REG - Greencoat UK Wind - Half year results, NAV and Dividend Announcement
24/07/2024 07:00
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RNS Number : 5438X Greencoat UK Wind PLC 24 July 2024
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24 July 2024
GREENCOAT UK WIND PLC
(the "Company")
Half year results to 30 June 2024, Net Asset Value and Dividend Announcement
Greencoat UK Wind PLC today announces the half year results for the period
to 30 June 2024.
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 2,654GWh of renewable electricity.
· Net cash generation (Group and wind farm SPVs) was £165.4 million.
· The Company declared total dividends of 5 pence per share with
respect to the period and paid an additional £29 million of dividends with
respect to 2023.
· The Company bought back 32 million of its own shares at an average
cost of 140 pence per share.
· Aggregate Group Debt was £2,329 million as at 30 June 2024,
equivalent to 39 per cent of GAV.
Commenting on today's results, Lucinda Riches, Chairman of Greencoat UK Wind,
said:
"We are pleased to have delivered a resilient performance, extending our
sustained track record of growing our dividend at least in line with RPI since
our listing in. Dividend cover was robust at 1.5x despite lower than usual
wind and portfolio availability during the period and net cash generation
remained strong at £165.4 million. We are also pleased to have returned an
extra £82 million of capital to investors through share buybacks and
additional dividends since October 2023.
"The outlook for the Group remains very encouraging. Portfolio returns have
been adjusted over the past two years to reflect the macro environment, and
are now set to deliver net returns to investors of 10% on NAV. We operate in a
mature and growing asset class and, as the market for UK wind assets is
expected to grow to threefold over the next decade, we are well placed to
capitalise on our leading position, continuing to deliver superior returns and
supporting the UK Government's net zero targets."
Net Asset Value
The Company announces that its unaudited Net Asset Value as at 30 June 2024 is
£3,633.2 million (159.3 pence per share). The Company's June 2024 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 2.50 pence per share in
respect of the period from 1 April 2024 to 30 June 2024.
Dividend Timetable
Ex-dividend date: 15 August 2024
Record date: 16 August 2024
Payment date: 30 August 2024
Key Metrics
As at 30 June 2024:
Market capitalisation £3,010.7 million
Share price 132 pence
Dividends with respect to the period £114.1 million
Dividends with respect to the period per share 5 pence
GAV £5,962.2 million
NAV £3,633.2 million
NAV per share 159.3 pence
The Company's 2024 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=4404837d&confId=67966
(https://www.netroadshow.com/events/login?show=4404837d&confId=67966) .
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
Matt Ridley
Headland 020
3805 4822
Stephen Malthouse
Rob Walker
Charlie Twigg
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 2024.
The Company is well established as the leader in the UK wind sector; a sector
that is set to grow two to threefold over the next decade. Earlier this month
we saw the election of a government that is committed to delivering a net zero
electricity grid by 2030 and as the leading financial owner of operational UK
wind farms, we are well positioned to be a part of this transformation.
Demand for green electrons continues to strengthen. The continuing
decarbonisation of transport and heating through electrification, as well as
green hydrogen production, will require a further 30TWh of green electrons per
annum by 2030. This represents approximately one tenth of the UK's current
annual electrical demand and approximately five times the Company's current
annual electrical output.
The portfolio provides renewable electricity for 2.3 million homes and avoids
emissions of 2.5 million tonnes of CO(2).
Performance
Portfolio generation for the period was 2,654GWh, 15 per cent below budget
owing to low wind and lower availability, principally from an export cable
failure at Hornsea 1. Despite lower than budgeted output, net cash generated
by the Group and wind farm SPVs was £165 million and underlying dividend
cover for the period was 1.5x. In the period, the Company reinvested £44
million by buying back its own shares.
Dividends and Returns
The Company's aim remains to provide investors with an attractive and
sustainable dividend that increases in line with RPI while preserving capital
on a real basis. In each of the first 10 years since listing, the Company
increased its dividend target by RPI and for 2024, the 11(th) year, the
Company increased its target significantly above RPI to 10 pence per share.
The Company paid an underlying 2.5 pence per share with respect to Q1 2024 and
has declared a dividend of the same amount per share with respect to Q2 2024,
giving a total of 5 pence per share for the period. The Company also paid an
additional £29 million of dividends to shareholders in February, increasing
the total dividend to 10 pence per share for 2023.
NAV per share decreased in the period from 164.1 pence per share on 31
December 2023 to 159.3 pence per share on 30 June 2024, reflecting lower net
cash generation in the period, and a fall in forecast power prices.
In line with the current higher interest rate environment, the Company
forecasts a 10 per cent return to investors on NAV (net of all costs). This
includes reinvestment of excess cash generation (dividend cover) in addition
to the dividend yield. Since listing, the Company has reinvested £935 million
of excess cash generation and paid £1,074 million of dividends.
Capital Allocation and Outlook
As the Company continues to trade at a discount to NAV, we must consider how
best to allocate capital. We are 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 in the medium and long term.
We 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. The Board and the Investment Manager will continue to actively explore
selective disposals given the current environment. Divestment proceeds would
generally be expected to be used to repay the Company's revolving credit
facility.
Although there is a significant need for capital in the sector, the Company
expects not to make acquisitions if they are not as accretive to NAV as buying
back shares in the market or repaying debt.
In the first half, the Company bought back a further £44 million of shares at
an average cost of 140 pence per share and at an average discount to NAV of
14.2 per cent. As of 30 June, the Company has bought back a total of £53
million of shares under the £100 million programme announced in October
2023. After also taking into account the £29 million of additional 2023
dividends paid in February, the Company has returned £82 million to
shareholders since October 2023 on top of the quarterly dividend which has
increased at least in line with RPI inflation.
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 2023 and remain the most likely to affect the Group and its investee
companies in the second half of the year.
The Board and Governance
On 1 March 2024, Abigail Rotheroe joined the Board. Abigail has extensive
experience in the investment and asset management industry, with a focus on
ESG. Abigail's appointment broadens the experience of the Board, particularly
as relates to ESG considerations.
At the Company's AGM on 24 April 2024, Martin McAdam retired from the Board
and on behalf of the Board, I would like to thank him for his services as a
non-executive Director of the Company since his appointment in 2015 and for
his wisdom and insight.
Also, at the AGM on 24 April 2024, the Company held a Continuation Vote as a
consequence of trading at an average discount to NAV of 10.5 per cent over the
12 month period ending 31 December 2023, with 11 per cent of shareholders
voting in favour of a discontinuation, therefore, the resolution confirmed
continuation. I thank shareholders for their continued support of the Company
on behalf of the Board and the Investment Manager.
Lucinda Riches C.B.E.
Chairman
23 July 2024
Investment Manager's Report
Investment Portfolio
As at 30 June 2024, the Group owned investments in a diversified portfolio of
49 operating UK wind farms with net generating capacity totalling 2,007MW.
Asset Management
The Group operates a sizeable and diverse portfolio of 49 assets with net
generating capacity in excess of 2GW. The Investment Manager has an
experienced and specialist asset management team, which has expanded
considerably as the portfolio has grown. The team focuses on the safe and
optimal performance of the Group's assets, as well as ensuring the delivery of
the Company's long term investment case. The team continues to move forward
several key initiatives to optimise the performance of the Group's assets,
creating long term value for shareholders. Initiatives include, for instance,
lease extensions, turbine performance upgrades, and revenue and operating cost
optimisation. Together these initiatives have, since 2016, added approximately
£138 million to NAV.
Operating and financial performance
Portfolio generation in the period was 2,654GWh, 15 per cent below budget,
with wind resource being 5 per cent below budget. Portfolio availability was
also lower than expectations, principally because of an export cable outage at
Hornsea 1. This has now been remedied and the asset returned to full
production on 2 June 2024.
Net cash generated by the Group and wind farm SPVs was £165.4 million.
Dividend cover for the period, adjusted for the additional £28.6 million of
dividend paid in February 2024 with respect to 2023, was 1.5x, despite lower
wind and availability. In the period, the Company reinvested £44 million
buying back its own shares.
Group and wind farm SPV cash flows For the six months ended
30 June 2024
£'000
Net cash generation ((1)) 165,425
Dividends paid (136,381)
Acquisitions -
Acquisition costs (251)
Share buybacks (43,983)
Share buyback costs (280)
Net amounts drawn under debt facilities -
Upfront finance costs -
Movement in cash (Group and wind farm SPVs) (15,470)
Opening cash balance (Group and wind farm SPVs)((2)) 221,217
Closing cash balance (Group and wind farm SPVs) ((2)) 205,747
Net cash generation 165,425
Dividends ((3)) 107,780
Dividend cover 1.5x
((1) ) Alternative Performance Measure defined below.
((2) ) Includes security cash deposits recognised as a receivable in
note 10 to the financial statements.
((3) ) Dividends adjusted by £28,601k for additional dividends paid
to bring the 2023 dividend to 10 pence per share.
The following tables provide further detail in relation to net cash generation
of £165.4 million:
Net Cash Generation - Breakdown ((1)) For the six months ended
30 June 2024
£'000
Revenue 419,346
Operating expenses (102,248)
Tax (30,219)
SPV level debt interest (9,153)
SPV level debt amortisation (40,514)
Other (8,263)
Wind farm cash flow 228,949
Management fee (15,618)
Operating expenses (1,669)
Ongoing finance costs (48,082)
Other 2,461
Group cash flow (62,908)
VAT (Group and wind farm SPVs) (616)
Net cash generation 165,425
((1)) Alternative Performance Measure defined below.
Net Cash Generation - Reconciliation to Net Cash Flows from Operating For the six months ended
Activities((1))
30 June 2024
£'000
Net cash flows from operating activities ((2)) 203,842
Movement in cash balances of wind farm SPVs 1,254
Repayment of shareholder loan investment ((2)) 11,355
Finance costs ((2)) (48,082)
Movement in security cash deposits ((3)) (2,944)
Net cash generation 165,425
((1)) Alternative Performance Measure defined below.
((2)) Consolidated Statement of Cash Flows.
((3)) The movement in security cash deposits in note 10 to the financial
statements.
Investment and Gearing
The Investment Manager believes that there should continue to be further
opportunities for investments that are beneficial to shareholders in the
medium and long term. The Company will maintain its disciplined approach to
acquisitions, and, at present, expects only to invest in further assets when
it is considered to be more accretive than buying back shares, or repaying
debt.
The Company continues its £100 million buyback programme, having now
repurchased 39 million shares as of 30 June 2024, at an average cost of 139
pence per share. The Company may also use excess cash generation to return
capital to shareholders through further increased dividends, or for the
repayment of debt.
The Company continues to explore selective disposals, with the aim of
generating further capital to deploy to the advantage of its shareholders. In
the near term, any disposal proceeds would be expected to repay the Company's
revolving credit facility.
As at 30 June 2024, Aggregate Group Debt was £2,329 million, comprising
£1,390 million of term debt at Company level, £400 million drawn under the
Company's revolving credit facility plus £539 million being the Group's share
of limited recourse debt in Hornsea 1. Cash balances (Group and wind farm
SPVs) as at 30 June 2024 were £206 million (including £37.2 million of
security cash deposits).
Gearing as at 30 June 2024 was 39 per cent of GAV, with a weighted cost of
debt of 4.63 per cent across a range of maturities (October 2024 to March
2036):
Facility Maturity date Loan principal Loan margin Swap rate/ SONIA All-in rate
£'000 % % %
RCF 29 Oct 2024 400,000 1.75 5.20 ((1)) 6.95
NAB 4 Nov 2024 50,000 1.15 1.06 2.21
CBA 14 Nov 2024 50,000 1.35 0.81 2.16
CBA 6 Mar 2025 50,000 1.55 1.53 3.08
CIBC 3 Nov 2025 100,000 1.50 1.51 3.01
ANZ 3 May 2026 75,000 1.45 5.92 7.37
NAB 1 Nov 2026 75,000 1.50 1.60 3.10
NAB 1 Nov 2026 25,000 1.50 0.84 2.34
CIBC 14 Nov 2026 100,000 1.40 0.81 2.21
Lloyds 9 May 2027 150,000 1.60 5.65 7.25
CBA 4 Nov 2027 100,000 1.60 1.37 2.97
ABN AMRO 2 May 2028 100,000 1.75 5.04 6.79
ANZ 3 May 2028 75,000 1.75 5.38 7.13
Barclays 3 May 2028 100,000 1.75 4.99 6.74
AXA 31 Jan 2030 125,000 - - 3.03
AXA 31 Jan 2030 75,000 1.70 1.45 3.15
AXA 28 Apr 2031 25,000 - - 6.43
AXA 28 Apr 2031 115,000 1.80 5.20 (1) 7.00
Hornsea 1 31 Mar 2036 539,000 - - 2.60
2,329,000 Weighted average 4.63
(1) Facility pays SONIA as variable rate.
The Company's revolving credit facility matures in October 2024 and, in
addition, there are term loan tranches nearing maturity. The refinancing
process of both the revolving credit facility and selected term debt tranches
is at an advanced stage and will conclude earlier than the first maturity
date. The Investment Manager has found significant appetite to lend amongst
its existing pool of lenders and expects the refinancing to maintain a
sustainable debt structure ensuring both flexibility and the lowest cost form
of refinancing for the Company.
Given the leading market position of the Group and the Investment Manager,
there is no shortage of investment opportunities. The market for UK wind
assets is expected to grow two to threefold over the next decade, and so the
outlook for the Company remains strong.
Net Asset Value
The following table sets out the movement in NAV from 31 December 2023 to 30
June 2024. The key components are discussed in detail below.
£'000 Pence per share
NAV as at 31 December 2023 3,793,997 164.1
Net cash generation 165,425 7.3
Dividend (136,381) (6.0)
Depreciation (22,661) (1.0)
Power price (115,819) (5.1)
Share buybacks (44,262) 0.3
Other ((1)) (7,129) (0.3)
NAV as at 30 June 2024 3,633,170 159.3
((1) ) Includes wind farm SPV budget updates
Reconciliation of Statutory Net Assets to Reported NAV As at As at
30 June 2024
31 December 2023
£'000 £'000
Operating portfolio 5,768,997 5,964,343
Cash (wind farm SPVs) 160,547 159,293
Fair value of investments((1)) 5,929,544 6,123,636
Cash (Group) 8,025 21,805
Other relevant assets 24,601 23,556
GAV 5,962,170 6,168,997
Aggregate Group Debt((1)) (2,329,000) (2,375,000)
NAV 3,633,170 3,793,997
Reconciling items - -
Statutory net assets 3,633,170 3,793,997
Shares in issue 2,280,856,721 2,312,131,799
NAV per share (pence) 159.3 164.1
(1) Includes limited recourse debt at Hornsea 1, not included in the
Condensed Consolidated Statement of Financial Position.
Health and Safety and the Environment
Health and safety is of key importance to both the Company and the Investment
Manager.
The Investment Manager is an active member of SafetyOn, the UK's leading
health and safety focused organisation for the onshore wind industry. The
Investment Manager also has its own health and safety forum, chaired by
Stephen Lilley, where best practice is discussed and key learnings from
incidents across the industry are shared.
The Company has continued to contribute to local community funds and to invest
in a range of local environmental and social projects. On a voluntary basis,
the Company continues to fund a £250,000 programme to advance knowledge on
blade recycling and repurposing, with over half of the funding being granted
to date.
As at 30 June 2024, the portfolio powers 2.3 million homes and avoids the
emission of 2.5 million tonnes of CO(2) per annum.
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 28 June 2024.
A discount of 10-20 per cent is applied to power price assumptions in all
years to reflect the fact that wind generation typically captures a lower
price than the base load power price. During the period, the portfolio
captured an average price of £56.84/MWh versus an average N2EX index price of
£63.77/MWh (11 per cent discount).
In addition to the above capture 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 table on page 13 of the Company's 2023 Annual Report sets out the terms of
each PPA.
The following table shows the assumed power price (post capture discount, pre
PPA discount) and also the price post a representative PPA discount (90 per
cent x index price).
£/MWh (real 2023) 2024 2025 2026 2027 2028 2029 2030
Pre PPA discount 70.84 66.26 64.35 61.36 66.32 66.88 65.84
Post representative PPA discount 63.76 59.64 57.92 55.22 59.69 60.19 59.26
2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Pre PPA discount 64.00 62.00 62.40 62.24 60.72 62.96 62.40 59.68 59.52 57.28
Post representative PPA discount 57.60 55.80 56.16 56.02 54.65 56.66 56.16 53.71 53.57 51.55
2041 2042 2043 2044 2045 2046 2047 2048 2049 2050
Pre PPA discount 55.44 54.32 54.88 54.32 54.72 53.84 53.92 53.12 54.40 52.40
Post representative PPA discount 49.90 48.89 49.39 48.89 49.25 48.46 48.53 47.81 48.96 47.16
2051 2052 2053 2054 2055 2056 2057 2058 2059 2060
Pre PPA discount 53.36 52.00 52.24 51.04 49.20 49.28 48.40 46.08 44.72 43.20
Post representative PPA discount 48.02 46.80 47.02 45.94 44.28 44.35 43.56 41.47 40.25 38.88
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).
The fixed revenue base means that dividend cover is robust in the face of
extreme downside power price sensitivities:
2025 2026 2027 2028 2029
RPI increase (%) 3.5 3.5 3.5 3.5 3.5
Dividend (pence / share) 10.35 10.71 11.09 11.48 11.88
Dividend (£ 000) 236,069 244,331 252,883 261,734 270,894
Dividend cover (x)
Base case 1.9 2.0 2.0 2.1 2.2
£50/MWh 1.7 1.7 1.7 1.8 1.7
£40/MWh 1.5 1.6 1.5 1.6 1.5
£30/MWh 1.4 1.4 1.3 1.3 1.2
£20/MWh 1.2 1.2 1.1 1.1 1.0
£10/MWh 1.1 1.0 0.9 0.9 0.8
All numbers illustrative. Power prices real 2023, pre PPA discounts.
The Group's strategy remains to maintain an appropriate balance between fixed
and merchant revenue. Over the life of the portfolio, the total DCF is
forecast to maintain an equal blend of fixed and merchant cash flows. To the
extent that merchant revenues were to increase as a proportion of total
revenues, new fixed price PPAs would be entered into. An appropriate revenue
balance could also be maintained through the acquisition of new fixed revenue
streams (for example, onshore and offshore wind CFD assets).
Inflation
Base case assumptions in relation to inflation are:
• CPI: 2.5 per cent (all years)
• RPI: 4.3 per cent (2024), 3.5 per cent (2025-2030), 2.5 per cent (2031
onwards)
The ROC price is inflated annually from 1 April each year based on the
previous year's average RPI. For example, on 1 April 2024, the ROC price has
increased by 9.7 per cent (average RPI over 2023).
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. For example, on 1
April 2024, CFD prices have increased by 4.0 per cent (January 2024 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.
Returns
Discount rates should reflect the interest rate environment.
For the 30 June 2024 NAV, the discount rate remained unchanged. The levered
portfolio IRR remains at 11 per cent. This is materially higher than at IPO
over a decade ago, having been revised upwards significantly in the past two
years to reflect rising interest rates.
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 at NAV 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 11 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 net return of 10 per cent and a dividend yield of 6 per cent would
imply NAV growth of 4 per cent. The total return is more important than the
dividend yield, which depends on the chosen dividend policy (the Company could
have chosen a different combination of dividend yield and NAV growth).
Since IPO, aggregate historical dividend cover has been 1.9x and the Group has
reinvested £935 million and has delivered NAV growth significantly in excess
of RPI.
Outlook
There are currently approximately 30GW (£100 billion) of operating UK wind
farms (15GW onshore plus 15GW offshore). The Company expects the UK wind
market to grow two to threefold over the next decade. The Group's market share
is approximately 7 per cent. As at 30 June 2024, the average age of the
portfolio was 8 years (versus 5 years at IPO in March 2013).
As progress towards a net zero electricity grid continues, the decarbonisation
of transport and home heating through electrification, and the production of
green hydrogen, are emerging as significant sources of responsive demand for
green electrons by 2030. Together these sources of demand alone are expected
to require a further 30TWh per annum of electricity in the next five years.
This is approximately one tenth of the UK's current annual electrical demand
and approximately five times the Company's current annual electrical output.
Further sources of responsive demand are expected to materialise in the coming
five years including, for example, an expansion of capacity to power data
centre demand as the use of AI increases. The Investment Manager expects that
these sources of demand will present further opportunities for the Company to
enter long term power price agreements in due course.
The portfolio is robust in the face of downside production and power price
sensitivities as well as remaining exposed to significant upside (power
prices, 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 on NAV should be very attractive versus
other investment opportunities.
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
23 July 2024
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the six months ended 30 June 2024
Note For the six months ended For the six months ended
30 June 2024
30 June 2023
£'000 £'000
Investment income 3 218,763 238,031
Unrealised movement in fair value of investments (136,737) (132,574)
Other income 3,929 864
Total income and unrealised movement 85,955 106,321
Operating expenses 4 (18,633) (18,751)
Investment acquisition costs (196) (226)
Operating profit 67,126 87,344
Finance expense 12 (48,036) (21,858)
Profit for the year before tax 19,090 65,486
Tax 5 - -
Profit for the year after tax 19,090 65,486
Profit and total comprehensive income attributable to:
Equity holders of the Company 19,090 65,486
Earnings per share
Basic and diluted earnings from continuing operations in the year (pence) 6 0.83 2.82
The accompanying notes form an integral part of the financial statements.
Condensed Consolidated Statement of Financial Position (unaudited)
As at 30 June 2024
Note 30 June 2024 31 December 2023
£'000 £'000
Non current assets
Investments at fair value through profit or loss 8 5,390,544 5,538,636
5,390,544 5,538,636
Current assets
Receivables 10 40,125 41,129
Cash at bank 8,025 21,805
48,150 62,934
Current liabilities
Loans and borrowings 12 (550,000) (500,000)
Payables 11 (15,524) (17,573)
Net current liabilities (517,374) (454,639)
Non current liabilities
Loans and borrowings 12 (1,240,000) (1,290,000)
Net assets 3,633,170 3,793,997
Capital and reserves
Called up share capital 14 23,074 23,121
Share premium account 14 2,471,515 2,471,515
Capital redemption reserve 14 113 66
Treasury shares 14 (36,469) -
Retained earnings 1,174,937 1,299,295
Total shareholders' funds 3,633,170 3,793,997
Net assets per share (pence) 15 159.3 164.1
Authorised for issue by the Board of Greencoat UK Wind PLC (registered number
08318092) on 23 July 2024 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 2024
For the six months ended Note Share capital Share premium Capital redemption reserve Treasury shares Retained earnings Total
30 June 2024
£'000 £'000 £'000 £'000 £'000 £'000
Opening net assets attributable to shareholders (1 January 2024) 23,121 2,471,515 66 - 1,299,295 3,793,997
Share buybacks 14 (47) - 47 (37,594) (6,788) (44,382)
Share buyback costs - - - - (279) (279)
Shares issued to the Investment Manager 14 - - - 1,125 - 1,125
Profit and total comprehensive income for the period - - - - 19,090 19,090
Interim dividends paid in the period 7 - - - - (136,381) (136,381)
Closing net assets attributable to shareholders 23,074 2,471,515 113 (36,469) 1,174,937 3,633,170
The total reserves distributable by way of a dividend as at 30 June 2024 were
£789,633,192.
For the year ended 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 4 746 - 750
Profit and total comprehensive income for the year - 65,486 65,486
Interim dividends paid in the year - - (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.
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 2024
Note For the six months ended For the six months ended
30 June 2024
30 June 2023
£'000 £'000
Net cash flows from operating activities 16 203,842 220,152
Cash flows from investing activities
Acquisition of investments - (55,936)
Investment acquisition costs (251) (226)
Repayment of shareholder loan investments 11,355 11,388
Net cash flows from investing activities 11,104 (44,774)
Cash flows from financing activities
Share buybacks (43,983) -
Share buyback costs (280) -
Amounts drawn down on loan facilities - 640,000
Amounts repaid on loan facilities - (350,000)
Net finance costs (48,082) (22,284)
Dividends paid 7 (136,381) (95,517)
Net cash flows from financing activities (228,726) 172,199
Net (decrease)/increase in cash and cash equivalents during the period (13,780) 347,577
Cash and cash equivalents at the beginning of the period 21,805 19,783
Cash and cash equivalents at the end of the period 8,025 367,360
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 2024
1. Material 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 2023 and are expected to
continue to apply in the Group's consolidated financial statements for the
year ended 31 December 2024.
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 2023. The audited annual accounts for the year ended 31
December 2023 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 2024, the Group had net current liabilities of £517.4 million
(31 December 2023: £454.6 million), cash balances of £8.0 million (31
December 2023: £21.8 million) and security cash deposits of £37.2 million
(31 December 2023: £40.1 million). The significant net current liabilities
position of the Group at 30 June 2024 is due to both the Company's revolving
credit facility and three of the Company's term debt tranches with NAB and CBA
maturing within 12 months of the reporting date and therefore being classified
as current liabilities. The Company is in advanced discussions with lenders
and will refinance the revolving credit facility and near maturing term debt
earlier than the first facility maturity date.
As the Company's shares traded at an average discount to NAV of 10.5 per cent
over the 12 month period ending 31 December 2023, a Continuation Vote was held
at the Company's AGM in April 2024 in line with its Articles of Association,
with 11 per cent voting in favour of a discontinuation, therefore, the
resolution confirmed continuation.
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 2025.
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 pages 79 and 80 of the Company's Annual Report for the year ended
31 December 2023.
Investment management fees paid or accrued in the period were as follows:
For the six months ended For the six months ended
30 June 2024
30 June 2023
£'000 £'000
Cash Fee 15,323 15,777
Equity Element 750 750
16,073 16,527
As at 30 June 2024, total amounts payable to the Investment Manager were
£7,701,201 (31 December 2023: £8,090,319).
3. Investment Income
For the six months ended For the six months ended
30 June 2024
30 June 2023
£'000 £'000
Dividends received (note 17) 186,519 208,286
Interest on shareholder loan investment received 32,244 29,745
218,763 238,031
4. Operating expenses
For the six months ended For the six months ended
30 June 2024
30 June 2023
£'000 £'000
Management fees (note 2) 16,073 16,527
Group and SPV administration fees 653 608
Non-executive Directors' fees 202 160
Other expenses 1,575 1,328
Fees to the Company's Auditor:
for audit of the statutory financial statements 125 124
for other audit related services 5 4
18,633 18,751
The fees to the Company's Auditor for the period ended 30 June 2024 include
£5,100 (30 June 2023: £4,290) 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 2024 is £nil (30 June 2023: £nil).
6. Earnings per share
For the six months ended For the six months ended
30 June 2024
30 June 2023
Profit attributable to equity holders of the Company - £'000 19,090 65,486
Weighted average number of ordinary shares in issue 2,308,212,941 2,318,296,118
Basic and diluted earnings from continuing operations in the period (pence) 0.83 2.82
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 2024 Dividend per share Total dividend
pence £'000
With respect to the quarter ended 31 December 2023 3.43 79,114
With respect to the quarter ended 31 March 2024 2.50 57,267
5.93 136,381
Interim dividends declared after 30 June 2024 and not accrued in the period Dividend per share Total dividend
pence £'000
With respect to the quarter ended 30 June 2024 2.50 56,816
2.50 56,816
As disclosed in note 18, on 23 July 2024, the Board approved a dividend of 2.5
pence per share with respect to the quarter ended 30 June 2024, bringing the
total dividends declared with respect to the period to 5.0 pence per share.
The record date for the dividend is 16 August 2024 and the payment date is 30
August 2024.
8. Investments at fair value through profit or loss
30 June 31 December 2023
2024
£'000 £'000
Opening balance 5,538,636 4,959,312
Additions - 820,925
Repayment of shareholder loan investments (note 17) (11,355) (50,199)
Unrealised movement in fair value of investments (136,737) (191,402)
5,390,544 5,538,636
The investments made in underlying assets are carried at fair value through
profit and loss. The investments are typically made through a combination of
shareholder loans and equity into the SPVs which own the underlying asset. The
nominal value of the shareholder loan investments as at 30 June 2024 was
£1,482,786,408 (31 December 2023: £1,484,003,180).
Fair value measurements
As disclosed on pages 83 and 84 of the Company's Annual Report for the year
ended 31 December 2023, 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 £5,390,543,969 (31 December
2023: £5,538,635,628). 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.
30 June 2024
Input Base case Change in input Change in fair value of investments Change in NAV per share
£'000 pence
Discount rate 11 per cent levered portfolio IRR + 0.5 per cent (160,272) (7.0)
- 0.5 per cent 169,213 7.4
Long term inflation rate RPI: 3.5 per cent to 2030, 2.5 per cent thereafter - 0.5 per cent (167,157) (7.3)
CPI: 2.5 per cent
+ 0.5 per cent 175,553 7.7
Energy yield P50 10 year P90 (342,609) (15.0)
10 year P10 342,547 15.0
Power price Forecast by leading consultant - 10 per cent (329,040) (14.4)
+ 10 per cent 327,739 14.4
Asset life 30 years - 5 years (318,606) (14.0)
+ 5 years 209,928 9.2
31 December 2023
Input Base case Change in input Change in fair value of investments Change in NAV per share
£'000 pence
Discount rate 11 per cent levered portfolio IRR + 0.5 per cent (170,310) (7.4)
- 0.5 per cent 179,963 7.8
Long term inflation rate RPI: 3.5 per cent to 2030, 2.5 per cent thereafter - 0.5 per cent (162,604) (7.0)
CPI: 2.5 per cent
+ 0.5 per cent 170,870 7.4
Energy yield P50 10 year P90 (352,901) (15.3)
10 year P10 352,854 15.3
Power price Forecast by leading consultant - 10 per cent (335,334) (14.5)
+ 10 per cent 316,943 13.7
Asset life 30 years - 5 years (313,935) (13.6)
+ 5 years 204,932 8.9
The portfolio is valued on an unlevered basis using a lower discount rate for
fixed cash flows and a higher discount rate for merchant cash flows. This
results in a blended unlevered portfolio IRR. The equivalent levered
portfolio IRR is calculated assuming 35 per cent gearing and an all-in
interest cost of 5 per cent.
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 incorporated 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:
Subsidiary Place of business Ownership interest as at
30 June 2024
Greencoat KME Holdco Limited England 100%
There were no other changes to the unconsolidated subsidiaries or the
associates and joint ventures of the Group as disclosed on pages 85 and 86 of
the Company's Annual Report for the year ended 31 December 2023.
There were no material changes to guarantees and counter-indemnities provided
by the Group, as disclosed on page 87 of the Company's Annual Report for the
year ended 31 December 2023. The fair value of these guarantees and
counter-indemnities provided by the Group are considered to be £nil (30 June
2023: £nil).
10. Receivables
30 June 2024 31 December 2023
£'000 £'000
Security cash deposits 37,175 40,119
VAT receivable 1,323 676
Interest income receivable 107 111
Prepayments 284 151
Other receivables 6 72
Amounts due from SPVs 1,230 -
40,125 41,129
11. Payables
30 June 2024 31 December 2023
£'000 £'000
Investment management fee payable 7,701 8,090
Loan interest payable 5,436 5,487
Commitment fee payable (note 12) 224 235
Letter of credit fees payable (note 12) 129 93
Amounts due to SPVs 859 2,508
Acquisition costs payable - 55
Other payables 1,175 1,105
15,524 17,573
12. Loans and borrowings
30 June 2024 31 December 2023
£'000 £'000
Opening balance 1,790,000 1,100,000
Revolving credit facility
Drawdowns - 400,000
Repayments - (200,000)
Term debt facilities
Drawdowns - 640,000
Repayments - (150,000)
Closing balance 1,790,000 1,790,000
Reconciled as:
Current liabilities 550,000 500,000
Non current liabilities 1,240,000 1,290,000
For the six months ended For the six
30 June 2024
months ended
30 June 2023
£'000 £'000
Loan interest 46,767 15,046
Facility arrangement fees - 4,350
Commitment fees 669 1,390
Letter of credit fees 506 471
Professional fees - 467
Other facility fees 94 134
Finance expense 48,036 21,858
The loan balance as at 30 June 2024 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 89 of the Company's Annual Report for the year ended 31
December 2023. As at 30 June 2024, the balance of this facility was £400
million (31 December 2023: £400 million), accrued interest was £228,812 (31
December 2023: £228,404) and the outstanding commitment fee payable was
£224,384 (31 December 2023: £235,068).
The Company has a £100 million letter of credit facility in place with
Lloyds. The fee for this facility is 1.25 per cent and the fee payable, as at
30 June 2024 was £93,400 (31 December 2023: £93,400).
The Company also has a £30 million letter of credit facility in place with
ANZ. The fee for this facility is 0.24 per cent and the fee payable, as at 30
June 2024 was £35,704 (31 December 2023: £nil).
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 margin Swap rate / SONIA All-in rate Loan principal Accrued interest at 30 June 2024
% % % £'000 £'000
NAB 4 Nov 2024 1.15 1.06 2.21 50,000 179
CBA 14 Nov 2024 1.35 0.81 2.16 50,000 163
CBA 6 Mar 2025 1.55 1.53 3.08 50,000 232
CIBC 3 Nov 2025 1.50 1.51 3.01 100,000 454
ANZ 3 May 2026 1.45 5.92 7.37 75,000 44
NAB 1 Nov 2026 1.50 1.60 3.10 75,000 376
NAB 1 Nov 2026 1.50 0.84 2.34 25,000 95
CIBC 14 Nov 2026 1.40 0.81 2.21 100,000 334
Lloyds 9 May 2027 1.60 5.65 7.25 150,000 89
CBA 4 Nov 2027 1.60 1.37 2.97 100,000 447
ABN AMRO 2 May 2028 1.75 5.04 6.79 100,000 56
ANZ 3 May 2028 1.75 5.38 7.13 75,000 44
Barclays 3 May 2028 1.75 4.99 6.74 100,000 55
AXA 31 Jan 2030 - - 3.03 125,000 1,577
AXA 31 Jan 2030 1.70 1.45 3.15 75,000 982
AXA 28 Apr 2031 - - 6.43 25,000 13
AXA 28 Apr 2031 1.80 5.20( 1 ) 7.00 115,000 67
1,390,000 5,207
( 1 ) Facility pays SONIA as variable rate
13. Contingencies and commitments
There were no contingencies and commitments for the period ended 30 June 2024.
14. Share capital - ordinary shares of £0.01
Six months to 30 June 2024
Date Authorised, issued and fully paid Number of shares issued Share capital Share premium Capital redemption reserve Treasury shares Total
£'000 £'000 £'000 £'000 £'000
1 January 2024 2,312,131,799 23,121 2,471,515 66 - 2,494,702
Shares issued to the Investment Manager
7 May 2024 True-up of 2023 and 230,238 - - - 375 375
Q4 2023 Equity Element
7 May 2024 Q1 2024 Equity Element 228,532 - - - 375 375
7 May 2024 Q2 2024 Equity Element 234,415 - - - 375 375
693,185 - - - 1,125 1,125
Share buybacks (31,968,263) (47) - 47 (37,594) (37,594)
30 June 2024 2,280,856,721 23,074 2,471,515 113 (36,469) 2,458,233
15. Net assets per share
30 June 2024 31 December 2023
Net assets - £'000 3,633,170 3,793,997
Number of ordinary shares issued 2,280,856,721 2,312,131,799
Total net assets - pence 159.3 164.1
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 2024
30 June 2023
£'000 £'000
Operating profit for the period 67,126 87,344
Adjustments for:
Unrealised movement in fair value of investments 136,737 132,574
Investment acquisition costs 196 226
Decrease in receivables 1,024 470
Decrease in payables (1,991) (1,212)
Equity Element of Investment Manager's fee (note 2) 750 750
Net cash flows from operating activities 203,842 220,152
17. Related party transactions
During the period, the Company increased its loan to Holdco by £2,431,779 (30
June 2023: £400,000) and Holdco settled amounts of £244,683,789 (30 June
2023: £150,647,425). The amount outstanding at the period end was
£2,453,851,467 (31 December 2023: £2,696,103,477).
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 2024
30 June 2023
£'000 £'000
Humber Holdco ((1)) 18,152 30,239
Clyde 18,048 27,038
Hornsea 1 Holdco ((2)) - 17,921
London Array ((3)) 15,554 -
Walney Holdco ((4)) 14,084 11,383
Stronelairg Holdco ((5)) 12,803 11,189
Stroupster 7,877 1,862
South Kyle Wind 7,850 -
Braes of Doune 6,600 6,735
SYND Holdco ((6)) 5,201 6,969
North Hoyle 5,120 7,547
Corriegarth 4,564 2,484
Brockaghboy 4,279 9,045
Hoylake ((7)) 3,921 8,156
Fenlands ((8)) 3,840 3,954
Rhyl Flats 3,792 6,237
ML Wind ((9)) 3,675 7,595
Andershaw 3,574 3,482
Little Cheyne Court 3,321 4,264
Cotton Farm 3,231 966
Dunmaglass Holdco ((10)) 3,194 5,688
Windy Rig 2,961 3,244
Glen Kyllachy 2,786 2,131
Kildrummy 2,720 616
Bishopthorpe 2,608 2,395
Douglas West 2,547 3,040
Crighshane 2,333 1,655
Maerdy 2,254 2,789
Tom nan Clach 2,230 -
Slieve Divena 2,148 2,727
Tappaghan 2,125 2,966
Langhope Rig 1,853 1,621
Earl's Hall Farm 1,838 604
Twentyshilling 1,709 2,734
Bicker Fen 1,560 2,326
Slieve Divena 2 1,429 2,040
Screggagh 1,379 1,930
Church Hill 1,360 940
Carcant 751 866
Bin Mountain 642 908
Dalquhandy 606 -
186,519 208,286
((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 London Array is held through
London Array Holdco.
((4) ) The Group's investment in Walney is held through Walney
Holdco.
((5) ) The Group's investment in Stronelairg is held through
Stronelairg Holdco.
((6) ) The Group's investments in Drone Hill, North Rhins,
Sixpenny Wood and Yelvertoft are held through SYND Holdco.
((7) ) The Group's investment in Burbo Bank Extension is held
through Hoylake.
((8) ) The Group's investments in Deeping St. Nicholas, Glass
Moor, Red House and Red Tile are held through Fenlands.
((9) ) The Group's investments in Middlemoor and Lindhurst are
held through ML Wind.
((10) ) The Group's investment in Dunmaglass is held through
Dunmaglass Holdco.
The table below shows the Group's shareholder loans with the wind farm
investments.
Loans at 1 January 2024((1)) Loan repayments in the period Loans at 30 June 2024 Accrued interest at 30 June 2024 Total
£'000 £'000 £'000 £'000 £'000
Andershaw 29,946 (790) 29,156 148 29,304
Church Hill 12,654 (226) 12,428 81 12,509
Clyde 71,503 - 71,503 1,004 72,507
Corriegarth 42,553 (1,043) 41,510 82 41,592
Crighshane 18,527 (344) 18,183 33 18,216
Dalquhandy 40,878 - 40,878 67 40,945
Douglas West 40,109 (1,309) 38,800 64 38,864
Dunmaglass Holdco ((2)) 56,864 - 56,864 848 57,712
Glen Kyllachy 46,630 - 46,630 696 47,326
Hornsea 1 Holdco ((3)) 101,331 - 101,331 3,165 104,496
Hoylake ((4)) 179,359 - 179,359 - 179,359
Kype Muir Extension 30,159 - 30,159 1,355 31,514
London Array ((5)) 133,269 (5,580) 127,689 1,419 129,108
Slieve Divena 2 20,672 (220) 20,452 205 20,657
South Kyle 206,791 - 206,791 5,083 211,874
Stronelairg 86,619 - 86,619 1,292 87,911
Tom nan Clach 65,824 (1,843) 63,981 87 64,068
Twentyshilling 32,190 - 32,190 602 32,792
Walney Holdco ((6)) 172,727 - 172,727 1,727 174,454
Windy Rig 36,772 - 36,772 60 36,832
1,425,377 (11,355) 1,414,022 18,018 1,432,040
((1) ) Excludes accrued interest at 31 December 2023 of
£7,326,641.
((2) ) The Group's investment in Dunmaglass is held through
Dunmaglass Holdco.
((3) ) The Group's investment in Hornsea 1 is held through Hornsea
1 Holdco.
((4) ) The Group's investment in Burbo Bank Extension is held
through Hoylake.
((5) ) The Group's investment in London Array is held through
London Array Holdco.
((6) ) The Group's investment in Walney is held through Walney
Holdco.
18. Subsequent events
On 23 July 2024, the Board approved a dividend of 2.5 pence per share with
respect to the quarter ended June 2024. The record date for the dividend is 16
August 2024 and the payment date is 30 August 2024.
Company Information
Registered Company Number
Directors (all non-executive)
Lucinda Riches C.B.E (Chairman) 08318092
Caoimhe Giblin
Nick Winser C.B.E. Registered Office
Jim Smith 5(th) Floor
Abigail Rotheroe ((1)) 20 Fenchurch Street
London
EC3M 3BY
Martin McAdam ((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 March 2024.
((2) ) Retired from the Board with effect from 24 April 2024.
Defined Terms
ABN AMRO means ABN AMRO Bank N.V.
Aggregate Group Debt means the Group's proportionate share of outstanding
third party borrowings including its share of the limited recourse debt in
Hornsea 1
AGM means Annual General Meeting of the Company
AI means Artificial Intelligence
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
DCF means discounted cash flows
Deeping St. Nicholas means Deeping St. Nicholas wind farm
Depreciation means the unwinding of the discount rate assumptions
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
ESG mean Environmental, Social and Governance
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
KME Holdco means Greencoat KME Holdco Limited
Langhope Rig means Langhope Rig Wind Farm Limited
Levered portfolio IRR means the Internal Rate of Return with an assumed level
of gearing
Lindhurst means Lindhurst Wind Farm
Little Cheyne Court means Little Cheyne Court Wind Farm Limited
London Array means London Array Holdco & London Array Limited
London Array Holdco means Greencoat London Array Holdco Limited
Lloyds means Lloyds Bank PLC and Lloyds Bank Corporate Markets 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
RCF means revolving credit facility
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 As at As at
30 June 2024 31 December 2023
Aggregate Group Debt The Group's proportionate share of outstanding third party borrowings of £2,329 million £2,375 million
£1,790 million per note 12 to the financial statements plus limited recourse
debt of £539 million at Hornsea 1, not included in the Consolidated Statement
of Financial Position
CO(2) emissions avoided per annum The estimate of the portfolio's annual CO(2) emissions avoided through the 2.5 million tonnes 2.5 million tonnes
displacement of thermal generation, based on the portfolio's estimated
generation as at the relevant reporting date
GAV Gross Asset Value £5,962.2 million £6,169.0 million
Homes powered per annum The estimate of the number of homes powered by electricity generated by the 2.3 million homes 2.3 million homes
portfolio, based on the portfolio's estimated generation as at the relevant
reporting date
NAV Net Asset Value £3,633.2 million £3,794.0 million
NAV per share The Net Asset Value per ordinary share per note 16 to the financial statements 159.3 pence 164.1 pence
Performance Measure Definition For the six months ended For the six months ended
30 June 2024
30 June 2023
Net cash generation The operating cash flow of the Group and wind farm SPVs as broken down below £165.4 million £204.0 million
Group and wind farm SPV cash flows For the six months ended
30 June 2024
For the six months ended
30 June 2023
£'000 £'000
Net cash generation 165,425 204,020
Dividends paid (136,381) (95,517)
Acquisitions - (55,936)
Acquisition costs (251) (226)
Share buybacks (43,983) -
Share buyback costs (280) -
Net amounts drawn under debt facilities - 290,000
Upfront finance costs - (4,609)
Movement in cash (Group and wind farm SPVs) (15,470) 337,732
Opening cash balance (Group and wind farm SPVs) 221,217 160,851
Closing cash balance (Group and wind farm SPVs) 205,747 498,583
Net cash generation 165,425 204,020
Dividends 107,780 95,517
Dividend cover 1.5x 2.1x
Net Cash Generation - Breakdown For the six months ended
30 June 2024
For the six months ended
30 June 2023
£'000 £'000
Revenue 419,346 400,591
Operating expenses (102,248) (90,100)
Tax (30,219) (36,670)
SPV level debt interest (9,153) (9,148)
SPV level debt amortisation (40,514) (26,595)
Other (8,263) (197)
Wind farm cash flow 228,949 237,881
Management fee (15,618) (17,141)
Operating expenses (1,669) (1,237)
Ongoing finance costs (48,082) (17,675)
Other 2,461 1,623
Group cash flow (62,908) (34,430)
VAT (Group and wind farm SPVs) (616) 569
Net cash generation 165,425 204,020
Net Cash Generation - Reconciliation to Net Cash Flows from Operating For the six months ended For the six months ended
Activities
30 June 2024
30 June 2023
£'000 £'000
Net cash flows from operating activities 203,842 220,152
Movement in cash balances of wind farm SPVs 1,254 (9,845)
Repayment of shareholder loan investment 11,355 11,388
Finance costs (48,082) (22,284)
Movement in security cash deposits (2,944) -
Upfront finance costs - 4,609
Net cash generation 165,425 204,020
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 2023, 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 2023,
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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