Gore Street Energy Storage Fund Plc ($GSF)

Good afternoon, ladies and gentlemen, and welcome to the Gore Street Energy Storage Fund Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to the team from Gore Street Energy Storage Fund, Angus, Alex, good afternoon.

Good afternoon. So by way of introduction, my name is Angus Gordon. I've been Chairman of this company since mid- to late January only, having been on the Board just at the end of -- on the Board at the end of last year. And since I came on to the Board, we have completely refreshed the Board to a completely new Board. And also, we've obviously been doing a lot of analytics to determine what the best way forward for this company has been. It has been a tricky ride for a lot of investors, and we know that, and we want to reverse that. And we want to -- through the announcement of this new strategy to deliver shareholder value and to deliver shareholder returns in the short, the medium and the long term. We want to do that for the benefit of all shareholders, the majority of shareholders. And what we really want to reengage with is to align all our interests for the Board, the manager and shareholders to have their interest aligned and move forward in a positive manner from here. The first thing we're going to do, we recognize that this is -- it's been a difficult ride for a lot of shareholders. The first thing we're going to do is to give shareholders some money. But more than that, we want to make sure that there is certainty given responsible and reasonable assumptions of that money coming to shareholders. So we're going to pay a quarterly dividend of 1.75p every quarter starting now and which made 7p for the year. Before I go on and talk a little bit about that, let me just tell you about the Board. You can see our faces there. I'm the one on the left, I'm the Chair, and I spent many years and I'm still on boards of investment companies. So I would hope that I understand shareholders, I understand what shareholders are looking for, and I understand investment companies. But in a company like Gore Street, we also need some great experts in the asset class and in the accounting of such asset class. And that I bring you, first of all, Keith. Keith Pickard, who was the CFO of [indiscernible] , incredibly deep knowledge of infrastructure and infrastructure investments, and we're thrilled to have him on board. Christine, is similarly experienced in all manner of real assets, and she is going to be the Senior Independent Director or is the Senior Independent Director. But I've also asked her because I'm not sure that our communication has been quite as good as it should have been. I've asked her to be Chairman of a new Marketing and Communications Committee. [indiscernible] is our technical expert. He has many years, many, many years of experience in running assets such as these and indeed broader solar and wind assets as well. So he is the one that keeps the manager's feet to the fire when it comes to the actual asset management or will be doing so in the future. Norman [indiscernible] joined the Board the same day as I did. and he has great expertise in investment companies, but was also Chairman of another battery energy storage company and has great expertise in that and has run money as well in the past. Now I think since the advent of this company in 2018, the market environment has changed enormously. It has -- the interest rate cycle has changed. And of course, what was attractive in 2018 is no longer attractive in terms of just yield because of interest rates going up. So the market environment has changed. And actually, and Alex can talk to this later, I think through that ride, amount of battery storage that has come on to the market has surprised all market participants to be honest, which has impacted our ability to create the revenues that we would rather hope to. But we know that the shareholders are -- have suffered, frankly, and we want to reverse that. And so we have been spending -- the Board only met for -- or the Board was only constituted as it is in front of you for the first time on the 1st of February. So here we are 6 weeks later, announcing a strategic review and a change in strategy, which we hope and think will be a great benefit to all shareholders. Next slide, please. So what we're going to do is, as I said, we want to return some money back to shareholders, and we'll deliver a 7p per share annual dividend, annual distribution, which at the moment will be partly funded by revenues, but partly funded by asset sales, which we'll talk about in a minute. That, by definition, because of the asset sales, will reposition the portfolio, which will make it cleaner and easier to monitor and manage. And we think that this will enhance shareholder returns going forward, too. So first of all, the share price is very important that, that gets up and the discount is closed. Secondly, that the assets themselves perform. And we've set a KPI on augmentation of the assets at a 15% IRR, which is in any market, a good IRR. So let's hand over to Alex to tell you a little bit more about how we're going to do it, and I'll come back to you in a minute.

Thank you very much, Angus. What is the strategy underpinned on? There's obviously, as Angus has mentioned, some material changes in the marketplace. In essence, at this level of risk-free rate, this level of interest rates, long-term cash flows are less attractive than short-term capital return. And so that is front and center in our minds as we work with the Board to develop this new strategy. We are moving from a strategy of buy and hold to construct, augment, dispose and return and recycle. That is the strategy we're engaged in and the strategy that we're presenting today. What does that mean then in some of the kind of portfolio and allocation discussion? So we continue, of course, on revenue maximization. This is a good portfolio, well diversified, which is achieving revenues -- best-in-class revenues in each of the markets that we are in. That said, and as Angus has mentioned, we have been surprised at the amount of build-out of energy storage in all of the markets that we're in. We aim to manage that large build-out of energy storage through diversification, but we can see in the markets that we're in, energy storage continues to be a very attractive asset class for asset owners and therefore, leading to big build-out. And it does remain a very attractive asset class. We will look to divest certain assets, and we have started that process already from our announcements late last year, and those processes are well engaged. And then critically, we are looking to distribute significant cash back to shareholders, prioritized from revenue and disposals. We are very cognizant that the share price is -- has a large disconnect to NAV, and we need to solve that. Consideration of funding of value-accretive activities in terms of recycling, augmentation, that only takes place after the dividends and cash distributions that Angus has laid out, but there is within the portfolio, attractive opportunities, especially in augmentation, especially at this CapEx level. So how does that mechanism look? Operational preconstruction assets. We have a gigawatt hour in operation. We have potentially another gigawatt hour of assets to be constructed. We are looking into that portfolio to understand which assets will generate the most value in the most efficient way for shareholders and which assets potentially we will look to JV with other financial sponsors to have them built and therefore, look for disposal. We are avoiding any force or value destructive transactions. We will have multiple assets in the market at any time to be able to choose when we transact. We look to maximize value from the incumbent positions. So target developments and enhancements, I think the company has done a good job in terms of choosing when to augment assets. We are now at an all-time low price for CapEx. And so adding augmentation to the existing portfolio, we believe, offers good value for our investors, alongside continued process around the use of technology, not just for revenue optimization, but also for cost takeout. Potential reinvestment after committed distributions to shareholders. Of course, that exists. The Board will make that decision post making sure that we have enough capital to distribute to investors alongside as per this strategy.

So the distributions, 7p per share, GBP 35 million a year annual distribution to be funded from cash flows and sales, as we've said. So we -- the Board is committing to 1.75p per share each quarter starting now. Additionally, and I'm aware of some questions about that. Additionally, there is this 1.5p per share that is linked to the U.S. tax credits. And that is in addition to the 1.75p, just to be clear. We were rather hoping that we'd be able to talk about that today, but it is imminent, and we'll keep you in touch with that. So we've set some KPIs, which is partly the 1.5p -- sorry, 1.75p per share dividend that must be paid and also that the realizations of the assets will be GBP 25 million in the coming year, GBP 75 million in the -- at least, by the way, in the year after that and a further GBP 75 million in the year after that. Now there is going to be augmentation being done, and we've set a KPI for that augmentation of at least 15% IRR. Now there may just be some extra cash available for doing what's right for you shareholders at that point, and we will look at tactical share buybacks and/or other returns as well. Next slide, I think. In terms of the alignment and governance, the Board has obviously looked at and continues to look at the arrangements with Gore Street Capital managing these assets. And to date, we are happy with the fact that Gore Street and to an extent, it's kind of obvious, but Gore Street who have sourced, developed, put in production and got revenues from these assets are in a good position to be able to implement this strategy, particularly if the Board holds their feet to the fire, which I'll talk about in a second. We have -- the previous Board, if you like, or the previous Board changed the investment management terms, they got rid of the performance fee and an exit fee from the investment management agreement. And indeed, the management fee changed from being all on NAV to being half on NAV and half on market cap. So that is an alignment of interest with you, the shareholders. Today, we're announcing also that the CMA exit fee, which is 2% of assets has also been removed. And that proves a strong alignment with shareholders. The Board recognized that shareholders won't be patient forever for the delivery of this strategy. And therefore, we put in some very clear KPIs, some of which I've already mentioned. But there is a continuation vote scheduled for 2028. And that will be brought forward if any of these KPIs, including the payment of the quarterly 1.75p are not met. So in conclusion, I think we've said it all, but it's handing back money to shareholders at NAV, by the way, revenue and costs. It is active recycling to make the best of our assets, our current assets to make sure that their value is enhanced. And throughout this, we, the new Board are going to hold the management to account, and we will call a continuation vote if what we said is going to happen is not happening. So we think that this strategy delivers significant value for shareholders, as I said, in the short, medium and longer term. At which point, I think I'll hand back to Jake, and we can answer some questions.

[Operator Instructions] But Ben, at this stage, if I may hand over to you to chair the Q&A with the team.

Thank you, Jake. I appreciate this was covered in the presentation, but it was a question received multiple times. Could you please clarify is the special dividend in addition to the ordinary dividend you're speaking about today? And when will that be paid?

Yes, absolutely. We can clarify that this is in addition to the 1.74. And I'm going to tell Alex has been leading the charge. But what's happened is that it's coming from the U.S. You need a lot of signatures from the various different -- well, equivalent of counselors and that sort of thing. And we are within one signature of being able to release that money to shareholders.

Yes. Thank you, Angus. So we did receive all of the ITC proceeds by the end of the year, which was what our goal was. For sure, there is multiple things that needed to be ticked and tied in terms of documentation through that, and we are imminent, we believe. So please bear with us over the next coming days, and we hope to be able to deliver good news on that.

Next question. Could you give guidance on the dividend cover using both operational cash flow and asset sale proceeds expected, but net of CapEx and JVs over the next few years?

I can tell you what it is now, and I'll hand over to Alex to tell you a little bit about the forecast going forward or the estimates going forward. But at the moment, a 7p dividend is basically 2p from -- a little over 2p from revenues and 5p from capital. We thought it was really important that we hand that capital at NAV back to shareholders. In the past, when the pounds per megawatt hour have been higher than here, it would all have been covered at this level of production, or at this level of revenue. So over to Alex to add to that. But we are revenue generation lows at the moment. And we hope that, that is -- it turns out to be lows.

Yes. So what we have seen -- so this company has been on the market since May 2018, started investing into the GB market, in Ireland, Germany, Texas, California, building a well-diversified portfolio. We have seen several cycles in the market. And so at the high point back in '21, '22, we were making between GBP 20 and GBP 24 per megawatt for every hour we had a megawatt in operation. At GBP 10 to GBP 12, we fully cover a 7p dividend. And right now, we see across -- blended across the portfolio just under GBP 7. So -- which is still at an absolute level better than, for instance, a GB-only strategy, but does not get a covered dividend from operational cash flows. Another way to think about this is we are looking for disposals over the next 3 years. So we're looking at GBP 35 million this year, GBP 75 million. And we will get from that give back to shareholders approximately GBP 100 million, GBP 106 million. And then we also very critically here is we are maintaining debt at a sub-20% level. And then that leaves over capital for augmentation if the augmentation is at the right level of return, which Board will oversee and/or other opportunities. But as we sit here today, we take the last few months revenue level, as Angus said, about 7p of 7p dividend is covered by operational cash flows, the rest [indiscernible]

Next question is on LDES. So how is the LDES bid and 2-hour duration extensions going versus the schedule?

Yes. That's definitely one -- thank you. So we're very pleased with the augmentation. Augmentation is going well, on schedule, on budget. So very happy with that. And we are assessing augmentation across the rest of the portfolio as we speak in terms of what that would look like and pricing. So we're very pleased with that progress. LDES, we believe a very strong proposal from us with the Middleton asset. It is obviously a government process. And so we are working with government in terms of ongoing questions and answers, but we would hope to see news on that over the coming 4 to 8 weeks. You will bear with us, it is a U.K. government decision. So it is their timing. But we are working hard consistently in terms of answering questions on it.

Next question is, what is the current level of debt? And what is the debt servicing costs?

So we're at approximately 17% to GAAP, and we're running at around [indiscernible] over.

Next question is, when will you introduce operational cost savings?

There have already been some, by the way, but back to...

Yes. So one of the big areas we see of cost savings is the use of more and more technology. And so this is a young portfolio in that we brought on the majority of the megawatts over the last 2 years. The majority of the megawatts in the portfolio are all come on stream pretty recently. These are technically advanced assets operating very, very well. So our later assets are very, very high availability. The use of technology, the use of data to get better revenue availability, i.e., to keep the asset up longer to understand what's happening in the asset in terms of state of charge. These are all big initiatives that we announced last quarter -- sorry, at the end of last year and have been working hard with, for instance, Simon and the Board in terms of how to implement more and more technology solutions where we see real cost savings. Some of those cost savings we previously announced such as insurance cost savings where our use of technology, our use of safety has led to best-in-class insurance cost, which is a reasonable operational cost. Suffice to say, we are consistently looking at the portfolio to see where we can take cost out and have a large initiative around how technology can improve availability and lower cost.

The next question is more on best business model. So it reads, I am a new investor in the space. I have learned that revenue is made from electricity price volatility. I read about lots of measures like intercountry connectors, increasing rollout power storage and other measures. Could all these reduce price volatility? And to what extent do you consider these a threat to GSF's business model?

So I'll take that. So in essence, an investor in an energy storage portfolio is long volatility on the energy system. Energy storage assets are stabilization assets. They either balance the grid against voltage imbalances caused by the growth of intermittent power and the decline of baseload power or they move energy from times of low demand to times of high demand. All of these are stabilization assets -- stabilization activities. Energy storage, therefore, stabilizes the grid through multiple different contracts, but times of high volatility are better for us because then we can generate more revenue because we're doing the function of assets therefore. If negative to revenues in energy storage are either more baseload power, so more coal, gas and nuclear or more interconnectors. That said, interconnectors take a very long time to build. These are things that could take up to a decade. So in terms of an investment profile in this fund, interconnectors are not so much a huge factor for us. If, for instance, GB was to switch on loads of coal power plants, that would be a factor, that is we deem unlikely. The present market environment given tragic activities out of the Gulf is increasing volatility, and we have seen a marked uptick in revenue in keeping with that.

The next question is around the Cremzow asset, which we have announced for sale. Could you give a time frame around the first disposal given the strong interest?

So -- and Board and manager are well briefed on top of this sale. We talked to our sell-side adviser only this week on it. That sale of Cremzow is going to plan. And so we are encouraged by the amount of interest in it. The German market remains a very strong market with lots of activity taking place in it and Cremzow is a very good asset. So the market should expect to hear from us over the next 4 to 8 weeks around that asset.

The other thing to say is that when you sell an asset like this, you have to put all the numbers into a data room. And you then invite the people that might want to come and bid for it to come and study after signing NDAs and things to come and study that the numbers and the facts and figures in [indiscernible] And there are a lot of people interested. I mean it's absolutely amazing. You can imagine it's all online, but it's absolutely amazing how you can monitor who's looking at it, how they're looking at it, how often they're looking at it, et cetera, et cetera. And there are a lot of very serious players that are accessing that data room at the moment.

Next question is what benchmark has been carried out, please explain refes?

What benchmarking as far as the CA, this is an ongoing process. This is a -- as I said, the Board met is constituted as it is at the moment since, the 1st of February. So it's an ongoing process. But as we've discussed and as we've announced, currently, we think that Gore Street is best placed to manage these assets to the best advantage of shareholders. We are, of course, unbelievably [indiscernible] About fees. And you will notice that we have secured the dropping of a 2% exit fee. And indeed, the investment management fees are broadly the same now as other competitors and other similar funds. So in terms of benchmarking the services under the CMA agreement, that is an ongoing process. And -- but to date, we've been pleasantly surprised by -- not pleasantly seen to be good value as they are at the moment. But as I said, it's an ongoing process.

Ben asked a question about augmentation. Could you give an idea of the costs involved to complete these?

So overall, we're looking at -- over the next 2, 3 years, we're looking at around GBP 50 million in potential augmentation CapEx. What I would say is an augmentation is very interesting because we're not rebuilding the entire project. We're adding in cells. So that is the cost. We've seen a 40% decline in sales over the last 2 years. Of course, we have strong relationships with multiple cell manufacturers into our value chain. So we're very [indiscernible] with how that commodity price is developing and it is very much in our favor. It's moving fast. And so numbers today could be kind of radically different in the next 6 to 9 months. But as I said earlier, I think one of the successes of the company is being able to minimize CapEx and only authorize increased CapEx into projects when the incremental CapEx delivers the appropriate incremental EBITDA, and we see that at these CapEx levels.

And we should come back to these KPIs as well. And clearly, an augmentation, the IRR on the augmentation, has 2 inputs really. It's what it costs and what you set it for. It gives you the IRR. So therefore, the Board is going to be right on top of that. And if things change, then we'll perhaps use the same money to do other things. I've mentioned share buybacks and things like that as well.

There's a few questions, which I'll group together, which is around did the Board consider any other options such as larger M&A or portfolio sales?

I think we've looked at a lot of stuff. We have to be cognizant of our shareholder base. And you'd be aware that compared to other listed vehicles, this has got a much larger retail shareholder base who would be unable to access these really exciting assets in any other way. We would look at M&A on any day. This is the strategy we're doing at the moment. There has been no one that has come over the hill to conduct M&A with us. But yes, of course, the Board must keep its options open. But this, we think, is the best strategy as we currently stand.

Next question from Peter M. The war in Iran has pushed up the price of gas and electricity in the U.K. To what extent does this increase company profits, if any?

Yes. I think I've already talked about volatility across the energy system is what energy storage assets are set up to solve and by solving it, they generate more and more revenue. A large portion of our revenue is wholesale trading. So it's buying in essence, a simpler strategy is buying 2:00 a.m. and selling at 5:00 p.m. or 6:00 p.m. depending when the peak is. What I would say is we have seen good uptick in revenue. We would be hopeful of increased uptick in revenue as we go more into summer because the lows should be lower because more and more solar on the grid producing electricity in the middle of the day. Gas prices are high, and we see higher peaks, but we're hopeful that we'll also see some lower troughs as well as more solar kicks in here in GB.

[indiscernible] asks, some of the dividend will be paid from capital. What is the Board's view on what leverage should be?

So the answer is -- I mean I think the question is, are we going to use leverage to pay the dividend? And the answer is absolutely not. We will maintain the leverage of below 20%. It's currently 17%, I think, below 20% despite the fact there will be some asset sales. So we're not going to be increasing the leverage to pay the dividend. As I think we mentioned earlier, when revenues at a higher level of pounds per megawatt hour, the revenues will be -- will go further to covering the dividend. But no one can predict exactly what that is. So we felt it was incredibly important that we do hand some money back to shareholders now. And if some of that has to come from asset sales, then some of that has to come from asset sales.

Next question from Roland M. Is this a managed wind up?

No, it's not. It is absolutely not a managed wind up because we're going to be doing augmentation and we're going to be doing -- making the most of the assets. If you get into a managed wind up, we think that would be value destructive, especially if someone other than Gore Street was doing that. We think that would be value destructive. We think that this way, I would categorize it not as a managed wind up, but as a trading out of its difficulties. So a bit of money back at this stage, a bit of money back from revenues and cash sales in the future and trading out of its difficulties to make this an attractive investment proposition in the medium to long term as well as in the short term.

Yes, I would only add to that, that there is a large model behind this. And that model is on the basis that we bring assets from one level of risk, i.e., a preconstruction or unaugmented asset to a new level of risk where we believe that gap between those two will be profit for our shareholders. that active recycling is a critical part of this, and it is reflective of the fact that a buy a whole strategy in today's interest rate market is not as attractive as that active recycling. And that underpins this as going forward, we believe this vehicle deserves to be on the public market and offers a good opportunity for investors on the public market.

Next question is around buybacks. Given the current level of discount, would buybacks have been better capital allocation decision than paying dividends?

Well, the dividend is handing back money to all shareholders at asset value. A buyback would be buying shares cheaply from some shareholders. So whilst -- if we do have excess capital in due course, we will look at what the best way of spending that is over and above the 7p per share, and that may be through augmentation. But actually, at this level, share buybacks will be screening out to be utilized. But at the moment, we want to hand money back to all shareholders at asset value as opposed to a select few shareholders at a big discount.

And then a question from James around the disposal environment. He's asking what does private market activity look like? Is the liquidity in the secondary market?

Yes. So of course, we're active in the private market through other private vehicles. What I would say is we see across the universe of buyers. So financial sponsors, we see financial sponsors active so the kind of the large mega private equity houses out of their low-return vehicles, we see strategics and strategics can be utilities, for instance, of course, we saw [indiscernible] Buying assets more recently and bid on the Harmony assets. We see the trading houses, the large trading houses are asset accumulators in terms of megawatts to launch their trading strategies of. And we also see kind of long-term pension funds buying. So in the market, we've seen people like [indiscernible] And CPPIB buying. So absolutely, there is a disconnect between the private markets and the public market. And what we need to capture here in this vehicle for the benefit of our investors is that appetite in the private markets. That said, we are being held to account by the Board in terms of being able to deliver that, and we'll deliver that by being able to get those sales done of particular assets.

But the key thing is that Gore Street capital should never be gained in these sales. So they will have assets more than we require for sale at any one time so that no one holds them to ransom.

And then there's a few questions around the same, so I'll try to group them together. Are you planning to sell preconstruction assets or operational? This -- one of the questions has said that they've seen preconstruction assets being sold, but they haven't seen operational. Is there a market operational as well?

Yes. So again, it depends on the buyer, to be honest, right? What we see is large pension funds, for instance, who would not want to take kind of construction development risk, buying operational portfolios for yield. And we see other more potentially sophisticated players who have their own capabilities, for instance, such as utilities, looking to acquire preconstruction assets. We are in the market with preconstruction assets that was previously announced late last year, and we are looking across the entire portfolio. But we do believe that there is very good uplift as we bring assets through the development cycle through the construction and augmentation to sell to owners who have a lower capital rate.

Next question is from Sandeep. What are you thinking in terms of geographic strategy?

So if I may, I would...

Yes. I mean, by the way, the diversification into other geographies has helped us. It has reduced the volatility of revenues and has given us a greater spread, obviously. With the asset sales, and it will depend on which asset should be sold at what time, that will undoubtedly become a change. We don't really have a a geographic strategy. We have an asset strategy that happen to be in different geographies. Sorry, I..

I 100% agree with that. So we are agnostic to the spread of the portfolio. We have a portfolio, which has been the manufacturers are the -- same manufacturer, whether it's in Texas or Germany or Ireland. We're doing more or less the same thing, more or less the same assets in different geographies. We benefited from uncorrelated revenue between an absolute higher level of revenue, but we are looking at disposals where we see best value and best efficiency for shareholders, not from we are no longer in Texas or no longer here. It is around best value, best efficiency.

There's quite a number of questions around shareholder support. Some mentioned specific investors, but I'll avoid that for today. So could you give an indication if you have spoken to investors around the strategy and if there has been support?

We have spoken to quite a large number of investors, analysts this morning and indeed all day today. And you can see from the share price that there's a certain amount of support for this strategy. The share price is up today. I'm afraid that we are never going to please all of the people all of the time. But our job as a Board is to do what we think is right for the majority of shareholders, and we certainly think that, that is the case.

Next, a few questions from Chris B. At current revenue levels, could you give an indication of the proportion of revenues which are contracted?

So we are -- if you take contracted through our availability contracts, is the in California, which is giving us contracted revenue above merchant revenues in GB. So it's a very excellent performance from that asset, good contracted revenue in GB in the capacity market contracts and then actually floor contracts we have in place in the Republic of Ireland and Northern Ireland. We're about 40%, 50% between floors and contracted. What I would say is where we have seen pressure on our revenues has been the pure merchant part of that. So we were hoping for more revenues in California above the RA contract in terms of merchant. Gas price being there has really affected the spread. We're looking to see how the higher gas price might affect that. But it's between 40% and 50% in the combination of floors and contracted. [Technical Difficulty]

We can't hear you.

This is around execution of the strategy.

Sorry, we couldn't hear you -- can you ask it again?

So I think this question was touched upon earlier, but it's been asked again a few times, so I'll read out again. This is in terms of execution, in terms of the first asset sale, could you give an indication of how far down the line you are, when we should expect to hear, et cetera?

Perspective, there's lots of people in the data room. We have asked for a timetable. The Board has accepted of the timetable. I'm not going to say it right now, but it's not that far away. We are -- so we clearly wouldn't be happy to talk about the 7p dividend [indiscernible] quarters in the next few months given the level of revenues unless we had confidence in that asset sale.

And then one last question from Michael. This is around to achieve the 15% IRR on augmentation. What assumptions are you making around the use of leverage?

Yes. So again, on leverage, this company has been a low leverage player, I think, to benefit of shareholders for sure. We can see across the investment trust universe that lots of folks probably took on too much leverage there when interest rates are very low. We've maintained a sub-20% position, we will continue to maintain a sub 20% position. So the 15% is not overly accelerated by the use of leverage. What's important on the 15% is what we think we're going to make in revenues. And we've been through a few cycles here in terms of energy storage. And so we look very conservatively these days in terms of what revenue an asset might generate, but also what CapEx we can get the asset augmented for. They are the key components going into us being able to generate this 15%.

We've had one more question coming as well from [indiscernible] , and this is around rates in the [indiscernible] Company have complained about [indiscernible]

I'll answer that question. In terms of...

Batteries over other generators, could you speak...

But what I would say is that BM revenue, we are accessing as much BM revenue as we think we would access. So that particular revenue source in Britain is one that we are engaged in and delivering what our base case would say.

Thank you very much. That concludes the Q&A. I hand it over to Angus or Alex for closing remarks.

Thank you, Ben. So -- and thank you, everyone, for being on this call and engaging with this, actually quite exciting company, which has gone through tough times, which we think that we have gone a long way to address with this new strategy. We're going to hand back some money. We're going to give shareholders certainty as to that money. And we are going to do it in a responsible and sustainable way. We're going to hold the manager's feet to the fire to make sure that we deliver that. And we think that, that will enhance value for all shareholders in the short term, the medium term and the long term. So that is all I think I've got to say at the moment. The market has been -- has reacted favorably to this so far. And we are thrilled to announce this strategy, and we have been working hard to do so. So thanks very much indeed for taking part in this, whatever it's called webinar. Thank you.

Perfect. Guys, if I may just jump back in there. Thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback. On behalf of the management team of the Gore Street Energy Storage Fund plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.