Greencoat UK Wind (UKW) published an update. It says that its NAV as of 31 December 2024 is £3,409m (151.2p per share), which is a decrease of 7.4 pence per share from the NAV at 30 September 2024. The movement in NAV was primarily the result of a revision to energy yield estimates across the company’s portfolio.

UKW’s board and manager periodically review the portfolio’s energy yield estimates (P50), and decided to harmonise the data set used in long term wind speed correlation in conjunction with an expert third party. This has also added a number of recent years to the correlation data with lower than long term average UK wind speeds and this serves to bring the long term average down. As a result, the long term generation forecast is expected to be 2.4% lower, with a resulting NAV decrease of 6.5p per share.

Dividend – FY2025 target is 10.35p per share

UKW has declared a quarterly interim dividend of 2.5p per share with respect to the quarter ended 31 December 2024, taking the total FY 2024 dividend to 10p per share. It has also announced an increase in the target dividend for 2025 to 10.35p per share in line with RPI for December 2024 of 3.5%.

Since IPO, UKW has delivered 1.8x dividend cover and, with its revised generating budget, says that it remains on course to generate (on average) dividend cover of 1.9x over the next 5 years. It adds that this would deliver over £1bn in excess cashflow over the next five years “for allocation to the advantage of its shareholders”.

Asset sales

On 23 December 2024, UKW made its first disposal, divesting of 40% interests in Dalquhandy and Douglas West onshore wind farms to Fuyo General Lease Co. Ltd. at the prevailing NAV of £41m. Proceeds from the sale were used to pay down its revolving credit facility (RCF) and fund further share buybacks. Drawings under the RCF as at 31 December 2024 were £270m and overall gearing was 39.7%. UKW says that its board and the manager continue to pursue selective disposals to reduce gearing further, as well as “generate further capital to deploy to the advantage of the Company’s shareholders”.

Share buyback programme

UKW says that its share buyback programme continues to progress with £19.7m returned to shareholders in the quarter, taking the cumulative amount returned via the programme to 31 December 2024 to £89.9m.