Greencoat Uk Wind Share Discussion Threads

[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

[marktime1231] 19/3/2024 12:30

What a bggrs muddle to the online vote, the proposed fix just making things even more clumsy ...

IF IN DOUBT DO NOTHING

"If you would like to split your votes, to be able to vote for, and/or against, and/or to abstain from voting across different resolutions, you will need to send a secure message, before the deadline, as below:
- in the ‘Subject’; field, please state: CORPORATE ACTION - Greencoat UK Wind PLC - 9839443
- specify the details of the meeting and how you would like to vote for each resolution."

[gbh2] 14/3/2024 11:04

SP moves are uninspiring.

[yump] 08/3/2024 10:11

Perhaps I’m missing something but share buybacks seem to have no effect on the discount. Anywhere, anytime, any business.

If the discount is caused by external circumstances, then how can an internal process make any difference ?

Similarly as our inflation rise was caused by external circumstances, not an overheating economy, how does raising UK interest rates help ? Especially as it pours fuel on the pay rise fire.

[marktime1231] 07/3/2024 23:25

Oh dear how clumsy. The online AGM voting form has arrived but it only offers the chance to vote for or against all items en bloc. Unfortunately they are worded "for" except the crucial continuation resolution which, unless you vote "against", could mean inadvertently causing UKW to wind up!

So if in doubt do nothing not even abstain.

[mwj1959] 01/3/2024 16:18

Having read through the presentation and the report all seems ok to me, particularly the sustainability of the dividend. The level of gearing appears reasonable in the current environment, albeit they shouldn't be complacent about it and make efforts to reduce where feasible / appropriate. The size of the discount is frustrating and there will be a continuation vote if the share price trades at a an average discount of 10% or more over a 12m period. So there is work to do there, even if I suspect the risk of a no vote is low. At the end of the day UKW has been a flagship trust in the Renewables space, delivering both NAV and dividend growth.

[marktime1231] 01/3/2024 13:41

The hold co and spv structure is pretty complex, my attempt to read through the detail of the report yesterday evening didn't get very far, will try again.

I did note that the buyback is running at a pretty slow rate, only £20M of a possible £100M spent after 4 months. There is a chance that, if the share price recovers strongly, they might reallocate the money, the report does stress they are continuously looking closely at how best to allocate capital. The pressure to run the buyback remains high until the discount closes to 10% which is now around 148p.

They do however seem to have a good handle on all the group debt, a lot of which is non-recourse and on long term low rates. It is the flexible finance facility which needs paying down. Given there is already a Capital Markets event scheduled for early May, could they be thinking of a further raise to take advantage of the good offers they say keep coming their way and perhaps reduce the gearing? All depends on the share price and discount to NAV no doubt, not much point reissuing shares at 138p if you have just bought them back at 142p. Meanwhile even a token £50M or so allocation of free cash to group debt reduction would sit well with those bothered by that. Personally in this particular case of UKW I am not so worried and bold accretive expansion is fine with me.

Also, while the headline debt is in your face and reduction would be welcome, the spv debt is amortised eg older onshore projects are being paid down slowly over their lifetime I think at about £50M per year across the portfolio. The opportunities, apart from the obvious market price for energy, include life extension and better wind conditions having had three poor years in a row. We don't get a trading update to tell us how things are going year-to-date unfortunately, but we are due some upside on generation.

[nickrl] 29/2/2024 15:12

@marktime reducing debt is what they should have done as interest charges are the only certainty here not that i don't expect the wind to stop blowing just there is element of uncertainty that could crimp revenue.

[marktime1231] 29/2/2024 13:42

A sense that there is underlying progress in UKW and more to come, but not linear, the occasional sharp step back. The results today deserve a better response, should be back in the 150s at least. Surplus cash from peaky prices has been very wisely invested and they have boosted returns, including an understandable snap buyback. The fundamentals remain really positive, including the HUGE divdend which landed this morning.

Will be reading the detail of the report in slower time, a quick scan didn't spot anything especially new or of interest. I am assuming cashflow continues to produce a healthy surplus, until higher interest costs kick in, so long as the wind blows. We can increase generation or reduce debt or cancel shares depending on the relative merits eg what the share price does, while sustaining excellent dividends.

[nickrl] 29/2/2024 12:06

@igoe only one coal station left at Ratcliffe and thats shutting in September.then we wilm only have the tree burning Drax and gas fired stations left that are dispatchable. Labour are in cloud cookoo land that grid will be carbon free by 2030. Will be days when its windy and sunny that it will carbon free but plenty of days when it won't be.
Anyhow back here these ticking over nicely and when they tell you ROC
payments increase by 8% and CfDs by 4% we can live with power prices dropping back. My bigger concern with Labour is whether they will break the link for renewable generation with price being set by gas currently. Gas prices have dropped back but there is enough uncertainty in the world to see it go much lower from here. UKW reckon they are well insulated from lower prices without divi cover being compromised.
They have 500m of debt to refi later this year which will no doubt increase interest charge. So its surprising given income stream certainty and buyback tbese keep drifting.

[yump] 29/2/2024 08:55

Well we’ll soon see what Labour will do although they’ll have a handy book of excuses.

Actually more bothered that we are paying for the front benches to indulge in panto - PM’s questions was and usually is a disgrace. I’m surprised more people in the public gallery don’t get escorted out for creating a scene by calling the behaviour out.

[igoe104] 29/2/2024 08:29

They are over supply because the are still using dirty coal power stations.

They were supposed to be fazzing these power stations out, and prioritize greener energy, but as usual this current government talk a good game but don't deliver...

[boadicea] 21/2/2024 15:48

The value of infrastructure where further creation is ongoing should rise in line with the current cost of creation - subject to certain provisos such as the distorting effects of new subsidies, taxes etc. The price of infrastructure fund shares is heavily influenced by the cost of financing their debts which should be taken into account in arriving at their net value.

The market implication of an apparent discount in the share price is that (1) we currently have a surplus of infrastructire capacity such that ongoing creation is not reqired and (2) that new projects will not be started due to lack of capital (unless given a distorting subsidy) until equilibrium is reached - i.e. fund prices revert to approximate asset values.

Provided that that the implied over-supply of infrastructure is temporary (or an illusion) the situation should normalise in due course.

[riverman77] 21/2/2024 14:44

Was thinking the same - TRIG AND ORIT also up strongly but can't see anything obvious. No changes in interest rate outlook or gilt yields so that doesn't seem to be the factor.

[marktime1231] 21/2/2024 13:58

A welcome 4p step up 9.30am onwards for no reason I can find. Has the interest rate outlook improved, has wind data been published to show income will be strong, an analyst tip maybe, a big investor adding £900K thinking now is the time to dive in having seen the share price squeezed unreasonably since January, rumours of ...?

[chrissnox] 19/2/2024 14:19

They are not holding shares in treasury to potentially resale in the market. They are buying them to satisfy future share awards under various incentive / share / performance plans. Issuing new shares at a discount to NAV would be dilutive to the NAV/share. Basic corporate finance principles tells you buy shares to hold shares in treasury than issue new stock.

[marktime1231] 16/2/2024 16:00

Yes, despite this punishment let's just remind ourselves there is a higher price, there is a future.

[nickrl] 16/2/2024 14:21

@ramellous depends if they choose to cancel them or not. Potentially they could try and sell them back into the market if the share price ever recovers and there is pent up demand. Personally short of a geopolitical event creating a significant price hike in energy i can't see that happening anytime soon. Am surprised the negativity that come here again given the pretty strong financials. The changes to electricity market have stalled which may have worked against renewables but with Labour still wanting net zero generation sill by 2030 they can't afford to undermine the investment conditions.

[ramellous] 16/2/2024 13:15

So they can sell them at a higher price in the future

[adeg] 16/2/2024 13:13

The buy back has switched on the 9th February from cancelling the shares to holding them in treasury.

Why would they change this?