Greencoat puts in decent performance despite lack of wind

Greencoat UK Wind said it performed in line with its expectations in its results for 2018 on Thursday, with cash generation on budget.

The FTSE 250 company said its investments generated 2,003GWh of electricity, which was 6% below budget, due to “low wind resource”.

It reported on-budget cash generation, from group and wind farm special purpose vehicles, of £117.3m.

During the year ended 31 December, Greencoat acquired a further three wind farms and an additional interest in Clyde, which increased the portfolio to 32 wind farm investments.

It also saw its net generating capacity rise to 836MW, and its gross asset value to £1.87bn.

The firm also agreed to acquire 75% of Tom nan Clach and 100% of Douglas West, which were its first contract-for-difference and subsidy-free investments, respectively.

Greencoat also issued further shares raising £118.8m in May.

Looking at the finances, Greencoat had declared total dividends of 6.76p per share for the year, adding that it was targeting a dividend of 6.94p per share for 2019, which was an increase in line with the December retail price index.

Its net asset value grew by 11.8p per share, adjusting for dividends, and the firm had £480m of outstanding borrowings as at 31 December, equivalent to 26% of its gross asset value.

Since period end, on 1 February Greencoat announced a £452m investment in the Stronelairg and Dunmaglass wind farms with SSE.

Completion of that was expected to occur at the end of March, increasing the firm’s total number of investments to 34 operating UK wind farms with a net generating capacity of 950MW.

On 27 February, it also issued an additional 103 million new shares at a price of 127p each, raising gross proceeds of £131m in an oversubscribed share placing.

“Today's results represent another year of consistent delivery with performance in line with expectations, achieving strong NAV growth of 11.8p,” said Greencoat UK Wind chairman Tim Ingram.

“With our continuing strong cash flow and robust dividend cover we confidently target a dividend of 6.94 pence per share with respect to 2019, again increased in line with RPI.”

Ingram said 2018 was “another active investment year”, as Greencoat committed to invest more than £500m across six wind farms.

“We also increased the number of vendors we have acquired from to 14 - including commitments - showing the breadth of our relationships.

“Our portfolio is now reducing carbon dioxide emissions by approximately one million tonnes per annum through displacing thermal generation.

“Our pipeline of acquisition opportunities remains very healthy and we continue to expect the majority of future investments to be made from the £50bn pool of UK Wind farms accredited under the ROC regime.”