Greencoat UK Wind focuses on capital allocation following strong 2023 performance
London, UK
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March 08, 2024 06:36 AM Eastern Standard Time
Greencoat UK Wind's Stephen Lilley discusses the company's full-year results for 2023, highlighting significant financial achievements and strategic initiatives. The company reported over £406 million of net cash generation and a coverage ratio of 2.1 times.
Due to its strong cash flow, the trust, which is one of the UK’s largest wind farm operators, has remained resilient despite rising interest rates and a higher discount rate.
Lilley said Greencoast has focused on capital allocation, particularly as shares have been trading at a discount to net asset value (NAV), leading to an increase in the dividend for 2023 from 8.76 pence to 10 pence per share, resulting in an additional £29 million paid to shareholders. The dividend for 2024 has been increased by 14.2%, achieving a 6% return on NAV, surpassing the Retail Price Index (RPI) increase of 5.2%.
Greencoat UK Wind completed £821 million in acquisitions, contributing significantly to NAV accretion. The company also reached a milestone of distributing over £1 billion in dividends over the past decade.
Additionally, Greencoat UK Wind generated 1.5% of the UK's electricity demand, owning approximately 7% of the UK's wind capacity.
Looking ahead, the company aims to support the expansion of wind capacity in line with government targets for 2050, focusing on owning and operating existing capacity while recycling capital into new projects.
Despite some limitations due to trading at a discount to NAV, the company sees ample growth opportunities and may consider disposals to manage its capital effectively. Lilley remains optimistic about the company's performance in 2024, with stable operations and a positive outlook for February's production capacity.
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