Greencoat UK Wind has grown the value of its portfolio to over £1.4 billion after investing more than £500 million in wind generation in 2017.
The fund acquired interests in 10 wind farms and increased its stake another. It now has investments in 29 onshore and offshore wind farms with net generating capacity of 694MW.
Gross asset value (GAV) rose 57 per cent to £1,409 million. To help pay for the purchases, the fund raised £340 million in October by issuing 291 million new shares at a price of 117p.
It finished the year with debts of £265 million, giving it a net asset value (NAV) of £1,144 million. NAV per share swelled to 111.2p – a gain of 2.6p when adjusting for dividends.
The share price increased by 3.3p to 128.8p. At the end of 2017, the fund was worth £1,263 million, representing a 10.4 per cent premium over the NAV.
Output from the portfolio was in line with expectations at 1,457GWh and net cash generation was up 64 per cent at £80.1 million. The full-year dividend was 6.49p per share – up from 6.34p in 2016 – equating to a total payout of £57.3 million.
The total return to shareholders – covering both dividends and share price gains – was 8.4 per cent, down from 17.4 per cent the year before. The fund is targetting a dividend of 6.76p per share for 2018.
Greencoat Capital partner and fund co-manager, Stephen Lilley, told Utility Week: “We have 3 per cent of the UK wind market. That’s what we own. It’s obviously not a large part.”
He continued: “No one owns a lot. It’s very dispersed and there’s a lot of different wind farms that we can hopefully look at buying over the next year and into the future.”
The fund has a 40 per cent cap on the ratio of its debts to GAV and the figure currently stands at 19 per cent.
Fellow partner and fund co-manager, Laurence Fumagalli, said: “If we were to invest tomorrow we’ve got what we would call £500 million of investment fire power.
“Put simply, gross assets would go up from £1.4 billion today to £1.9 billion and out debt would go up from £265 million to £765 million, and that £765 million is 40 per cent of the £1.9 billion.
“The intention is that no single asset goes above 25 per cent of our gross asset value, and strictly cannot go above 30 per cent, so we could invest all £500 million in one asset.”
The fund’s largest single investment is currently the Clyde onshore wind farm in Scotland which accounts for 19 per cent of its GAV.
“There’s not that many people out there with larger ticket sizes than £500 million,” said Fumagalli. “We are now of a size where we can compete for any asset.”
“Clearly there are people we would not want to buy assets from and clearly there are investments that we wouldn’t want to buy, but there’s a very large market,” he added. “The vast majority of the £45 billion worth of turning wind farms today would be available for us”.