Greencoat UK Wind - Half year results, NAV and Dividend Announcement
27/07/2023 07:00
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RNS Number : 3193H Greencoat UK Wind PLC 27 July 2023
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27 July 2023
GREENCOAT UK WIND PLC
(the "Company")
Half year results to 30 June 2023, Net Asset Value and Dividend Announcement
Greencoat UK Wind PLC today announces the half year results for the period
to 30 June 2023.
Greencoat UK Wind PLC is the leading listed renewable infrastructure fund,
invested in UK wind farms. The Company's aim is to provide investors with an
annual dividend that increases in line with RPI inflation while preserving the
capital value of its investment portfolio in the long term on a real basis
through reinvestment of excess cash flow.
The Company provides investors with the opportunity to participate directly in
the ownership of UK wind farms, so increasing the resources and capital
dedicated to the deployment of renewable energy and the reduction of
greenhouse gas emissions.
Highlights
· The Group's investments generated 2,088GWh of renewable electricity.
· Net cash generation (Group and wind farm SPVs) was £204.0 million.
· Acquisition of Dalquhandy wind farm increased the portfolio to 46
operating wind farm investments and net generating capacity to 1,652MW as at
30 June 2023.
· Agreed to acquire a net 13.7 per cent stake in London Array offshore
wind farm, with the transaction expected to complete on 31 July 2023.
· The Company declared total dividends of 4.38 pence per share with
respect to the period.
· Aggregate Group Debt was £2,000 million as at 30 June 2023,
equivalent to 34 per cent of GAV.
Commenting on today's results, Lucinda Riches, Chairman of Greencoat UK Wind,
said:
"I am pleased to report another strong performance in the first half,
extending our track record of attractive dividends and returns. Cash
generation was strong and dividend cover for the period was 2.1x. Since IPO,
the Company has increased its dividend in line with RPI every year with excess
cash generation being reinvested to drive NAV growth above RPI, now delivering
returns to investors of 10%.
"We continue to leverage our scale and financial strength to grow the
portfolio with high quality investments including that of Dalquhandy in the
period. Looking ahead to the remainder of the year, we already have a strong
pipeline of additions to our portfolio through our investment in London Array
and completing on our committed investments, South Kyle and Kype Muir
Extension. These investments will add 355MW of net generating capacity
increasing the portfolio to over 2GW.
"The outlook for the Group is extremely encouraging. We operate in a mature
and growing asset class and with our market leading position and self funding
business model, we are well placed to capitalise on NAV accretive investment
opportunities and continue delivering superior returns to shareholders."
Net Asset Value
The Company announces that its unaudited Net Asset Value as at 30 June 2023 is
£3,843.9 million (165.8 pence per share). The Company's June 2023 Factsheet
is available on the Company's website, www.greencoat-ukwind.com
(http://www.greencoat-ukwind.com) .
Dividend Announcement
The Company also announces a quarterly dividend of 2.19 pence per share in
respect of the period from 1 April 2023 to 30 June 2023.
Dividend Timetable
Ex-dividend date: 10 August 2023
Record date: 11 August 2023
Payment date: 25 August 2023
Key Metrics
As at 30 June 2023:
Market capitalisation £ 3,345.6 million
Share price 144.3 pence
Dividends with respect to the period £ 101.6 million
Dividends with respect to the period per share 4.38 pence
GAV £ 5,843.9 million
NAV £ 3,843.9 million
NAV per share 165.8 pence
The Company's 2023 Half Year Report is available on the Company's website,
www.greencoat-ukwind.com (http://www.greencoat-ukwind.com) , and can also be
inspected on the National Storage Mechanism website,
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Details of the conference call for analysts and investors:
There will be a conference call at 9.00am today for analysts and investors.
Analysts and investors can register and watch the event at:
https://www.netroadshow.com/events/login?show=ed784d86&confId=53665
(https://www.netroadshow.com/events/login?show=ed784d86&confId=53665) .
Presentation materials will be posted on the Company's website,
www.greencoat-ukwind.com (http://www.greencoat-ukwind.com/) , from 9.00am.
For further information, please contact:
Greencoat UK Wind PLC 020 7832 9400
Stephen Lilley
Laurence Fumagalli
Headland 020
3805 4822
Stephen Malthouse
Rob Walker
Charlie Twigg
ukwind@headlandconsultancy.com (mailto:ukwind@headlandconsultancy.com)
All capitalised terms are defined in the list of defined terms below unless
separately defined.
Chairman's Statement
I am pleased to present the Half Year Report of Greencoat UK Wind PLC for the
six months ended 30 June 2023.
Performance
Portfolio generation for the period was 2,088GWh, 18 per cent below budget
owing to low wind. Net cash generated by the Group and wind farm SPVs was
£204.0 million and dividend cover for the period was 2.1x.
The portfolio provides renewable electricity for 1.8 million homes and avoided
the emission of 0.8 million tonnes of CO(2) in the period.
Dividends and Returns
The Company's aim is to provide investors with an attractive and sustainable
dividend that increases in line with RPI while preserving capital on a real
basis. In line with this aim, in every one of the last 10 years since listing,
the Company increased its stated dividend target for 2023 by RPI to 8.76
pence. It has paid a quarterly dividend of 2.19 pence per share with respect
to Q1 2023 and has declared a dividend of the same amount per share with
respect to Q2 2023, giving a total of 4.38 pence per share for the period
(compared to 3.86 pence per share for the first half of 2022).
NAV per share decreased in the period from 167.1 pence per share on 31
December 2022 to 165.8 pence per share on 30 June 2023, reflecting an increase
in discount rates and lower short term power prices offset by higher short
term inflation and valuation gains from recent and committed investments.
In line with the higher interest rate environment, the Company has continued
to increase its discount rate and thus returns to investors. The forecast 10
per cent return to investors (net of all costs) includes reinvestment of
excess cash generation (dividend cover) in addition to the dividend yield.
Since listing, the Company has reinvested £806 million of excess cash
generation (dividend cover) and paid £836 million of dividends (aggregate
historical dividend cover being 2.0x).
Investment
During the period, the Group invested £51.5 million to acquire Dalquhandy
wind farm from BayWa, increasing net generating capacity to 1,652MW. During
the period, the Group also provided a further £4.5 million of construction
finance to the Kype Muir Extension wind farm project (target commissioning in
Q3 2023).
In Q3 2023, the Group will invest £444 million into London Array offshore
wind farm and £320 million into South Kyle wind farm, which the Group are
acquiring from Orsted and Vattenfall respectively. Along with Kype Muir
Extension completion, 355MW of net generating capacity will be added to the
portfolio.
Outlook
The Company is investing in a mature and growing market, and the Board
believes that there should continue to be further opportunities for
investments that are beneficial to shareholders. The Company will continue to
maintain a strictly disciplined approach to acquisitions, only investing when
it is considered to be in the interests of shareholders to do so. At the same
time, we will also look at opportunistic disposals, given the current
environment we are operating in.
The principal risk and uncertainties of the Group and its investee companies
are unchanged from those detailed in the Company's Annual Report to 31
December 2022 and remain the most likely to affect the Group and its investee
companies in the second half of the year. A summary of these may be found
below.
The Board and Governance
At the AGM on 28 April 2023, Nick Winser assumed the role of Senior
Independent Director. Shonaid Jemmett-Page also retired and I, on behalf of
the whole Board, would like to thank her for the excellent job she has done
chairing the Company. I am delighted to have taken over as Chairman, and look
forward to working with the rest of the Board and the Investment Manager to
deliver continued shareholder value.
On 1 May 2023 Jim Smith joined the Board and has extensive experience in the
electricity industry, including in offshore wind asset management.
Lucinda Riches C.B.E.
Chairman
26 July 2023
Investment Manager's Report
Investment Portfolio
As at 30 June 2023, the Group owned investments in a diversified portfolio of
46 operating UK wind farms totalling 1,652MW, powering 1.8 million homes and
avoiding the emission of 2.1 million tonnes of CO(2) per annum. A further
355MW of investments are due to complete in Q3 2023, which will increase the
portfolio to over 2GW.
Operating and Financial Performance
Portfolio generation in the period was 2,088GWh, 18 per cent below budget
owing to low wind. Portfolio availability was above budget.
Net cash generated by the Group and wind farm SPVs was £204.0 million and
dividend cover for the period was 2.1x.
Group and wind farm SPV cash flows For the six months ended
30 June 2023
£'000
Net cash generation ((1)) 204,020
Dividends paid (95,517)
Acquisitions (55,936)
Acquisition costs (226)
Equity issuance -
Equity issuance costs -
Net amounts drawn under debt facilities 290,000
Upfront finance costs (4,609)
Movement in cash (Group and wind farm SPVs) 337,732
Opening cash balance (Group and wind farm SPVs) 160,851
Closing cash balance (Group and wind farm SPVs) 498,583
Net cash generation 204,020
Dividends 95,517
Dividend cover 2.1x
((1) ) Alternative Performance Measure as defined below.
The following tables provide further detail in relation to net cash generation
of £204.0 million:
Net Cash Generation - Breakdown For the six months ended
30 June 2023
£'000
Revenue 400,591
Operating expenses (90,100)
Tax (36,670)
SPV level debt interest (9,148)
SPV level debt amortisation (26,595)
Other (197)
Wind farm cash flow 237,881
Management fee (17,141)
Operating expenses (1,237)
Ongoing finance costs (17,675)
Other 1,623
Group cash flow (34,430)
VAT (Group and wind farm SPVs) 569
Net cash generation 204,020
Net Cash Generation - Reconciliation to Net Cash Flows from Operating For the six months ended
Activities
30 June 2023
£'000
Net cash flows from operating activities ((1)) 220,152
Movement in cash balances of wind farm SPVs (9,845)
Repayment of shareholder loan investment ((1)) 11,388
Finance costs ((1)) (22,284)
Upfront finance costs ((2)) 4,609
Net cash generation 204,020
((1)) Condensed Consolidated Statement of Cash Flows.
((2)) £4,350k facility arrangement fees plus £467k professional fees per
note 12 to the financial statements less £208k movement in other finance
costs payable per note 11 to the financial statements.
Investment and Gearing
On 6 June 2023, the Group acquired Dalquhandy wind farm from BayWa for
consideration of £51.5 million.
During the period, the Group provided a further £4.5 million of construction
finance to the Kype Muir Extension wind farm project (target commissioning Q3
2023). As at 30 June 2023, the Group's total investment in Kype Muir Extension
(including accrued interest) was £44.9 million. The Group has entered into
arrangements to acquire a 49.9 per cent stake in Kype Muir Extension, once
fully commissioned, for a headline consideration of £51.4 million. The
construction loan will be repaid in full upon acquisition.
On 24 July 2023, the Group announced that, together with other funds managed
by the Investment Manager, it would acquire a 25 per cent stake in London
Array offshore wind farm from Orsted. Other owners are RWE (30 per cent), CDPQ
(25 per cent) and Masdar (20 per cent). The investment is scheduled to
complete on 31 July 2023 and the Group's total investment in London Array is
expected to be £444 million, comprising an equity investment of £394 million
(13.7 per cent net stake) and £50 million loan investment.
On 31 August 2023, the Group will acquire South Kyle wind farm from Vattenfall
for consideration of £320 million (commitment made in 2020). South Kyle was
officially opened on 13 June by Laurence Fumagalli, on behalf of the Company
and Anna Borg, Vattenfall CEO.
All of the above investments are materially accretive to NAV, with committed
investments (South Kyle and Kype Muir Extension) valued at £132.5 million as
at 30 June 2023, above the investment consideration.
On 29 June 2023, the Company utilised £640 million of new term loan
commitments from new and existing lenders and on 30 June 2023, prepaid £150
million of term loans maturing in November and December 2023 and £200 million
drawn under the RCF.
The Group is very well capitalised to complete on its near term investments.
Cash balances (Group and wind farm SPVs) as at 30 June 2023 were £499 million
with zero drawn under the £600 million RCF.
Gearing as at 30 June 2023 was 34 per cent of GAV, with a weighted cost of
debt of 4.08 per cent across a spread of maturities (November 2024 to March
2036):
Facility Maturity date Loan principal Loan margin Swap rate All-in rate
£ 000 % / SONIA %
%
RCF 29 Oct 24 - 1.7500 5.0000 ( 1 ) 6.7500
NAB 4 Nov 24 50,000 1.1500 1.0610 2.2110
CBA 14 Nov 24 50,000 1.3500 0.8075 2.1575
CBA 6 Mar 25 50,000 1.5500 1.5265 3.0765
CIBC 3 Nov 25 100,000 1.5000 1.5103 3.0103
ANZ 3 May 26 75,000 1.4500 5.9240 7.3740
NAB 1 Nov 26 75,000 1.5000 1.5980 3.0980
NAB 1 Nov 26 25,000 1.5000 0.8425 2.3425
CIBC 14 Nov 26 100,000 1.4000 0.8132 2.2132
Lloyds 9 May 27 150,000 1.6000 5.6510 7.2510
CBA 4 Nov 27 100,000 1.6000 1.3680 2.9680
ABN AMRO 2 May 28 100,000 1.7500 5.0430 6.7930
ANZ 3 May 28 75,000 1.7500 5.3790 7.1290
Barclays 3 May 28 100,000 1.7500 4.9880 6.7380
AXA 31 Jan 30 125,000 - - 3.0300
AXA 31 Jan 30 75,000 1.7000 1.4450 3.1450
AXA 28 Apr 31 25,000 - - 6.4340
AXA 28 Apr 31 115,000 1.8000 5.0000 ( 1 ) 6.8000
Hornsea 1 31 Mar 36 610,000 - - 2.6000
2,000,000 Weighted average 4.0800
((1)) Facility pays SONIA as variable rate
Given the leading market position of the Group and the Investment Manager,
there is no shortage of investment opportunities, further fuelled by the
challenging fundraising environment affecting all buyers (in both public and
private markets). Thus the Investment Manager regularly reviews the portfolio
for potential disposals, with a view to recycling capital into NAV accretive
investments.
Net Asset Value
The following table sets out the movement in NAV from 31 December 2022 to 30
June 2023. The key components are discussed in detail below.
£'000 Pence per share
NAV as at 31 December 2022 3,873,228 167.1
Net cash generation 204,020 8.8
Dividend (95,517) (4.1)
Power price (158,595) (6.8)
Inflation 188,224 8.1
Discount rate (263,252) (11.4)
Committed investments 132,507 5.7
Depreciation and other (36,669) (1.6)
NAV as at 30 June 2023 3,843,947 165.8
Reconciliation of Statutory Net Assets to Reported NAV
As at As at
30 June 2023
31 December 2022
£'000 £'000
Operating portfolio 5,172,618 5,458,334
Construction portfolio 44,938 39,414
Committed investments 132,507 -
Cash (wind farm SPVs) 131,223 141,068
Fair value of investments ((1)) 5,481,286 5,638,816
Cash (Group) 367,360 19,783
Other relevant liabilities (4,699) (5,867)
GAV 5,843,947 5,652,732
Aggregate Group Debt ((1)) (2,000,000) (1,779,504)
NAV 3,843,947 3,873,228
Reconciling items - -
Statutory net assets 3,843,947 3,873,228
Shares in issue 2,318,483,353 2,318,089,989
NAV per share (pence) 165.8 167.1
((1) ) Includes limited recourse debt at Hornsea 1, not included in the
Condensed Consolidated Statement of Financial Position.
Power Price
Long term power price forecasts are provided by a leading market consultant,
updated quarterly, and may be adjusted by the Investment Manager where more
conservative assumptions are considered appropriate. Short term power price
assumptions reflect the forward curve as at 3 July 2023.
A conservative 20 per cent discount (10 per cent for offshore) is applied to
power price assumptions in all years to reflect that wind generation typically
earns a lower price than the base load power price. This compares to the 4 per
cent discount to the base load power price achieved by the portfolio in the
period (£104.06/MWh average achieved price versus £108.40/MWh average N2EX
index price).
In addition to the 20 per cent discount, a further discount is applied to
reflect the terms of each PPA. The price of some PPAs is expressed as a
percentage of a given price index, whereas other PPAs include a fixed £/MWh
discount to the price index. Other PPAs pay a fixed £/MWh price for power.
The following table shows the assumed power price (post 20 per cent discount
pre PPA discount) and also the price post a representative PPA discount (90
per cent x index price).
£/MWh (real 2022) 2023 2024 2025 2026 2027 2028 2029 2030
Pre PPA discount 78.93 81.14 67.67 56.10 57.60 57.60 57.60 59.04
Post representative PPA discount 71.04 73.03 60.90 50.49 51.84 51.84 51.84 53.14
2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Pre PPA discount 58.08 57.68 58.00 58.72 56.40 57.36 56.56 53.36 53.92 54.00
Post representative PPA discount 52.27 51.91 52.20 52.85 50.76 51.62 50.90 48.02 48.53 48.60
2041 2042 2043 2044 2045 2046 2047 2048 2049 2050
Pre PPA discount 51.76 50.40 48.88 48.96 49.04 48.40 47.84 48.00 49.84 46.48
Post representative PPA discount 46.58 45.36 43.99 44.06 44.14 43.56 43.06 43.20 44.86 41.83
2051 2052 2053 2054 2055 2056 2057 2058 2059 2060
Pre PPA discount 46.72 45.12 45.68 45.44 43.76 42.80 40.48 39.20 39.76 39.84
Post representative PPA discount 42.05 40.61 41.11 40.90 39.38 38.52 36.43 35.28 35.78 35.86
The portfolio benefits from a substantial fixed revenue base. Furthermore,
most fixed revenues are index linked (RPI in the case of ROCs, CPI in the case
of CFDs etc).
The fixed revenue base means that dividend cover is robust in the face of
extreme downside power price sensitivities. A dividend that continues to
increase with RPI is covered down to £10/MWh over the next 5 years.
2024 2025 2026 2027 2028
RPI increase (%) 7.0 3.5 3.5 3.5 3.5
Dividend (pence / share) 9.37 9.70 10.04 10.39 10.76
Dividend (£ 000) 217,316 224,922 232,794 240,942 249,375
Dividend cover (x)
Base case 2.3 2.4 2.3 2.4 2.4
£50/MWh 1.8 1.9 2.0 2.0 2.1
£40/MWh 1.6 1.7 1.8 1.8 1.8
£30/MWh 1.4 1.5 1.5 1.5 1.5
£20/MWh 1.2 1.3 1.3 1.2 1.2
£10/MWh 1.0 1.1 1.0 1.0 0.9
All numbers illustrative. Power prices real 2022, pre PPA discounts.
The Group's strategy remains to maintain an appropriate balance between fixed
and merchant revenue. To the extent that merchant revenues were to increase as
a proportion of total revenues then new fixed price PPAs would be entered
into. However, it is likely that an appropriate revenue balance would be
maintained through the acquisition of new fixed revenue streams (for example,
offshore wind CFD assets).
Inflation
The base case assumes the following values for December inflation each year:
2023 2024-2030 2031 onwards
RPI 7 per cent 3.5 per cent 2.5 per cent
CPI 5 per cent 2.5 per cent 2.5 per cent
If December 2023 RPI is 7 per cent this implies average RPI over 2023 of 10
per cent (13 per cent falling to 7 per cent over the course of the year).
Similarly, 2024 RPI starting at 7 per cent and falling to 3.5 per cent by year
end implies average RPI over 2024 of 5 per cent. Average RPI over 2025 is 3.5
per cent etc.
Average RPI over a year is important as this figure drives ROC prices. The ROC
price is inflated annually from 1 April each year based on the previous year's
average RPI. For example, based on the assumptions in the table above, we
assume a 10 per cent increase in the ROC price from 1 April 2024.
CFD prices are also inflated annually from 1 April each year. However, in the
case of CFDs, the price is inflated based on January CPI.
Given the explicit inflation linkage of a substantial proportion of portfolio
revenue (ROCs, CFDs, certain PPAs) and the implicit inflation linkage inherent
in power prices, there is a strong link between inflation and portfolio
return.
Over the long term, 1 per cent higher inflation means 1 per cent higher IRR
(all else being equal).
In the short term, a one off increase in inflation (for example, a 10 per cent
increase in the ROC price) leads to a ratchet-like increase in portfolio cash
flows that lock in for all future years.
Interest rates (and therefore discount rates) are correlated with inflation.
It is important to appreciate the inflation linked nature of the portfolio
cash flows and that changes in discount rates (associated with changes in
interest rates) are broadly offset by changes in inflation.
Returns
Discount rates must increase to reflect the higher interest rate environment.
For the 30 June 2023 NAV, the discount rate was increased by a further 1 per
cent. The levered portfolio IRR now stands at 11 per cent. This is now
materially higher than at IPO over a decade ago.
Given that the Company's ongoing charges ratio is less than 1 per cent, the
net return to investors (assuming investment at NAV) is thus 10 per cent.
The 10 per cent net return is also inflation linked, as described above.
A 10 per cent inflation linked return should be very attractive versus other
investment opportunities. The Company's 10 year track record demonstrates
relatively low volatility and the historical and projected dividend cover is
robust. By investing in operating UK wind farms (higher returning than
European or solar generation assets, and lower risk than batteries or
development assets), the Company aims to continue to generate consistent
superior risk adjusted returns.
A total return of 10 per cent and a dividend yield of 5 per cent would imply
NAV growth of 5 per cent. The total return is more important than the dividend
yield, which depends on the chosen dividend policy (the Company could have a
different combination of dividend yield and NAV growth).
Excess cash generation (dividend cover) is reinvested to drive NAV growth.
Therefore the size of dividend cover is important; it is not just a question
of "covered or not covered". The business model is self funding and does not
rely on further equity issuance.
Since IPO, aggregate historical dividend cover has been 1.9x and the Group has
reinvested £786 million and has delivered NAV growth significantly in excess
of RPI.
Outlook
There are currently approximately 29GW of operating UK wind farms (15GW
onshore plus 14GW offshore). In monetary terms, the 29GW of operating UK wind
farms amounts to approximately £100 billion. The Group's market share is
approximately 6 per cent. As at 30 June 2023, the average age of the portfolio
was 7 years (versus 5 years at IPO in March 2013).
Given the leading market position of the Group and the Investment Manager,
there is no shortage of investment opportunities, further fuelled by the
challenging fundraising environment affecting all buyers (in both public and
private markets). The Group is very well capitalised and the business model is
self funding.
The assumptions underpinning NAV are conservative. The portfolio is robust in
the face of downside power price sensitivities and remains exposed to
significant upside (power prices, inflation, asset life extension, asset
optimisation, new revenue streams, interest rate cycle etc).
The levered portfolio IRR of 11 per cent and net return to investors of 10 per
cent should be very attractive versus other investment opportunities.
Directors and senior management of the Investment Manager invested £1,645,680
over the period.
In general, the outlook for the Group is extremely encouraging.
Statement of Directors' Responsibilities
The Directors acknowledge responsibility for the interim results and approve
this Half Year Report. The Directors confirm that to the best of their
knowledge:
a) the condensed financial statements have been prepared in accordance
with IAS 34 "Interim Financial Reporting" and give a true and fair view of the
assets, liabilities and financial position and the profit of the Group as
required by DTR 4.2.4R;
b) the interim management report, included within the Chairman's Statement
and Investment Manager's Report, includes a fair review of the information
required by DTR 4.2.7R, being the significant events of the first half of the
year and the principal risks and uncertainties for the remaining six months of
the year; and
c) the condensed financial statements include a fair review of the related
party transactions, as required by DTR 4.2.8R.
The Responsibility Statement has been approved by the Board.
Lucinda Riches C.B.E.
Chairman
26 July 2023
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the six months ended 30 June 2023
Note For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Investment income 3 238,031 323,438
Unrealised movement in fair value of investments 8 (132,574) 258,752
Other income 864 990
Total income and unrealised movement 106,321 583,180
Operating expenses 4 (18,751) (16,509)
Investment acquisition costs (226) (577)
Operating profit 87,344 566,094
Finance expense 12 (21,858) (14,497)
Profit for the period before tax 65,486 551,597
Tax 5 - -
Profit for the period after tax 65,486 551,597
Profit and total comprehensive income attributable to:
Equity holders of the Company 65,486 551,597
Earnings per share
Basic and diluted earnings from continuing operations in the period (pence) 6 2.82 23.80
The accompanying notes form an integral part of the financial statements.
Condensed Consolidated Statement of Financial Position (unaudited)
As at 30 June 2023
Note 30 June 2023 31 December 2022
£'000 £'000
Non current assets
Investments at fair value through profit or loss 8 4,871,286 4,959,312
4,871,286 4,959,312
Current assets
Receivables 10 2,040 2,487
Cash and cash equivalents 367,360 19,783
369,400 22,270
Current liabilities
Loans and borrowings 12 - (150,000)
Payables 11 (6,739) (8,354)
Net current assets/(liabilities) 362,661 (136,084)
Non current liabilities
Loans and borrowings 12 (1,390,000) (950,000)
Net assets 3,843,947 3,873,228
Capital and reserves
Called up share capital 14 23,185 23,181
Share premium account 14 2,471,142 2,470,396
Retained earnings 1,349,620 1,379,651
Total shareholders' funds 3,843,947 3,873,228
Net assets per share (pence) 15 165.8 167.1
Authorised for issue by the Board of Greencoat UK Wind PLC (registered number
08318092) on 26 July 2023 and signed on its behalf by:
Lucinda Riches
C.B.E.
Caoimhe Giblin
Chairman
Director
The accompanying notes form an integral part of the financial statements.
Condensed Consolidated Statement of Changes in Equity (unaudited)
For the six months ended 30 June 2023
For the six months ended Note Share capital Share premium Retained earnings Total
30 June 2023
£'000 £'000 £'000 £'000
Opening net assets attributable to shareholders (1 January 2023) 23,181 2,470,396 1,379,651 3,873,228
Issue of share capital 14 4 746 - 750
Profit and total comprehensive income for the period - 65,486 65,486
Interim dividends paid in the period 7 - - (95,517) (95,517)
Closing net assets attributable to shareholders 23,185 2,471,142 1,349,620 3,843,947
The total reserves distributable by way of a dividend as at 30 June 2023 were
£768,751,535.
For the six months ended Note Share capital Share premium Retained earnings Total
30 June 2022
£'000 £'000 £'000 £'000
Opening net assets attributable to shareholders (1 January 2023) 23,171 2,468,940 601,588 3,093,699
Issue of share capital 6 744 - 750
Share issue costs - (34) - (34)
Profit and total comprehensive income for the period - - 551,597 551,597
Interim dividends paid in the period - - (86,326) (86,326)
Closing net assets attributable to shareholders 23,177 2,469,650 1,066,859 3,559,686
The total reserves distributable by way of a dividend as at 30 June 2022 were
£540,760,772.
The accompanying notes form an integral part of the financial statements.
Condensed Consolidated Statement of Cash Flows (unaudited)
For the six months ended 30 June 2023
Note For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Net cash flows from operating activities 16 220,152 309,426
Cash flows from investing activities
Acquisition of investments 8 (55,936) (70,386)
Investment acquisition costs (226) (1,953)
Repayment of shareholder loan investments 8 11,388 5,272
Net cash flows from investing activities (44,774) (67,067)
Cash flows from financing activities
Payment of issue costs - (42)
Amounts drawn down on loan facilities 12 640,000 200,000
Amounts repaid on loan facilities 12 (350,000) (250,000)
Net finance costs (22,284) (11,621)
Dividends paid 7 (95,517) (86,326)
Net cash flows from financing activities 172,199 (147,989)
Net increase in cash and cash equivalents during the period 347,577 94,370
Cash and cash equivalents at the beginning of the period 19,783 4,801
Cash and cash equivalents at the end of the period 367,360 99,171
The accompanying notes form an integral part of the financial statements.
Notes to the Unaudited Condensed Consolidated Financial Statements
For the six months ended 30 June 2023
1. Significant accounting policies
Basis of accounting
The condensed consolidated financial statements included in this Half Year
Report have been prepared in accordance with IAS 34 "Interim Financial
Reporting". The same accounting policies, presentation and methods of
computation are followed in these condensed consolidated financial statements
as were applied in the preparation of the Group's consolidated annual
financial statements for the year ended 31 December 2022 and are expected to
continue to apply in the Group's consolidated financial statements for the
year ended 31 December 2023.
The Group's consolidated annual financial statements were prepared on the
historic cost basis, as modified for the measurement of certain financial
instruments at fair value through profit or loss, and in accordance with UK
adopted international accounting standards.
These condensed financial statements do not include all information and
disclosures required in the annual financial statements and should be read in
conjunction with the Group's consolidated annual financial statements for the
year ended 31 December 2022. The audited annual accounts for the year ended 31
December 2022 have been delivered to the Registrar of Companies. The audit
report thereon was unmodified.
Review
This Half Year Report has not been audited or reviewed by the Company's
Auditor in accordance with the International Standards on Auditing (ISAs) (UK)
or International Standard on Review Engagements (ISREs).
Going concern
As at 30 June 2023, the Group had net current assets of £362.7 million (31
December 2022: net current liabilities of £136.1 million) and cash balances
of £367.4 million (31 December 2022: £19.8 million) which are sufficient to
meet current obligations as they fall due.
The Directors have reviewed Group forecasts and projections which cover a
period of at least 12 months from the date of approval of this report, taking
into account foreseeable changes in investment and trading performance, which
show that the Group has sufficient financial resources to continue in
operation for at least the next 12 months from the date of approval of this
report.
On the basis of this review, and after making due enquiries, the Directors
have a reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence until at least July 2024.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board, as a
whole. The key measure of performance used by the Board to assess the Group's
performance and to allocate resources is the total return on the Group's net
assets, as calculated under IFRS, and therefore no reconciliation is required
between the measure of profit or loss used by the Board and that contained in
the financial statements.
For management purposes, the Group is organised into one main operating
segment, which invests in wind farm assets.
All of the Group's income is generated within the UK.
All of the Group's non-current assets are located in the UK.
Seasonal and cyclical variations
The Group's results do not vary significantly during reporting periods as a
result of seasonal activity.
2. Investment management fees
Under the terms of the Investment Management Agreement, the Investment Manager
is entitled to a combination of a Cash Fee and an Equity Element from the
Company.
The Cash Fee and Equity Element are calculated quarterly in advance, as
disclosed on page 74 of the Company's Annual Report for the year ended 31
December 2022.
Investment management fees paid or accrued in the period were as follows:
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Cash Fee 15,777 13,718
Equity Element 750 750
16,527 14,468
As at 30 June 2023, total amounts payable to the Investment Manager were £nil
(31 December 2022: £1,364,170).
3. Investment Income
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Dividends received (note 17) 208,286 297,483
Interest on shareholder loan investment received 29,745 25,955
238,031 323,438
4. Operating expenses
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Management fees (note 2) 16,527 14,468
Group and SPV administration fees 608 439
Non-executive Directors' fees 160 178
Other expenses 1,328 1,309
Fees to the Company's Auditor:
for audit of the statutory financial statements 124 111
for other audit related services 4 4
18,751 16,509
The fees to the Company's Auditor for the period ended 30 June 2023 include
£4,290 (30 June 2022: £4,173) payable in relation to a limited review of the
Half Year Report and estimated accruals proportioned across the year for the
audit of the statutory financial statements.
5. Taxation
Taxable income during the period was offset by management expenses and the tax
charge for the period ended 30 June 2023 is £nil (30 June 2022: £nil).
6. Earnings per share
For the six months ended For the six months ended
30 June 2023
30 June 2022
Profit attributable to equity holders of the Company - £'000 65,486 551,597
Weighted average number of ordinary shares in issue 2,318,296,118 2,317,381,121
Basic and diluted earnings from continuing operations in the period (pence) 2.82 23.80
Dilution of the earnings per share as a result of the Equity Element of the
investment management fee as disclosed in note 2 does not have a significant
impact on the basic earnings per share.
7. Dividends declared with respect to the period
Interim dividends paid during the period ended 30 June 2023 Dividend per share Total dividend
pence £'000
With respect to the quarter ended 31 December 2022 1.93 44,742
With respect to the quarter ended 31 March 2023 2.19 50,775
4.12 95,517
Interim dividends declared after 30 June 2023 and not accrued in the period Dividend per share Total dividend
pence £'000
With respect to the quarter ended 30 June 2023 2.19 50,780
2.19 50,780
As disclosed in note 18, on 26 July 2023, the Board approved a dividend of
2.19 pence per share with respect to the quarter ended 30 June 2023, bringing
the total dividends declared with respect to the period to 4.38 pence per
share. The record date for the dividend is 11 August 2023 and the payment date
is 25 August 2023.
8. Investments at fair value through profit or loss
For the period ended 30 June 2023 Loans Equity interest Total
£'000 £'000 £'000
Opening balance 1,087,081 3,872,231 4,959,312
Additions 45,356 10,580 55,936
Repayment of shareholder loan investments (note 17) (11,388) - (11,388)
Unrealised movement in fair value of investments 2,521 (135,095) (132,574)
1,123,570 3,747,716 4,871,286
Loans Equity interest Total
For the period ended 30 June 2022
£'000 £'000 £'000
Opening balance 924,748 3,117,797 4,042,545
Additions((1)) 50,397 19,831 70,228
Repayment of shareholder loan investments (5,272) - (5,272)
Unrealised movement in fair value of investments 1,018 257,734 258,752
970,891 3,395,362 4,366,253
((1) ) Includes a true-up receivable at Glen Kyllachy of £158k.
Fair value measurements
As disclosed on pages 78 and 79 of the Company's Annual Report for the year
ended 31 December 2022, IFRS 13 "Fair Value Measurement" requires disclosure
of fair value measurement by level. The level of fair value hierarchy within
the financial assets or financial liabilities ranges from level 1 to level 3
and is determined on the basis of the lowest level input that is significant
to the fair value measurement.
The fair value of the Group's investments is ultimately determined by the
underlying net present values of the SPV investments. Due to their nature,
they are always expected to be classified as level 3 as the investments are
not traded and contain unobservable inputs. There have been no transfers
between levels during the period.
Sensitivity analysis
The fair value of the Group's investments is £4,871,286,111 (31 December
2022: £4,959,311,361). The analysis below is provided to illustrate the
sensitivity of the fair value of investments to an individual input, while all
other variables remain constant. The Board considers these changes in inputs
to be within reasonable expected ranges. This is not intended to imply the
likelihood of change or that possible changes in value would be restricted to
this range.
Input Change in input Change in fair value of investments Change in NAV per share
£'000 pence
Discount rate + 0.5 per cent (167,189) (7.2)
- 0.5 per cent 176,917 7.6
Inflation - 0.5 per cent (166,598) (7.2)
+ 0.5 per cent 175,538 7.6
Energy yield 10 year P90 (334,251) (14.4)
10 year P10 333,854 14.4
Power price - 10 per cent (311,587) (13.4)
+ 10 per cent 300,530 13.0
Asset life - 5 years (285,671) (12.3)
+ 5 years 185,783 8.0
The sensitivities above are assumed to be independent of each other. Combined
sensitivities are not presented.
9. Unconsolidated subsidiaries, associates and joint ventures
The following table shows subsidiaries of the Group acquired during the
period. As the Company is regarded as an investment entity under IFRS, this
subsidiary has not been consolidated in the preparation of the financial
statements:
Investment Place of business Ownership interest as at
30 June 2023
Dalquhandy Scotland 100%
There are no other changes to the unconsolidated subsidiaries or the
associates and joint ventures of the Group as disclosed on pages 80 and 81 of
the Company's Annual Report for the year ended 31 December 2022.
Guarantees and counter-indemnities provided by the Group during the period on
behalf of its investments are as follows:
Provider of security Investment Beneficiary Nature Purpose Amount
£'000
The Company Dalquhandy BT Guarantee PPA 5,897
Holdco Dalquhandy BayWa Counter-indemnity Decommissioning 2,525
8,422
There were no other material changes to guarantees and counter-indemnities
provided by the Group, as disclosed on page 82 of the Company's Annual Report
for the year ended 31 December 2022. The fair value of these guarantees and
counter-indemnities provided by the Group are considered to be £nil (30 June
2022: £nil).
10. Receivables
30 June 2023 31 December 2022
£'000 £'000
Amounts due from SPVs 1,222 1,648
VAT receivable 370 527
Prepayments 199 122
Other receivables 249 190
2,040 2,487
11. Payables
30 June 2023 31 December 2022
£'000 £'000
Loan interest payable 4,905 5,490
Commitment fee payable 564 402
Letter of credit fees payable (note 12) 103 324
Other finance costs payable 208 -
Investment management fee payable - 1,364
Other payables 959 774
6,739 8,354
12. Loans and borrowings
30 June 2023 31 December 2022
£'000 £'000
Opening balance 1,100,000 950,000
Revolving credit facility
Drawdowns - 260,000
Repayments (200,000) (310,000)
Term debt facilities
Drawdowns 640,000 200,000
Repayments (150,000) -
Closing balance 1,390,000 1,100,000
Reconciled as:
Current liabilities - 150,000
Non current liabilities 1,390,000 950,000
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Loan interest 15,046 11,586
Facility arrangement fees 4,350 -
Commitment fees 1,390 1,748
Letter of credit fees 471 -
Professional fees 467 1,076
Other facility fees 134 87
Finance expense 21,858 14,497
The loan balance as at 30 June 2023 has not been adjusted to reflect amortised
cost, as the amounts are not materially different from the outstanding
balances.
There are no changes to the terms of the Company's revolving credit facility
as disclosed on page 84 of the Company's Annual Report for the year ended 31
December 2022. As at 30 June 2023, the balance of this facility was £nil (31
December 2022: £200 million), accrued interest was £nil (31 December 2022:
£52,675) and the outstanding commitment fee payable was £466,575 (31
December 2022: £401,753).
The Company also has a £100 million letter of credit facility in place with
Lloyds, of which £81.2 million was utilised as at 30 June 2023 (31 December
2022: £72.8 million). The fee for this facility is 1.25 per cent of utilised
amounts and the fee payable, as at 30 June 2023 was £102,935 (31 December
2022: £324,221).
During the period, the Company entered into new term debt arrangements with
ABN AMRO, ANZ, AXA, Barclays and Lloyds, totalling £640 million. Details of
the new facilities are outlined in the table below.
On 30 June 2023, the Company repaid principal of £150 million relating to the
NAB and CBA facilities with maturity dates in November 2023 and December 2023,
respectively.
The Company's term debt facilities and associated interest rate swaps, with
various maturity dates, are set out in the below table:
Provider Maturity date Loan principal Loan margin Swap rate All-in rate
/ SONIA
£'000 % % %
NAB 4 Nov 24 50,000 1.15 1.0610 2.2110
CBA 14 Nov 24 50,000 1.35 0.8075 2.1575
CBA 6 Mar 25 50,000 1.55 1.5265 3.0765
CIBC 3 Nov 25 100,000 1.50 1.5103 3.0103
ANZ 3 May 26 75,000 1.45 5.9240 7.3740
NAB 1 Nov 26 75,000 1.50 1.5980 3.0980
NAB 1 Nov 26 25,000 1.50 0.8425 2.3425
CIBC 14 Nov 26 100,000 1.40 0.8133 2.2133
Lloyds 9 May 27 150,000 1.60 5.6510 7.2510
CBA 4 Nov 27 100,000 1.60 1.3680 2.9680
ABN AMRO 2 May 28 100,000 1.75 5.0430 6.7930
ANZ 3 May 28 75,000 1.75 5.3790 7.1290
Barclays 3 May 28 100,000 1.75 4.9880 6.7380
AXA 31 Jan 30 125,000 3.0300
AXA 31 Jan 30 75,000 1.70 1.4450 3.1450
AXA 28 Apr 31 25,000 6.4430
AXA 28 Apr 31 115,000 1.80 5.0000( 1 ) 6.8000
1,390,000
( 1 ) Facility pays SONIA as variable rate
13. Contingencies and commitments
In April 2020, the Group announced that it had agreed to acquire South Kyle
wind farm project for a headline consideration of £320 million. The
investment is scheduled to complete on 31 August 2023.
In December 2020, the Group entered into an agreement to acquire 49.9 per cent
of the Kype Muir Extension wind farm project for a headline consideration of
£51.4 million, to be paid once the wind farm is fully operational (target Q3
2023). The Group also agreed to provide construction finance of up to £47
million, of which £44.9 million had been utilised as at 30 June 2023.
The committed investments of South Kyle and Kype Muir Extension were valued at
£132.5 million above the investment consideration as at 30 June 2023.
14. Share capital - ordinary shares of £0.01
Six months to 30 June 2023
Date Issued and fully paid Number of shares issued Share capital Share premium Total
£'000 £'000 £'000
1 January 2023 2,318,089,989 23,181 2,470,396 2,493,577
Shares issued to the Investment Manager
3 February 2023 True-up of 2022 and 167,923 2 373 375
Q1 2023 Equity Element
5 May 2023 Q2 2023 Equity Element 225,441 2 373 375
393,364 4 746 750
30 June 2023 2,318,483,353 23,185 2,471,142 2,494,327
15. Net assets per share
30 June 2023 31 December 2022
Net assets - £'000 3,843,947 3,873,228
Number of ordinary shares issued 2,318,483,353 2,318,089,989
Total net assets - pence 165.8 167.1
16. Reconciliation of operating profit for the period to net cash from operating activities
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Operating profit for the period 87,344 566,094
Adjustments for:
Unrealised movement in fair value of investments (note 8) 132,574 (258,752)
Investment acquisition costs 226 577
Decrease in receivables 470 1,534
Decrease in payables (1,212) (777)
Equity Element of Investment Manager's fee (note 2) 750 750
Net cash flows from operating activities 220,152 309,426
17. Related party transactions
During the period, the Company increased its loan to Holdco by £400,000 (30
June 2022: £411,425) and Holdco settled amounts of £150,647,425 (30 June
2022: £163,866,761). The amount outstanding at the period end was
£2,193,467,789 (31 December 2022: £2,343,715,214).
The below table shows dividends received in the period from the Group's
investments.
For the six months ended For the six months ended
30 June 2023
30 June 2022
£'000 £'000
Humber Holdco ((1)) 30,239 29,722
Clyde 27,038 38,556
Hornsea 1 Holdco((2)) 17,921 -
Walney Holdco ((3)) 11,383 9,366
Stronelairg Holdco ((4)) 11,189 24,640
Brockaghboy 9,045 9,791
Hoylake ((5)) 8,156 2,961
ML Wind ((6)) 7,595 10,241
North Hoyle 7,547 14,186
SYND Holdco ((7)) 6,969 11,670
Braes of Doune 6,735 14,380
Rhyl Flats 6,237 8,184
Dunmaglass Holdco ((8)) 5,688 9,362
Little Cheyne Court 4,264 5,412
Fenlands ((9)) 3,954 11,300
Andershaw 3,482 6,913
Windy Rig 3,244 7,093
Douglas West 3,040 8,644
Tappaghan 2,966 5,933
Maerdy 2,789 5,427
Twentyshilling 2,734 -
Slieve Divena 2,727 4,602
Corriegarth 2,484 17,054
Bishopthorpe 2,395 4,721
Bicker Fen 2,326 4,550
Glen Kyllachy 2,131 2,500
Slieve Divena 2 2,040 3,991
Screggagh 1,930 3,871
Stroupster 1,862 1,000
Crighshane 1,655 4,020
Langhope Rig 1,621 4,924
Cotton Farm 966 1,913
Church Hill 940 3,124
Bin Mountain 908 2,202
Carcant 866 1,909
Kildrummy 616 2,221
Earl's Hall Farm 604 1,100
208,286 297,483
((1) ) The Group's investment in Humber Gateway is held through Humber
Holdco.
((2) ) The Group's investment in Hornsea 1 is held through Hornsea 1
Holdco.
((3) ) The Group's investment in Walney is held through Walney Holdco.
((4) ) The Group's investment in Stronelairg is held through Stronelairg
Holdco.
((5) ) The Group's investment in Burbo Bank Extension is held through
Hoylake.
((6) ) The Group's investments in Middlemoor and Lindhurst are held
through ML Wind.
((7) ) The Group's investments in Drone Hill, North Rhins, Sixpenny Wood
and Yelvertoft are held through SYND Holdco.
((8) ) The Group's investment in Dunmaglass is held through Dunmaglass
Holdco.
((9) ) The Group's investments in Deeping St. Nicholas, Glass Moor, Red
House and Red Tile are held through Fenlands.
The table below shows the Group's shareholder loans with the wind farm
investments.
Loans at 1 January 2023((1)) Loans advanced in the period ((2)) Loan repayments in the period Loans at 30 June 2023 Accrued interest at 30 June 2023 Total
£'000 £'000 £'000 £'000 £'000 £'000
Andershaw 32,641 - (1,466) 31,175 470 31,645
Church Hill 13,830 - (803) 13,027 132 13,159
Clyde 71,503 - - 71,503 965 72,468
Corriegarth 42,553 - - 42,553 420 42,973
Crighshane 20,497 - (662) 19,835 204 20,039
Dalquhandy - 40,878 - 40,878 168 41,046
Douglas West 43,248 - (1,177) 42,071 410 42,481
Dunmaglass Holdco ((3)) 56,864 - - 56,864 851 57,715
Glen Kyllachy 48,776 - (1,132) 47,644 456 48,100
Hornsea 1 Holdco ((4)) 109,475 - - 109,475 39 109,514
Hoylake ((5)) 178,120 - - 178,120 - 178,120
Kype Muir Extension 39,415 5,523 - 44,938 - 44,938
Slieve Divena 2 21,378 - (706) 20,672 209 20,881
Stronelairg 86,619 - - 86,619 1,296 87,915
Tom nan Clach 73,709 - (5,442) 68,267 218 68,485
Twentyshilling 32,190 - - 32,190 313 32,503
Walney Holdco ((6)) 172,727 - - 172,727 1,732 174,459
Windy Rig 36,772 - - 36,772 357 37,129
1,080,317 46,401 (11,388) 1,115,330 8,240 1,123,570
((1) ) Excludes accrued interest at 31 December 2022 of
£6,763,541.
((2) ) Includes capitalised interest of £1.05 million for Kype
Muir Extension.
((3) ) The Group's investment in Dunmaglass is held through
Dunmaglass Holdco.
((4) ) The Group's investment in Hornsea 1 is held through Hornsea
1 Holdco.
((5) ) The Group's investment in Burbo Bank Extension is held
through Hoylake.
((6) ) The Group's investment in Walney is held through Walney
Holdco.
18. Subsequent events
On 24 July 2023, the Group announced that, together with other funds managed
by the Investment Manager, it would acquire a net 13.7 per cent stake in
London Array offshore wind farm for £394 million plus an associated loan
investment of £50 million. The transaction is expected to complete on 31 July
2023.
On 26 July 2023, the Board approved a dividend of 2.19 pence per share with
respect to the quarter ended June 2023. The record date for the dividend is 11
August 2023 and the payment date is 25 August 2023.
Company Information
Registered Company Number
Directors (all non-executive)
Lucinda Riches C.B.E (Chairman) 08318092
Martin McAdam
Caoimhe Giblin Registered Office
Nick Winser C.B.E. 5(th) Floor
Jim Smith ((1)) 20 Fenchurch Street
London
EC3M 3BY
Shonaid Jemmett-Page ((2))
Investment Manager
Schroders Greencoat LLP
4th Floor, The Peak Registered Auditor
5 Wilton Road BDO LLP
London 55 Baker Street
SW1V 1AN London
W1U 7EU
Administrator and Company Secretary
Ocorian Administration (UK) Limited
Unit 4, The Legacy Building Joint Broker
Northern Ireland Science Park RBC Capital Markets
Queen's Road 100 Bishopsgate
Belfast London
BT3 9DT EC2N 4AA
Depositary
Ocorian Depositary (UK) Limited
Unit 4, The Legacy Building Joint Broker
Northern Ireland Science Park Jefferies International Limited
Queen's Road 100 Bishopsgate
Belfast London
BT3 9DT EC2N 4JL
Registrar
Computershare Limited
The Pavilions
Bridgewater Road
Bristol
BS99 6ZZ
((1) ) Appointed to the Board with effect from 1 May 2023.
((2) ) Retired from the Board with effect from 28 April 2023.
Defined Terms
ABN AMRO means ABN AMRO Bank N.V.
Aggregate Group Debt means the Group's proportionate share of outstanding
third party borrowings
AGM means Annual General Meeting of the Company
Alternative Performance Measure means a financial measure other than those
defined or specified in the applicable financial reporting framework
Andershaw means Andershaw Wind Power Limited
ANZ means Australia and New Zealand Banking Group Limited
AXA means funds managed by AXA Investment Managers UK Limited
Barclays means Barclays Bank PLC
BDO LLP means the Company's Auditor as at the reporting date
Bicker Fen means Bicker Fen Windfarm Limited
Bin Mountain means Bin Mountain Wind Farm (NI) Limited
Bishopthorpe means Bishopthorpe Wind Farm Limited
Board means the Directors of the Company
Braes of Doune means Braes of Doune Wind Farm (Scotland) Limited
Breeze Bidco means Breeze Bidco (TNC) Limited
Brockaghboy means Brockaghboy Windfarm Limited
Burbo Bank Extension means Hoylake Wind Limited, Greencoat Burbo Extension
Holding (UK) Limited, Burbo Extension Holding Limited and Burbo Extension
Limited
Carcant means Carcant Wind Farm (Scotland) Limited
Cash Fee means the cash fee that the Investment Manager is entitled to under
the Investment Management Agreement
CBA means Commonwealth Bank of Australia
CFD means Contract For Difference
Church Hill means Church Hill Wind Farm Limited
CIBC means Canadian Imperial Bank of Commerce
Clyde means Clyde Wind Farm (Scotland) Limited
CO(2) means carbon dioxide
Company means Greencoat UK Wind PLC
Corriegarth means Corriegarth Wind Energy Limited
Cotton Farm means Cotton Farm Wind Farm Limited
CPI means the Consumer Price Index
Crighshane means Crighshane Wind Farm Limited
Dalquhandy means Dalquhandy Wind Farm Limited
Deeping St. Nicholas means Deeping St. Nicholas wind farm
Douglas West means Douglas West Wind Farm Limited
Drone Hill means Drone Hill Wind Farm Limited
DTR means the Disclosure Guidance and Transparency Rules sourcebook issued by
the Financial Conduct Authority
Dunmaglass means Dunmaglass Holdco and Dunmaglass Wind Farm
Dunmaglass Holdco means Greencoat Dunmaglass Holdco Limited
Dunmaglass Wind Farm means Dunmaglass Wind Farm Limited
Earl's Hall Farm means Earl's Hall Farm Wind Farm Limited
Equity Element means the ordinary shares issued to the Investment Manager
under the Investment Management Agreement
EU means the European Union
Fenlands means Fenland Windfarms Limited
GAV means Gross Asset Value
GB means Great Britain consisting of England, Scotland and Wales
Glass Moor means Glass Moor wind farm
Glen Kyllachy means Glen Kyllachy Wind Farm Limited
Group means Greencoat UK Wind PLC and Greencoat UK Wind Holdco Limited
Holdco means Greencoat UK Wind Holdco Limited
Hornsea 1 means Hornsea 1 Holdco and Hornsea 1 Limited
Hornsea 1 Holdco means Jupiter Investor TopCo Limited
Hoylake means Hoylake Wind Limited
Humber Gateway means Humber Holdco and Humber Wind Farm
Humber Holdco means Greencoat Humber Limited
Humber Wind Farm means RWE Renewables UK Humber Wind Limited
IAS means International Accounting Standard
IFRS means International Financial Reporting Standards
Investment Management Agreement means the agreement between the Company and
the Investment Manager
Investment Manager means Schroders Greencoat LLP
IPO means Initial Public Offering
IRR means Internal Rate of Return
Kildrummy means Kildrummy Wind Farm Limited
Kype Muir Extension means Kype Muir Extension Wind Farm
Langhope Rig means Langhope Rig Wind Farm Limited
Lindhurst means Lindhurst Wind Farm
Little Cheyne Court means Little Cheyne Court Wind Farm Limited
London Array means London Array Limited
Lloyds means Lloyds Bank PLC
Maerdy means Maerdy Wind Farm Limited
Middlemoor means Middlemoor Wind Farm
ML Wind means ML Wind LLP
NAB means National Australia Bank
Nanclach means Nanclach Limited
NAV means Net Asset Value
NAV per Share means the Net Asset Value per Ordinary Share
North Hoyle means North Hoyle Wind Farm Limited
North Rhins means North Rhins Wind Farm Limited
PPA means Power Purchase Agreement entered into by the Group's wind farms
RBC means the Royal Bank of Canada
RBS International means the Royal Bank of Scotland International Limited
Red House means Red House wind farm
Red Tile means Red Tile wind farm
Review Section means the front end review section of this report (including
but not limited to the Chairman's Statement and the Investment Manager's
Report)
Rhyl Flats means Rhyl Flats Wind Farm Limited
ROC means Renewable Obligation Certificate
RPI means the Retail Price Index
Santander means Santander Global Banking and Markets
Screggagh means Screggagh Wind Farm Limited
Sixpenny Wood means Sixpenny Wood Wind Farm Limited
Slieve Divena means Slieve Divena Wind Farm Limited
Slieve Divena 2 means Slieve Divena Wind Farm No. 2 Limited
SONIA means the Sterling Overnight Index Average
South Kyle means South Kyle Wind Farm Limited
SPVs means the Special Purpose Vehicles which hold the Group's investment
portfolio of underlying wind farms
Stronelairg means Stronelairg Holdco and Stronelairg Wind Farm
Stronelairg Holdco means Greencoat Stronelairg Holdco Limited
Stronelairg Wind Farm means Stronelairg Wind Farm Limited
Stroupster means Stroupster Caithness Wind Farm Limited
SYND Holdco means SYND Holdco Limited
Tappaghan means Tappaghan Wind Farm (NI) Limited
Tom nan Clach means Breeze Bidco and Nanclach
TSR means Total Shareholder Return
Twentyshilling means Twentyshilling Limited
UK means the United Kingdom of Great Britain and Northern Ireland
Walney means Walney Holdco and Walney Wind Farm
Walney Holdco means Greencoat Walney Holdco Limited
Walney Wind Farm means Walney (UK) Offshore Windfarms Limited
Windy Rig means Windy Rig Wind Farm Limited
Yelvertoft means Yelvertoft Wind Farm Limited
Alternative Performance Measures
Performance Measure Definition
Aggregate Group Debt The Group's proportionate share of outstanding third party
borrowings
GAV Gross Asset Value
NAV Net Asset Value
NAV per share The Net Asset Value per ordinary share
Net cash generation The operating cash flow of the Group and wind farm SPVs
Total Shareholder Return The movement in share price, combined with dividends paid, on the assumption
that these dividends have been reinvested
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group were identified in
detail in the Company's Annual Report to 31 December 2022, summarised as
follows:
• dependence on the Investment Manager;
• financing risk; and
• risk of investment returns becoming unattractive.
Also, the principal risks and uncertainties affecting the investee companies
were identified in detail in the Company's Annual Report to 31 December 2022,
summarised as follows:
• changes in Government policy on renewable energy;
• a decline in the market price of electricity;
• risk of low wind resource;
• lower than expected asset life; and
• health and safety and the environment.
The principal risks outlined above remain the most likely to affect the Group
and its investee companies in the second half of the year.
Cautionary Statement
The Review Section of this report has been prepared solely to provide
additional information to shareholders to assess the Company's strategies and
the potential for those strategies to succeed. These should not be relied on
by any other party or for any other purpose.
The Review Section may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or comparable
terminology.
These forward-looking statements include all matters that are not historical
facts. They appear in a number of places throughout this document and include
statements regarding the intentions, beliefs or current expectations of the
Directors and the Investment Manager concerning, amongst other things, the
investment objectives and Investment Policy, financing strategies, investment
performance, results of operations, financial condition, liquidity, prospects,
and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Forward-looking statements are not guarantees of future
performance. The Company's actual investment performance, results of
operations, financial condition, liquidity, distribution policy and the
development of its financing strategies may differ materially from the
impression created by the forward-looking statements contained in this
document.
Subject to their legal and regulatory obligations, the Directors and the
Investment Manager expressly disclaim any obligations to update or revise any
forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
In addition, the Review Section may include target figures for future
financial periods. Any such figures are targets only and are not forecasts.
This Half Year Report has been prepared for the Company as a whole and
therefore gives greater emphasis to those matters which are significant in
respect of Greencoat UK Wind PLC and its subsidiary undertakings when viewed
as a whole.
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