Member Info for bunsenburner123

Nice. I do think we’ll

Look back in 6 months and more and think how did we get these prices

Sentiment at rock bottom means all the chat is doomsday when the reality is just not the case

Could you tell us more? What was it regarding?

The Telegraph article increases the chances that the Government backs away from the RO indexation changes.

They are already being attacked for rising energy bills, and both Option 1 and Option 2 would raise long-term system costs, not lower them.

Politically, after the OBR revelations, Miliband cannot afford another policy that scares investors and pushes bills higher.

This makes Option 2 very unlikely and makes “no change at all” a much more plausible outcome — which would be extremely positive for UKW.

That’s very good news IMO

Let’s hope the Goverment listens

If they do this will move back to 110p

Sentiment is at rock bottom. Goverment not helping. If and when option 1 gets chosen SP will recover to around 105p-110p

If they sold assets they’d sell them at nav or a premium

The opportunity is huge

Sentiment is at rock bottom. Goverment not helping. If and when option 1 gets chosen SP will recover to around 105p-110p

If they sold assets they’d sell them at nav or a premium

The opportunity is huge

CVC buying a huge developer is another sign that private money still values renewables at full fair value. They’re not buying at distressed discounts like the stock market — they pay NAV or more because they value 20-year cashflows, not sentiment. If a fund like UKW were sold privately today, it wouldn’t go for 99p — it would be closer to 120–130p. The deal basically confirms that listed renewables are oversold, not broken.

https://www.esgtoday.com/cvc-acquires-european-green-energy-platform-low-carbon/

Ye s agree with all that

The SP is utterly insane for the amount of t of cash they are throwing off

Just have to sit through the volatility

If you have spare cash great basically

So basically if there is lower wind output on the future it’s negligible to UKW’s cash flow

10% reduction over 75 years wouldn’t not affect cash flow at all

Also, scientists have not agreed global warming has any affect on wind

Long*

LNG term shortfall in wind speeds?!

Firstly they’re now priced into the NAV -

AND - what we know is they are unusually low wind speeds.

So worst case is it’s as it is now. Best case is what we’d expect - normal wind speeds. So far wind has been materially higher than the last two low wind years

You’re right that many renewables amortise part of their project-level debt, but none of the big trusts (TRIG, ORIT, FSFL, BSIF, NESF) are paying all fixed debt down before subsidies end — they all carry permanent project debt that is refinanced at maturity. UKW isn’t unusual here.

The £1.5bn fixed debt maturing around 2031 does not need to be “repaid” from free cashflow; it will be refinanced, exactly the same way utilities and other infrastructure funds manage long-dated assets with rolling debt. The £1bn free cashflow over five years is not earmarked for paying the whole debt stack down — it mainly supports dividends, selective reinvestments, and partial deleveraging. It’s not intended to clear every liability.

And yes — the Hornsea financing is a separate, ring-fenced project loan lasting into the 2030s. But that debt sits against an asset with long contracted revenue, and again will be refinanced in due course, not extinguished.

So the comparison to TRIG is not “TRIG pays everything off, UKW doesn’t.” Both run ongoing project debt; the key difference is simply UKW has more merchant exposure later in life. The idea that UKW must somehow eliminate £2bn of debt before subsidies fall is not how infrastructure financing works.

Everything is priced into the NAV remember

Everything is priced into the NAV & NAV is 140p

These are screaming buy prices and won’t last forever

Plus a 10.4p divi p/a

DYOR

You’re right that UKW will see lower revenues when subsidies roll off, that leverage increases sensitivity to interest rates, that UKW is more exposed to political risk than some peers, and that merchant power prices will matter much more in the 2030s than today. Those are all valid points.

But you’re wrong to imply that other renewable trusts will be debt-free when subsidies end — none of them will. TRIG, ORIT, FSFL, BSIF, NESF, GCP’s renewables segment, Greencoat Renewables — all of them run permanent project-level and corporate debt that they refinance. UKW is completely normal in this respect. He is also wrong to assume a dramatic cashflow collapse; when subsidies fall away, UKW’s debt costs fall as well because maturities roll off and refinancing happens at whatever the prevailing rate is. The NAV already models this, including subsidy expiry and future merchant pricing. And he is mistaken to present the debt as a danger — at 35–40% gearing, this is typical infrastructure leverage and nowhere near distressed levels.

So the real picture is this: yes, UKW carries more long-term policy and price risk than the average solar-heavy trust, but its structure is sound, the NAV already includes all these future declines, and the debt does not need to be repaid — it is designed to be refinanced, just like every other infrastructure trust. The risks are genuine, but they’re not existential, and they’re already embedded in the valuation.

Yes — Endeavour’s new 12–15Moz exploration plan very clearly links to their JV with East Star, even though they didn’t name them.

1. Kazakhstan fits perfectly into Endeavour’s new strategy.

Endeavour said they will now target three “immature tier-1 gold provinces,” including the Central Asian Orogenic Belt. Kazakhstan sits right inside it — exactly where East Star operates.

2. Endeavour wants 2–3 new cornerstone greenfield projects.

They’re looking for multi-million-ounce discoveries in new regions, partnering with local explorers. East Star gives them immediate access to two big, underexplored belts that match those criteria.

3. The timelines match exactly.

Endeavour’s plan covers 2026–2030.

The East Star earn-in (US$5m → US$20m → PFS) also covers 2025–2030. That’s not accidental — this JV is clearly part of their new 5-year pipeline.

4. This is how Endeavour builds mines.

They’ve already turned prior greenfield successes (Lafigué, Assafou) into cornerstone assets. East Star’s belts are the next potential multi-Moz plays, and Endeavour wants to repeat the formula.

Conclusion:

Yes — today’s exploration strategy absolutely connects to the East Star JV. It effectively confirms that Kazakhstan is now one of the regions Endeavour plans to invest heavily in. This makes the East Star agreement far more significant than it looked on its own and strongly increases the strategic value of EST’s 20% carried interest.

Check out the FTSE100 companies RNS today!

Completely aligns with our $25m JV deal!

UKW isn’t meant to amortise all debt before subsidies end — none of the big renewables trusts do.

Project debt rolls; that’s how infrastructure financing works.

UKW just presents it more transparently at company level instead of hiding gearing inside SPVs like TRIG/FSFL/BSIF.

The DCF NAV already includes subsidy expiry and refinancing, and still shows an 11% IRR.

Debt doesn’t increase risk — it increases efficiency of capital.

Most renewables don’t fully amortise debt before subsidies end — TRIG, ORIT, BSIF, FSFL all carry permanent project-level gearing. UKW just shows its debt at company level instead of hiding it in SPVs.

The NAV already models subsidy expiry and refinancing and still gives an 11% IRR.

So the debt isn’t extra risk — it’s how all infrastructure is financed.

UKW does not intend to repay £2bn of debt from cashflow, because that is not how infrastructure companies are designed to operate.

Infrastructure trusts carry permanent moderate leverage and refinance maturities rather than extinguishing the debt.

For context, this is exactly how major utilities operate:

• National Grid carries over £50 billion of permanent debt

• SSE carries around £10 billion

• UK water companies often carry £5–10+ billion each

• None of them ever “pay off” this debt — they roll and refinance it

Wind infrastructure is no different. UKW’s ~35–40% gearing is entirely normal for regulated-style assets with long-term cashflows.

The DCF NAV already models both subsidy expiry and the debt maturity profile, and still produces a levered IRR of 11%.

That includes every debt repayment, refinancing, subsidy reduction and cashflow projection.

There is no requirement to eliminate the debt — the capital structure is designed to operate with it permanently, exactly like any utility business.

What’s left over to keep growing NAV/dividends?”

Here is the logic:

During subsidised period (now → 2031–2037)

Cashflow =

• subsidy-linked revenue

• merchant power revenue

• minus opex

• minus interest

= large surplus → pays ~10% dividend AND retains surplus (1.3–1.7x cover)

After subsidies roll off (2031–2037 onwards)

Subsidies ↓

Debt interest ↓ even more

Asset opex stays low

Merchant pricing becomes the main driver

Result:

✔ Free cash flow remains positive

✔ NAV does not collapse

✔ Dividends remain covered

The DCF model already incorporates all the subsidy expiries and still produces a levered IRR of ~11%.

If subsidy expiry were catastrophic, the NAV would already reflect that.

“I’d love to see how UKW are modelling debt repayments…”

They do model it — this is already embedded in the NAV DCF.

And the key point is:

UKW does not need subsidies to maintain dividends once debt rolls off.

Because the subsidy period ends at the same time most debt matures.

That is exactly why the portfolio was structured this way.

It is intentional, not accidental.

When subsidies fall away:

• interest costs fall sharply too

• free cash flow does not collapse

• debt service reduces faster than subsidy income declines

The running costs of a wind farm (opex) are very low once built.

This is why UKW says explicitly:

“We can grow dividends without raising new capital.”

That statement would be impossible if subsidy expiry caused a cashflow hole.