Edison issues flash on SDCL Energy Efficiency Income Trust (SEEIT): H1 results confirm attractive potential total return
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Edison Investment Research Limited
London, UK, 6 December 2023
Edison issues flash on SDCL Energy Efficiency Income Trust (SEEIT): H1 results confirm attractive potential total return SDCL Energy Efficiency Income Trust (SEEIT) has taken a prudent approach to discount rate adjustments in the period, leading to a 10.9p reduction in net asset value (NAV) per share from 101.5p to 90.6p. This was largely driven by a 100bp increase in the weighted average unlevered discount rate to 8.7%. The portfolio valuation at the end of H124 stood at £1,066m and investment cash inflow from the portfolio was £47m (a c 9% increase from H123). SEEIT has declared a total aggregate dividend of 3.12p per share for H124, which is in line with its FY24 target of 6.24p (a 4% y-o-y increase), while maintaining a dividend cash cover of 1.1x, which is expected to grow by the end of FY24 and over the medium term. SEEIT is currently trading at a 33% discount to NAV with a 10% dividend yield. In our view, SEEIT presents an attractive 10% dividend yield and a potential 45% additional return if the discount to NAV closes. The investment manager sees the discount as unwarranted and not reflective of the value of the portfolio. To address the valuation gap, SEEIT has stated it is pursuing selective disposals to further strengthen its balance sheet and focus on delivering accretive projects and other upsides to drive growth in NAV. Buying back shares also remains an option following the £20m share buyback programme completed in H124. Click here to view the full report. All reports published by Edison are available to download free of charge from its website: www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached – across institutions, family offices, wealth managers and retail investors – Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first company in-market 17 years ago, Edison has more than 100 employees and covers every economic sector. Headquartered in London, Edison also has offices in New York, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison’s reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Andrew Keen +44 (0)20 3077 5700 investmenttrusts@edisongroup.com Learn more at www.edisongroup.com and connect with Edison on: LinkedIn www.linkedin.com/company/edison-group-/ Twitter www.twitter.com/Edison_Inv_Res YouTube www.youtube.com/edisonitv
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1790973 06-Dec-2023
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