About Us 

Company Strategy

The Company's aim is to provide investors with a sustainable annual dividend per ordinary share (6.49p for 2017) that increases in line with RPI inflation while preserving the portfolio's capital value in the long term, on a real basis, through reinvestment of excess cashflow and the prudent use of portfolio leverage

The revenue that operating wind farms receive in the UK is made up of a number of components, primarily from the sale of power produced and green benefits accredited. All are sold under long term agreements to utilities who are obliged by law to procure a certain percentage of power from green sources.

These revenue streams and the high EBITDA margin of unlevered operating assets provide the Company with a dividend cover, above the target annual dividend, that should be capable of withstanding significant downsides in wind volume[1] and power price in any individual year. 

Due to the direct RPI indexation of the UK Government's strong regulatory support mechanisms for renewable energy and the significant-influence of RPI in the growth of other cashflow components, the Company intends to increase the dividend in line with RPI inflation.

The excess cashflow (dividend cover) will be reinvested in new UK operating wind farm assets.

The Company intends to target returns to investors equivalent to an IRR net of fees and expenses of 8% to 9%. The Company will also seek to enhance these returns through active management of the wind farms. The company also wants to maintain exposure to power prices in order to benefit from any higher than expected increases.
 
 

Independence

The Company is an independent owner of wind farms assets and has no formal relationship with any seller.  It will look to further diversify its portfolio with new asset acquisitions.

Any new investment will also be approved by the independent UK-domiciled board, selected to bring together functional expertise in investment management, accounting and fund management, policy and wind acquisition and operational management.

 

No Currency Risk, Operating Track Record

The Company's focus will be in investing in sterling assets as it considers significant currency risk to be inappropriate given the Company's desire to produce a simple, stable and RPI-indexed dividend stream. For the same reason, the Company's focus will be in investing in assets with an appropriate track record as it does not wish to take significant wind energy modelling risk.

 

Utility Focus

The Company believes that there is a significant market into which it can grow over the next few years. The estimated total value of UK assets either in operation, construction or having been consented is around £60 billion.

Most of this asset base will be owned by utilities who will seek investors to take long term ownership of the assets and will recycle capital into construction programmes.  Accordingly, the Company has structured itself to be an ideal long term owner of operating assets and partner of utilities. The Company is capitalised in a similar way to utilities in order to easily invest alongside them, and its strategic desire for power price exposure is also attractive to the utility vendors who dislike the negative rating implications of long-term PPAs associated with project finance used by many other potential buyers.

 

Low Leverage 

The Company uses a medium-term revolving credit facility to acquire new assets. In due course, like other listed infrastructure funds, the Company will refinance that debt in the equity markets. Unlike those funds, it has also refinanced that debt in the longer term bank loan market. The Company does not have any long-term, project-level debt (unlike the other listed infrastructure funds and some renewable infrastructure funds). All debt is ranked pari passu and whilst in place, the Company will benefit from a modest increase in yield.

Like other listed infrastructure funds, the Company expects to repeat this cycle of acquisition using portfolio-level debt and equity (and longer term debt) refinancings at regular intervals.  In due course, it may also refinance into the debt capital markets.

By reinvesting in new assets, as described above, the Company expects to preserve NAV per share on a real basis in addition to growing NAV by additions to the portfolio.