Greencoat UK Wind Regulatory News (UKW)

Greencoat UK Wind (UKW)

06/03/2025

Results analysis from Kepler Trust Intelligence

UKW's NAV total return, which had been previously announced, was -8.5% for the year to 151.2p per share, with the most significant movements from downward power price forecasts largely seen in the first half, and a revised expectation on long term wind speeds, announced with the Q4 NAV on 29/01/2025. The final results provided more colour on this, which has seen a number of recent years' wind speeds incorporated into the data, serving to lower expected long term electricity generation by 2.4%.

Underlying dividend cover for 2024 was 1.3x on a normalised basis. The board is targeting a dividend of 10.35p per share with respect to 2025, a rise in line with December's RPI of 3.5%.

The board and manager acknowledge the difficult market backdrop in the alternative investment trust sector. In our view, UKW has always been managed for the long term and by doing the right things for shareholders. UKW was the first to list in this sector, the first to reflect rising interest rates through an increase in discount rates and the first to introduce a material share buyback programme. The announcement on 10/12/2024 is another example of UKW implementing shareholder friendly initiatives. Management fees from 01/01/2025 run on the lower of market capitalization and NAV. This level of fee reduction is, as yet, unmatched by UKW's peers. The manager is therefore even more strongly aligned with shareholders in the desire to see the share price improve.

UKW's board and manager undertake to generate and allocate capital wisely for shareholders. UKW recently completed its initial £100m buyback programme announced last year. UKW expects to generate over £1bn of excess cashflow in the next five years, and to augment this with further disposals. In the near term, excess capital will be applied in a new £100m buyback programme, and beyond that UKW expects to allocate further capital dynamically and between further, or accelerated, share buy backs and repaying debt to reduce gearing.

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