Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
To invest mostly in operating UK wind farms with the aim to provide investors with an annual dividend that increases in line with RPI inflation while preserving the capital value of its investment portfolio.
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Actuary,- You make a good point but it does ignore the premium you need when compared to the risk free element of gilts.
Although a tranche of UKW's income is inflation linked, not all is. They have debt which will cost more to service when it comes up for renewal, the assets also have a (fairly) fixed life span. There are other risks, both from government intervention and possible extreme weather events.
Will UKW be able to maintain inflation linkage of their divis over the longer term?
For large pension funds looking decades ahead the risk free element of a high fixed return tips the balance increasingly in that direction with every rate increase.
I couldn't find that article.
UKW has money in its coffers so I don't see why their broker would be forcing some of their investors to sell to raise capital.
But, as always with private investors, we are always the last to know the true picture.
ATB.
@Gavster-NBC
Just a guess, FT had an article about forced selling.
Hello everyone,
I agree that higher bond yields are probably driving the share price down. However it isn't technically correct to compare the yield from an inflation-linked income stream like UKW with the yield on fixed interest securities.
The appropriate metric to compare the UKW dividend yield with is the expected real bond yield, i.e. the nominal yield minus expected future inflation. If we assume expected future inflation = 4% per annum, UKW is providing a higher yield than all but the most risky bonds.
Thanks all.
Another director buys up shares at 140p spending £140,000.
Good enough for them, good enough for us Retail ?
The opinion that the SP goes down for a higher yield due to interest rates is very valid IMO. Seems to be happening all over and we've all been expecting TBH, but for me I still expected that last bounce up towards ex-div. Reminds of a famous interview with W Buffet where he talks about the bargains during high inflation back when he started investing.
@Foobar why Odey Asset Management ?
They are not listed anywhere here : https://www.morningstar.com/cefs/xlon/ukw/ownership
Why the drop ?
Market sentiment..... Even high yielders like IMB & LGEN are sat 15-20% lower than their 12 month highs.
I wouldn't add any more UKW at 150p or more but will show nterest n the 130's
In my opinion, it's mainly interest rates. We saw a similar drop (even lower) last year after the Truss mini-budget. There may also be a significant contribution from lower gas/electricity prices. It will be interesting to say what happens if we have a much colder winter this year.
I try not to worry about a falling share price, as I'm holding for the dividends over the long term. A lower price can even be a good thing if you want to buy more. Of course, it's another matter if the falling share price reflects an actual worsening of the company's prospects. I don't think that's the case here (or I wouldn't have just bought some more).
2. Low gas prices are probably having some effect too
Probably a combination of falling energy price, low wind (at least in the North/Ireland where they have the majority of turbines) and the prospect higher for longer interest rates.
You can get 2 year UK Gilts paying 5% now so the attraction of alternatives has diminished. You can see this across the board, most Infrastructure funds, REITs etc are also well down.
The other issue that a lot of these sectors have is that they can now no longer issue shares at a premium so it has also reduced their cash/liquidity . In past circumstances UKW would probably have issued shares by now to reduce debt and put themselves in a position to purchase another windfarm.
Possibly Odey Asset Management is selling.
I am in the same boat, these were flying a few months ago, something has spooked the share price, thinking of adding but not yet.
£500k in two director buys last few days, and the sell off continues. Chartwise I reckoned on a bounce at 145 and a climb over 150 towards the summer ex-div. Now we have a bottom which is anyone's guess, or a rerate to a new yield. Is it the possibility of a Labour government setting new rules on subsidies ? Is there a fundamental justification for that 130p SP mentioned below? If so then why did those directors buy at 142/147. Or just a straightforward sell-off by a particular large holder, for reasons not market-related..
Interested in peoples opinions.
Divi too low here in comparison to other renewables. I will look to buy here at 130p or lower.
Well, after looking at NESF and BSIF (and having looked at other renewables companies recently), I still like UKW best. And even though I know I should diversify, I can't bring myself to buy second best! So I bought some more UKW, at 140p.
I'm still half-expecting a significant market correction from here, and holding back some cash and equivalents to take advantage of any bargains. LGEN is on my watchlist, but I'm wary of financials at the moment and waiting for a bigger margin of safety. I already own CSN, a smaller pensions company, with similar yield to LGEN, but seems less volatile.)
Prices still falling, so I'm in no rush to buy. Other renewables are looking good too, so I may diversify a bit. NESF has a forward yield over 8.2%, based on its target dividend of 8.35p. I'll take a closer look at it.
That said, I'm still concerned about the long term future for renewables investments, so a bit reluctant to buy more.
Get_rich_quick
So does Legal & General - and you'll enjoy 2x the dividend while you wait
Not advice or a recommendation just another potential option to consider!
I'm a huge advocate of UKW, but the BP share price does seem quite attractive at the moment!
I sold out at £1.59 a while ago and got back in at £1.48 last week.....Am surprised it's still dropping still have a bit left for this years isa it's a toss up between this and BP
From 12 months ago down from £1.60 ish. WeekEnergy prices n threat of Labour government GB Energy Company announcement in October 22. But at least good dividend.
I'm thinking about adding more on Monday too.
What has overly spooked the SP?
I've just read a report that UKW have funded £125k to assist with recycling old wind turbines, which I'm aware is an issue, but I can only presume market sentiment on a whole has pulled it back a few %.
That said, come Monday, I may add more, as we are now below my average share price.
https://renews.biz/86365/wind-turbine-recycling-project-secures-funding/
Hi wetherboy. Well, advances in energy storage technology would be good for renewables, but it doesn't follow that energy storage stocks are a good investment.
I'm looking for safe investments, so not so keen on companies which are developing the technology. I've looked at companies which use current battery technology, like GSF (which has a nice yield). I'm put off by the knowledge that lithium ion batteries degrade over time, though that shouldn't really matter if it's priced in. Anyway, I have GSF on my watch list, but I'm not biting yet.
By the way current yield on UKW just hit 6%!
Tichtich
And more generally I worry that there could be eventually be a glut of intermittent renewable energy, more than can be economically used.
Your 'worry' leads me to suggest investments in energy storage. Batteries of one kind or another or maybe green hydrogen if you can separate the wheat from the chaff.
Hi get_rich. I meant that I have an unusually large amount invested in UKW, nearly 10% of my retirement pot! So I don't really want to buy even more, but I might be tempted if the price was very attractive.
At one time I was even more concentrated in the renewables sector, with shares in FSFL, BSIF and ORIT, as well as UKW. But after the sector started becoming a political football last year, I started to have some doubts, and I sold all except UKW, my favourite. I still might buy a little FSFL again, if the price is right.
I worry about the overhaul of the electricity pricing system that's currently being discussed, as I suspect that probably won't be to the advantage of renewables. And more generally I worry that there could be eventually be a glut of intermittent renewable energy, more than can be economically used. I'm a worrier!
Hi, tichtich,
Overweighted in UKW that your portfolio is top heavy or are you suggesting your average Sp is high, which I think that's what you're saying as you'd like to wait for the SP to drop.
If your average Sp is higher than where we are, it can't be that much higher.
I think my average Sp is around £1.53, but I've had dividends along the way.
I hope the bottom doesn't fall out of this company as I'm fairly well invested here (by my standards).
Yep. Fruits of last year's "windfall" profits. We have the windfall tax now, but it doesn't look like there'll be any windfall profits to tax this year. (Actually, I haven't looked at the numbers for this year. I'm just guessing from the fact that gas prices have gone through the floor. But maybe they'll be up again in the winter. I'm not hoping for a cold winter and high gas prices, but if we get them at least my UKW shares will bring me some consolation!)
I'm so overweight UKW already that I'm looking for a lower price before adding more. But it's tempting, with the yield up to 5.9% last time I looked, compared with 5.3% when I first bought in 2021.