Greencoat ongoing charges drop as it breaks £1bn market cap

Greencoat ongoing charges drop as it breaks £1bn market cap – Greencoat UK Wind PLC has reported results for the year ended 31 December 2017. Its total shareholder return for the year was 8.4%. The NAV per share increased from 107.0p on 31 December 2016 to 109.6p on 31 December 2017, an increase of 2.4%. Declared dividends for the year total 6.49p. The board says “we can confidently target a dividend of 6.76 pence per share with respect to 2018” as they increase dividends in line with December’s RPI.

Power prices and portfolio generation were both in line with budget and so cash generation was in line with budget. The average N2EX Day Ahead auction price for power was £45.32/MWh (2016: £40.44/MWh). Portfolio power generation was 1,457GWh. Wind speed was also in line with the long term mean. They say that the group’s current average generation provides enough electricity to power 620,000 homes.

Net cash generated was £80.1m and the dividends paid in the year totalled £52.3 million, thus UKW’s cash dividend cover was 1.5x.

Greencoat UK Wind raise more money in the year. Net issue proceeds of £335m were used to repay short term borrowings. The issue was NAV accretive (after issue costs) by 1.7 pence per share. This capital raising caused the trust’s market capitalisation comfortably to exceed £1bn (£1,263m as at 31 December 2017). With increasing size, its ongoing charges ratio again reduced from 1.33% in 2016 to 1.24% in 2017. They says that the expected ratio for 2018 is 1.15%, helped by the second step down in management fees (to 0.8%) on NAV above £1bn.

The fundraise helped cover the costs of the acquisitions that they made in 2017. They say it was a busy year on the acquisition front. They completed the acquisition of interests in 10 new wind farms (9 onshore and 1 offshore) during the year, through 5 transactions, and also increased their investment in the Clyde wind farm.

UKW : Greencoat ongoing charges drop as it breaks £1bn market cap

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