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The fact that C&G asset management have now popped up on their major shareholders (from nowhere) is a real sign. This fund is managed by Peter Spiller (Google him) - he doesnt really get many decisions wrong, 17% compound return on his fund over 3 decades and worth millions!
at last someone talking sense on here. they wouldnt have turned down 69p unless they were pretty sure of considerable upside above that price. the govt wants wind to be a big player over next decade so we just have to sit tight and wait for the profits to roll in. while the price remains sub-69p its a no-brainer to fill the boots!
Actual wind was worse than bottom 10% - bottom 5% probably. DECC has corroborated this. 2011 is ticking over nicely though - the hurricane season should be throwing off loads of cash!
Wind levels are recorded and forecast based on 10 / 20 year historic records. This is used to forecast volume. Volume x PPA price = bankable income This is used to value a wind farm or size debt. 'P50' is the term for an average year - looks like WIND has sized their debt on cautious wind volume. They are saying that if wind volume is right at the crap end (Like 2010), every year for the term of their debt, they can still service the debt. The wind levels would have to fall to a level as remote as rolling a dice 15 times and getting a six every time. Whether you buy the cold hard maths of it is a different matter - recent years of cold high pressure winters may be a blip or a worrying trend.
"A "one-in fifteen years" meteorological event which caused low winds in the Northern hemisphere, reduced the wind resource to 20% below the 10-year mean." "Covenant compliance is maintained if actual wind volumes are statistically in the lowest 10% of long term averages (P90). Over the 12 year term of this debt this is considered remote...." Was actual wind in the lowest 10% of long term averages last year? What on earth does lowest 10% of long term averages mean?
I would guess they have a legacy shareholder that requires a dividend to stay on board. Otherwise the only sensible thing is to invest in assets not return cash. The other aspect the Board has to consider is the period of time it takes for a shareholder to get a return. Onshore wind would give you 16% over a lifetime - but investors today can't wait that long so a dividend sacrifices some of that. Historic losses were the cost of building volume - WIND now has the volume to break even with everything built now being upside. You can see from their H2 v H1 results WIND actually turned in a nice profit in the 2nd half of the year. In all probability it will be a change of control that delivers value to investors - take out the costs of being listed and WIND could deliver a 10% yield to a private investor who pays 80p a share,
I don't understand this company - massive losses (Cumulative retained earnings -negative £19m) - no wind but £2m dividend. Two quotes from the report published today. Can anyone explain how it works? "As flagged in our interim results, wind speeds during the year were unusually low. This resulted in a reduction in Group revenue of close to £2m compared to a year with average wind levels. Group revenue was £9.8m (2010: £6.2m) with EBITDA before exceptional costs of nil (2010: loss of £0.9m). Pre-tax losses after exceptional costs were £3.0m (2010: £3.5m)." "In view of the strength of asset-building opportunities available to the Directors, they propose to pay a final dividend of 1.5p per ordinary share (2010: 1.5p) in respect of the past year. .......Your Board has begun a review of options for value distribution to ensure that shareholders receive a return reflecting the company's success."
It all stacks up nicely for a substantial windfall here.....eventually! NAV declared of 90p, offer for company rejected at 69p, regular dividend payer (yield c4%), single investor holding 22% of shares (Utilico Investments - check them out), favoured asset sector - alternative energy, hoped for b/e this year.................I could go on. Stock market volatility and general pull back in lower cap stocks appear to be holding us back. We probably need better volumes across markets to see this tick up near term, but the intrincic value IS THERE
Hi All! Made a good short-term profit on this company a while back . Considering two nuclear accidents in the last six months; awareness of potential and damaging disruption in traditional energy supply due to political risk; increasing government protectionism of raw materials; and Western countries struggling to find next technological/industrial boom... well, well....I've gotta come back and try my luck again and at a very decent price- this time for long term. Hopefully, all good here! GLA
Yeah saw that- says it's aimed at farmers so not sure what barclays are expecting... Farmers to negotiate grid connections, choose a turbine right for the wind and manage the build out?! REG already works closely with farmers, and pays a rent. Farmer gets a return without risk or capital. Barclays should use their fund to buy REG shares!
Wont let me post link but Barclays have just launched a £100million fund for purchasing renewables which will help boost the industry! http://www.newsroom.barclays.com/Press-releases/Barclays-launches-100million-renewable-energy-fund-for-farmers-810.aspx
Renewable Energy Generation concentrates on smaller wind farm sites – comprising between two and seven 2MW-turbines, which operate with an efficiency rate of about 30 per cent – and has a strong record for the percentage of projects that it has progressed through planning. A bid approach in January of 67.7p was rejected by the board, on the basis it significantly undervalued the company. With the balance sheet in good shape, and the company confident it will require no further cash calls, the shares, trading at around 43.75p, to yield a little under 5 per cent, could make this worth a look, according to the Scotsman, which recommends a buy.
No - only onshore. Given the real problems getting onshore working and the budget overruns it is a good position to be in at the moment. Longer term, offshore will be the place that delivers the big bucks though. The reasons why I see it as good for now are: Capital requirements are far beyond the capacity of REG - offshore wind would cost £5m per MW to build and £48 p/MW p.a to maintain - vs £1.5m per MW and £10 p/MW p.a. to maintain. The shortage in offshore wind coming online this year resulted in a big jump in the ROC price - benefitting everyone else in the sector. Until the grid connection issues are sorted (pylon vs underground) the economics are uncertain
Do this company do offshore wind farms ?
Don't know enough about Wave power - bu if the gov't start handing out 5xROC's when the EMR is published next week I'll start reading! Looks like Onshore Wind will go down to 0.9 ROCs from 2013, which should ensure REG dont hang around in building out their consented land to qualify for the full ROC. If you are interested in SEA, they are in RE News today
And what about SEA ENERGY (SEA) ?
Looks like we are keeping this stock to ourselves! I like the fact that there are some heavy hitting institutional investors on board. They are the guys that the WIND Board need to keep happy. We are just hanging on to their shirt tails. This looks to be coming to the boil nicely with or without a takeout, which must eventually happen. WIND is a well managed company, with a sound business strategy, quickly moving into profitability, self financing, in a topical and popular asset sector.
Looking at the TR1's in the public domain a few of Wind's big investors have been trimming their holdings. Cleverly it looks like they have been selling on the back of all the good news which has hidden the sales. The timing is indeed interesting - as Wind will be in a statutory closed period for insider trading. Unusual for that kind of thing to hit the press outside of a formal trading statement / preliminary announcement. With the big fat cash balance and this it looks like something is cooking....
Noodles - Agree, and while our patience is being tested we receive 3%+ on our money by way of div. Better than in the bank. Timing of presentation was interesting, it appeared to me as if REG was reaffirming why it rejected 67 pence and highlighting what price any other offer will need to be priced at.
Henge - that is the question. Fortunately this is pretty liquid industry - there are lots of deals going on all the time, so the value of the company should be realised on change of control if market sentiment doesnt improve. When I look at their main shareholders they are big funds that will have been sold an exit plan - when the £100m strategy is complete that may provide a window to work out where the company is going.
So, the only question is.........when will investors wake up and move the share price closer to its NAV? 90p per share represents an 87% premium to where we currently are. No wonder the Board rejected outright the 67 pence per share offer earlier this year. Very succinct presentation, clearly the Board are as frustrated as us patient investors.
IT UP!!!.............. http://www.proactiveinvestors.co.uk/companies/news/30130/broker-view-evolution-says-renewable-energys-assets-not-reflected-in-share-price-30130.html .................... and music to go with it too LOL ................... http://www.youtube.com/watch?v=oJzGyBTEzfg
Walkley is right - WIND needs cash to build out the impressive flow of consented land coming out. I cant see a rights issue - I can see an initial debt injection secured on their current portfolio and probably an approach to get banks involved in future projects to stop the rapid cash burn. Lots of transactions at the moment pushing the £2m per operating mw and 500k per consented hence the rejected offers. WIND remains undervalued in my opinion