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Greencoat UK Wind on the rise as institutions clamour for renewables

Last updated: 12:53 29 Feb 2024 GMT, First published: 09:24 15 Jan 2021 GMT

Snapshot

  • Greencoat UK Wind takes dividend payouts above one billion
  • Greencoat UK Wind seals position as leading pure-play British wind power provider
  • Greencoat UK Wind discount can narrow, says Stifel
  • Greencoat UK Wind focuses on capital allocation following strong 2023 performance
wind farms

About the company

Greencoat UK Wind PLC invests in operating UK wind farms to provide shareholders with a sustainable and transparent income stream through an annual dividend.

Given the nature of the company's income streams, the board has increased and intends to continue to increase the dividend in line with retail price index (RPI) inflation.

Greencoat also aims to preserve capital on a real basis by reinvesting excess cashflow in additional operating UK wind farms and through prudent use of portfolio leverage.

How it is doing

29 Feb 2024

Greencoat UK Wind PLC (LSE:UKW) increased its dividend by 14% more than its target in 2023 and said it is confident it can pay the same amount again in the current year.

The trust, which is one of the UK’s largest wind farm operators, announced a payment of 10p per share for 2023 against a target of 8.76p.

Compared to last year, this year’s target of 10p target is also well above the current rate of retail price inflation, it added.

"Our investment objective has remained unchanged over the last 11 years since listing: to provide shareholders with an annual dividend that increases in line with RPI inflation while preserving the capital value of the investment portfolio in real terms," said the statement.

11 Dec 2023

Greencoat UK Wind PLC (LSE:UKW) has completed the acquisition of a 49.9% interest in the Kype Muir Extension wind farm from Banks Renewables.

Greencoat initially committed to acquiring the interest in December 2020 and the investment was made during the farm’s construction through a loan now repaid.

08 Dec 2023

Greencoat UK Wind's new management is key to maintaining confidence in its strategy going forward, says broking house Stifel.

The wind farm investor recently announced Laurence Fumagalli is to step down with Matt Ridley appointed as co-head of the investment management team.

Insight: Greencoat UK Wind seals position as leading pure-play British wind power...

16 May 2022

Greencoat UK Wind PLC (LSE:UKW) further sealed its position as the leading pure-play British wind power provider with the purchase of a stake in world's largest offshore wind farm today.

Already, the FTSE 250-listed investment trust was generating 5-6% of the UK wind market in terms of capacity value, generating around 1% of all UK electricity.  

What the brokers say

30 Jan 2024

Greencoat UK Wind PLC (LSE:UKW)’s fourth-quarter net asset value dropped due to power prices and lower inflation, partly offset by a maiden valuation of REGOs (Regional Energy Guarantees of Origin), notes broker Stifel.

Net asset value on 31 December 2023 was 164.1p (vs 165.8p on 30 September). REGOs were included for the first time owing to increased and sustained market prices over the last 12 months, which added 4.8p; power prices were minus 2.5p and inflation minus 2.4p.

Wind generation in 2023 was 13% below budget owing to low wind.

What management says

29 Feb 2024

Greencoat UK Wind PLC (LSE:UKW)'s Stephen Lilley discusses the company's full-year results for 2023, highlighting significant financial achievements and strategic initiatives. The company reported over £406 million of net cash generation and a coverage ratio of 2.1 times.

Due to its strong cash flow, the trust, one of the UK’s largest wind farm operators, has remained resilient despite rising interest rates and a higher discount rate.

Lilley said Greencoast has focused on capital allocation, particularly as shares have been trading at a discount to net asset value (NAV), leading to an increase in the dividend for 2023 from 8.76 pence to 10 pence per share, resulting in an additional £29 million paid to shareholders. The dividend for 2024 has been increased by 14.2%, achieving a 6% return on NAV, surpassing the Retail Price Index (RPI) increase of 5.2%.

Greencoat UK Wind focuses on capital allocation following strong 2023...

Greencoat UK Wind PLC (LSE:UKW)'s Stephen Lilley discusses the company's full-year results for 2023, highlighting significant financial achievements and strategic initiatives. The company reported over £406 million of net cash generation and a coverage ratio of 2.1 times. Due to its strong...

2 weeks, 5 days ago