Half year results, NAV and Dividend Announcement

Greencoat UK Wind PLC
27 July 2023
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN.

 

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.

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, and can also be inspected on the National Storage Mechanism website, 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 .

Presentation materials will be posted on the Company's website, 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

 

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 CO2 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 CO2 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 Activities

For the six months ended
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

£ 000

Loan margin

%

Swap rate

 / SONIA

%

All-in rate

%

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
30 June 2023

As at
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

-

-

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
30 June 2023

For the six months ended
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
30 June 2023

Note

Share capital

Share premium

Retained earnings

Total



£'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
30 June 2022

Note

Share capital

Share premium

Retained earnings

Total



£'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
30 June 2023

For the six months ended
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
30 June 2023

For the six months ended
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
30 June 2023

For the six months ended
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
30 June 2023

For the six months ended
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
30 June 2023

For the six months ended
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

 

 

For the period ended 30 June 2022

Loans

Equity interest

Total


£'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

 

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
30 June 2023

For the six months ended
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
 / SONIA

All-in rate

 


£'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
Q1 2023 Equity Element

167,923

2

373

375

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
30 June 2023

For the six months ended
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
30 June 2023

For the six months ended
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

 

Directors (all non-executive)

Registered Company Number

Lucinda Riches C.B.E (Chairman)

08318092

Martin McAdam

 

Caoimhe Giblin

Registered Office

Nick Winser C.B.E.

5th 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

CO2 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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