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I think you're right about that. What they mean by Q4 2023 dividend is the one paid in February 2024. It relates to the earnings in Q4 rather than a dividend in Q4. I've just looked back at their announcement to see where the misunderstanding has arisen:
"In recognition of the very strong cash flow delivered by the business through 2023 to date, the Board also has decided to pay a 3.43 pence per share dividend for Q4 2023 increasing the 2023 full year dividend target to 10 pence per share."
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
I do wonder how/if the government will manage to separate electricity from gas pricing. If the UK's supply was self-contained I imagine it would be achievable, but there are a large number of interconnectors with France, Norway, Netherlands, Ireland etc it could be tricky.
I see that the levy is due to run until 2028, which suggests to me that they're not confident of de-linking any time soon.
Under the headline “ Three of our favourite funds will be hit by a 45pc tax – here’s how they'll fare” the Telegraph (behind a paywall) reports it’s view on the windfall tax impact on UKW.
“Let’s look first at Greencoat UK Wind, rated a buy in July 2020 and in May and July of this year. The good news here is that, according to analysts at Numis, the stockbroker, the trust’s valuation will not be affected by the windfall tax.
This is because the tax will apply when electricity is sold for more than £75 per megawatt-hour and Greencoat’s “valuation model appears to include [a] power price below £75”, Numis wrote after the Autumn Statement. (It said the same of Next Energy Solar, which has not been tipped by this column.)
This is not to say that Greencoat will pay no windfall tax; rather that it has valued its assets on the assumption that electricity prices will be less than the threshold for the tax. If it sells its power for more than £75/MWh it will indeed be liable to pay the extra tax but its revenues will also be higher than it expected when it valued its assets.”
Details here https://www.gov.uk/government/publications/electricity-generator-levy-technical-note
A lot of UKW's assets are on the older ROC scheme and are exposed to a windfall tax. The price has already taken a hit from the potential for a windfall tax of some sort. Whether the price goes up or down on the announcement of the details is just a matter of whether it's better or worse than expected.
I think that the markets would much prefer no general election and the months of uncertainty that would bring. There isn't really a mechanism to get rid of a party with a large parliamentary majority against its will.
It looks like some combination of Jeremy Hunt, Penny Mordaunt, Rishi Sunak and Ben Wallace as PM and Chancellor and hopefully with that, some form of stability.
Why would there be a general election if (when) Truss goes? The current batch or Tories can be accused of many things, but they're not fools. They are going to hold off until 2024 in the hope that they can begin to look vaguely competent by then. Meanwhile a new leader (and PM) will be appointed by coronation (ie no leadership election).
"is this not a bit of a "damned if you do damned if you don't" situation for the gov? wind energy is cheaper to produce than oil and gas which requires exploration and expensive drilling etc.. so is there not an argument that is should be cheaper? "
While I can see your point, I don't believe that oil and gas are more expensive to produce than wind energy. As an illustration from Sep 20 - Mar 21, the average price for domestic gas was 3p per kWh. That was a price which included exploration, production, distribution, profits and tax. The oil price was similar on a per kWh basis.
We can't yet produce electricity for 3p per kWh from wind, and that's before transmission costs, distribution costs and profits. The reason gas and oil prices are high is down to supply and demand, rather than production costs.
Given that these discussions with government have been going on for some time, I suspect that at least some of this is priced-in. It may well have been the cause of recent weakness over the last week. My assumption would be that they’re unlikely to do something which would cause a severe shock (say a 20% drop in price) as that would effectively destroy future energy investment. While a windfall tax would be politically popular, destroying the trust of potential investors is a high price to pay. Presumably this will open a little lower in the morning.
Interesting to hear how BSIF assess the combined effect of the recent market moves. I suppose one difficulty in reading that across to another company is that debt profiles could be quite different. I know nothing about BSIF, but they could have significantly longer term financing or interest rate hedging in place than UKW.
I am invested in UKW (and another unlisted wind energy company) but was surprised that UKW leave themselves exposed to interest rate risk, given that long term rates have been very low for a while.
As you say, it's not the green levies which are covered out of general taxation. I suspect it's a combination of falling wholesale price expectations and concern that the UK may be pushed into a deeper recession by the need to raise interest rates to defend the pound.
"Guess my only defence to that is that hopefully a Strat partner funds the shafts and bonds finance the rest.." - Bigtibbs01
That is a fair point, but I would expect a strategic partner to use their balance sheet to stand behind the bonds, so that they could issue at 3% rather than perhaps 13% if these were tied to the project alone (i.e. if the project fails the bonds default without recourse to the strategic partner). Therefore in effect the strategic partner are lending the money themselves. In return for taking that risk, they are going to want a large return, so why not buy Sirius for £0.3-0.5bn and keep 100% of the future revenue...
Clearly if there is more than one potential partner seriously considering this, that would Sirius in a much better negotiating position, and existing holders will fare better.
There is another route, which avoids dilution I have mentioned before, and has been mentioned by others. That is for Sirius to open discussions with Radioactive Waste Management and consider investigating the offshore part of their licence area for geological disposal. I understand the reservations, and why this would be unsuitable for a National Park, but if this was entirely offshore, it could provide Sirius with the perfect strategic partner.
RWM are expecting to pay something like £20bn for what is in effect a very large disused mine. A byproduct of Sirius's project is to create a very large disused mine. It would be crazy not to examine the possibility of some cooperation. This could facilitate the project without further dilution.
I should add that I don't live anywhere near the NYMNP, and I can see why those who do may feel differently!
"This is the way i look at is, tell me if its a bad way to look at it.
But let say a Strategic partner can fund us to production, and they want 50% thats effectively 14 Billion shares.
Lets say conservatively the company becomes worth 10Bn years down the line.
Thats 0.71 sp... Thats still several hundred percent increase for me. This is why im completely happy for dilution, providing that method funds us to production.
Feel free to rip apart my thinking" - Bigtibbs01
The difficulty I have with that is that the strategic partner is going to put in say £2.5bn and end up with 50% of the revenue. Given that the company is worth around £300m today, wouldn't it make more sense for them to put in £2.8bn (£2.5 funding + £0.3bn purchase) and keep 100% of the revenue?
Admittedly, they would probably have to pay a premium to the current share price to buy the company, but still £2.9bn, or even £3bn for 100% looks a better deal than £2.5bn for 50%.
At a time like this, I would hope to see management buying shares out of their own pockets (i.e. not exercising options, or being awarded shares). Having sold out last August (as reported here), I am considering buying again, but would like to see management doing the same, preferably with a material sum. That would give a strong signal that this is undervalued.
For now, I'll sit on my hands, while I wait and see.
“Word in the City is the bonds are as good as a done deal.
Many yield hungry funds out there. Seriously, look at the 10 year yields globally... they aint getting higher ;)”
If the City was that keen on the bonds in this company, you might expect to see that enthusiasm reflected in the share price.