Gore Street Energy Storage Fund results: NAV falls as turnaround strategy begins

The headline numbers

Gore Street Energy Storage Fund's full-year results contain a difficult combination for shareholders: the portfolio grew and revenue increased, but weaker market forecasts pushed the net asset value sharply lower.

NAV, or net asset value, ended the year to 31 March 2026 at 74.9p per share, compared with 102.8p a year earlier and 87.9p at 31 December 2025. Total NAV fell from £519.3 million to £378.3 million.

The main cause was lower merchant revenue forecasts supplied by independent third parties. Merchant revenue is income earned by selling storage services into prevailing energy and grid markets, rather than through a fixed long-term contract.

The results also cover a period before the company's revised strategy had time to make a meaningful contribution. That strategy was announced in March 2026 and focuses on releasing capital, improving the portfolio and reducing costs.

Key figure	FY2025/26	FY2024/25
NAV per share	74.9p	102.8p
Total NAV	£378.3 million	£519.3 million
Revenue	£36.27 million	£32.84 million
Operational EBITDA	£18.0 million	£18.5 million
Average revenue	£7.32 per MW/hr	£9.56 per MW/hr
Asset availability	94.5%	95.3%
Dividends declared	7.19p per share	4.00p per share

Why did NAV fall so sharply?

The NAV bridge makes the pressure points unusually clear.

The largest negative movement was a 19.0p per share reduction from revenue curves. These curves represent forecasts for the future revenue the assets may earn and are an important input into portfolio valuations.

Independent forecasters' reductions accounted for 17.2p of that movement. A further 1.8p adjustment was directed by the new Audit Committee members to bring projections for the rest of 2026 and calendar 2027 closer to recent revenue performance.

The company said the revenue curve change represented around 68% of the overall NAV decline for the financial year.

Other notable pressures included:

• Actual performance: -6.1p, after revenues underperformed previous assumptions in markets including Great Britain, California and Texas.
• Operating expenditure: -5.6p, mainly because forecast project-oversight costs are now included within asset-level cash flows.
• Fund expenses: -2.3p.
• Dividends: -4.2p.
• Discount rates: -0.6p, with the weighted average rate rising slightly from 10.22% to 10.25%.

These reductions were partly offset by a 9.3p rollover benefit, reflecting the passage of time and future cash flows moving closer to the present, plus a 1.1p positive contribution from inflation assumptions.

For investors, the key point is that this was not simply an accounting movement caused by one changed assumption. Lower forecasts were the biggest issue, but weaker realised performance and higher expected operating costs also contributed.

A bigger portfolio generated more revenue, but at lower rates

Operational capacity increased to 643.11 MW and 840.9 MWh by the year-end, up from 417.11 MW and 386.75 MWh one year earlier. The portfolio's average operational capacity during the year was 565.78 MW and 696.70 MWh.

That growth helped revenue rise to £36.27 million from £32.84 million. However, average revenue fell from £9.56 to £7.32 per MW/hr, reflecting challenging conditions in Great Britain and Texas.

The company said a Great Britain-only portfolio averaged £5.60 per MW/hr, illustrating the benefit of its international diversification. Gore Street operates 28 assets across five grids, with total capacity of 1.16 GW.

Operational EBITDA, meaning earnings before interest, tax, depreciation and amortisation from the operating portfolio, slipped from £18.5 million to £18.0 million. The company attributed this mainly to lower average revenue per MW across a larger portfolio, while costs remained largely fixed on a per-MW basis.

Availability remained high at 94.5%, although this was slightly below the previous year's 95.3%.

The revised strategy now carries the investment case

Following the Board refresh completed on 1 February 2026, Gore Street announced a revised strategy built around four areas:

1. A fixed annual distribution of 7p per share.
2. Selective asset sales.
3. Reinvestment into augmentation and other value-adding development.
4. Cost reductions.

Augmentation means adding storage capacity to an existing battery project. Works at the 79.9 MW Stony asset and 49.9 MW Ferrymuir asset are intended to increase their duration from one hour to two hours, expanding their potential revenue opportunities.

The work is described as on track and on budget, with completion due no later than December 2026.

Asset sales are another important part of the plan. The 22 MW Cremzow project in Germany is in late-stage negotiations, while sale processes have also started for pre-construction assets in the Republic of Ireland and the 200 MW Middelton project in Great Britain.

Further updates are expected later in summer 2026. Until transactions complete, however, the proceeds and any effect on shareholder value remain not disclosed.

The Board has established key performance indicators and said it will report progress regularly. If these targets are not met, the continuation vote currently scheduled for 2028 will be brought forward.

Dividends remain prominent

Dividends declared for the financial year totalled 7.19p per share, including 3.00p of special dividends.

For the fourth quarter, the Board approved a dividend of 1.75p per share, consistent with its policy of distributing 7p annually through quarterly payments. The shares are due to trade ex-dividend on 30 July 2026, with payment expected on or around 1 September 2026.

The higher fixed distribution gives shareholders a clear policy, but its durability will depend on the strategy delivering sufficient cash and capital flexibility. Dividend cover was not disclosed in the announcement.

Balance sheet and operational watchpoints

The group held £51.6 million in cash or cash equivalents at the year-end, alongside £37.8 million of undrawn debt capacity.

Total debt drawn was £105.8 million, producing a gross asset value gearing ratio of 21.9%, up from 17.8% a year earlier. Gearing can enhance returns when assets perform well, but it also increases sensitivity to weaker cash generation and valuation changes.

There are execution issues to monitor too. Construction at the 57 MW Enderby asset has finished, but grid connection constraints have delayed access to some revenue streams. Full operation is expected in the coming weeks.

The operational fleet is relatively young, with a weighted average age of 2.6 years by MWh. Gore Street also has 458.05 MW of pre-construction projects, which could be developed independently, progressed with partners or sold to recycle capital.

What should investors watch next?

These results underline the scale of the challenge facing the refreshed Board. Operational capacity and revenue moved forward, but revenue per MW weakened and valuation assumptions were cut substantially.

The positive side of the announcement is that the strategy now has identifiable milestones: completing the Stony and Ferrymuir augmentations, advancing asset sales, cutting costs and maintaining the 7p annual distribution policy.

The negatives are equally clear. Forecast revenues have fallen, recent performance missed earlier assumptions, expected operating costs increased and gearing rose. Asset-sale values and timings are also not yet certain.

The next meaningful evidence should come from the sales processes expected to produce updates later in summer 2026. Those transactions will help show whether the portfolio's stated NAV can be supported by external buyers and whether capital can be released on terms that improve shareholder value.