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Greencoat UK Wind PLC: Full Year Results

23 February, 2017
GREENCOAT UK WIND PLC

 

Greencoat UK Wind Half Yearly Results 2016

 

Greencoat UK Wind PLC (UKW)

23 February 2017

UKW - Final results announcement

 

Greencoat UK Wind PLC is the leading listed infrastructure fund, invested in operating UK wind farms. The Company's aim is to provide investors with an annual dividend that increases in line with RPI inflation while preserving the capital value of its investment portfolio in the long term on a real basis through reinvestment of excess cash flow and the prudent use of portfolio leverage.

 

2016 Highlights

Performance

·       The Group's portfolio of 19 wind farm investments generated 978.1GWh of electricity, 6 per cent. below budget, reflecting average wind speed across the UK being 6% below the long term mean.

·       Net cash generation (Group and wind farm SPVs) was £49.0 million.

 

Acquisitions and Equity Raising 

·       The Group made two acquisitions during the year for a total of £223.5m increasing the portfolio to 19 wind farm investments, net generating capacity to 420MW and GAV to £900.1 million as at 31 December 2016:

o    28.2% interest in Clyde in March; and

o    acquisition of Screggagh in June.

·       In April, the Group launched a 300 million new share issuance programme with the first and second tranches raising £100 million in May 2016 and £147 million in November 2016 respectively.

 

Dividends and Returns

·       NAV growth during 2016 was 4.1 pence per share (after adjusting for dividends); since listing NAV per share has grown by 9.2%.

·       The Company declared total dividends of 6.34 pence per share with respect to 2016.

·       In line with its policy of increasing the dividend in line with December RPI, the Company is targeting a dividend of 6.49 pence per share for 2017.

 

 

Key Metrics

As at 31 December 2016

Market capitalisation

£880.4 million

Share price

119.5 pence

Dividends with respect to the year

£38.8 million

Dividends with respect to the year per share

6.34 pence

GAV

£900.1 million

NAV

£800.1 million

NAV per share

108.6 pence

NAV growth per share (adjusting for dividends)

4.1 pence

Total return (NAV)

10.1 per cent.

TSR

17.4 per cent.

    

Defining Characteristics

Greencoat UK Wind PLC was designed for investors from first principles to be simple, transparent and low risk.

·       The Group is invested solely in operating UK wind farms.

 

·       Wind is the most mature and largest scale renewable technology.

 

·       The UK has a long established regulatory regime, high wind resource and £60 billion of wind farms in operation in the short to medium term.

 

·       The Group is wholly independent and thus avoids conflicts of interests in its investment decisions.

 

·       The UK-based, independent Board is actively involved in key investment decisions and in monitoring the efficient operation of the assets, and works in conjunction with the most experienced investment management team in the sector.

 

·       The Group only invests in wind farms that have an appropriate operational track record (or price adjustment mechanism as disclosed in note 14 to the financial statements).

 

·       Low leverage (including no asset level leverage) is important to ensure a high level of cash flow stability and higher tolerance to downside sensitivities.

 

The Group invests in sterling assets and thus does not incur material currency risk.

 

Commenting on today's results, Tim Ingram, Chairman of Greencoat UK Wind, said:

"We are pleased to report the continued good performance of our portfolio and demonstrate the robustness of the Company's business model in a dynamic environment. We have delivered a total shareholder return of 17.4% and NAV growth (adjusted for dividends) of 4.1 pence in 2016 and again increased our target dividend by RPI to 6.49p per share for 2017.

During the year, we analysed many further investment opportunities and made two significant acquisitions increasing our net generating capacity to 420MW. We were delighted with the support shown to us during the year in raising £247 million."