Greencoat Renewables [LON:GRP] [ISE:GREENCOAT], the AIM- and Irish-listed investment manager focussed on euro-denominated renewable energy assets reported its interim results to end-June today (16th September).
The investment trust said that it had generated EUR113.6m (GBP95.9m) in cash, a fall in comparison to the EUR125.5m generated a year ago, which is the equivalent of 3x gross dividend cover. Dividends of 3.37 cents/share were declared or paid during the period.
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Rónán Murphy, non-executive chairman of Greencoat Renewables said in a statement to the market this morning: “We are pleased to present another strong set of results […] with Greencoat Renewables continuing to benefit from strong cash generation and sector leading dividend cover. Disciplined capital allocation has remained a key focus for the board in a period where the company has continued to deleverage through operating cashflow whilst also initiating a share buyback programme of up to EUR25m.”
The share buyback commenced in May and will aim to buy back EUR25m of shares by November with EUR100m being returned to shareholders through dividends and share buybacks to end-June.
Greencoat Renewables is one of Europe’s largest listed owners of renewable energy assets, with installations in six countries. As reported Greencoat Renewables has a sister company, Greencoat UK Wind. The company has an optimistic outlook, especially given the drive to energy independence in European companies, with the new UK government prioritising renewables through newco parastatal, Great British Energy.
Greencoat Renewables looking for PPAs in Big Tech
Greencoat Renewables, said Murphy, has been prioritising securing power purchase agreements (PPA) with market leaders and blue chips with an especial interest in providing clean energy to large technology companies. Also, in relative terms, renewable assets are offering value at the moment, according to Murphy creating attractively priced opportunities for the fund manager.
The investment trust generated 1,927GWh of electricity in the six-month period, up 28.6% y-o-y from its assets under management of around EUR9bn and Murphy highlighted that the firm recently secured a 10-year PPA with a datacentre in the Republic of Ireland and is expecting more opportunities from AI and data. The investment trust has a large concentration of renewable assets in the Republic – nearly 60% of total assets – but also has assets in Finland, Sweden, France, Spain and Germany.
The company secured EUR150m of new debt, which was used in-part (EUR33m) to repay a revolver and has a tenor of five-years. The fund has a market capitalisation of EUR865.7m and has been listed on AIM since July 2017. Greencoat shares on the AIM market opened at EUR0.966 today. Greencoat Renewables was down 4.8% over one-year, and has returned of -3.9% year-to-date with its shares ranging between EUR0.82 and EUR1.04 over a 52-week period.
Growing demand for renewable energy solutions
While Greencoat Renewables experienced a slight decline in cash generation and share price during the period, the company remains well-positioned to capitalise on the growing demand for renewable energy solutions. The company’s strategic focus on securing long-term power purchase agreements with market leaders and blue chips, coupled with its disciplined capital allocation, provides a solid foundation for future growth and value creation. As the global transition to clean energy accelerates, Greencoat Renewables’ expertise and portfolio of renewable assets offer significant opportunities for continued expansion and sustainable returns.
