Greencoat Uk Wind Share Discussion Threads

[marktime1231] 16/5/2022 20:51

Aside from trying to time a possible fund raise the two opposing forces driving UKW price are:

in the plus column we can expect the NAV will rise each quarter, and keep rising every time a development project from the pipeline gets commissioned;

in the minus column the macro of wholesale energy prices which might take a breather, from lower domestic demand over Summer coupled with LNG supplies flooding in to the UK so we can support our European neighbours with surplus gas and electricity.

As you say the share price is at a relatively modest premium to NAV right now, if and when they go for the next fundraise it is likely to be at a premium of a few pence.

[nerja] 16/5/2022 20:18

Marktime1231
I can’t work out when is the best time to top up, wait for the fund raise, which may mean an upper nav to the last call, or grab some now , a 151 price looks a good point for me.

[marktime1231] 16/5/2022 20:08

A bit of research has not disclosed what price TRIG agreed with GIP for a 7.8% stake in Hornsea One earlier this year, but based on TRIGs fund raising issue in March they will pay across around £250M. If TRIG are also taking on debt pro-rata that means these two deals have been struck on similar terms. More expensive than early stage investment in onshore wind developments even adjusting for lower load factors, but Hornsea has an attractive inflation-linked tariff until 2035.

The terms of the acquired debt are hard to establish too. GIPs investment was financed by a complex of investment-grade "green" project bonds, and at a time of rock bottom interest rates. Long dated presumably. Based on comments from firms which participated I think the fixed coupons range 3-4%. Let's guess UKW will have to find £25M pa to service the term debt, plus the cost of servicing £200-250M drawn under the RCF at say 3% so another £7M pa. So net income should be around £78M pa.

That is starting to look quite a healthy deal, net income of £78M pa for an outlay of just £150-200M from cash. Repay the RCF from surplus cash flow over 3 years, or issue 150 million shares at 15?p to get gearing back down and use the increased free cash flow to boost dividends. 8.??p next year, please and thank you.

[yump] 16/5/2022 18:49

I’d just like to thank you for your very useful research.

[marktime1231] 16/5/2022 16:56

Factchecking myself ... good news.

DONG planned Hornsea One with a load factor of 42%. It has been operating for over two years now, and according to a report based on OFGEM / Elexon data the actual and life-projected load factor for Hornsea is 49%.

So UKW if all goes to plan has actually bought about £110M pa income with our money. That is more like it.

[whilstev] 16/5/2022 11:12

The last announced NAV is 149.3p . Fund raisings are normally at a premium to the NAV so hopefully any raising will not be very dilutive to the 155p share price.

[marktime1231] 16/5/2022 10:54

Very interesting and something of a departure for UKW, investing heavily in offshore for the first time? And paying a high price for 150MW of operational capacity rather than cheaper but riskier investing in early stage developments. Not sure if this will add much to NAV per share. I bet GIP are rubbing their hands.

Ignore the £400M price tag, this is costing £1.1B of which £700M is debt taken on whatever terms (which are?) and £400M paid across from surplus cash and some of the available RCF. Assuming a 35% load factor (it might be higher) UKW has bought in what corresponds to about £80M pa revenue. On the plus side it is secure income on a long term price formula, and will deliver immediate cash flow once the deal is complete. But I don't think this is enhancing dividend prospects, more like underpinning the current level.

Yes UKW is looking fully geared again, c. £1600M long term debt and c. £200M drawn on the RCF, the known pipeline probably covered by cashflow and available facilities but if UKW wants to reduce gearing and expand further there will need to be a fund raising issue.

[adrian j boris] 16/5/2022 07:21

Greencoat UK Wind PLC said Monday that it has agreed to acquire a 12.5% stake in Hornsea 1, the world's largest offshore wind farm, from Global Infrastructure Partners for 400 million pounds ($490.6 million).

The renewable infrastructure fund said that the acquisition is for a total enterprise value of GBP1.1 billion after including GBP0.7 billion of limited recourse debt.

Greencoat expects to fund the acquisition from cash flow and its revolving credit facility. The deal is expected to complete in the third quarter.

"This transaction, once completed, will add another high quality operating asset to our portfolio and increase our net generating capacity to over 1.6GW," Chairman Shonaid Jemmett-Page said.

Hornsea 1 has a total generation capacity of 1.2 gigawatts and is located in the U.K. North Sea. It is 50% owned and operated by Danish offshore wind developer Oersted AS and 50% owned by U.S. investment fund GIP.



Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT



(END) Dow Jones Newswires

May 16, 2022 03:01 ET (07:01 GMT)

[nerja] 16/5/2022 07:14

Nope that’s correct, but normally what follows is a placing to pay off the revolving credit!

[yump] 16/5/2022 07:12

Well cash flow is not a placing and neither is revolving credit.

[nerja] 16/5/2022 06:32

The acquisition is expected to be funded from cash flow and, to the extent required, the Company's revolving credit facility.

Hmmm is that code for a placing soon?

[growthpotential] 11/5/2022 16:07

The one of very few bright sparks in an otherwise abysmal portfolio. Long UKW!

[growthpotential] 10/5/2022 16:16

What are the servicing costs like on wind mills, need to oil up those ball bearings?

[bothdavis] 29/4/2022 10:01

Wondered how the new solvency rules for Insurers and such: L&G, Phoenix etc, will impact this sector?

Such large sums being bandied about, they may well be looking to invest/buy such companies for steady growth and divis?

[marktime1231] 28/4/2022 22:04

Some key points from the latest fact sheet / NAV report.

Q1 generation (only) 1% ahead of budget, power prices an unspecified (massive) amount above budget. By my observation UK wholesale has been averaging 3-4 x normal, and is still x 3. From the clues given I calculate an income surplus over base plan of £65M in Q1.

The 16p jump in NAV from cash flow (3p) price outlook (7p) and inflation (6p). That says to me there is even more good NAV news to come in 2022 from cash flow and inflation, because the upgraded outlook is still a little conservative.

£250M RCF repaid, £900M debt, holding £184M in cash, gearing down to 21%, £600M facility available. An incredibly strong financial platform. Time for news of grand expansion plans.

1442MW operational, pipeline 306MW to commission 22/23 at £423M. No delays please. Adding capacity at significantly lower cost rate than historic average. (Edit - I estimate the commissioning of this pipeline would add 20p to NAV per share over the next 18 months). And at this level of cash flow those investment costs could be covered by income.

And / or they will have to increase the dividend sharply next year to reward investors and keep yield in step not just with RPI but with NAV / share price progress.

In conclusion UKW a buy all the way to 175p on predictable short-term prospects.

As regards AGM dissent over giving themselves shares, yes so a bit uneasy, well the manager is already getting their bonus from the soaring value of assets under management. The directors are getting paid already for not actually doing much to cause the results, if they want to share in the success of UKW they can bloomin' well buy shares like the rest of us. On the other hand if the remuneration non-exec sees the need for an incentive plan to keep on winning, well £10M is worth paying for the outperformance we are enjoying. So long as the incentive is for sustained income performance not just asset growth. A £10M special dividend equivalent to shareholders would be less than a ha'penny each.

[growthpotential] 28/4/2022 17:06

Need to stop paying directors all of this compensation; I don't receive unearned vast sums, why should they...

[marktime1231] 28/4/2022 16:30

Looking forward to reading the detail, the dividend increase to 4 x 1.93p was heralded in February, good NAV progress was expected but this report is of a superb jump to 149p. 10% votes against the plan to award up to £10M of shares I think to reward the directors and investment managers. I imagine heavy demand tomorrow morning because the rns was so late today. A pity we are suffering another spell of light winds.

[whilstev] 28/4/2022 13:47

Nice increase in NAV to 149.3p and Div to 1.93. Looking very solid. Not surprising the share price is reacting positively.

[markldn] 19/4/2022 13:25

@GrowthPotential - no technology is perfect but the market is working on a solution. Would you rather have coal dust in your lungs, polluting tailing ponds and all the other environmental damage that comes from coal?

[marktime1231] 11/4/2022 10:56

Imagine being a submarine pilot in the North Sea what with all this offshore development, add floating platform tethers to concrete foundations, rigs and trawler nets.

[apollocreed1] 07/4/2022 11:35

Very interesting viewpoint on Renewables:

hxxps://youtu.be/vM_c-XvTre8

hxxps://contrarianpod.com/content/podcasts/season4/fallacy-of-renewable-energy-leigh-goehring-goehring-rozencwajg-associates/

[marktime1231] 07/4/2022 10:41

For wide-ranging read a scattergun of hollow promises.

We already have the offshore wind sector flat out delivering +30GW by 2030, so where is an extra extra +20GW coming from? 5GW from very expensive floating wind farms, and ... and what about grid connections, balancing services, storage, ...

As things stand we cannot nor conceivably could we deliver 8 new nuclear reactors by 2030. As the nice man on the telly said this morning, nuclear developments take 10 years to plan and 10 years to build. And cost £10B each per 1.6GW reactor. The only nuclear developer-operator we currently do business with EDF, a company controlled by a foreign country by the way, could not begin to cope with that sort of financial investment. And the UK govt seed funding each one by a few £M makes no odds. We are now promising what the Cameron govt promised ten years ago. Aaaaaaaaaaagh!

The cutting of onshore wind lead times by a year, yes good news for UKW perhaps, but so what does that mean in actual terms as far as we stand today?

How are extra developments in 10 years time going to solve our energy crisis over the next 2 years? Where is the storage / buffer solution?

What will solve our current energy crisis is the return of the northern hemisphere Summer, and increased supplies of natural gas to Europe. Nothing else.

[la forge] 07/4/2022 07:38

Philip Whiterow

08:06 Thu 07 Apr 2022


Nuclear, offshore wind and revitalised North Sea the bedrocks of PM's new energy plan

Up to 50Gw of new offshore turbine capacity is planned by 2030, which would be more than enough to power every home in the UK

North Sea


A new licensing round for the North Sea was also announced

Boris Johnson is backing a revival of the UK’s nuclear industry, offshore wind and the rejuvenation of North Sea oil and gas production to secure Britain’s energy future.

In a wide-ranging document, the PM said the new National Energy Strategy would reduce "dependence on power sources exposed to volatile international prices we cannot control".

A new nuclear power body, Great British Nuclear, will be set up immediately to look into new projects backed by state money, he said, while a £120mln Future Nuclear Enabling Fund will launch later this month.

Up to eight new reactors could be built through the plan, with Wylfa site in Anglesey highlighted, or one a year up to 2030.

A new licensing round for the North Sea was also announced, which will launch in Autumn and be overseen by a new task force that will provide 'bespoke support' for new exploration and projects.

Offshore wind and solar, however, are seemingly two of the most ambitious steps of the strategy.

Up to 50Gw new offshore turbine capacity is planned by 2030, which would be more than enough to power every home in the UK said the statement.

Some 5Gw of this will come from floating offshore wind in deeper seas.

The PM also looks to have won the row in the Cabinet over onshore wind farms, with approval times for new developments cut to one year as part of an overhaul of the whole planning process.

Communities are to be offered lower energy bills as an incentive to host new wind farms.

Solar, too, is set for a major capacity increase with a target to increase the UK’s current 14GW up to 5 times by 2035 including its use on household and industrial and commercial rooftops.

As a nod to energy efficiency, domestic use of heat pumps will also be encouraged through a £30mln competition to develop a new efficient unit that uses less gas.

Green hydrogen production targets were also be doubled from the current 10Gw by 2030, with at least half coming from green hydrogen and utilising excess offshore wind power to bring down costs

Johnson said they were: "Bold plans to scale up and accelerate affordable, clean and secure energy made in Britain– from new nuclear to offshore wind – in the decade ahead.”

“This will be central to weaning Britain off expensive fossil fuels, which are subject to volatile gas prices set by international markets we are unable to control, and boosting our diverse sources of homegrown energy for greater energy security in the long-term.”

[growthpotential] 31/3/2022 15:14

Okay great, thanks!

[growthpotential] 31/3/2022 15:12

Going to landfill seems at odds with ESG no? I hold UKW, but I do have a few issues with the landfill issue...