MIDAS SHARE TIPS UPDATE: Gresham House charges ahead

The UK generates about 40 per cent of its electricity from renewable sources, such as wind and solar. Boris Johnson would like to take that to 100 per cent by 2035 and, with oil and gas prices going through the roof, an increasing number of households are likely to agree with him. 

Gresham House is one of the companies helping to make Britain greener. A fast-growing investment firm, it manages £6.5billion of investors’ cash, channelling much of it into areas such as battery storage, forestry, energy from waste and sustainable, vertical farming. 

Midas recommended Gresham House in July 2020, when the shares were £6.28. Today, they are 41 per cent higher at £8.85, chief executive Tony Dalwood is more ambitious than ever and the shares should continue to motor. 

Powering ahead: Midas recommended Gresham House in July 2020, when the shares were £6.28

Wind and solar energy may be good for the planet, but they are unpredictable. Being able to store surplus power in giant batteries is a critical part of the renewable mix and Gresham House owns and manages more battery storage farms than any other UK firm. 

Today, the company has more than 15 sites across the country, capable of storing 425MW of electricity. But that will soar to 1.5GW over the next 18 months, enough to power 550 homes for an entire year. Gresham House also owns more woodland than any other UK firm, with 350,000 acres of forest – about the size of London.

The group recently bought another 62,000 acres in Australia. There is some forestry in Ireland too and more overseas deals are on the cards. 

Trees absorb carbon dioxide, offsetting greenhouse gas emissions, and, handled correctly, timber is considered the most sustainable material in the building trade. 

Vertical farming is another growth area for the group. A salad-producing farm is up and running in Staffordshire and a second site will be ready to go later this year. Based in Norfolk, this is expected to be the biggest vertical farm in the world, capable of producing more than 2,000 tons of leafy greens a year. 

Other Gresham interests include waste from energy plants, digital infrastructure to improve access to good quality broadband and affordable shared housing, designed to mitigate the UK’s housing crisis.

The group also manages several high-ranking private and listed equity funds and a number of venture capital trusts. 

The mix has proved popular. In 2020, the company had about £3billion of assets under management and Dalwood had said he wanted to double that by 2025. Having delivered on his goal in less than two years, Dalwood has now increased the target to £8billion and should comfortably achieve it. 

Results for 2021, out in early March, are expected to show a 53 per cent increase in profits to £18.5million, rising to £24million in the current year. 

A dividend of 7p has been pencilled in for 2021, climbing to 8p this year. Dalwood is also keen to set out a dividend policy so shareholders know what to expect in future.

Midas verdict: With a focus on sustainable, green assets, Gresham House is in the right place at the right time and many of the group’s assets should also hold their own in a more inflationary environment. At £8.85, the shares have already delivered rich rewards, but they should continue to gain ground. A strong hold. 

Traded on: AIM Ticker: GHE Contact: greshamhouse.com or 020 3837 6270