Generating capacity within the portfolio has risen to 980Mw net
Portfolio value is £2.3bn spread across 35 operating wind farms
Shares stand at big premium to NAV
Dividend yield of 5%
What it does
Since it listed in 2013, UK Wind has paid out inflation-linked dividends worth 38.2p (£261mln) while net asset value has grown to 123.2p.
Over that period, generating capacity within the portfolio has risen to 980Mw from 127Mw with a value of £2.3bn spread across 35 operating wind farms.
The company recently completed three major new deals: Tom nan Clach, Stronelairg and Dunmaglass.
Greencoat has already forecast a 6.94p payout for 2019 underpinned by the majority of its windfarm investments having ROC (Renewable obligation certificates) certification.
At 1389p, the yield is 5%.
Renewable industry fundamentals, meanwhile, remain very supportive.
Under the grandfathering arrangements for renewable ROCs, getting on for half of the firm’s revenue is “fixed” until a 2037 cut off, with the other half linked to wholesale electricity prices.
Although ROCs dominate the portfolio, Greencoat latest is already preparing for life without subsidies.
The 75% stake in Tom Nan Clach cost £126mln with the development set to be handed over to Greencoat in July.
What was different with this deal was that rather than ROCs, a 15-year contract for difference (CFD) fixes the power price received.
Stephen Lilley, Greencoat’s investment manager, says it effectively mirrors the ROC arrangement where half of price is fixed by the ROC while the other half is variable.
“We are starting to see attractive CFD and subsidy-free investment opportunities, of which Tom nan Clach is our first.
These opportunities will complement our core ROC investments and simple, low risk fund structure,” said Lilley at the time.
In December, Greencoat also acquired the unbuilt Douglas West wind farm near Lanark in Scotland with a planned capacity of 45Mw.
Douglas West will be subsidy-free and cost £45mln to construct.
“Reflecting the overall shape of the market, we expect the majority of future investments will continue to be made from the £50bn pool of UK wind farms accredited under the ROC regime," said Lilley.
What the boss says: Tim Ingram, chairman
The solid performance and cash generative nature of our portfolio has enabled us once more to increase our dividend in line with RPI whilst maintaining strong dividend cover.
"During the period we made three high quality investments, including a £452 million investment in Stronelairg and Dunmaglass wind farms and £145 million in Tom nan Clach, which have grown our generating capacity to 979MW.
“We were also pleased to raise over £500 million from existing and new shareholders, and we are grateful for their continued support.
Completion of latest placing at 133p
Tom nan Clach comes onstream
More acqusitions to grow the portfolio further