
|
Receivables (fixed) from sales of tax credits generated under the Italian Superbonus, which supports energy efficiency retrofits of residential buildings. |
BB- |
2 |
Building Retrofit |
Construction |
|
24,835 |
- |
|
Subscription for Notes (fixed) entitling the Note holder to receivables generated through services agreements for heat pump systems, water management services and sub-metering hardware and services in |
BBB+ / BBB- |
9-15 |
Heat Pumps Water Management Sub-meters |
Default |
|
11,128 |
- |
|
Subscription for a Note (fixed) for the refinancing of an operating biogas plant in north-eastern |
BBB+ / BBB- |
8 |
Biogas / |
Operational |
|
7,423 |
- |
|
Receivables (fixed/variable) from solar PV plants and building refurbishment projects in |
BBB+ / BBB- |
10-18 |
Solar PV |
Operational |
|
6,098 |
- |
|
Receivables (fixed/variable) from Solar PV projects in |
BBB+ / BBB- |
7-10 |
Solar PV |
Operational |
|
3,826 |
- |
|
Receivables (fixed/variable) from wind, CHP, metering and lighting as a service contracts in the |
BBB+ / BBB- |
5-14 |
Wind Lighting CHP Metering |
Operational |
|
3,021 |
41 |
Note: The term is the original maturity of the investment.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
Introduction
The Company's goal is to generate attractive returns for investors by reducing Primary Energy Consumption ("PEC"). The Company seeks to achieve this through investing principally in a diversified portfolio of energy efficiency projects with high-quality counterparties. The Company's investments positively impact the environment by reducing the amount of carbon dioxide produced, by decreasing PEC and by increasing the amount of renewable energy used. The synergies3 generated by the reduction of PEC and simultaneously using renewable energy sources further decrease CO2 emissions.
3
This is reflected across the investment philosophy and approach of both the Company and its Investment Adviser,
· 5,285 tonnes of avoided CO2 emissions ("tCO2e"); and
· 19,581 MWh of energy saved,
· for total emission savings equivalent to 2,312 passenger flights around the world4.
4 Passenger flights around the world: This number is derived from passenger flight emissions data retrieved on
Method of Calculation for Energy Savings (kWh) and Avoided CO2 Emissions (tCO2e)
The energy savings (in kWh) and avoided CO2 emissions (in tCO2e) are reported to
Only energy savings and avoided CO2 emissions for operational projects are considered on a pro-rata basis for the time of operation during the reporting period. Avoided CO2 emissions are estimated in gross terms and derived from energy savings in kWh using a conversion factor (except CHP, see below) which measures the grid's emission intensity. Emissions incurred during the life cycle of light bulbs such as materials sourcing, manufacturing, installation, maintenance etc. are not available. The reported metrics are estimations based on assumptions. For technical reasons, it is not possible or feasible to observe or measure actual energy or emission avoidance in real-time.
· LED/Lighting: Savings estimates are derived based on technical, product-specific attributes provided by the product manufacturer. Lighting assets are typically not connected to a distinct circuit. These solutions are designed according to the requirements of a given functional unit, i.e. office, street or space, which varies on asset level. Changes in the number of light bulbs or lumen are not considered.
· Solar PV: Electricity production is translated into emissions avoidance with a conversion factor (see above). Production estimates for Solar PV assets are evaluated during technical due diligence processes.
· CHP: Avoided CO2 emissions are calculated directly by comparing the asset's emissions based on the feedstock used for a specific plant with a reference co-generation unit's emission factor.
ESG Approach
The Company has adopted
· LED Lighting Systems;
· Solar PV;
· HVAC/Buildings; and
· Bio LNG.
5 For details please refer to: https://www.aquila-capital.de/fileadmin/user_upload/ESG_report/Aquila_Group_ESG_Integration_Policy.pdf
Environmental Contribution
The Company's investments are focused on reducing PEC, which should lead to significant reductions in greenhouse gas emissions. In addition, local production of energy (CHP, biomass boilers, Solar PV) reduces transportation energy losses and grid over-utilisation. Smart meters and other control technologies enable a better visibility and management of energy and therefore represent a basis for energy savings.
Social Contribution
Energy efficiency measures not only reduce PEC, but typically also have a positive impact on health and quality of life for different stakeholders, such as employees and users of public facilities. This is largely achieved through the installation of advanced solutions for lighting, heating, cooling, ventilation and the associated control units. All project developers are required to adhere to local, regional and national health and safety laws, to train and educate employees accordingly, to make sure casualties and injuries are avoided.
Governmental Contribution
The Company's business partners are required to adhere to the requirements of the relevant social security and tax authorities. The Company's business partners are required to provide evidence that they adhere to anti-bribery and corruption laws.
Due Diligence
The Investment Adviser performed detailed ESG due diligence for each asset prior to investment. The investment management team followed a structured screening, due diligence and investment process designed to ensure that investments are reviewed and compared on a consistent basis. Execution of this process is facilitated by the team's deep experience in energy efficiency project investing. As part of this process, the Investment Adviser, as relevant for each investment, considered:
· total PEC reduction, and implied CO2 emissions reduced and/or avoided; and/or
· total energy production from renewable and non-renewable sources.
Governance Framework
The Company has an independent Board of Directors, with
Monitoring of ESG
The Company's commitment to and compliance with the Company's established ESG approach is monitored on a continuous basis throughout the lifecycle of investments, as they become operational. This includes:
· ongoing monitoring of the PEC based on the energy consumption and deriving from that the CO2 savings, where appropriate, monitoring additional environment and ESG relevant developments both at the portfolio and asset level; and
· annual reporting, including ESG aspects, to relevant stakeholders including ad-hoc reporting of any material and urgent issues identified in the monitoring process.
The Company has been awarded the Green Economy Mark from the London Stock Exchange. The Green Economy Mark identifies
Aquila Capital Investmentgesellschaft mbH
28 April 2025
INVESTMENT POLICY
As at the date of this Annual Report, the Company's investment policy (including defined terms) is as adopted at the June 2023 AGM pursuant to the Continuation Managed Run-Off Resolution, which replaced the previous investment objective and policy in its entirety and is set out below.
The Company will be managed with the intention of realising all remaining assets in the Portfolio in a prudent manner consistent with the principles of good investment management and with a view to returning cash to Shareholders in an orderly manner.
The Company will pursue its investment objective by effecting an orderly realisation of its assets in a manner that seeks to achieve the best balance for Shareholders between maximising the value received from those assets and making timely returns of capital to Shareholders. This process might include sales of individual assets, mainly structured as loans/receivables, or groups of assets, or running off the Portfolio in accordance with the existing terms of the assets, or a combination.
The Company will cease to make any new investments or to undertake capital expenditure except where, in the opinion of both the Board and the Investment Adviser (or, where relevant, the Investment Adviser's successors):
· the investment is a follow-on investment made in connection with an existing asset in order to comply with the Company's pre-existing obligations; or
· failure to make the follow-on investment may result in a breach of contract or applicable law or regulation by the Company; or
· the investment is considered necessary to protect or enhance the value of any existing investments or to facilitate orderly disposals,
and in these circumstances the Company will observe the following restrictions when making any such investments:
· no more than 20 per cent. of its Gross Asset Value will be invested in any single asset;
· no more than 20 per cent. of its Gross Asset Value will be invested in Energy Efficiency Investments with the same Counterparty;
· no investments will be made outside of
· no more than 7.5 per cent. of its Gross Asset Value, in aggregate, will be invested in Equity Investments, and at all times such investments will only be made with appropriate Shareholder protections in place.
Any cash received by the Company as part of the realisation process prior to its distribution to Shareholders will be held by the Company as cash on deposit and/or as cash equivalents.
The Company will not undertake new borrowing.
As required by the
Currency and Hedging
The Company does not use hedging or derivatives for investment purposes. The functional currency of the Company is sterling. With many of its investment assets in euros the Company uses a series of regular forward foreign exchange contracts to provide protection against movements in the sterling exchange rate. Under these arrangements the Company is required to provide £2.5million in cash as collateral for these forward foreign exchange contracts.
Cash Management
Cash held pending investment in Energy Efficiency Investments or for working capital purposes will either be held in cash or invested in cash, cash equivalents, near cash instruments, bearer bonds and/or money market instruments ("Cash and Cash Equivalents"). There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position. For the avoidance of doubt, the
Changes to and compliance with the Investment Policy
As required by the Listing Rules, any material changes to the Company's Investment Policy as set out above will require the approval of Shareholders by way of an ordinary resolution at a general meeting and the approval of the
Compliance with the above restrictions will be measured at the time of investment and non-compliance resulting from changes in the price or value of assets following investment will not be considered as a breach of the investment restrictions.
In the event of a breach of the investment guidelines and the investment restrictions set out above, the AIFM shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service.
KEY PERFORMANCE INDICATORS
THE BOARD MEASURES THE COMPANY'S SUCCESS IN ACHIEVING ITS INVESTMENT OBJECTIVE BY REFERENCE TO THE KEY PERFORMANCE INDICATORS ("KPIs") DESCRIBED BELOW:
Efficient Return of Capital
In line with the Managed Run-Off status of the Company, the Board is focussed on the efficient return of capital to Shareholders.
On 19 April 2024, the Company launched a Tender Offer of up to 18,561,732 Ordinary Shares, representing approximately 18.6 per cent. of the Company's Issued Ordinary Share Capital. Further to Shareholder approval at the Company's general meeting held on 13 May 2024, 90,231,121 Ordinary Shares were tendered and 18,561,732 Ordinary Shares were acquired at the Tender Price of 94.28 pence per Ordinary Share, equating to £17.5 million being returned to Shareholders, and then cancelled by the Company.
As and when sufficient cash has been accumulated, the Board's intention is for there to be further distribution of cash to Shareholders. However, if realisations are either delayed or it takes longer to make sizeable returns of capital, the Board will consider the payment of dividends.
The Company paid an interim dividend of 6.139p per Ordinary Share, amounting to £5.0 million, to Shareholders on 1 November 2024.
The Company announced on 29 April 2025 the intention to return a further £30.01 million by way of a special interim dividend.
Discount of share price to NAV
The Board monitors the price of the Company's shares in relation to their NAV and the premium or discount at which they trade. The share price closed at a 39.2% discount to the NAV as at 31 December 2024. As at 25 April 2025, the latest date prior to the publication of the Annual Report, the share price discount to NAV was 25.4 %.
Maintenance of a reasonable level of ongoing charges
The expenses of managing the Group are carefully monitored by the Board. The Board receives and reviews management accounts which contain an analysis of expenditure which are reviewed at quarterly Board meetings. The Board reviews the ongoing charges on a quarterly basis. Based on the Group's average net assets during the year ended 31 December 2024, the Group's ongoing charges figure calculated in accordance with the AIC methodology was 3.8% (31 December 2023: 3.5%). Following the announcement of a special interim dividend on 29 April 2025 the Board is reviewing its cost structure to reduce the costs in absolute terms to a level more appropriate for a company of its size.
1 On 29 April 2025, the Board announced a special interim dividend of 36.837p per share, payable on 30 May 2025, to Shareholders on the register on 9 May 2025. The ex-dividend date is 8 May 2025.
RISK MANAGEMENT
Principal Risks and Uncertainties
During the year under review, the Company has carried out a robust assessment of its principal and emerging risks and the procedures in place to identify any emerging risks are described below.
Procedures to identify principal or emerging risks:
The Board regularly reviews the Company's risk matrix, with a focus on ensuring that the appropriate controls are in place to mitigate each risk. The experience and knowledge of the Board is important, as is advice received from the Board's service providers, specifically the AIFM, which is responsible for the risk and portfolio management services and outsources the portfolio management to the Investment Adviser. Each service provider has a role with respect to the identification of risks:
1. Investment Adviser: the Investment Adviser submits a quarterly report on the investment portfolio to the Board which includes risks faced by the projects in the portfolio, plus an update on hedging;
2. Alternative Investment Fund Manager: following advice from the Investment Adviser and other service providers, the AIFM maintains a register of identified risks including emerging risks likely to impact the Company;
3. Broker: provides advice periodically specific to the Company on the Company's sector, competitors and the investment company market whilst working with the Board and Investment Adviser to communicate with Shareholders;
4. Company Secretary: briefs the Board on forthcoming legislation/regulatory change that might impact on the Company; and
5. Association of Investment Companies (''AIC''): The Company is a member of the AIC, which provides regular technical updates as well as drawing members' attention to forthcoming industry and regulatory issues.
Procedure for oversight
The Audit and Risk Committee undertakes a review at least twice a year of the Company's risk matrix and a formal review of the risk procedures and controls in place at the AIFM and other key service providers to ensure that emerging (as well as known) risks are adequately identified and, so far as is practicable, mitigated.
Principal Risks
The Board considers the following to be the principal risks faced by the Company along with the potential impact of these risks and the steps taken to mitigate them.
|
Portfolio |
|
|
|
Principal Risks |
Potential Impact/Description |
Mitigation |
|
Counterparty / Credit |
The risk that the Company has allocated funds to a Counterparty that defaults on its obligations. This could impact the financial performance of the Company and its ability to meet dividends as well as achieving its intended goals and returns for its investors. |
The Company has sought to invest mostly, although not exclusively, in projects where the counterparties have an investment grade or near investment grade rating. The Investment Adviser uses third party credit rating service providers to support its credit risk assessments. Continued monitoring of the investments and the associated counterparties/service providers, including the use of credit rating data providers, allows the Investment Adviser to identify and address these risks early. The Investment Adviser seeks to mitigate credit risks, for example, in the case of Solar PV investments, by the counterparty having the opportunity to sell electricity to the grid or other customers where possible. The Investment Adviser also seeks to structure investments whereby contracts can be adapted/extended to accommodate periods of payment defaults. The Board closely scrutinises, on an asset specific basis, the fair value calculations and expected credit loss provisions proposed by the Investment Adviser. An independent credit rating services company provides probability of default ("PD") and loss given default ("LGD") ratios of individual counterparties to support the calculation of ECL provisions. Diversification of counterparties and service providers ensures any impact is limited. In addition, a diversified portfolio provides further mitigation. |
|
Concentration risk |
The risk that the concentration of investments in a limited number of countries, counterparties, geographical markets, tenure and currencies could expose the Company to unnecessary fluctuations in a narrow range of markets. This risk could negatively impact the Company's performance and ability to meet strategic targets. |
The AIFM and the Investment Adviser continuously monitor the existing portfolio against the Company's portfolio concentration limits and investment policy. This mitigates the risk by ensuring that concentration limits and asset diversification limits are observed. As at 31 December 2024, the Company had no substantial geographic exposure to any one country (with assets principally in |
|
Environmental/ Social/ Governance ("ESG")
|
Failure to adequately consider ESG implications when making and monitoring investments could lead to reputational risk: exposure to greenwashing claims and potentially have an adverse impact on the portfolio's ability to achieve its targeted returns.
|
The Investment Adviser performs detailed due diligence on ESG for each asset prior to recommendation. General standards including IFS Performance Standards, IFC Environmental Health and Safety Guidelines (''EHS'') and Equator Principles as well as local health and safety and social laws are reviewed on a regular basis for all assets depending on the location and development status of each asset. |
|
Economic and Markets |
|
|
|
Principal Risks |
Potential Impact/Description |
Mitigation |
|
Discount management |
Market sentiment has moved the share price to a persistent discount to NAV. There is a risk that the Company will not be able to find ways to bring the share price back to NAV, leading to Shareholders being unable to realise their investments through the secondary market at Net Asset Value or at market price. Loss of market confidence in the Board/Investment Adviser.
|
The Company's Broker monitors the market for the Company's shares and reports at quarterly Board meetings. The Company has the authority, if appropriate, to purchase Ordinary Shares in the market with the result of, amongst other things, enhancing the Net Asset Value per Ordinary Share. The Board and Broker maintains engagement with Shareholders and ensures good market information is available to investors. Following the successful continuation and managed run-off vote in June 2023, the Board, with its advisers, continues to consider strategic options, including asset realisations, to maximise value for Shareholders. |
|
Interest rates/ inflation |
Changes to interest rates may impact the valuation of the investment portfolio by impacting the valuation discount rate. This in turn may have an adverse impact on the attractiveness of returns. Although energy prices have fallen from the heights, they reached in mid-2022, current global geopolitics could drive a return to increased energy prices and volatility, as well as prolonged higher inflation and interest rate levels. |
The Company's investments, which provide in many cases for fixed returns, are not significantly exposed to inflation and interest rate movements because the income streams from investments are not subject to significant deductions for operating costs associated with the investments. While there may be O&M costs these are not a high percentage of revenues and so any inflationary pressures on such costs are not expected to have a significant impact. Furthermore, the Company has not taken on indebtedness to finance its investments and so there is no risk of the costs of indebtedness negatively impacting the revenues from investments. Were the Company to take on indebtedness it may use derivative instruments such as futures, options and swaps to protect the Company from fluctuations in interest rates. The Investment Adviser manages the correlation of cash flows to inflation and resilience to the economic environment. The Investment Adviser has sought to incorporate RPI adjustments in investment documentation where possible. In addition, investing in energy efficiency assets can in some cases provide an effective protection against inflation, as many such assets benefit from rising electricity prices with no burden on the cost side in relation to the use of resources. |
|
Relations with ESCOs during managed run-off |
Entering a managed run-off has strained relations with some ESCOs who may have expected further volume from AEET over time, giving rise to further counterparty/ credit risk for the Company. |
In certain investments there is risk on the ESCO to provide a continuing service to enable the underlying investment, for example, to deliver energy savings or produce renewable energy. Where relationships may be strained the ESCO may not deliver such service and/or there may be a requirement to secure an alternative service provider, in which circumstances receivables may be at risk and/ or the cost of delivering the necessary services may increase. Appropriate provisions have been made within the financial statements where necessary. Communications with the ESCOs from the Investment Adviser ("IA") take into account these considerations and professional advice has been sought by the Company where needed. The Board and IA will continue to monitor relations with ESCOs as the run-off progresses. |
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Service provider risk |
Risks that the Company's third-party service providers do not perform to the appropriate standards. Potential lack of resource, experience or depth in the Investment Adviser's team to manage the Company's investments. This may be exacerbated by the Managed Run-off status of the Company which has led, over time, to reduced fees for the Investment Adviser. Possible conflicts with other private Aquila clients and private investing vehicles which Aquila cannot disclose to the Board or the AIFM. The Investment Adviser is dependent on key people to identify, acquire and manage the Company's investments. |
The Board continues to monitor the quality of services provided by all of its service providers, and in particular, the Investment Adviser. Where it is deemed that work carried out by any service provider is of insufficient quality, the Board will procure additional services from other service providers with a view to ensuring the required standard of portfolio management and reporting is maintained. The Board will reserve its right to recover the cost of such additional services from the current service providers. Additionally through the Management Engagement Committee, the Board conducts a formal assessment of each key service provider's performance once a year. To assist its ability to properly oversee the Company's service providers, the Board requires each service provider to notify it as soon as reasonably practicable following any material breach of its contract with the Company. The Company and AIFM are made aware of and review potential conflicts of interest at the time of each investment being made. Conflicts of interest and investment allocation policies are in place and agreed with the Board. The strength and depth of the Investment Adviser's resources mitigate the risk of a key person departure and provides the ability to draw skills from other areas if needed. |
|
Operational |
|
|
|
Principal Risks |
Potential Impact/Description |
Mitigation |
|
IT security |
A hacker or third party could obtain access to the Investment Adviser or any other service provider and destroy data or use it for malicious purposes resulting in reputational damage and possible GDPR concern. Data records could be destroyed resulting in an inability to make investment decisions and/or monitor investments. |
Service providers have been carefully selected for their expertise and reputation in the sector. Each service provider has provided assurances to both the AIFM and the Company on their cyber policies and business continuity plans along with external reviews of their procedures where applicable. The AIFM, Administrator and Board include Cyber Risk in their reviews of counterparties. |
|
Financial |
|
|
|
Principal Risks |
Potential Impact/Description |
Mitigation |
|
Portfolio Carrying Value |
The principal component of the Company's balance sheet is its portfolio of energy efficiency assets. The Investment Adviser is responsible for preparing a fair market value of the investments where such investments have variable returns. Fair value calculations rely on projections, which involve estimates of the future, which are inherently judgmental. There is a risk that these valuations and underlying assumptions such as discount rates being applied are not a fair reflection of an open market valuation, therefore the investment portfolio could be over or under valued. Investments with fixed returns are measured at amortised cost and subject to expected credit loss provisions, which are based on numerous assumptions and judgments. |
The Investment Adviser has experience in undertaking valuations of renewable sustainability/energy transition assets. In addition, independent advice from a professional accounting services firm has been received to ensure that the Portfolio valuation adheres to the relevant accounting standards. The AIFM and the Board review and interrogate the valuations and underlying assumptions provided by the Investment Adviser. It should be noted that valuations are held at fair value and at amortised cost and not at net realisable value. |
|
Act of War/ Sanctions |
As evidenced with conflict in the It has also led to short term price increases and more focus on renewable energy infrastructure. Possible change to the world order and globalisation. Conflict brings uncertainty to the commodities market and how price levels of modules and other hardware will be impacted directly or indirectly. |
The Company does not have any direct exposure in
|
|
Capital Preservation |
During the run-off, there is a risk that overdistribution of cash will leave the Company short of sufficient liquidity to meet ongoing expenditure. |
The Board, Investment Adviser and AIFM will review the ongoing liquidity requirements and cashflow forecasts of the Company prior to making distributions to ensure that sufficient funds are maintained throughout the run-off process. |
|
Emerging Risks |
|
|
|
Principal Risks |
Potential Impact/Description |
Mitigation |
|
Shrinking Company size relative to cost base. |
As the run-off progresses there will be a significantly reduced size to the portfolio, which will in turn reduce the IA fee and potentially place a strain on available IA resourcing. As several costs are fixed, this will potentially lead to a growing cost base relative to the size of the Company. |
The Board will continue to monitor the services of IA and other providers during run-off. Should it be considered that there is either a lack of sufficient service, this can be addressed prior to it having a detrimental effect on the Company. Conversely, should the Board feel that costs are becoming disproportionately high relative to the requirements of the Company, steps can be taken to scale back providers and their associated costs where possible. |
Viability Statement
In accordance with the
In reviewing the Company's viability, the Directors have assessed the viability of the Company for the period to 31 December 2027 (the "Look-forward Period").
Following the change in investment policy approved by Shareholders at the 2023 AGM, the Company entered a managed run-off, meaning that it is not making any new investments (save for in limited circumstances as set out in the New Investment Policy) and its investing activity is solely in respect of funding legal commitments to existing investments (the "Managed Run-Off"). The Board will continue to review strategic options in respect of the Company's assets to realise the maximum value for Shareholders in the shortest possible time, recognising the inherent difficulties in the construction of the portfolio, including the number of investments, multiple geographies and long tenors. While the Company is continuing to explore strategic options there remains no certainty that any of these options will materialise and be put to Shareholders for consideration. Accordingly, the Directors recognise that these conditions indicate the existence of material uncertainty which may cast significant doubt about the Group and the Company's viability over the Look-forward Period.
Although the Company is in a Managed Run-Off, the Board believes that the Look-forward Period, being approximately three years, is an appropriate time horizon over which to assess the viability of the Company, particularly when taking into account the long-term nature of the maturity of the Company's assets, which is modelled over three years and the principal risks outlined above. In considering the prospects of the Company, the Directors looked at the key risks facing the Company, focusing on the likelihood and impact of each risk as well as any key contracts, future events or timescales that may be assigned to each key risk.
The Directors have a reasonable expectation that the Company has adequate resources to: continue in operation; realise the Company's assets in an orderly manner; and meet its liabilities as they fall due, over the Look-forward Period.
Going Concern
The Directors have adopted the going concern basis in preparing the financial statements. The following is a summary of the Directors' assessment of the going concern status of the Group and Company.
The Group and Company continue to meet day-to-day liquidity needs through their cash resources. The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least twelve months from the date of this document.
In reaching this conclusion, the Directors have taken into account the following considerations:
· The Group's investment commitments, amounting to £0.04 million, and its income and expense flows;
· No new commitments have been entered into since 28 February 2023;
· The £36.4 million cash balance at 31 March 2025 (excluding £2.5 million held as collateral for FX hedging) following the receipt of repayments up to that date; and
· The potential income from the remaining investments.
The Board has announced that a special interim dividend of 36.837 pence per Ordinary Share will be paid on 30 May 2025. Total expenses for the year were £3.0 million (excluding impairment losses) (2023: £3.3 million), which represented 3.8% of average net assets during the year (2023: 3.5%). The Board, Investment Adviser and AIFM will review the ongoing liquidity requirements and cashflow forecasts of the Company prior to making further distributions to ensure that sufficient funds are maintained throughout the run-off process. At the date of approval of this document, based on the aggregate of investments and cash held, the Group and Company have substantial operating expenses cover. The Directors are also satisfied that the Group and Company would continue to remain viable under downside scenarios.
As set out in the 2023 Annual Report, at the 2023 AGM, Shareholders voted in favour of the Company's change of investment policy (the "New Investment Policy"). Following the 2023 AGM, and in accordance with the New Investment Policy, the Company entered a continuation and managed run-off of its portfolio ("Managed Run-Off"), meaning that it is not making any new investments (save for the limited circumstances as set out in the New Investment Policy) and its investing activity is solely in respect of funding legal commitments to existing investments.
The Continuation and Managed Run-Off Resolution was put forward as a resolution to Shareholders in response to the outcome of the Company's continuation vote held in February 2023, which did not pass.
As referred to above, the Company is operating currently under a Managed Run-Off with the term of some of the Company's assets being several years. While the Company is continuing to explore other strategic options, there remains no certainty that any of these options will materialise and be put to Shareholders for consideration.
Accordingly, while the Directors recognise that these conditions indicate the existence of material uncertainty which may cast significant doubt about the Group and Company's ability to continue as a going concern, based on the assessment and considerations above, the Directors have concluded that the financial statements of the Group and the Company should be prepared on a going concern basis. Neither the Group nor the Company financial statements include any potential costs of liquidation and the financial statements do not include the other adjustments that would result if the Group and the Company were unable to continue as a going concern.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group and the Company financial statements in accordance with
Under company law, directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. In preparing the financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable
· make judgements and accounting estimates that are reasonable and prudent; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.
The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the
Directors' Confirmations
The Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group's and Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Corporate Governance section confirm that, to the best of their knowledge:
· the Group and Company financial statements, which have been prepared in accordance with
· the Strategic Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors' report is approved:
· so far as the Director is aware, there is no relevant audit information of which the Group's and Company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group's and Company's auditors are aware of that information.
For and on behalf of the Board,
Miriam Greenwood OBE DL
Chair of the Board
28 April 2025
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
For the year ended |
For the year ended |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Losses on investments at fair value |
|
|
|
|
|
|
|
|
through profit and loss |
4 |
- |
(2,077) |
(2,077) |
- |
(2,380) |
(2,380) |
|
Unrealised (loss)/gain on derivatives |
|
- |
(24) |
(24) |
- |
122 |
122 |
|
Realised gain on derivatives |
|
- |
3,493 |
3,493 |
- |
1,713 |
1,713 |
|
Net foreign exchange loss |
|
- |
(3,241) |
(3,241) |
- |
(64) |
(64) |
|
Investment Income |
5 |
5,397 |
- |
5,397 |
5,948 |
- |
5,948 |
|
Investment advisory fees |
6 |
(647) |
- |
(647) |
(808) |
- |
(808) |
|
Impairment loss |
4 |
(2,554) |
- |
(2,554) |
(1,735) |
- |
(1,735) |
|
Other expenses |
7 |
(2,374) |
- |
(2,374) |
(2,492) |
- |
(2,492) |
|
(Loss)/profit on ordinary activities before taxation |
|
(178) |
(1,849) |
(2,027) |
913 |
(609) |
304 |
|
Taxation |
8 |
- |
- |
- |
- |
- |
- |
|
(Loss)/profit on ordinary activities after taxation |
|
(178) |
(1,849) |
(2,027) |
913 |
(609) |
304 |
|
(Loss)/return per Ordinary Share |
9 |
(0.20)p |
(2.09)p |
(2.29)p |
0.91p |
(0.61)p |
0.30p |
The total column of the Consolidated Statement of Profit or Loss and Comprehensive Income is the profit and loss account of the Group.
All revenue and capital items in the above consolidated statement derive from continuing operations. No operations were discontinued during the year.
Profit/(loss) on ordinary activities after taxation is also the "Total comprehensive income/(expense) for the year".
The notes are an integral part of these financial statements.
COMPANY STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
For the year ended |
For the year ended |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
(Losses)/gains on investments at fair value through profit or loss |
4 |
- |
(1,299) |
(1,299) |
- |
961 |
961 |
|
Net foreign exchange loss |
|
- |
(1,728) |
(1,728) |
- |
(37) |
(37) |
|
Investment income |
5 |
4,203 |
- |
4,203 |
4,080 |
- |
4,080 |
|
Investment advisory fees |
6 |
(647) |
- |
(647) |
(808) |
- |
(808) |
|
Other expenses |
7 |
(1,939) |
- |
(1,939) |
(1,912) |
- |
(1,912) |
|
Impairment loss |
4 |
(923) |
- |
(923) |
(2,041) |
- |
(2,041) |
|
Profit/(loss) on ordinary activities before taxation |
|
694 |
(3,027) |
(2,333) |
(681) |
924 |
243 |
|
Taxation |
8 |
- |
- |
- |
- |
- |
- |
|
Profit/(loss) on ordinary activities after taxation |
|
694 |
(3,027) |
(2,333) |
(681) |
924 |
243 |
|
Return/(loss) per Ordinary Share |
9 |
0.79p |
(3.43)p |
(2.64)p |
(0.68)p |
0.92p |
0.24p |
The total column of the Company Statement of Profit or Loss and Comprehensive Income is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.
Profit/(loss) on ordinary activities after taxation is also the "Total comprehensive income/(expense) for the year".
The notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
|
|
|
2024 |
2023 |
|
|
Notes |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
Investments at fair value through profit or loss |
4 |
10,022 |
10,492 |
|
Investments at amortised cost |
4 |
46,309 |
54,990 |
|
|
|
56,331 |
65,482 |
|
Current assets |
10 |
|
|
|
Trade and other receivables |
|
80 |
652 |
|
Derivative financial instrument |
|
- |
122 |
|
Cash and cash equivalents |
|
14,417 |
29,082 |
|
|
|
14,497 |
29,856 |
|
Creditors: amounts falling due within one year |
11 |
|
|
|
Payables |
|
(1,137) |
(1,057) |
|
Derivative financial instrument |
|
(24) |
- |
|
Net current assets |
|
13,336 |
28,799 |
|
Net assets |
|
69,667 |
94,281 |
|
Capital and reserves: equity |
|
|
|
|
Share capital |
12 |
814 |
1,000 |
|
Capital redemption reserve |
13 |
186 |
- |
|
Special reserve |
13 |
70,913 |
93,500 |
|
Capital reserve |
13 |
(2,027) |
(178) |
|
Revenue reserve |
13 |
(219) |
(41) |
|
Shareholders' funds |
|
69,667 |
94,281 |
|
Net asset value per Ordinary Share |
14 |
85.55p |
94.28p |
|
No. of Ordinary Shares in issue |
|
81,438,268 |
100,000,000 |
Approved by the Board of directors and authorised for issue on 28 April 2025.
Signed on behalf of the Board of Directors
Miriam Greenwood OBE DL
Aquila Energy Efficiency Trust PLC is incorporated in
The notes are an integral part of these financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
|
|
|
2024 |
2023 |
|
|
Notes |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
Investment in subsidiaries |
4 |
38,399 |
45,654 |
|
Current assets |
10 |
|
|
|
Trade and other receivables |
|
27,348 |
27,548 |
|
Cash and cash equivalents |
|
7,620 |
22,548 |
|
|
|
34,968 |
50,096 |
|
Creditors: amounts falling due within one year |
11 |
(3,411) |
(874) |
|
Net current assets |
|
31,557 |
49,222 |
|
Net assets |
|
69,956 |
94,876 |
|
Capital and reserves: equity |
|
|
|
|
Share capital |
12 |
814 |
1,000 |
|
Capital redemption reserve |
13 |
186 |
- |
|
Special reserve |
13 |
70,913 |
93,500 |
|
Capital reserve |
13 |
(104) |
2,923 |
|
Revenue reserve |
13 |
(1,853) |
(2,547) |
|
Shareholders' funds |
|
69,956 |
94,876 |
Approved by the Board of directors and authorised for issue on 28April 2025.
Signed on behalf of the Board of Directors
Miriam Greenwood OBE DL
Aquila Energy Efficiency Trust PLC is incorporated in
The notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
|
Capital |
|
|
|
|
|
|
|
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
Total |
|
For the year ended 31 December 2024 |
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2024 |
|
1,000 |
- |
93,500 |
(178) |
(41) |
94,281 |
|
Repurchase and cancellation of the Company's own shares following a Tender Offer |
12 |
(186) |
186 |
(17,500) |
- |
- |
(17,500) |
|
Expenses of Tender Offer |
|
- |
- |
(88) |
- |
- |
(88) |
|
Dividend paid |
15 |
- |
- |
(4,999) |
- |
- |
(4,999) |
|
Loss for the year |
|
- |
- |
- |
(1,849) |
(178) |
(2,027) |
|
Closing equity as at 31 December 2024 |
|
814 |
186 |
70,913 |
(2,027) |
(219) |
69,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
|
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
Total |
|
For the year ended 31 December 2023 |
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2023 |
|
1,000 |
- |
94,750 |
431 |
(954) |
95,227 |
|
Dividend paid |
15 |
- |
- |
(1,250) |
- |
- |
(1,250) |
|
(Loss)/profit for the year |
|
- |
- |
- |
(609) |
913 |
304 |
|
Closing equity as at 31 December 2023 |
|
1,000 |
- |
93,500 |
(178) |
(41) |
94,281 |
The notes are an integral part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
|
Capital |
|
|
|
|
|
|
|
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
Total |
|
For the year ended 31 December 2024 |
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2024 |
|
1,000 |
- |
93,500 |
2,923 |
(2,547) |
94,876 |
|
Repurchase and cancellation of the Company's own |
|
|
|
|
|
|
|
|
shares following a Tender Offer |
12 |
(186) |
186 |
(17,500) |
- |
- |
(17,500) |
|
Expenses of Tender Offer |
|
- |
- |
(88) |
- |
- |
(88) |
|
Dividend paid |
15 |
- |
- |
(4,999) |
- |
- |
(4,999) |
|
(Loss)/profit for the year |
|
- |
- |
- |
(3,027) |
694 |
(2,333) |
|
Closing equity as at 31 December 2024 |
|
814 |
186 |
70,913 |
(104) |
(1,853) |
69,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
|
Share |
redemption |
Special |
Capital |
Revenue |
|
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
Total |
|
For the year ended 31 December 2023 |
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2023 |
|
1,000 |
- |
94,750 |
1,999 |
(1,866) |
95,883 |
|
Dividend paid |
15 |
- |
- |
(1,250) |
- |
- |
(1,250) |
|
Profit/(loss) for the year |
|
- |
- |
- |
924 |
(681) |
243 |
|
Closing equity as at 31 December 2023 |
|
1,000 |
- |
93,500 |
2,923 |
(2,547) |
94,876 |
The notes are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
For the year |
For the year |
|
|
|
ended |
ended |
|
|
|
31 December |
31 December |
|
|
|
2024 |
2023 |
|
|
Notes |
£'000 |
£'000 |
|
Operating activities |
|
|
|
|
(Loss)/profit on ordinary activities before taxation |
|
(2,027) |
304 |
|
Adjustments for: |
|
|
|
|
Unrealised loss on investments |
4 |
2,060 |
2,380 |
|
Unrealised loss/(gain) on derivative instruments |
|
24 |
(122) |
|
Realised loss on investments |
4 |
17 |
- |
|
Realised gains on derivative investments |
|
- |
(108) |
|
Impairment loss |
|
2,554 |
1,735 |
|
Net foreign exchange loss |
|
3,241 |
116 |
|
Decrease/(increase) in trade and other receivables |
|
572 |
(310) |
|
Increase in creditors: amounts falling due within one year |
|
80 |
968 |
|
Interest receivable from amortised cost investments |
4 |
(4,008) |
(2,420) |
|
Net cash flow from operating activities |
|
2,513 |
2,543 |
|
Investing activities |
|
|
|
|
Purchase of investments |
4 |
(4,224) |
(21,834) |
|
Repayment of investments |
4 |
9,894 |
3,050 |
|
Net cash flow used in investing activities |
|
5,670 |
(18,784) |
|
Financing activities |
|
|
|
|
Tender Offer payment |
|
(17,500) |
- |
|
Expenses of Tender Offer |
|
(88) |
- |
|
Dividends paid |
15 |
(4,999) |
(1,250) |
|
Net cash flow used in financing activities |
|
(22,587) |
(1,250) |
|
Decrease in cash and cash equivalents |
|
(14,404) |
(17,491) |
|
Cash and cash equivalents at start of year |
|
29,082 |
46,625 |
|
Effect of foreign currency exchange translation |
|
(261) |
(52) |
|
Cash and cash equivalents at end of year |
|
14,417 |
29,082 |
The notes are an integral part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
|
|
|
For the year |
For the year |
|
|
|
ended |
ended |
|
|
|
31 December |
31 December |
|
|
|
2024 |
2023 |
|
|
Notes |
£'000 |
£'000 |
|
Operating activities |
|
|
|
|
(Loss)/profit on ordinary activities before taxation |
|
(2,333) |
243 |
|
Adjustments for: |
|
|
|
|
Unrealised loss/(gain) on investments |
4 |
1,299 |
(961) |
|
Net foreign exchange loss/(gain) |
|
1,728 |
(17) |
|
Shareholder loan interest income |
|
(1,936) |
(1,912) |
|
Adjustment for impairment loss |
|
923 |
2,041 |
|
Movement in intercompany balances |
|
2,443 |
(1,901) |
|
Decrease/(increase) in trade receivables |
|
199 |
(91) |
|
Increase/(decrease) in creditors: amounts falling due within one year |
|
94 |
(175) |
|
Net cash flow generated from/(used in) operating activities* |
|
2,417 |
(2,773) |
|
Investing activities |
|
|
|
|
Purchase of investments |
4 |
(294) |
(4,808) |
|
Repayment of investments |
|
3,724 |
1,306 |
|
Net cash flow used in investing activities |
|
3,430 |
(3,502) |
|
Financing activities |
|
|
|
|
Loan to subsidiary |
|
1 |
(4,437) |
|
Shareholder loan interest income received |
|
1,936 |
1,782 |
|
Tender Offer payment |
|
(17,500) |
- |
|
Expenses of Tender Offer |
|
(88) |
- |
|
Dividends paid |
15 |
(4,999) |
(1,250) |
|
Net cash flow used in financing activities |
|
(20,650) |
(3,905) |
|
Decrease in cash and cash equivalents |
|
(14,803) |
(10,180) |
|
Cash and cash equivalents at start of year |
|
22,548 |
32,714 |
|
Effect of foreign currency exchange translation |
|
(125) |
14 |
|
Cash and cash equivalents at end of year |
|
7,620 |
22,548 |
|
*Cash flows from operating activities were presented after the following non-cash |
|
|
|
|
transactions: |
|
|
|
|
Conversion of intercompany receivables to investment in subsidiary |
|
- |
11,791 |
|
Conversion of intercompany receivable to Shareholder loan |
|
- |
23,076 |
|
|
|
- |
34,867 |
The notes are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. GENERAL INFORMATION
Aquila Energy Efficiency Trust Plc (the "Company") is a public Company limited by shares, incorporated in
The Company owns 100% of its subsidiary, Attika Holdings Limited (the "
The registered office address of the Company is 4th Floor, 140 Aldersgate Street,
The Company's investment objective is to generate attractive returns, principally in the form of income distributions, by investing in a diversified portfolio of Energy Efficiency Investments.
The Group's Investment Adviser is Aquila Capital Investmentgesellschaft mbH authorised and regulated by the German Federal Financial Supervisory Authority.
Apex Listed Companies Services (
2. BASIS OF PREPARATION
Group financial statements
The consolidated financial statements have been prepared in accordance with
The consolidated financial statements have also been prepared as far as is relevant and applicable to the Group in accordance with the Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC") in July 2022.
The consolidated financial statements are prepared on the historical cost basis, except for the revaluation of certain financial instruments at fair value through profit or loss. The principal accounting policies adopted are set out below. These policies are consistently applied.
The financial statements are presented in sterling rounded to the nearest thousand. They have been prepared in accordance with the accounting policies, significant judgements, key assumptions and estimates set out below.
Company financial statements
The Company financial statements have been prepared in accordance with the
The financial statements have also been prepared as far as is relevant and applicable to the Company in accordance with the Statement of Recommended Practice ("SORP") issued by the AIC in July 2022.
The financial statements are prepared on the historical cost basis, except for the revaluation of certain financial instruments at fair value through profit or loss. The principal accounting policies adopted are set out below. These policies are consistently applied.
The functional currency of the Company is sterling. The capital of the Company was raised in sterling and majority of its expenses are in sterling. The liquidity of the Company is managed in sterling as the Company's performance is evaluated in that currency. Accordingly, the financial statements are presented in sterling rounded to the nearest thousand. They have been prepared in accordance with the accounting policies, significant judgements, key assumptions and estimates as set out below.
Basis of consolidation
The Company does not satisfy the definition of an investment entity in paragraph 27(c) if IFRS 10, as it does not measure and evaluate the performance of substantially all of its investment on a fair value basis. It is therefore required to prepare consolidated accounts.
The Group's financial statements consolidate those of the Company and of its subsidiaries at 31 December 2024. The subsidiaries have a reporting date of 31 December. AHL's functional currency is sterling. The Italian SPV's functional currency is the euro. However, to align with the Group's functional currency, the balances of Italian SPV have been converted to sterling at the year-end rate for the Statement of Financial Position accounts and at the average rate during the year for the Statement of Profit or Loss and Comprehensive Income accounts.
All transactions and balances between Group companies are eliminated on consolidation. The accounting policies adopted by the Group are consistent with those adopted by the Company and the subsidiaries.
Accounting for wholly owned entities
AHL
The Company owns 100% of its subsidiary, AHL. The registered office address of AHL is Leaf B, 20th Floor, Tower 42, Old Broad Street,
Italian SPV
The Italian SPV is a Company established under the laws of
Going concern
The Directors have adopted the going concern basis in preparing the financial statements. The following is a summary of the Directors' assessment of the going concern status of the Group and Company.
The Group and Company continue to meet day-to-day liquidity needs through their cash resources. The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least twelve months from the date of this document.
In reaching this conclusion, the Directors have taken into account the following considerations:
· The Group's investment commitments, amounting to £0.04 million, and its income and expense flows;
· No new commitments have been entered into since 28 February 2023;
· The £36.4 million cash balance at 31 March 2025 (excluding £2.5 million held as collateral for FX hedging) following the receipt of repayments up to that date; and
· The potential income from the remaining investments.
The Board has announced that a special interim dividend of 36.837 pence per Ordinary Share will be paid on 30 May 2025. Total expenses for the year were £3.0 million (excluding impairment losses) (2023: £3.3 million), which represented 3.8% of average net assets during the year (2023: 3.5%). The Board, Investment Adviser and AIFM will review the ongoing liquidity requirements and cashflow forecasts of the Company prior to making further distributions to ensure that sufficient funds are maintained throughout the run-off process. At the date of approval of this document, based on the aggregate of investments and cash held, the Group and Company have substantial operating expenses cover. The Directors are also satisfied that the Group and Company would continue to remain viable under downside scenarios.
At the Annual General Meeting of the Company (the "AGM") held on 14 June 2023, Shareholders voted in favour of the Company's change of investment policy (the "New Investment Policy"). Following the AGM, and in accordance with the New Investment Policy, the Company entered a continuation and managed run-off of its portfolio ("Managed Run-Off"), meaning that it is not making any new investments (save for the limited circumstances as set out in the New Investment Policy) and its investing activity is solely in respect of funding legal commitments to existing investments.
The Continuation and Managed Run-Off Resolution was put forward as a resolution to Shareholders in response to the outcome of the Company's continuation vote held in February 2023, which did not pass.
As referred to above, the Company is operating currently under a Managed Run-Off with the term of some of the Company's assets being of several years. While the Company is continuing to explore other strategic options, there remains no certainty that any of these options will materialise and be put to Shareholders for consideration.
Accordingly, while the Directors recognise that these conditions indicate the existence of material uncertainty which may cast significant doubt about the Group and Company's ability to continue as a going concern, based on the assessment and considerations above, the Directors have concluded that the financial statements of the Group and the Company should be prepared on a going concern basis. Neither the Group nor the Company financial statements include any potential costs of liquidation and the financial statements do not include the other adjustments that would result if the Group and the Company were unable to continue as a going concern.
Critical accounting judgements, estimates and assumptions
The preparation of the consolidated financial statements requires the application of estimates and assumptions which may affect the results reported in the consolidated financial statements. Estimates, by their nature, are based on judgement and available information.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the fair value of the investments and expected credit loss as disclosed in note 4 to the financial statements.
Investment fair value
The key assumptions that have a significant impact on the value of the Group's investments are discount rates, energy yield, power prices and capital expenditure factors. The impact of risks associated with climate change is assessed on an investment-by-investment basis and factored into the underlying cash flows where relevant.
The discount factors are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different value. The discount factors applied to the cashflows are reviewed semi-annually by the Investment Adviser to ensure they are at the appropriate level. The Investment Adviser will take into consideration market transactions, where they are of similar nature, when considering changes to the discount factors used.
The operating costs of the operating companies are frequently partly or wholly subject to indexation and an assumption is made that inflation will increase at a long-term rate.
The values of Energy Efficiency investments are not significantly sensitive to fluctuations in future revenues if a fixed indexation clause is applied to its cash flow schedule.
Expected credit loss (''ECL'') allowance for financial assets measured at amortised cost
The calculation of the Group's ECL allowances and provisions against receivable purchase agreements under IFRS 9 is complex and involves the use of significant judgement and estimation. Loan impairment provisions represent an estimate of the losses incurred in the loan portfolios at the balance sheet date. The calculation involves the formulation and incorporation of multiple conditions into ECL to meet the measurement objective of IFRS 9. Further details are given in note 4 to the financial statement below.
New Standards, Interpretations and Amendments Adopted from 1 January 2024
A number of new standards and amendments to standards are effective for the annual periods beginning after 1 January 2024. None of these have a significant effect on the measurement of the amounts recognised in the financial statements of the Company.
New Standards and Amendments Issued but not yet Effective
The relevant new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's and Company's financial statements are disclosed below.
Amendments to IAS 21 - Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025)
In August 2023, the IASB amended IAS 21 to help entities to determine whether a currency is exchangeable into another currency, and which spot exchange rate to use when it is not. The Group does not expect these amendments to have a material impact on its operations or financial statements.
Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2026)
On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:
· clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;
· clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;
· add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and
· update the disclosures for equity instruments designated at fair value through other comprehensive income ('FVOCI').
The Group does not expect these amendments to have a material impact on its operations or financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of comprehensive income and providing management-defined performance measures within the financial statements.
Management is currently assessing the detailed implications of applying the new standard on the Group's and Company's financial statements. From the high-level preliminary assessment performed, the following potential impacts have been identified:
· Although the adoption of IFRS 18 will have no impact on the Group's and Company's net profit, the Group and Company expects that grouping items of income and expenses in the statement of comprehensive income into the new categories will impact how operating profit is calculated and reported. From the high-level impact assessment that the Group and Company has performed, the following might potentially impact operating profit:
- Foreign exchange differences currently aggregated in the line item 'Net foreign exchange loss/gain' in operating profit might need to be disaggregated, with some foreign exchange gains or losses presented below operating profit.
- The line items presented on the primary financial statements might change as a result of the application of the concept of 'useful structured summary' and the enhanced principles on aggregation and disaggregation.
· The Company does not expect there to be a significant change in the information that is currently disclosed in the notes because the requirement to disclose material information remains unchanged; however, the way in which the information is grouped might change as a result of the aggregation/disaggregation principles. In addition, there will be significant new disclosures required for:
- management-defined performance measures;
- a break-down of the nature of expenses for line items presented by function in the operating category of the statement of comprehensive income - this break-down is only required for certain nature expenses; and
- for the first annual period of application of IFRS 18, a reconciliation for each line item in the statement of comprehensive income between the restated amounts presented by applying IFRS 18 and the amounts previously presented applying IAS 1.
· From a cash flow statement perspective, there will be changes to how interest received and interest paid are presented. Interest paid will be presented as financing cash flows and interest received as investing cash flows, which is a change from current presentation as part of operating cash flows.
The Group and Company will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and so the comparative information for the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.
3. MATERIAL ACCOUNTING POLICIES
Financial instruments
Financial assets
The Group's and Company's financial assets principally comprise cash and cash equivalents, investments held at fair value through profit and loss, investments held at amortised cost, derivative financial instruments, interest income receivables, Shareholder loan receivables and prepayments and other receivables.
Interest income receivables, prepayments and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.
The Group's investments are debt instruments held at fair value through profit or loss and debt instruments at amortised cost. Gains or losses resulting from the movements in the fair value are recognised in the Group's Consolidated Statement of Profit or Loss and Comprehensive income under the capital column. Debt instruments at amortised cost are revalued with the functional currency exchange rate at each valuation point and recognised in the Group's Consolidated Statement of Profit or Loss and Comprehensive income and are subject to ECL.
Derivatives comprise forward currency transactions used to hedge the Group's foreign currency exposure. The fair value of the currency forward transactions is the difference between the spot rate and the forward rate at the date of the Consolidated Statement of Financial Position.
Investment in Subsidiaries
The Company's investment in its subsidiary AHL comprises equity shares and a Shareholder loan. The Company's equity investment in its subsidiary AHL, is held at cost less impairment in the Company's Statement of Financial Position.
The Company's investment in SPV is held at fair value through profit or loss. The fair value of SPV as at 31 December 2024 has been determined through an aggregation of the fair value of SPV's individual investments adjusted for the cash and liabilities of SPV as at 31 December 2024. Where returns are not fixed, the fair value of SPV's individual investments take account of forecast power production and power price curves provided by independent research companies. Discount rates take account of the risk profile of the counterparty and other areas of judgment.
Financial liabilities
The Group's financial liabilities include trade and other payables and other short-term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method. The Group's financial liabilities also include derivative financial instruments.
Recognition and derecognition
Financial assets and financial liabilities are recognised in the Group's Consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.
At initial recognition, financial instruments classified at fair value through profit or loss are measured at fair value which is normally the transaction price. Other financial instruments not classified at fair value through profit or loss are measured initially at fair value but are adjusted for incremental and directly attributable transaction costs.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual obligations, it expires or is cancelled. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Group has transferred substantially all risks and rewards of ownership.
Classification and measurement of financial assets
IFRS 9 contains a classification and measurement approach for debt instruments that reflects the business model in which assets are managed and their cash flow characteristics. For debt instruments two criteria are used to determine how financial assets should be classified and measured:
· The entity's business model (i.e. how an entity manages its debt Instruments in order to generate cash flows by collecting contractual cash flows, selling financial assets or both); and
· The contractual cash flow characteristics of the financial asset (i.e. whether the contractual cash flows are solely payments of principal and interest).
A debt instrument is measured at amortised cost if it meets both of the following conditions and is not designated as at fair value through profit and loss ("FVTPL"):
(a) it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
(b) its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument is measured at fair value through other comprehensive income ("FVOCI") if it meets both of the following conditions and is not designated as at FVTPL:
(a) it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
(b) its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
In assessing whether the contractual cash flows are solely payments of principal and interest, the contractual terms of the instrument are considered. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
Subsequent to initial recognition, financial assets that are classified as measured at fair value through profit or loss are measured at fair value in the Consolidated Statement of Financial Position (with no deduction for sale or disposal costs). Gains and losses resulting from the movement in fair value are recognised in the Consolidated Statement of Profit or Loss and Comprehensive Income.
Subsequent to initial recognition, financial assets that are measured at amortised cost require the use of the effective interest method and are subject to expected credit loss.
Taxation
The tax charge for the year is based on amounts expected to be received or paid.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
Segmental reporting
The Chief Operating Decision Maker ("CODM"), which is the Board, is of the opinion that the Group is engaged in a single segment of business, being investment in energy efficiency assets to generate investment returns whilst preserving capital. The financial information used by the CODM to manage the Group presents the business as a single segment.
Income
Income includes interest and dividends receiveable from investments held at fair value and at amortised cost, and bank interest.
Investment interest income for the year is recognised in the Consolidated Statement of Profit or Loss and Comprehensive income using effective interest method calculation.
Interest and dividends receivable are recognised when the right to receive them is established and is reflected in the Consolidated Statement of Profit or Loss and Comprehensive Income as Investment Income.
Bank interest income is recognised for the year in the Consolidated Statement of Profit or Loss and Comprehensive income on an accruals basis.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Consolidated Statement of Profit or Loss and Comprehensive Income, all expenses are presented as revenue as it is directly attributable to the operations of the Group.
Details of the Group's fee payments to the Investment Adviser are disclosed in note 6 to the consolidated financial statements. Details of the Group's other expenses are disclosed in note 7 to the consolidated financial statements. These fees are presented under the revenue column in the Consolidated Statement of Profit or Loss and Comprehensive Income.
Foreign currency
Transactions denominated in foreign currencies are translated into sterling at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at year-end are reported at the rates of exchange prevailing at the year-end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss to capital or revenue in the Consolidated Statement of Profit or Loss and Comprehensive Income as appropriate. Foreign exchange movements on investments are included in the Capital account of the Consolidated Statement of Profit or Loss and Comprehensive Income.
Cash and cash equivalents
Cash and cash equivalents include deposits held at call with banks and other short-term deposits with original maturities of three months or less.
Trade and other payables
Trade and other payables are initially recognised at fair value, and subsequently re-measured at amortised cost using the effective interest method where necessary.
Share capital and share premium
Ordinary Shares are classified as equity. Costs directly attributable to the issue of new shares (that would have been avoided if there had not been a new issue of new shares) are recognised against the value of the ordinary share premium account.
Repurchase of the Company's own shares are recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
Realised gains and losses on investments
Realised gains and losses comprise the difference between the sale proceeds of an investment and its fair value, and are deemed to be realised when the proceeds have settled.
ECL allowance for financial assets measured at amortised cost
Many of the Group's investments are financial assets measured at amortised cost. These investments are structured as purchases of receivables or purchases of notes which have the right to receivables. The purchased receivables derive from energy services agreements for the provision of energy efficiency and/or renewable energy solutions provided by Energy Service Companies ("ESCOs") to their corporate clients and these receivables provide a fixed return for the Group. ESCOs are businesses that provide energy-related services to end-users, often focusing on energy efficiency projects. The receivables are due to be received over a range of maturities from less than 12 months to more than fifteen years. Individual agreements provide for the receivables to be paid mostly on a monthly or quarterly basis.
In addition to past events and current conditions, reasonable and supportable forecasts affecting collectability are also considered when determining the amount of impairment in accordance with IFRS 9. Under the IFRS 9 expected credit loss model, expected credit losses are recognised at each reporting period, even if no actual loss events have taken place. In addition to past events and current conditions, reasonable and supportable forward-looking information that is available without undue cost or effort is considered in determining impairment, with the model applied to all financial instruments subject to impairment testing.
At initial recognition, allowance is made for ECL resulting from default events that are possible within the next 12 months (12-month expected ECL). In the event of a significant increase in credit risk, allowance (or provision) is made for ECL resulting from all possible default events over the expected life of the financial instrument (lifetime ECL).
Financial assets where 12-month ECL is recognised are Stage 1; financial assets which are considered to have experienced a significant increase in credit risk are in Stage 2; and financial assets which have defaulted or are otherwise considered to be credit-impaired are allocated to Stage 3. Stage 2 and Stage 3 are based on lifetime ECL.
The measurement of ECL, is primarily based on the product of the instrument's probability of default ("PD"), loss given default ("LGD"), and exposure at default ("EAD"), taking into account the value of any collateral held or other mitigants of loss and including the impact of discounting using the EIR.
· The PD represents the likelihood of a borrower defaulting on its financial obligation, either over the next 12 months ("12M PD"), or over the remaining lifetime ("Lifetime PD") of the obligation. This has been calculated by an external third party credit rating agency using a wide range of parameters such as the company's financial statements and the macro economic environment. The external credit rating company have also designed a downside and upside scenario based on historic data. Company financials are modified to reflect various factors leading to a deterioration in performance.
· In each of the scenarios, various macro and financial variables are flexed and applied in the calculation. The macros variables are GDP growth, inflation, unemployment rate and interest rate. The financial variables are turnover, net debt, Shareholder equity, working capital, tangible assets, interest expense, EBITDA, EBIT and net income. A base, optimistic and pessimistic scenario is applied for each of these above variables to calculate the corresponding expected credit loss.
The probability weighting of the scenarios was based an analysis of the level of severity. It was determined that a weighting of 50% for the base case and 25% for each of the other scenarios was appropriate. The resulting forecasts are thus neither overly optimistic nor unduly conservative for IFRS9 purposes.
|
|
Optimistic |
Base Case |
Mild Pessimistic |
|
IFRS 9 Probability Weighting |
25% |
50% |
25% |
· The EAD represents the amounts the Group is owed at the reporting date.
· LGD represents the Group's expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of EAD. LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan ("Lifetime LGD").
The ECL is determined by estimating the PD, LGD, and EAD for each individual exposure or collective segment. These three components are multiplied together and adjusted for the likelihood of survival (i.e., the exposure has not prepaid or defaulted in an earlier month). This effectively calculates an ECL.
Management is aware that there is a high level of judgement in calculating the scenarios and the inputs given the assets are relatively recent with limited historic data.
The main difference between Stage 1 and Stage 2 is the respective PD horizon. Stage 1 estimates use a maximum of a 12-month PD, while Stage 2 estimates use a lifetime PD. The main difference between Stage 2 and Stage 3 is that Stage 3 is effectively the point at which there has been a default event or the investment can be considered to be credit-impaired.
Movements between Stage 1 and Stage 2 are based on whether an instrument's credit risk as at the reporting date has increased significantly relative to the date it was initially recognised. Where the credit risk subsequently improves such that it no longer represents a significant increase in credit risk since origination, the asset is transferred back to Stage 1.
In assessing whether a counterparty has had a significant increase in credit risk the following indicators are considered:
1. Early signs of cashflow/liquidity problems such as an ongoing delay in servicing of payables.
2. Significant increase in PD.
3. Actual or expected late payments or restructuring of payments due.
4. Actual or expected significant adverse change in operating results of the borrower, where this information is available.
5. Significant adverse changes in business, financial and/or economic conditions in which the counterparty operates.
Movements between Stage 2 and Stage 3 are based on whether financial assets are credit-impaired as at the reporting date. The Group uses a rebuttable presumption that a credit deterioration (i.e. stage 1 to stage 2) occurs no later than when a payment is 90 days past due. The Group uses this 90-day backstop for all its assets. Assets can move in both directions through the stages of the impairment model. The Directors do not believe that being 30 days overdue is considered a credit deterioration given the nature and payment profile of some of its small counterparties. Payments are different from consumer loan payments and often comprise a very large number of payments, each of a very small amount. There is also significant evidence of catch-up payments, where a counterparty has just past the 30 days, and very rarely have these counterparties missed the payment completely.
We recognise that individual credit exposures, which define the Group's investments, are different from, for example, consumer mortgage or consumer car loan portfolios. Late payments can arise due to the corporate counterparties refusing to utilise direct debit or standing order payment processes with the result that payment chasing can be required for relatively small amounts, eg lighting service contracts. Accordingly, we do expect that in certain cases 90 days late payments may not lead to movements through the ECL stages.
4. INVESTMENTS
Fair value measurements
IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value measurement.
Financial assets and financial liabilities are classified in their entirety into only one of the following three levels:
Level 1
The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.
Level 2
Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.
Level 3
Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
The classification of the Group's investments held at fair value are detailed in the table below:
|
|
31 December 2024 |
31 December 2023 |
||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investments at fair value through profit and loss |
- |
- |
10,022 |
10,022 |
- |
- |
10,492 |
10,492 |
|
Derivative financial instruments |
- |
(24) |
- |
(24) |
- |
122 |
- |
122 |
|
|
|
(24) |
10,022 |
9,998 |
- |
122 |
10,492 |
10,614 |
There are no transfers between investment levels for the Group during the year.
The classification of the Company's investments held is detailed in the table below:
|
|
31 December 2024 |
31 December 2023 |
||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment in SPV at fair value through profit or loss |
- |
- |
29,351 |
29,351 |
- |
- |
35,683 |
35,683 |
There are no transfers between investment levels for the Company during the year.
The movement on the Level 3 unquoted investments of the Group during the year is shown below:
|
|
31 December 2024 |
31 December 2023 |
|
|
Group |
Group |
|
|
£'000 |
£'000 |
|
Opening balance |
10,492 |
11,742 |
|
Additions during the year |
3,683 |
1,675 |
|
Disposals during the year |
(1,564) |
(1,551) |
|
Realised losses |
(17) |
- |
|
Urealised losses |
(2,060) |
(1,374) |
|
Net FX losses |
(512) |
- |
|
Closing balance |
10,022 |
10,492 |
The movement on investments at amortised cost of the Group during the year is shown below:
|
|
31 December 2024 |
|
|
Group |
|
|
£'000 |
|
Opening balance |
54,990 |
|
Additions during the year |
541 |
|
Receipts during the year |
(8,330) |
|
Income accrued in the year |
4,008 |
|
Net FX losses |
(2,346) |
|
Impairment |
(2,554) |
|
Closing balance |
46,309 |
The movement on the Level 3 unquoted investments of the Company during the year is shown below:
|
|
31 December 2024 |
31 December 2023 |
|
|
Company |
Company |
|
|
£'000 |
£'000 |
|
Opening balance |
35,683 |
31,220 |
|
Additions during the year |
294 |
4,808 |
|
Repayments during the year |
(3,724) |
(1,306) |
|
Net FX losses |
(1,603) |
- |
|
Unrealised (losses)/gains |
(1,299) |
961 |
|
Closing balance |
29,351 |
35,683 |
Assets and liabilities not carried at fair value but for which are fair value is disclosed
The following table presents the fair value of the Group's assets and liabilities not measured at fair value through profit and loss at 31 December 2024 but for which fair value is disclosed:
|
|
31 December 2024 |
31 December 2023 |
||
|
|
Carrying value |
Fair market value |
Carrying value |
Fair market value |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Assets |
|
|
|
|
|
Investments at amortised cost |
46,309 |
46,543 |
54,990 |
57,221 |
For all other assets and liabilities not carried at fair value, the carrying value is a reasonable approximation of fair value.
Valuation methodology
Debt instruments at fair value through profit or loss
The Group through its subsidiary (AHL) and its notes in the Italian SPV has acquired debt instruments at fair value through profit or loss. The Investment Adviser has determined the fair value of debt investments as at 31 December 2024. The Directors have satisfied themselves as to the fair value of the debt instrument investments as at 31 December 2024.
Valuation Assumptions and Inputs
The determination of what qualifies as 'observable' data requires significant judgment. Observable data is defined as market information that is readily available, regularly updated, reliable, verifiable, non-proprietary, and sourced from independent entities actively participating in the relevant market.
The investments fall under Level 3 classification, as they are not publicly traded and rely on inputs that cannot be directly observed. The discount rate, power price and energy yield are the key unobservable inputs that significantly influence the fair value of investments. Any increase or decrease in these factors would have an impact on valuation as can be seen in our sensitivities below.
Valuation assumptions and Inputs
|
Discount rates |
The discount rate used in the valuations is derived according to internationally recognised methods. Typical components of the discount rate are risk free rates, country-specific and asset-specific risk premia. The latter comprise the risks inherent to the respective asset class as well as specific premia for other risks such as development and construction. |
|
Power price |
Power prices are based on power price forecasts from leading market analysts. The forecasts are independently sourced from a provider with coverage in almost all European markets as well as providers with regional expertise. |
|
Energy yield |
Estimated based on third party energy yield assessments as well as operational performance data (where applicable). |
|
Inflation rates |
Long-term inflation is based on central bank targets for the respective jurisdiction. |
|
Capital expenditure |
Based on the contractual position (e.g. engineering, procurement and construction agreement), where applicable. |
Valuation sensitivities
For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case assumption, and that the number of investments remains static throughout the modelled life.
The Net Asset Value impacts from each sensitivity is shown below.
Discount rates
The Discounted Cash Flow (''DCF'') valuation of the investments which are held at fair value represents one component of the Net Asset Value of the Group and the key sensitivities are considered to be the discount rate used in the DCF valuation and assumptions.
The weighted average valuation discount rate applied to calculate the investment valuation is 9.2% (2023: 7.7%). An increase or decrease in this rate by 0.5% at investment level has the following effect on valuation.
|
|
31 December 2024 |
31 December 2023 |
||
|
|
+0.5% |
-0.5% |
-0.5% |
+0.5% |
|
|
Change |
Change |
Change |
Change |
|
Discount rate |
£'000 |
£'000 |
£'000 |
£'000 |
|
Valuation |
(59) |
61 |
(242) |
250 |
Power price
Long term power price forecasts are provided by leading market consultants and are updated quarterly. The sensitivity below assumes a 10% increase or decrease in merchant power prices relative to the base case for every year of the asset life. The sensitivity considers a flat 10% movement in power prices for all years, i.e. the effect of adjusting the forecast electricity price assumptions in each of the jurisdictions applicable to the investments down by 10% and up by 10% from the base case assumptions for each year throughout the operating life of the investment.
A change in the forecast electricity price assumptions by plus or minus 10% has the following effect on valuation, as shown below.
|
|
31 December 2024 |
31 December 2023 |
||
|
|
-10.0% |
+10.0% |
-10.0% |
+10.0% |
|
|
Change |
Change |
Change |
Change |
|
Power price |
£'000 |
£'000 |
£'000 |
£'000 |
|
Valuation |
(48) |
51 |
(64) |
66 |
Energy yield
The base case assumes a (''P50'') level of output. The P50 output is the estimated annual amount of electricity generation (in MWh) that has a 50% probability of being exceeded both in any single year and over the long term and a 50% probability of being under achieved. Hence the P50 is the expected level of generation over the long term. The sensitivity illustrates the effect of a 10% lower annual production (a downside case) and a 10% higher annual production (upside case). The sensitivity is applied throughout the whole term of the projects.
The table below shows the sensitivity of the project values to changes in the energy yield applied to cash flows from project as explained above.
|
|
31 December 2024 |
31 December 2023 |
||
|
|
-10.0% |
+10.0% |
-10.0% |
+10.0% |
|
|
Change |
Change |
Change |
Change |
|
Energy yield |
£'000 |
£'000 |
£'000 |
£'000 |
|
Valuation |
(296) |
297 |
(555) |
533 |
Inflation rates
As most payments are fixed and not linked to the inflation rate, a sensitivity of the inflation rate has only a negligible impact on the NAV.
Capital expenditure
The Group has contractual protections if capex is delayed (i.e. reduce the capex or increase receivables due) and the Group is not obliged to fund cost overruns. Therefore, capex sensitivities are not appropriate for the Group's type of investments.
Investments at Amortised Cost
a) Investments at amortised cost
The disclosure below presents the gross carrying value of financial instruments to which the impairment requirements in IFRS 9 are applied and the associated allowance for ECL. Please see Note 3 for more detail on the allowance for ECL where the Group has classified the investment portfolio according to stages.
The following table analyses loans by staging for the Group as at 31 December 2024:
|
|
31 December 2024 |
31 December 2023 |
||||
|
|
Gross |
|
Net |
Gross |
|
Net |
|
|
Carrying |
Allowance |
Carrying |
Carrying |
Allowance |
carrying |
|
|
Amount |
for ECL |
Amount |
Amount |
for ECL |
amount |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Fixed Value Investments at amortised cost |
|
|
|
|
|
|
|
Stage 1 |
21,194 |
(118) |
21,076 |
54,399 |
(259) |
54,140 |
|
Stage 2 |
27,156 |
(1,923) |
25,233 |
156 |
(24) |
132 |
|
Stage 3 |
2,384 |
(2,384) |
- |
2,306 |
(1,588) |
718 |
|
Total Assets |
50,734 |
(4,425) |
46,309 |
56,861 |
(1,871) |
54,990 |
b) Expected Credit Loss allowance for IFRS 9
Impairment Provisions are driven by changes in credit risk of instruments, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly since initial recognition.
The following table analyses Group ECL by stage.
|
|
31 December 2024 |
31 December 2023 |
|
Group |
£'000 |
£'000 |
|
At 1 January |
1,871 |
136 |
|
Charge for the year - Stage 1 |
(141) |
182 |
|
Charge for the year - Stage 2 |
1,899 |
(35) |
|
Charge for the year - Stage 3 |
796 |
1,588 |
|
Allowance for ECL at 31 December |
4,425 |
1,871 |
Stage 2 losses
The stage 2 ECL provision increased because certain investments were deemed to be in arrears of more than 90 days as at 31 December 2024 and because the credit risk of Superbonus investments was deemed to have changed to the ESCOs themselves rather than the purchasers of the tax credits generated by these investments.
Stage 3 losses
The Stage 3 losses relate to full impairments against three investments, which were partially provided against as at 31 December 2023: a CHP investment in the United Kingdom, the sub-metering investment in Germany and a Solar PV investment in Spain where the prospects of significant recoveries were deemed remote.
Measurement uncertainty and sensitivity analysis of ECL
The recognition and measurement of ECL is complex and involves the use of judgement and estimation. This includes the formulation and incorporation of multiple forward-looking economic conditions into ECL to meet the measurement objective of IFRS 9.
The ECL recognised in the financial statements reflects the effect on expected credit losses of a range of three possible outcomes, calculated on a probability-weighted basis, based on the economic scenarios described in Note 3 to the financial statements, including management overlays where required. The probability-weighted amount is typically a higher number than would result from using only the base (most likely) economic scenario. ECLs typically have a non-linear relationship to the many factors which influence credit losses, such that more favourable macroeconomic factors do not reduce defaults as much as less favourable macroeconomic factors increase defaults. The ECL calculated for each of the scenarios represents three outcomes that have been evaluated to estimate ECL. As a result, the ECL calculated for the upside and downside scenarios should not be taken to represent the upper and lower limits of possible actual ECL outcomes. There is a high degree of estimation uncertainty in numbers representing tail risk scenarios when assigned a 100% weight. A wider range of possible ECL outcomes reflects uncertainty about the distribution of economic conditions and does not necessarily mean that credit risk on the associated loans is higher than for loans where the distribution of possible future economic conditions is narrower.
The PD ratios ranged from 0.02% to 8.27% for Stage 1 investments and 1.41% to 27.62% for Stage 2 investments. On a weighted basis the PD ratios for Stage 1 investments were 1.32% and for Stage 2 investments 9.03%. The PD ratios for Stage 3 investments were 100%. The LGD ratios ranged from 12.0% to 100.0% for Stage 1 investments and 16.9% to 82.3% for Stage 2 investments. On a weighted basis the LGD ratios for Stage 1 investments were 31.0% and for Stage 2 investments 80.5%. The LGD ratios for Stage 3 investments were 100%.
Two downside scenarios were provided as follows: the first scenario is LGD% assumed increased to 100%, in which event we calculate that this would result in an ECL provision of £5,159,000. A further second, harsher scenario would be to assume that in addition to an LGD% of 100%, the PD% is also increased by 50%. In this case the ECL provision would be £6,544,000.
Investments held by the Company
The Company holds 100% of the equity shares of its subsidiary, AHL, which are held at cost less impairment in the Company's Statement of Financial Position. The Company also holds the loan notes in the Italian SPV, which are held at fair value through profit or loss in the Company's Statement of Financial Position.
The Company's investments in subsidiaries comprise the following:
|
|
As at 31 December |
As at 31 December |
|
|
2024 |
2023 |
|
Company |
£'000 |
£'000 |
|
Investment in the Italian SPV, held at fair value through profit or loss |
29,351 |
35,683 |
|
Investment in AHL, held at cost less impairment |
9,048 |
9,971 |
|
Total investments |
38,399 |
45,654 |
The movement in the Company's investment in AHL was as follows:
|
|
For the year ended |
For the year ended |
|
|
31 December 2024 |
31 December 2023 |
|
Gross carrying amount |
£'000 |
£'000 |
|
Opening balance |
11,791 |
- |
|
Additions during the year |
- |
11,791 |
|
Closing balance |
11,791 |
11,791 |
|
Accumulated impairment |
|
|
|
Opening balance |
(1,820) |
- |
|
Impairment loss recognised in the year |
(923) |
(1,820) |
|
Closing carrying amount |
9,048 |
9,971 |
5. INVESTMENT INCOME
|
|
For the year ended |
For the year ended |
|
Group |
£'000 |
£'000 |
|
Investment interest income |
4,679 |
5,027 |
|
Bank interest income |
718 |
921 |
|
Total investment income |
5,397 |
5,948 |
|
|
For the year ended |
For the year ended |
|
Company |
£'000 |
£'000 |
|
Investment interest income |
3,797 |
3,426 |
|
Bank interest income |
406 |
654 |
|
Total investment income |
4,203 |
4,080 |
6. INVESTMENT ADVISORY FEES
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment advisory fees |
647 |
- |
647 |
808 |
- |
808 |
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment advisory fees |
647 |
- |
647 |
808 |
- |
808 |
Under the Investment Advisory Agreement, the following fee is payable to the Investment Adviser:
(i) 0.95 per cent. per annum of Committed Capital of the Company up to and including £500 million; and
(ii) 0.75 per cent. per annum of Committed Capital of the Company above £500 million.
7. OTHER EXPENSES
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Secretary and administrator fees |
297 |
- |
297 |
281 |
- |
281 |
|
Tax compliance |
37 |
- |
37 |
62 |
- |
62 |
|
Directors' fees |
326 |
- |
326 |
281 |
- |
281 |
|
Broker's fees |
320 |
- |
320 |
182 |
- |
182 |
|
Auditors' fees* |
|
|
|
|
|
|
|
- Fees payable to the Company's auditors for the audit of the Company's annual accounts |
506 |
- |
506 |
590 |
- |
590 |
|
- Fees payable to the Company's auditors and its associates for other services: audit of the accounts of subsidiaries |
27 |
- |
27 |
26 |
- |
26 |
|
AIFM fees |
112 |
- |
112 |
91 |
- |
91 |
|
Registrar's fees |
52 |
- |
52 |
23 |
- |
23 |
|
Marketing fees |
93 |
- |
93 |
104 |
- |
104 |
|
FCA and listing fees |
29 |
- |
29 |
26 |
- |
26 |
|
Investment expenses |
169 |
- |
169 |
332 |
- |
332 |
|
Legal fees |
169 |
- |
169 |
235 |
- |
235 |
|
Other expenses |
237 |
- |
237 |
259 |
- |
259 |
|
Total other expenses |
2,374 |
- |
2,374 |
2,492 |
- |
2,492 |
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Secretary and administrator fees |
219 |
- |
219 |
199 |
- |
199 |
|
Tax compliance |
26 |
- |
26 |
41 |
- |
41 |
|
Directors' fees |
228 |
- |
228 |
203 |
- |
203 |
|
Broker's fees |
320 |
- |
320 |
182 |
- |
182 |
|
Auditor's fees* |
|
|
|
|
|
|
|
- Fees payable to the Company's auditors for the audit of the Company's annual accounts |
479 |
- |
479 |
590 |
- |
590 |
|
- Fees payable to the Company's auditors and its associates for other services: |
27 |
- |
27 |
26 |
- |
26 |
|
AIFM fees |
112 |
- |
112 |
91 |
- |
91 |
|
Registrar's fees |
52 |
- |
52 |
23 |
- |
23 |
|
Marketing fees |
93 |
- |
93 |
104 |
- |
104 |
|
FCA and listing fees |
29 |
- |
29 |
26 |
- |
26 |
|
Legal fees |
169 |
- |
169 |
235 |
- |
235 |
|
Other expenses |
158 |
- |
158 |
192 |
- |
192 |
|
Total other expenses |
1,939 |
- |
1,939 |
1,912 |
- |
1,912 |
* For the year to 31 December 2024, the statutory audit fees payable to the Company's auditors and its associates for the audit of the Company and consolidated financial statements were £325k (2023: £309k), excluding VAT. Further fees of £97k were also included in the year in relation to the statutory audit of the Company and consolidated financial statements for the year to 31 December 2023, excluding VAT (2023: £178k in relation to the statutory audit of the Company and consolidated financial statements for the year to 31 December 2022, excluding VAT). The audit fees payable to the Company's auditors and its associates for the audit of the Company's subsidiaries are £23k (2023: £22k) excluding VAT, which was paid by the Parent entity.
8. TAXATION
(a) Analysis of charge in the year
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Corporation tax |
- |
- |
- |
- |
- |
- |
|
Taxation |
- |
- |
- |
- |
- |
- |
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Corporation tax |
- |
- |
- |
- |
- |
- |
|
Taxation |
- |
- |
- |
- |
- |
- |
(b) Factors affecting total tax charge for the year
The tax assessed for the year is higher (2023: lower) than the Company's applicable rate of corporation tax for the year of 25% (2023: 23.5%).
The factors affecting the current tax charge for the year are as follows
The effective UK corporation tax rate applicable to the Company for the period is 25% (2023: 23.5%). The tax charge differs from the charge resulting from applying the standard rate of UK corporation tax for an investment trust company.
The differences are explained below:
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
(Loss)/profit on ordinary activities before taxation |
(178) |
(1,849) |
(2,027) |
913 |
(609) |
304 |
|
Corporation tax at 25% (2023: 23.5%) |
(45) |
(462) |
(507) |
215 |
(143) |
72 |
|
Effects of: |
|
|
|
|
|
|
|
Excess management expenses brought forward |
(30) |
- |
(30) |
(320) |
(35) |
(355) |
|
Deemed interest payment under income streaming rules |
(52) |
- |
(52) |
- |
- |
- |
|
Non deductible expenses |
162 |
- |
162 |
415 |
- |
415 |
|
Movements on investments not allowable/taxable |
(35) |
462 |
427 |
(310) |
178 |
(132) |
|
Tax charge for the year |
- |
- |
- |
- |
- |
- |
|
|
For the year ended 31 December 2024 |
For the year ended 31 December 2023 |
||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Profit/(loss) on ordinary activities before taxation |
694 |
(3,027) |
(2,333) |
(681) |
924 |
243 |
|
Corporation tax at 25% (2023: 23.5%) |
174 |
(757) |
(583) |
(160) |
217 |
57 |
|
Effects of: |
|
|
|
|
|
|
|
Excess management expenses brought forward |
(30) |
- |
(30) |
(320) |
- |
(320) |
|
Group relief |
(460) |
- |
(460) |
|
|
|
|
Deemed interest payment under income streaming rules |
(77) |
- |
(77) |
- |
- |
- |
|
Non deductible expenses |
393 |
- |
393 |
480 |
- |
480 |
|
Movements on investments not allowable/taxable |
- |
757 |
757 |
- |
(217) |
(217) |
|
Tax charge for the year |
- |
- |
- |
- |
- |
- |
The Company has an unrecognised deferred tax asset of £nil (2023: £89,000) based on a main rate of corporation tax of 25% (2023: 25%). In its 2021 budget, the UK government announced that the main rate of corporation tax would increase to 25% for the fiscal year beginning on 1 April 2023. The deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company's portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the financial statements.
Given the Company's intention to meet the conditions required to retain its status as an Investment Trust Company, no provision has been made for deferred UK capital gains tax on any capital gains or losses arising on the revaluation or disposal of investments.
9. RETURN/(LOSS) PER ORDINARY SHARE
Group
Return per share is based on the consolidated loss for the year of £2,027,000 (2023: profit of £304,000) and the weighted average number of Ordinary Shares in issue of 88,335,524 (2023: 100,000,000) during the year. Consolidated revenue loss amounts to £178,000 (2023: profit of £913,000) and consolidated capital loss amounts to £1,849,000 (2023: loss of £609,000).
Company
Return per share is based on the Company loss for the year of £2,333,000 (2023: profit of £243,000) and the weighted average number of Ordinary Shares in issue of 88,335,524 (2023: 100,000,000) during the year. Company revenue profit amounts to £694,000 (2023: loss of £681,000) and Company capital loss amounts to £3,027,000 (2023: profit of £924,000).
10. CURRENT ASSETS
|
|
As at 31 December 2024 |
As at 31 December 2023 |
||
|
|
Group |
Company |
Group |
Company |
|
Trade and other receivables |
£'000 |
£'000 |
£'000 |
£'000 |
|
Trade receivables |
80 |
56 |
652 |
255 |
|
Shareholder loan receivable |
- |
27,292 |
- |
27,293 |
|
Total |
80 |
27,348 |
652 |
27,548 |
At 31 December 2024, the Company had a Shareholder loan receivable from AHL in the amount of £27,292,000 (2023: £27,293,000). The interest rate is 7.90% per annum which is then being adjusted every fourth quarter of the financial year in order for AHL to earn a gross margin of at least 50bps from its financing activities. The loan is repayable in full on 31 December 2046.
Derivative financial instruments
|
|
As at 31 December 2024 |
As at 31 December 2023 |
||
|
|
Group |
Company |
Group |
Company |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Forward currency contracts |
- |
- |
122 |
- |
The forward currency contracts outstanding at 31 December 2023 comprised the following:
Sale of euro 37,198,000 for £32,431,000 for settlement on 9 January 2024; and Sale of euro 34,834,000 for £30,362,000 for settlement on 23 February 2024.
Cash and cash equivalents
Cash and cash equivalents comprises bank balances held by the Group and Company, including short-term deposits.
The carrying amount of these represents their fair value. Cash balances in excess of a predetermined amount are placed on short-term deposit at market rates of interest.
11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Payables
|
|
As at 31 December 2024 |
As at 31 December 2023 |
||
|
|
Group |
Company |
Group |
Company |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Intercompany balance with Attika Holdings Limited |
- |
2,443 |
- |
- |
|
Accrued expenses |
1,094 |
968 |
1,016 |
874 |
|
Unsettled trades |
43 |
- |
41 |
- |
|
Total |
1,137 |
3,411 |
1,057 |
874 |
Derivative financial instruments
|
|
As at 31 December 2024 |
As at 31 December 2023 |
||
|
|
Group |
Company |
Group |
Company |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Forward currency contracts |
24 |
- |
- |
- |
The forward currency contracts outstanding at the year end comprised the following:
Sale of euro 38,000,000 for £31,411,000 for settlement on 21 January 2025; and Sale of euro 28,900,000 for £24,212,000 for settlement on 28 February 2025.
12. SHARE CAPITAL
|
|
As at |
As at |
|
|
31 December |
31 December |
|
|
2024 |
2023 |
|
|
£'000 |
£'000 |
|
Allotted, issued and fully paid: |
|
|
|
Ordinary Shares of 1p each |
|
|
|
Opening balance of 100,000,000 Ordinary Shares |
1,000 |
1,000 |
|
Repurchase and cancellation of 18,561,732 (2023: nil) Ordinary Shares following a Tender Offer |
(186) |
- |
|
Closing balance of 81,438,268 (2023: 100,000,000) Ordinary Shares |
814 |
1,000 |
The Ordinary Shares rank pari passu and each share carries one vote in the event of a poll at a general meeting.
Following a Tender Offer during the year, the Company repurchased and cancelled 18,561,732 of its own Ordinary Shares, nominal value £185,617 for a total consideration of £17,500,000, representing 18.6% of the Ordinary Shares outstanding at the beginning of the year.
13. RESERVES
|
|
Capital |
|
|
|
|
|
redemption |
Special |
Capital |
Revenue |
|
|
reserve |
reserve |
reserve |
reserve |
|
Group |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 1 January 2024 |
- |
93,500 |
(178) |
(41) |
|
Repurchase and cancellation of Ordinary Shares following a Tender Offer |
186 |
(17,500) |
- |
- |
|
Expenses of Tender Offer |
- |
(88) |
- |
- |
|
Dividends paid |
- |
(4,999) |
- |
- |
|
(Loss)/profit on ordinary activities after taxation |
- |
- |
(1,849) |
(178) |
|
At 31 December 2024 |
186 |
70,913 |
(2,027) |
(219) |
|
|
Capital |
|
|
|
|
|
redemption |
Special |
Capital |
Revenue |
|
|
reserve1 |
reserve2 |
reserve3 |
reserve4 |
|
Company |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 1 January 2024 |
- |
93,500 |
2,923 |
(2,547) |
|
Repurchase and cancellation of Ordinary Shares following a Tender Offer |
186 |
(17,500) |
- |
- |
|
Expenses of Tender Offer |
- |
(88) |
- |
- |
|
Dividends paid |
- |
(4,999) |
- |
- |
|
Loss on ordinary activities after taxation |
- |
- |
(3,027) |
694 |
|
At 31 December 2024 |
186 |
70,913 |
(104) |
(1,853) |
The Company's Articles of Association permit dividend distributions out of realised capital profits.
1 The capital redemption reserve represents the accumulated nominal value of shares repurchased for cancellation. This reserve is not distributable.
2 The special reserve arose following the cancellation of the share premium account in 2021. As a result, this became a distributable reserve and may be used to repurchase the Company's own Ordinary Shares or distributed as dividends.
3 The capital reserve comprises realised and unrealised gains and losses on investments and foreign currency. An analysis has not been made between those that are realised (and may be distributed as dividends or used to repurchase the Company's own Ordinary Shares) and those that are unrealised.
4 The revenue reserve may be distributed as dividends or used to repurchase the Company's own Ordinary Shares. The balance on the Company's revenue reserve is currently negative and therefore no distribution can be made.
14. NET ASSET VALUE PER ORDINARY SHARE
The Group's net asset value per Ordinary Share as at 31 December 2024 is based on the £69,667,000 (2023: £94,281,000) net assets of the Group attributable to the 81,438,268 (2023: 100,000,000) Ordinary Shares in issue as at 31 December 2024.
The Company's net asset value per Ordinary Share as at 31 December 2024 is based on the £69,956,000 (2023: £94,876,000) net assets of the Company attributable to the 81,438,268 (2023: 100,000,000) Ordinary Shares in issue as at 31 December 2024.
15. DIVIDENDS
The Company has paid the following interim dividend in respect of the year under review:
|
|
For the year ended |
For the year ended |
||
|
|
31 December 2024 |
31 December 2023 |
||
|
|
Pence per |
Total |
Pence per |
Total |
|
Dividend paid in the year |
Ordinary Share |
£'000 |
Ordinary Share |
£'000 |
|
Interim - paid 1 November 2024 |
6.139p |
4,999 |
- |
- |
|
Total |
6.139p |
4,999 |
- |
- |
The Company is not required to pay a dividend in respect of the current or prior year in order to satisfy the requirements of Section 1159 of the Corporation Tax Act 2010, as it has a negative balance on its revenue reserve. The above dividend was paid out of the special reserve.
The Company paid an of 1.25p per share, amounting to £1,250,000 on 20 March 2023, in respect of the year ended 31 December 2022.
16. FINANCIAL RISK MANAGEMENT
The Investment Adviser, AIFM and the Administrator report to the Board on a quarterly basis and provide information to the Board which allows it to monitor and manage financial risks relating to the Group's operations. The Group's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. These risks are monitored by the AIFM. Each risk and its management are summarised below.
(i) Currency risk
Foreign currency risk is defined as the risk that the fair values of future cashflows will fluctuate because of changes in foreign exchange rates. The Group's and the Company's financial assets and liabilities are denominated in sterling and the euro and substantially all of its revenues and expenses are in sterling and the euro. The Group and the Company are therefore exposed to foreign currency risk.
For any non-base currency assets, the Investment Adviser can use forward foreign exchange contracts to seek to hedge up to 100% of non-sterling exposure.
The Company does not intend to use hedging or derivatives for investment purposes but may use derivative instruments such as forwards, options, future contracts and swaps to hedge currency, inflation, interest rates, commodity prices and/or electricity prices.
With many of its investment assets denominated in the euro, the Group uses a series of regular forward foreign exchange contracts to provide a level of protection against movement in the sterling exchange rate. Under these arrangements the Group is required to provide £2.5 million in cash as collateral for these forward foreign exchange contracts. Following the failure of the Continuation vote, the Group is currently reviewing the strategic options for realising value for Shareholders. The Board will consider the appropriateness of the current hedging arrangements and the cash collateral as part of the review of strategic options and in light of the cash requirements of the Group.
The currency profile of the Group as at 31 December 2024 is as follows:
|
|
31 December 2024 |
31 December 2023 |
||||
|
|
GBP |
EUR |
Total |
GBP |
EUR |
Total |
|
Assets |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
7,358 |
7,059 |
14,417 |
23,547 |
5,535 |
29,082 |
|
Trade and other receivables |
56 |
24 |
80 |
159 |
493 |
652 |
|
Derivative financial instruments |
- |
- |
- |
122 |
- |
122 |
|
Investments |
3,021 |
53,310 |
56,331 |
3,566 |
61,916 |
65,482 |
|
Total assets |
10,435 |
60,393 |
70,828 |
27,394 |
67,944 |
95,338 |
|
Liabilities |
|
|
|
|
|
|
|
Creditors |
(986) |
(151) |
(1,137) |
(901) |
(156) |
(1,057) |
|
Derivative financial instruments |
(24) |
- |
(24) |
- |
- |
- |
|
Total liabilities |
(1,010) |
(151) |
(1,161) |
(901) |
(156) |
(1,057) |
If the value of sterling against euro increased or decreased by 10% (2023: 10%), if all other variables remained constant, the NAV of the Group would increase or decrease by £6,039,000 (2023: £6,794,000) without taking account of the Group's forward foreign exchange contracts.
The currency profile of the Company as at 31 December 2024 is as follows:
|
|
31 December 2024 |
31 December 2023 |
||||
|
|
GBP |
EUR |
Total |
GBP |
EUR |
Total |
|
Assets |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
3,957 |
3,663 |
7,620 |
19,884 |
2,664 |
22,548 |
|
Shareholder loan receivable |
27,292 |
- |
27,292 |
27,293 |
- |
27,293 |
|
Trade and other receivables |
56 |
- |
56 |
255 |
- |
255 |
|
Investments in subsidiaries |
9,048 |
29,351 |
38,399 |
9,971 |
35,683 |
45,654 |
|
Total assets |
40,353 |
33,014 |
73,367 |
57,403 |
38,347 |
95,750 |
|
Liabilities |
|
|
|
|
|
|
|
Intercompany balance with Attika Holdings Limited |
(2,443) |
- |
(2,443) |
- |
- |
- |
|
Accrued expenses |
(968) |
- |
(968) |
(874) |
- |
(874) |
|
Total liabilities |
(3,411) |
- |
(3,411) |
(874) |
- |
(874) |
If the value of the sterling against euro increased or decreased by 10% (2023: 10%), if all other variables remained constant, the NAV of the Group would increase or decrease by £3,301,000 (2023: £3,835,000).
(ii) Interest rate risk
The Group's interest rate risk on interest bearing financial assets is limited to interest earned on cash and investments. The interest rates of investments held at amortised cost are fixed therefore the interest rate risk is minimal. Investments held at fair value through profit or loss have variable returns based on e.g. power production levels and not on variability in interest rates.
The Group's interest and non-interest bearing assets and liabilities as at 31 December 2024 are summarised below:
|
|
31 December 2024 |
31 December 2023 |
||||
|
|
Interest |
Non-interest |
|
Interest |
Non-interest |
|
|
|
bearing |
bearing |
Total |
bearing |
bearing |
Total |
|
Assets |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
9,121 |
5,296 |
14,417 |
27,817 |
1,265 |
29,082 |
|
Trade and other receivables |
- |
80 |
80 |
- |
652 |
652 |
|
Derivative financial instruments |
- |
- |
- |
- |
122 |
122 |
|
Investments |
46,309 |
10,022 |
56,331 |
54,990 |
10,492 |
65,482 |
|
Total assets |
55,430 |
15,398 |
70,828 |
82,807 |
12,531 |
95,338 |
|
Liabilities |
|
|
|
|
|
|
|
Creditors |
- |
(1,137) |
(1,137) |
- |
(1,057) |
(1,057) |
|
Derivative financial instruments |
- |
(24) |
(24) |
- |
- |
- |
|
Total liabilities |
- |
(1,161) |
(1,161) |
- |
(1,057) |
(1,057) |
The Company's interest and non-interest-bearing assets and liabilities as at 31 December in each reporting year are summarised below:
|
|
31 December 2024 |
31 December 2023 |
||||
|
|
Interest |
Non-interest |
|
Interest |
Non-interest |
|
|
|
bearing |
bearing |
Total |
bearing |
bearing |
Total |
|
Assets |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash and cash equivalents |
3,971 |
3,649 |
7,620 |
21,606 |
942 |
22,548 |
|
Trade and other receivables |
- |
56 |
56 |
- |
255 |
255 |
|
Shareholder loan receivable |
27,292 |
- |
27,292 |
27,293 |
- |
27,293 |
|
Investments in subsidiaries |
29,351 |
9,048 |
38,399 |
35,683 |
9,971 |
45,654 |
|
Total assets |
60,614 |
12,753 |
73,367 |
84,582 |
11,168 |
95,750 |
|
Liabilities |
|
|
|
|
|
|
|
Intercompany balance with Attika Holdings Limited |
- |
(2,443) |
(2,443) |
- |
- |
- |
|
Accrued expenses |
- |
(968) |
(968) |
- |
(874) |
(874) |
|
Total liabilities |
- |
(3,411) |
(3,411) |
- |
(874) |
(874) |
(iii) Price risk
Price risk is defined as the risk that the fair value of a financial instrument held by the Group will fluctuate. As of 31 December 2024 the Group held investments at fair value through profit or loss with an aggregate fair value of £10,022,000 (2023: £10,492,000). All other things being equal, the effect of a 10% increase or decrease in the prices of the investments held at the year-end would have been an increase or decrease of £1,002,000 (2023: £1,049,000) in the profit after taxation for the year ended 31 December 2024 and the Group's net assets at 31 December 2024. The sensitivity of the investment valuation due to price risk is shown further in note 4.
As of 31 December 2024 the Company held investments at fair value through profit or loss with an aggregate fair value of £29,351,000 (2023: £35,683,000). All other things being equal, the effect of a 10% increase or decrease in the prices of the investments held at the year-end would have been an increase or decrease of £2,935,000 (2023: £3,568,000) in the profit after taxation for the year ended 31 December 2024 and the Company's net assets at 31 December 2024.
(iv) Credit risk
Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Group and the Company is exposed to credit risk in respect of the investments valued at amortised cost, interest income receivable and other receivables and cash at bank. The Group and the Company's credit risk exposure is minimised by dealing with financial institutions with investment grade credit ratings.
Continued monitoring of the investments and the counterparties/service providers, including the use of credit rating data providers, allows the Investment Adviser to identify and address these risks early. Where possible, the Investment Adviser seeks to mitigate credit risks by the counterparty having the opportunity to sell electricity to the grid or other customers. The Investment Adviser also seeks to structure investments whereby contracts can be adapted/extended to accommodate periods of payment defaults. Diversification of counterparties and service providers ensures any impact is limited. In addition, a diversified portfolio provides further mitigation.
The table below shows the cash balances of the Group and the Company as well as the credit rating for each counterparty:
|
|
|
As at 31 December 2024 |
As at 31 December 2023 |
||
|
|
|
Company |
Group |
Company |
Group |
|
|
Rating |
£'000 |
£'000 |
£'000 |
£'000 |
|
Goldman Sachs-Liquid Reserves Fund |
AAAmmf (Fitch Rating) |
249 |
249 |
6,632 |
6,632 |
|
EFG Deposit account |
A (Fitch Rating) |
7,333 |
9,000 |
15,858 |
19,248 |
|
Royal Bank of Scotland International |
A+ (Fitch Rating) |
38 |
5,013 |
58 |
2,998 |
|
Bank of New York Mellon |
AA (Fitch Rating) |
- |
155 |
- |
204 |
|
|
|
7,620 |
14,417 |
22,548 |
29,082 |
The table below shows the amortised cost investment balances of the Group as well as the credit rating for each counterparty:
|
|
As at |
As at |
|
|
31 December |
31 December |
|
Group |
2024 £'000 |
2023 £'000 |
|
A |
4,346 |
5,871 |
|
B |
33,865 |
31,890 |
|
C |
8,098 |
16,509 |
|
D |
- |
720 |
|
|
46,309 |
54,990 |
The Group and the Company classified each project using a certain credit risk band. Listed below are the conversion methodology used:
|
|
Corresponding |
|
Credit risk band |
S&P rating range |
|
A |
AAA to A- |
|
B |
BBB+ to BBB- |
|
C |
BB to CC- |
|
D |
Default |
(v) Liquidity risks
Liquidity risk is the risk that the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Adviser, AIFM and the Board continuously monitor forecast and actual cashflows from operating, financing and investing activities to consider payment of dividends or further investing activities.
The financial liabilities by maturity of the Group at the year-end are shown below:
|
|
31 December |
31 December |
|
|
2024 |
2023 |
|
|
Less than |
Less than |
|
|
£'000 |
£'000 |
|
Liabilities |
|
|
|
Payables |
(1,137) |
(1,057) |
|
Derivative financial instruments |
(24) |
- |
|
|
(1,161) |
(1,057) |
The financial liabilities by maturity of the Company at the year-end are shown below:
|
|
31 December |
31 December |
|
|
2024 |
2023 |
|
|
Less than |
Less than |
|
|
£'000 |
£'000 |
|
Liabilities |
|
|
|
Payables |
(3,411) |
(874) |
|
|
(3,411) |
(874) |
As at 31 December 2024, the Group has total commitments of £0.04 million (31 December 2023: £5.26 million) to its investments which are unfunded.
Capital management
The Company considers its capital to comprise ordinary share capital, distributable reserves and retained earnings. The Company is not subject to any externally imposed capital requirements.
The Company's primary capital management objectives are to ensure the sustainability of its capital to support continuing operations, meet its financial obligations and allow for growth opportunities. Generally, acquisitions are anticipated to be funded by a combination of current cash and equity.
17. TRANSACTIONS WITH THE INVESTMENT ADVISER
Aquila Capital Investmentgesellchaft has been appointed as the Investment Adviser to the Company and full details of the Investment Advisory Agreement can be found in the Annual Report under Directors' Report. Investment advisory fees payable in respect of the year ended 31 December 2024 amounted to £647,000 (2023: £808,000), of which £319,000 (2023: £361,000) was outstanding at the year end.
18. RELATED PARTY TRANSACTIONS
Directors
Details of the remuneration payable to Directors and details of Directors' shareholdings are given in the Directors' Remuneration Report in the Annual Report.
Subsidiary and wholly owned entity
The following table includes details of the subsidiary and other wholly owned entity of the Company. Further details of these are given in notes 1 and 2 to the accounts. Transactions with these entities have been carried out at arm's length. The Company has prepared consolidated accounts, which incorporate these two entities.
|
Entity name and registered address |
Effective ownership |
Investment |
Country of incorporation |
|
Attika Holdings Limited |
100% |
HoldCo Subsidiary entity, which owns underlying investments |
United Kingdom |
|
Compartment 2 of SPV Project 2013 S.r.l. |
100% of the notes of one compartment |
Special purpose entity, which owns underlying investments. |
Italy |
Transaction with the subsidiary
At 31 December 2024, the Company had a Shareholder loan receiveble from its subsidiary, Attika Holdings Limited ("AHL"), amounting to £27,292,000 (2023: £27,293,000). Under the terms of the loan agreement, the initial interest rate is is 7.9% per annum, which is then adjusted every fourth quarter of the financial year in order for AHL to earn a gross margin of at least 50 basis points from its financing activities. The loan is repayable in full on 31 December 2046.
At 31 December 2024, the Company had an intercompany balance payable to AHL, amounting to £2,443,000 (2023: nil).
19. EVENTS AFTER THE ACCOUNTING DATE
The following events occurred after the accounting date, and for which no adjustments have been made in the financial statements:
On 28 February 2025, the Group received £7.0 million from the disposal of its investment in Bio-LNG, in addition to a quarterly receipt of £0.5 million in January 2025.
In February and March 2025, the Board entered agreements for the repayment of three of the Group's five Superbonus investments, for a total consideration of £19.3 million, of which £16.3 million had been received by 31 March 2025.
OTHER INFORMATION
ALTERNATIVE PERFORMANCE MEASURES OF THE GROUP
OTHER INFORMATION (UNAUDITED)
In reporting financial information, the Company presents alternative performance measures, "APMs", which are not defined or specified under the requirements of IFRS. These APM's are commonly used by investment companies to assess values, investment performance and operating costs. There have been no changes in these APMs from the prior year. The APMs presented in this report are shown below, together with supporting numerical calculations.
(Discount)/premium
The amount by which the share price of an investment trust is lower (discount) or higher (premium) than the NAV per share. The discount or premium is expressed as a percentage of the NAV per share.
|
|
|
As at 31 December 2024 |
As at 31 December 2023 |
|
NAV per Ordinary Share (pence) |
a |
85.55 |
94.28 |
|
Share price (pence) |
b |
52.00 |
57.25 |
|
Discount (%) |
(b÷a)-1 |
(39.2) |
(39.3) |
Ongoing charges
A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company. The average net assets has been computed as the average of the published NAV for 31 December 2023, 30 June 2024 and 31 December 2024.
|
|
|
As at 31 December 2024 |
As at 31 December 2023 |
|
Average NAV (£'000) |
a |
80,459 |
94,349 |
|
Annualised expenses (£'000) |
b |
3,0211 |
3,3001 |
|
Ongoing charges (%) |
(b÷a) |
3.8 |
3.5 |
1 Figure includes Investment Advisory fees and Other expenses as disclosed in the Consolidated Statement of Profit or Loss and Comprehensive Income.
Total return
A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends paid out by the Company into the Ordinary Shares of the Company on the ex-dividend date.
|
Year ended 31 December 2024 |
|
NAV per share |
Share price |
|
Opening at 1 January 2024 (pence) |
a |
94.28 |
57.25 |
|
Dividend adjustment (pence) |
b |
6.14 |
6.14 |
|
Closing at 31 December 2024 (pence) |
c |
85.55 |
52.00 |
|
Total (loss)/return (%) |
((c+b)÷a)-1 |
(2.7) |
1.6 |
|
Year ended 31 December 2023 |
|
NAV per share |
Share price |
|
Opening at 1 January 2023 (pence) |
a |
95.23 |
71.00 |
|
Dividend adjustment (pence) |
b |
1.25 |
1.25 |
|
Closing at 31 December 2023 (pence) |
c |
94.28 |
57.25 |
|
Total return/(loss) (%) |
((c+b)÷a)-1 |
0.3 |
(17.6) |
FINANCIAL INFORMATION
Year ended 31 December 2024
The figures and financial information for the year ended 2024 do not constitute the statutory financial statements for that year. Those financial statements have not yet been delivered to the registrar and include the auditors' report which, whilst unmodified, contains reference to the material uncertainty disclosed in note 2 above. The auditors' report does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.
ANNUAL REPORT
The Annual Report for the year ended 31 December 2024 was approved on 28 April 2025. It will shortly be made available on the Company's website at: https://www.aquila-energy-efficiency-trust.com/ and via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The Company's AGM will be held at
2.00 p.m. on 28 May 2025 at the offices of CMS Cameron McKenna Nabarro Olswang LLP located at Cannon Place, 78 Cannon Street, London EC4N 6AF. The Company will publish an announcement to confirm when the AGM notice is available to access via the Company's website at: https://www.aquila-energy-efficiency-trust.com/ and via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
This announcement contains regulated information under the Disclosure Guidance and Transparency Rules of the FCA.
29 April 2025
For further information contact:
Company Secretary and registered office:
Apex Listed Companies Services (UK) Limited
4th Floor, 140 Aldersgate Street, London, EC1A 4HY
END
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