The Renewables Infrastru... Share Discussion Threads

[daveofdevon] 05/9/2013 16:31

Oh dear... this new float troubles me. I suspect its a bit of indigestion !

I have participated in most of the infrastructure floats and each has given me a very nice initial capital gain followed by a regular flow of income at a rate that is at least 300% higher than cash. I also sleep easy at night.

Now for some reason doubts have crept in. My portfolio is becoming unbalanced, and if I go for this one a voice in my head is saying "you are addicted to these" and stuff like that

I remember pouring money into zero dividend preference shares in the belief that I could just let them gather dust and collect. I was lucky to come out unscathed when I realised that the game was up, dumping them in the nick of time and collected from the compensation fund.

Ho hum ....will sleep on this for a week at least.

[jonwig] 05/9/2013 07:07

Foresight Solar Fund intention to float:



Up to £200m with 6p dividend, inflation-linked.

[jaws6] 29/8/2013 09:22

now 104 go on

[jaws6] 21/8/2013 08:53

now on CNBC they talking on this projects , so must be artical there later on cnbc.com
asmodeus
I got DNA3 too.
no thread on advfn for dna3 but there is DNA2 thread ,I posted few link there.

[asmodeus] 20/8/2013 13:08

I bought some too, yesterday, for my ISA! Read about them in Investment Trusts Newsletter. (Also bought Doric Nimrod 3 )

[jonwig] 20/8/2013 11:20

UKW had some encouraging maiden figures yesterday, that may be a factor.

[grahamg8] 20/8/2013 11:17

Bought some today, so I'm positive on the prospects. This is hardly on anyones radar at the moment, but it will get there eventually. Then I see the yield merging with HICL and similar. So to get to 5.5% yield on 6p divi suggests a share price of 109p. To be clear that's a target for 12 months time when the divi will be historic not prospective. That gives me a return of 11.65% over 12 months on a buy in price of 103p. Not exactly exciting but this is meant to be a core holding for long term income in my ISA. Of course if the price goes >109p in the short term I might sell up and move on. Happy either way.

[wirralowl] 14/8/2013 21:19

Bought some of these and BSIF today, hopefully to provide a steady, inflation protected income for a good few years.

[jaws6] 13/8/2013 12:17

RNS out , TRIG traded at 102.5 too today

jon
is this good info for header here,if you like

[n3tleylucas] 03/8/2013 19:30

Good evening jon,

HICL run a much bigger p/f of what I'd consider more traditional PFI projects, and yes they've done very well at growing the dividend & share price, well done.

This however has a riskier profile, hope it does well mate. gla.

[daveofdevon] 03/8/2013 13:23

Thanks for putting me right on Channel Islands income Jonwig, never to old to learn.

[jonwig] 03/8/2013 12:30

DAVE- dividend is not further taxable (unless HRT payer).
Prospectus p128:

A tax credit equal to
10 per cent. of the gross dividend (also equal to one ninth
of the cash dividend received) should be
available to set off against a Shareholder's total income tax
liability. The effect of the tax credit is that
a basic rate taxpayer will have no further tax to pay,...

Under SA, the dividends will be entered in the foreign pages, of course.

The 'traditional' infrastructure funds (such as HICL which has the same manager as TRIG) yield 5.3 - 5.5% (some inflation linking)and stand at a premium of around 10% to NAV. They have a longer track record than TRIG, of course, but PPI/PFI projects have implicit government guarantees, as do the subsidies for wind and solar.

So is 5.5% indexed too high, as well?

The government can, should and will, reduce subsidies in future years, but the evidence is that this will be for *new* projects. This means that future fundraisings may well be on less attractive terms.

[it_trader] 03/8/2013 12:26

Pretty confident it'll do well, but didn't need to promise 6%to get the IPO investment. I hope they don't take to many risks trying to honour this, but on the other hand they now risk reputation and capital loss if they don't deliver.Pretty much why I didn't invest the kitchen sink in this.

[n3tleylucas] 03/8/2013 10:50

I understand risk mate, and an indexed-linked 6% net is way too high in the current climate of low rates. So, either the stock is too low, or the strategy doesn't work. Hope it's the former for your sake, or this will fall.

[daveofdevon] 03/8/2013 10:32

Firstly it is not 6% net, it is 6% gross because the company is based in the channel islands and avoids tax deduction. Tuck these away in an ISA and just relax.

Secondly I can see no merit in drawing risk comparisons with corporate bonds and PIBS when the bond market is a bubble waiting to pop and the PIBS market is the home of the Co-op investors who are being hammered!

Thirdly the 6% rate is "the going rate". In March Greencoat wind floated at 6% and previous infrastructure funds have launched at similar rates.

I hold 4 different funds in this sector and am sitting on an average capital gain of 8% and an average tax free yield of 5.3%

I think the problem is that you don't have much understanding of this sector.

It doesn't matter to me if you see problems or catches, and it doesn't matter to me if you choose to walk away rather than invest. My only motive for taking issue with you is to prevent your views misleading other interested parties. On that note I withdraw and return to sleep, argument is not my style.

[n3tleylucas] 03/8/2013 07:01

Well Dave, when I see an index-linked 6% net in the current climate of astonishing low bond yields, I wonder "what's the catch here ... because there is one".

The quality & risk you'd have to take on shares, corporate bonds or PIBS to get the same net index-linked return would be very low and very high respectively.

My conclusion is that investment/capital growth will have to be compromised to achieve their target.

It's a risky stock for income seekers, and the heavyweight ii's backing this might just attract some pi's.

Best left alone, if it looks too good to be true ... it usually is. gla.

edit ... on the other hand, if they can achieve their target, and invest appropriately to ensure future growth in profits/dividends ... the stock would seem good value. Why they went for 6% though, when surely 4% would have still attracted income seekers? ... seems bizarre. There's the catch, they've aimed too high, when it wasn't necessary.

[jonwig] 03/8/2013 06:54

Dave is quite correct. In fact, most prospectuses for funds these days have virtually identical wording.

The statement in post #6 needs to be read in the context of the risk factors detailed in the prospectus. The main ones concerning the dividend are (a) political, but UK Gov have so far been very fair - ie. reducing subsidies for wind only with new builds from 2017 and (b) that we will be a virtually windless and sunless island for years to come.

This second one is the more likely, and it's a risk I can understand.

IC has a long article this week on the sector:

[daveofdevon] 03/8/2013 02:08

I see no catch.

It is quite normal for lawyers involved with the publication of a prospectus to take a simple statement such as "we plan to pay a 6% dividend and increase it in line with inflation" and strange it to death with caveats.

Trying to publish a prospectus is a real "tear your hair out" event and the legal bills can be unbelievable.

If you try to issue a prospectus in USA it's almost impossible to avoid breaking the law in at least one or two states which is why the TRIG website wants to know which country you are from before letting you see the prospectus.

[n3tleylucas] 02/8/2013 21:32

6% net index-linked? Okay, what's the catch? ... because there is one, somewhere.

Ah ... here we are;

[cheesus2] 02/8/2013 20:39

What is the quality of the farms they've bought? Seem to be a range of ages 2000 to 2013. The longevity is an issue: obviously there's no long term testing to go on there. I've read that even 20 years might be optimistic, but only one story about this.

What about the directors etc: what's their history?

Thanks

[jonwig] 30/7/2013 19:11

Will update the Holdings into the header as they happen.

It's likely that a good 70% of these will be in institutional hands - mostly declarable. So a lower 'free float' might make it volatile, but only as a distraction.

The 6% indexed return for the current portfolio is probably very secure but UKGov have announced reduced subsidies for wind for new builds from 2017. This is down to lower costs.
If similar happens to solar, there's lower subsidies but also cheaper hardware and more efficient distribution.

BTW - if anyone here bought and paid 0.5% stamp duty, do complain - it doesn't apply.

[pas100] 30/7/2013 18:10

I see that M&G have taken a large stake as well as Old Mutual - looks very promising

[it_trader] 30/7/2013 14:32

This is going to most likely be my most boring defensive investments yet ;)