Greencoat Uk Wind Share Discussion Threads

[marktime1231] 25/4/2024 12:15

EU and UK both reporting record renewables generation in Q1 2024. Including the observation from one analyst looking at UK stats

"Wind dominated the mix, reaching 25.2 TWh, a record high for any Q1 period"

Can't find any reference to a recent Hornsea One problem either. How strange.

[marktime1231] 24/4/2024 22:40

Thanks, I will link through to look at that fact sheet in slower time.

Very surprised they say wind has been below budget again, hard to believe in fact, I have been monitoring wind conditions closely all year and they have been above average. Wasn't previously aware there had been a problem with Hornsea.

Despite all of which, as you say, income and cash flow in comfortable surplus.

Why I wonder have they struggled to close the discount even after boosting the dividend and running a buyback. Was there discussion of exposure to the allegation that some generators have overcharged for curtailment perhaps. Curious to know what the board will do next, and how bullish they were on performance and outlook.

[nickrl] 24/4/2024 21:58

@marktime there was a factsheet released couple of key points

-Q1 generation 15% below budget reflecting lower availability (including a grid
outage at Hornsea 1) and low wind resource
-Net cash generation of £127m
-Payment of £79m dividend in respect of Q4 2023 (3.43p per share, bringing 2023
dividend to 10p)
-13.8m of share buybacks during the quarter, 20.4m shares repurchased in total at a
cost of £28m
-Additional 1.24p per share for 2023 dividend, and buybacks, have returned £57m to
shareholders since October 2023

Surprised wind generation down so much as the battery boys have been saying their improved revenue has come from higher wind so maybe most of it was from Hornsea. Anyhow cash generation still good and certainly the daily system price has been well above £50/MWh ytd.

[marktime1231] 24/4/2024 19:08

Well we got the 2.5p dividend but a 4p or so decline in NAV. Nothing about current trading or things like how much in cash we are, unless it was discussed at the AGM. I wonder what the NAV bridge looks like, is it in the linked doc? Not quite the boost to share price I was hoping for, not yet anyway.

Expressing surprise that 11% voted for winding up. It will not surprise me in fact I will be laughing if that is because some folks blindly ticked Yes to all resolutions not realising the need to say no to 17. One to remember when reviewing the performance of the secretariat and investor relations who bungled the voting format. I can't imagine significant investors genuinely seeking to wind up UKW given its performance and outlook.

[rongetsrich] 23/4/2024 19:20

Nice jump today.

[marktime1231] 23/4/2024 15:44

Hoping tomorrow's AGM statement of NAV, dividend (2.5p?) and perhaps something about how well UKW have traded recently is positive enough to sustain this welcome return to the 140's.

[tuftymatt] 23/4/2024 11:16

A nice little bounce this morning I see.

Let's hope for much more of the same as this is unloved, along with the sector right now.

Good luck all 👍🏻

[gbh2] 23/4/2024 08:44

It's to be hoped there's something in the results to put some wind in this dead share price

[nickrl] 15/4/2024 13:38

@rongetsrich im no so sure they wouldn't as they benefit hugely currently (which im not compalining about) from wholesale cost being linked to gas in most settlement periods thus the mantra of renewables are cheap isn't being realised. There still looking into changing the way the leccy market works under the REMA (Review of Electricity Market Arrangements ) and one option is zonal pricing which could be quite detrimental to UKW with high concentration of wind in Scotland. It won't impact the existing subsidy arrangements so UKW reasonable well insulated if the average price falls across the portfolio but its a cloud hanging over it. Labour will want to push into the area of lowering costs but also their desire to for faster green energy will act as a restraint so all round probably will be neutral in the long run but markets care fickle when it comes to Labour and what they might do.

[rongetsrich] 15/4/2024 13:09

A stock that Labour won't touch.

[marktime1231] 14/4/2024 12:52

So instead of or as well as buying back shares which cost you over 7% in dividends they can pay down debt (from surplus cash or by issuing new shares?) much of which is long term non-recourse and very cheap eg 3%, even the credit facility only costs around 6% I think. Whereas investing in additional assets ought to return even better if prices hold up. Let's not start worrying about some of the oldest subsidies on a tiny fraction of assets coming to an end in three years time.

As the board said they are continuously looking at all the options and reviewing which is the best use of cash or capital, a fine balance depending on power prices, interest rate outlook etc etc. But in the short term they have been impelled to run a small buyback to support the share price when it fell to 130p and try and close the discount gap, sort of obliged to respond according to the terms of the trust when it widens over 10% for a sustained period. All good trusts seek to manage the discount or premium by cancelling or issuing shares in this way. Every share they buy is 20p or more off its resale value and saves 10p a year in dividends ... win win.

As things stand with the share price subdued they may feel obliged to continue a small buyback. Deleveraging can wait, and would be best achieved by asset disposal rather than deploying cash. But I would rather they continue boldly to acquire and grow while accretive assets are still available.

[nickrl] 14/4/2024 08:31

@marktime eroding some of the debt pile would be a sensible course as well. Reality is ZIRP was an aberration so rates are going to be higher over the medium term. You also have to consider the clock is ticking down on the subsidies on some assets from as early as 2027 so cashflow starts to be crimped the further into the future we go.

[marktime1231] 13/4/2024 22:28

How else do they close the discount? I think they will keep going with buybacks if they survive the winding up resolution at the AGM, as a way of deploying a little surplus cash flow, ramping the dividend might risk making it unsustainable. I think we are due a 2.5p quarterly though.

A good trading update would help too, showing the benefits of recent acquisitions and I think good wind conditions even though wholesale prices are subdued.

[nickrl] 13/4/2024 15:05

UKW very rangebound despite them being in the market everyday to hoover up 300k shares. Barely one quarter into the buyback but you have to wonder what will happen to share price once it comes to an end.

[cerrito] 12/4/2024 21:07

Tempus in The Times had a buy today.

[marktime1231] 28/3/2024 13:47

Ian Cowie backing his own personal investment in UKW, using the excuse that Labour's pledge in Wales (until they backtrack?) to invest in tethered offshore wind is supportive of the sector followed by a rosy review of past performance.

There should be better argument in favour of UKW ... its performance and outlook, the sustainability of its progressive excellent yield, a wide and hopefully temporary discount, large scale, strong backing, mostly long term cheap debt, the wind picking up, the prospective decline of other forms of generation, in built price indexing, a pending investor influx when interest rates fall and other sectors decline, etc etc etc

Still if this draws attention going in to the new ISA season all well and good.

[catch007] 28/3/2024 10:07

Ian Cowie article on Interactive Investor today commenting on UKW.

[fwatson] 27/3/2024 16:55

A good day today... any reason?

[marktime1231] 26/3/2024 15:07

I wonder if some of the dampener here is due to OFGEM saying it is investigating the level of compensation claimed by wind farms when generation is curtailed. Since OFGEM is judge and jury it probably means they think wind farms have been overcharging, perhaps some of the super surplus cash flow which UKW enjoyed during the price spike needs to be handed back.

From memory OFGEM have demanded money back from the likes of SSE and NG of the order of £5-10M. You would think the scale of any such issue for UKW would be lower and in any case the consequence can be absorbed, but the threat and the uncertainty still does damage.

[uncle_sam] 25/3/2024 20:40

Article in The Times today, p31, (and other newspapers, I'm sure) is worth a read: "Energy prices may riseas Treasury stifles cheaper offshore wind".

[marktime1231] 21/3/2024 12:48

A positive research note from Kepler (paid for?). I didn't spot a target price, but there is an implied share price uprating of 10-20% due from closing the discount and the ongoing opportunity to strengthen NAV using free cash flow which continues to comfortably cover the dividend eg by acquisition, debt reduction and buybacks.

And a good observation that the progressive dividend will continue to be covered even in a weaker power price environment and even if some parcels of debt have to be refinanced at higher rates.

I am happily reassured UKW remains a standout pick in the renewables sector, but frustrated that the share price does not reflect performance or outlook. Sufficiently overinvested here not to want to add further so its a case of waiting for common sense to prevail and happily banking the excellent dividend income.

[gbh2] 20/3/2024 12:20

Reducing debt doesn't affect the EPS and bonuses are often linked to the EPS.

[nickrl] 20/3/2024 11:26

HEIT are buying up 300k/day but it aint moving the dial would ahve rather they used the money on reducing debt