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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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My apologies, but I didn't even attempt to answer your question!
In essence, you'd like to think that there is less of a chance to raise funds at the expense if they have good earnings but that logic doesn't always go hand in hand.
There was a capital raising last year and we've had strong financial results, so I think it's unlikely in the short to mid term.
Morning, Oldbrian,
The fact that the share cover is serviceable by 3x the companies earnings shows the company isn't struggling to pay dividends out to shareholders.
My (layman) understanding is, when the earnings are at or below 1.2, that is when an element of concern can start to set it.
My biggest concern is the threshold with dividends being slashed this financial year to £1000 and then next year to £500.
Any dividend payments earned over that amount will be liable to tax.
Lowering the dividend threshold before tax is going to gnaw away at reliable companies that pay out dividends to their shareholders.
Hopefully the policy changes as this share is a little long term gold mine.
All the best.
Genuine question. The fact that dividends are covered 3 times does that mean it is unlikely there will be another round of capital raising through a share offer. Or am I being too simplistic.
I'm hoping for 151.
blimey....a 5 mill trade,just there
Yep.
I am going to add some more . Already have a good holding..
UKW featured in today's magazine in it's "Great Ideas: Investments to make today" slot:
https://www.sharesmagazine.co.uk/article/invest-in-renewables-winner-uk-greencoat-wind-for-a-handsome-5-4-dividend-yield (it's behind a paywall so only headlines viewable without a login).
"Since its launch in 2013 Greencoat UK Wind has paid an RPI-linked dividend and it reaffirmed these inflation-busting income credentials in January as it confirmed a 2023 target to increase dividends by 13.4% to 8.76p. That puts the stock on a 5.4% prospective yield."
"Dividend cover in 2022 was 3.2 times which leaves surplus cash of £395 million, according to estimates by research group Kepler, which can be reinvested in the portfolio, helping to lay the foundations for further growth in the dividend."
Nothing we don't already know but nice to see it being picked up elsewhere. K
Lots to digest
Link to the presentation of the annual results
https://www.greencoat-ukwind.com/~/media/Files/G/GreenCoat-UKWind/2022%20AR%20UKW%20vF%20results%20presentation_23022023.pdf
link to the annual report
https://www.greencoat-ukwind.com/~/media/Files/G/GreenCoat-UKWind/documents/Greencoat%20UK%20Wind%20AR%20vF%2023022023.pdf
Me too, excellent year. 2022 dividend covered 3.2x so plenty of headroom for the 13.4% increase this year. All we need now is for the wind to blow & we're set fair. Will look to increase my holding here when able.
A 13 4% dividend uplift is most welcome.
I'm getting steady capital growth and a 5 5% dividend
Very happy with progress in 2022.
Annual results for the period to 31 December 2022 on Thursday 23 February.
https://www.trustintelligence.co.uk/articles/fund-profile-greencoat-uk-wind-feb-2023
"15 Feb 2023
Greencoat UK Wind PLC (LSE:UKW) has been left with significant surplus cash for reinvestment following its conservative approach to higher wholesale energy prices last year, according to analysts at research house Kepler.
Keeping dividend coverage at 3.2 times for 2022 while wholesale energy prices were rising, boosting revenues, should mean it has £394mln in cash to invest.
Kepler estimates net assets are up 31% in total over the full year even though it did not hedge electricity prices and they subsequently fell.
Greencoat “captured high prices during the last year but having seen electricity prices come back significantly from their highs, [its] conservative approach looks to have paid off,” analysts said."
https://www.proactiveinvestors.co.uk/companies/news/219589/greencoat-uk-wind-on-the-rise-as-institutions-clamour-for-renewables-219589.html?INVESTING
Yes there was an RNS in January with a 167.1p NAV
https://www.lse.co.uk/rns/UKW/net-asset-value-and-dividend-announcement-4r2l1477gp9tycx.html
Looked to pick up some more on Friday on a small dip but the price went the other way. Still a good income stock at 4-5% yields with inceasing NAVs.
I've seen the NAV as 167 now, can anyone confirm that?
I sold the shares I bought at 140 for 160, made a good profit, I didn't see the volume behind this price rise, I expected it to fall back to 150p.
Hopefully I'll sell more at 168 again and buy again on the pullback.
I've been a long holder of UKW, and I've bought since the lows of £1.20.
I appreciate that may not be 'low' but this share has slowly, but steadily, inclined over the last 3 years. As you know, it's been complemented with a FTSE beating dividend.
Renewable energy is a strong market to be in with a long term future, and UKW provides that ideal investment.
Costs of development and refurbishments are high but so is the revenue.
This must ge a good, long term investment with arguably more upsides than lows.
The only thing that pains me (but it's a good pain to have) and that is I'm always averaging upwards because the Sp is generally increasing!
All the best.
GRQ
https://archy.deberker.com/the-uk-is-wasting-a-lot-of-wind-power/
This share is off alot of Retail Investors radar and it shouldn't be. Great to have in your portfolio.
Further details-
2022 dividend cover of 3.2x
• 2022 generation 5% below budget reflecting low wind in H2
• High power prices in 2022 + forward curve remains high over 2023-2026
• Clarity in relation to Electricity Generator Levy:
o 45% of annual average power revenue above index linked £75/MWh
o CFDs excluded
o £10m annual allowance
• 12.1p increase in NAV per share over Q4:
o +20p from updated power price assumptions
o -8p reflecting Electricity Generator Levy
• 8.0% blended portfolio discount rate (unlevered):
o 10% equivalent levered discount rate
o 9% net return to investors
o inflation linked
• 13.4% increase in target dividend to 8.76p for 2023, in line with Dec RPI
• Aggregate Group Debt of £1,780m (31% of GAV), comprising £900m term debt +
£200m drawn RCF + £680m share of Hornsea 1 debt
• £161m cash + £400m available under RCF (£600m facility
Excellent news. Still at a reasonable discount to NAV for a top up.