The Renewables Infrastru... Share Discussion Threads

[steve c1] 16/3/2020 10:05

Well this is looking interesting, at about nav now. Can't see this or jlen being affected by whats going on.

[davebowler] 18/2/2020 11:11

Liberum;
2019 results demonstrate benefits of diversification and scale

Mkt Cap £2,242m | Prem/(disc) 19.1% | Div yield 4.8%

Event

TRIG's NAV per share at 31 December 2019 was 115.0p, representing a NAV total return of 11.9% in 2019 (H1: 8.6%; H2 2.9%). NAV performance for the year benefited from asset life extensions (mainly in H1), asset enhancements and discount rate compression. This was partly offset by falling power prices.

The portfolio valuation at the December 2019 was £1,745m. Lower power price projections reduced the portfolio valuation by £101m in 2019. The reduction was most marked in the UK due to increased build-out projections of renewable projects (particularly offshore wind). The blended curve was down 9% over the year (UK -11%, non-UK range of -2% to -5%). The portfolio valuation also includes a c.10% adjustment to the baseload power price to allow for cannibalisation. The impact of power prices was largely offset by asset life extensions and the reduction in the discount rate to 7.25% (December 2018: 7.6%). The balance of the portfolio return included a number of value enhancements in addition to the unwinding of the discount rate. NAV performance in the year was boosted by value enhancements including refinancing gains, improved PPA terms, portfolio level tax reliefs and a better outcome from the targeted charging review than had been provided for.


In addition to mitigating the effect of reduced power price forecasts, portfolio diversification benefited production in 2019. Production was 4.4% below budget for 2019, mainly due to low wind resource. Solar generation was 6.9% above budget. Dividend cover remained robust at 1.2x in 2019 despite this and lower achieved power prices in the year. TRIG's target dividend has been increased by 1.8% to 6.76p for 2020. The ongoing charges ratio continues to fall and is now sub-1%, demonstrating the advantages of the company's increased scale.
2019 was TRIG's most active year in terms of acquisitions with £612m of new commitments adding 519MW of capacity. £508m was invested in the year and the company has £350m of outstanding commitments. Acquisitions in the year included large investments in Jädraas (€209m), an onshore Swedish wind farm, and the first investments in German offshore wind farms (c.£280m for stakes in Gode Wind 1 and Merkur). Surplus cash at the period end was £100m and TRIG expects to be c.£70m drawn on its revolving credit facility once £174m of commitments in H1 2020 are funded.


Liberum view

2019 has been another year of strong NAV returns for TRIG, maintaining the positive performance since IPO (8.4% annualised NAV TR). This has been achieved despite the impact of falling power prices in the UK. The portfolio diversification has increased considerably over the past 18 months. The manager has added investments in established markets such as Sweden and Germany. 45% of the portfolio is now invested in non-UK assets, which has helped reduce the exposure to UK power prices. We also note commentary on the potential for future investment opportunities in subsidy free solar in Iberia and UK battery storage. The investments in new jurisdictions have typically been done alongside experienced operators and partners. The new investments help to diversify portfolio exposure by jurisdiction, weather system and power market.

[petewy] 18/2/2020 09:37

Pre-tax profit for the year through December rose to £162m, up from £123m on-year, as generation capacity jumped 50% to 3,036 gigawatt hours.

The company's net asset value per share rose to 115.0p as at 31 December, up from 108.9p a year earlier.

[woodhawk] 04/2/2020 17:15

Even small time traders like me can buy at the bid and sell at the offer - hence the ADvFN trades are little more than guesses - larger trades even more so, because the reporting is often legitimately delayed. If everything was transparent, we'd all be rich!

[jonwig] 03/2/2020 18:38

The official closing price is determined by the uncrossing trade (131.2p), but in any case, it's a narrow spread and anything below mid-price is recorded as sell, above as buy. In reality that won't be the case.

[schofip] 03/2/2020 17:08

I realise that ADVFN trades cannot be relied on but assumi9ng they were reasonably correct I don't understand when there are 1,000,000 buys and 300k sells that the price goes down 0.6. Any experts to advise

[cc2014] 29/1/2020 14:16

This just out. New IPO. Target return of 8-10% seems a bit racy to me.
£200m issue initially targetting £500m in due course.



Cabot Square Alternatives PLC is a new closed-ended evergreen UK Investment Trust for investors to access returns from the alternatives sector to generate an attractive level of sustainable dividend income alongside capital appreciation over the long term.

The company will invest directly in a portfolio of infrastructure and property alternative assets (“Alternative Assets”) and in alternative asset managers manging those assets (“Alternative Asset Managers”). Alternative Assets will take the form of direct interests in infrastructure, including renewable energy, and property alternative assets or specialist debt secured against infrastructure and property assets.

The company is targeting a NAV Total Return in the region of 8% to 10% per annum including a dividend yield of 5.0% per annum, both based on the Initial Issue Price and once substantially invested and over the long-term. As well as generating an attractive risk adjusted return ALTS’ investments are expected to make a positive ESG impact.

[jonwig] 29/1/2020 10:09

I suspect the first broker report led to Monday's falls and the second to Tuesday's. We're a day late catching up.

[keyno] 29/1/2020 09:57

Thanks for that jonwig.

I saw that nerja posted the same article on Bluefield Solar etc. yesterday afternoon, jonwig. Possibly elsewhere? I couldn't be bothered to look. I was merely an interested observer and don't have any shares in Bluefield Solar.

When I decide to sell a share, for whatever reason, I move on and maybe revisit at a later date. I think most people are the same. I find his behaviour unusual if he's not shorting but each to his own................

[jonwig] 29/1/2020 06:52

Chart of share price vs nav:



The premium/discpount over the past year or so:

[jonwig] 29/1/2020 06:45

Another broker questions the valuations of these companies:



Neither of the two articles has anything to say about the role played by the CFD auction in guiding energy prices.

It's also worth pointing out that TRIG's large share price premium is a relatively recent phenomenon.

[8w] 28/1/2020 16:02

They told me electricity would be free when they built Bradwell power station....some people believed that...

[schofip] 28/1/2020 16:01

There is great pressure out there to get rid of fossil fuels due to climate change and nuclear(due to the cost of decommissioning). Wind, wave and solar are the only viable alternatives moving forward and this company is in exactly the right place at the right time. Feel sorry for the people shaken out today by the scare mongering shorters. This share price did get ahead of itself very quickly and as I understand it a 20% pullback on the rise is a very healthy thing.

[cc2014] 28/1/2020 13:56

In a totally free market, companies would sell to the grid at a price which enabled them to make a profit (and don't forget depreciation ... what's the useful life of a wind farm, 25 years?).

I agree.

Further the cost is nearly all fixed cost like a nuclear power station.

Say you need £10/hr to make money.
Your costs are £8/hr fixed and £1/hr variable.

Sales price is £10/hr - you are fine
Price falls to £9/hr - you are a price acceptor but you keep selling as whilst you aren't making any money you are still paying off the loan
Price falls to £8/hr. - you are a price acceptor and still keep selling as loan company would rather have something than nothing
Price falls to £5/hr. You go bust but adminstrator sells assets to new owner equivalent to £2/hr
New owner keeps selling.
It goes on forever until the costs of maintenance become a factor as the seller would always rather take something rather than nothing.

[4spiel] 28/1/2020 13:34

Mild winter.

[woodhawk] 28/1/2020 13:31

I could take a pretty good guess ;-) What else are you doing here?

[jonwig] 28/1/2020 13:30

Woodhawk - I am not talking my position, and you don't know what that position is. I try to weigh facts before coming to a view.

[woodhawk] 28/1/2020 12:53

Of course there are many different opinions, but just keep talking your position jonwig... you're all over the place today.

From Jan 2nd, tipped in the times today as one of the shares of 2020 by Tempus.

[jonwig] 28/1/2020 12:46

In a totally free market, companies would sell to the grid at a price which enabled them to make a profit (and don't forget depreciation ... what's the useful life of a wind farm, 25 years?).

As comparison, look at the price of laptops, etc. When I bought my first (about 1998) it cost me more than £1,000, and it weighed a ton.

[carpingtris] 28/1/2020 12:24

Surely if energy prices become so cheap then it won't be in anyones interest to build new Solar sites or wind farms? theirs a balance.

[jonwig] 28/1/2020 12:11

Scare story?

The fact that costs of renewables are falling and capacity increasing should not be a surprise. This will happen further, as new generations of solar cell will triple the energy capture available.

In addition, maintenance costs are relatively low: compare a solar park with an oil refinery. So is it a surprise that retail electricity prices have the potential to fall once capacity meets increased demand (for EVs, 5G, etc.).

The investment question is whether returns on capital will justify a nav premium for the shares. That broker research article suggests the current consensus is questionable. That's a reasonable thing to ask, given the very steep premiums current.

It's inevitable that fossil fuels will be phased out: costs of financing are already rising compared with renewables; reputational damage will be serious.
Whatever the "truth" of MMCC, the trend is pretty well irreversible.

I guess some investors in this sector close their minds to views which question their investment strategy. It's the same on the shell (RDSB) thread, where MMCC denial is rampant.

If you invest in a company or sector, you should not close your minds to evidence which questions it.

[woodhawk] 28/1/2020 11:33

Anyone selling on the basis of a 'scare' story in the press deserve all they get. Feels like a co-ordinated bear raid to me.

[trekker60] 28/1/2020 11:06

Ref this morning's debate about the article posted by Nerja:
I've no insight into his motive for posting the article or the merits of the arguments/assessments included in it. HOWEVER, regardless of both factors, I agree it is relevant information which warrants being published on this board - if only so less well informed small PIs like me understand why the TRIG price has dropped suddenly over the last couple of days. So, thanks Nerja. For what it's worth, I am continuing to hold TRIG but that's not set in stone and I will be keeping an even closer eye on them than usual. Will be interesring to see if TRIG comments on this when the annual results are published on Feb 18.

[petewy] 28/1/2020 10:43

Thanks Nerja

[daburd] 28/1/2020 10:30

thank you nerja. I was not aware of the article which seems to have triggered big falls today in the sector. Like you I exited my positions this morning and will take stock. A rare moment when bulletin boards add value.