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viewGreencoat UK Wind PLC

Greencoat UK Wind on the rise as institutions clamour for renewables

Snapshot

  • Generating capacity has risen to 980Mw net
  • Portfolio value of £2.42bn across 35 wind farms
  • Shares stand at a big premium to NAV
wind farms

Quick facts: Greencoat UK Wind PLC

Price: 135 GBX

LSE:UKW
Market: LSE
Market Cap: £2.05 billion
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What it does 

Greencoat UK Wind PLC (LON:UKW) invests in operating UK wind farms.

It is listed on the FTSE 250 index and is a UK Investment Trust.

 

ROC-solid support

Renewable industry fundamentals remain very supportive.

Under the grandfathering arrangements for renewable ROCs, getting on for half of the firm’s revenue is “fixed” until a 2037 cut off, with the other half linked to wholesale electricity prices.

Although ROCs dominate the portfolio, Greencoat began to prepare for life without subsidies last July when it snapped up a 75% stake in Tom Nan Clach for £126mln.

What was different with this deal was that rather than ROCs, a 15-year contract for difference (CFD) fixes the power price received.

 

How it is doing

Greencoat announced a new share issuance programme in September to issue up to a maximum of 750 million new ordinary shares over the next 12 months.

The news came shortly after the firm agreed to acquire SSE's 25.1% interest in the Walney I and II offshore projects for £350mln.

Walney is located nine miles off the Cumbrian coast and has a capacity of 367Mw. It was constructed in two phases in 2011 and 2012 by Danish firm Orsted, which remains the operator with a 50.1% stake.

In the half-year to June, electricity generation was 2% above budget at 1,494GWh though power prices were below budget, primarily reflecting low gas prices and low demand due to COVID-19.

Net cash generated by the group and wind farm SPVs (special purpose vehicles) was £71mln, covering dividends during the period by 1.3 times.

 

What the boss says: Shonaid Jemmett-Page, chairman

"Following our investment in the Walney offshore wind farm, and anticipating our commitment to make wind farm investments over the next 18 months, the Share Issuance Programme will enable the Company to pay down debt and continue to capitalise on our strong pipeline of acquisition opportunities in the UK wind farm market."

“Given the size and scale the company has attained over recent years, UKW is well placed to make value- accretive acquisitions and further enhance returns for our shareholders."

 

Video

 

Inflexion points 

  • Debt to be repaid via share issuance programme
  • Tom nan Clach comes onstream 
  • More acquisitions to grow the portfolio further

 

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