9 February 2024
The Renewables Infrastructure Group
Limited
"TRIG" or "the Company", a
London-listed investment company advised by InfraRed Capital
Partners ("InfraRed") as Investment Manager and Renewable Energy
Systems ("RES") as Operations Manager.
Q4 2023 Net Asset Value, 2024
dividend target and notice of results
TRIG announces that its estimated
unaudited Net Asset Value as at 31 December 2023 is 127.7
pence per share, a decrease of 3.3 pence per share to the
Company's last announced Net Asset Value as at 30 September 2023,
principally due to a reduction in near-term power price
forecasts.
Cash generation from TRIG's
well-diversified portfolio remained strong in Q4 with net dividend
cover for the full year of 2023 remaining healthy at 1.6x, which is
stated after the repayment of £219m project level debt (gross
dividend cover was 2.8x*).
The key drivers of the movement in
Net Asset Value per share in the quarter are summarised in the
table below with further details following:
|
Net Asset Value (pence per
share)
|
Positive
Movements
|
Negative
Movements
|
NAV per share at 30
September 2023
|
131.0p
|
|
|
Decrease in forecast power
prices
|
|
|
(3.4)p
|
Q4 inflation and foreign exchange
movements
|
|
|
(0.7)p
|
Value Enhancements & Other
items
|
|
0.8p
|
|
NAV per share at 31
December 2023**
|
127.7p
|
|
|
*The dividend cover implied on
operational cashflow generated before the repayment of portfolio
level debt.
**NAV per share at 31 December 2023
presented after unwind of the discount rate, company costs and
payment of the dividend, which in aggregate sum to net nil
impact.
Decrease in forecast power
prices
Power price projections assumed in
the valuation have decreased materially from those at 30 September.
Forecast prices over the next three to five years are lower across
each of the markets in which TRIG invests, tracking lower global
gas prices. Longer term forecast prices are broadly unchanged in
real terms.
The impact of lower power price
assumptions has been mitigated by the interaction with government
windfall taxes introduced in late 2022, which are levied in the UK
and some other jurisdictions, on higher power price
levels.
Q4 inflation and foreign exchange
movements
UK and European inflation
decelerated during the quarter, ending at levels lower than had
been assumed in the 30 September 2023 valuation, reducing the 31
December 2023 valuation. This has been partly offset by gains on
the Company's foreign exchange hedges due to narrowing near term UK
/ Eurozone interest rate expectations.
The portfolio is well-positioned to
handle different possible paths for inflation. 51% of the Company's
forecast revenue over the next ten years is directly indexed to
inflation.
Other items
Other items in the quarter include
actual portfolio performance, a small increase to forecast REGO
pricing and adjustments to energy budgets at a small number of
projects.
Capital allocation
During Q4, the sale of three onshore
wind farms in Ireland announced in August was successfully
completed, raising gross proceeds of £22m at a 26%
premium to carrying value, reflecting the Company's disciplined
approach to balance sheet management. The Company is actively
progressing with further divestment opportunities. Initial offers
have been consistent with or above the Portfolio Valuation and the
Company expects to provide updates on these in due
course.
The Board and Managers continue to
prioritise paying an attractive, sustainable and resilient dividend
to shareholders, fulfilling existing investment commitments and
reducing RCF drawings, which are currently £364m.
Over the next twelve months, the Company expects
to be able to reduce RCF drawings to about £150m, which is within
5% of Portfolio Value, using proceeds from disposals and organic
cashflows. The Company may also make
accretive investments where there is a compelling rationale to
further the Company's strategic priorities. In the absence of
compelling investments, the Company may consider share
buybacks.
Dividend
The Board has set the dividend
target for 2024 at 7.47p per share, representing a 4% growth on the
2023 dividend. This increase reflects strong cash generation, but
also recognises inflation has reduced materially from its peak and
that future cash flows are expected to be moderated by reductions
in power prices (with average forwards for 2024 lower than
wholesale prices seen in 2023 across TRIG's markets). Maintaining
healthy dividend cover provides the Company with optionality to
fund organic investment in the portfolio to enhance total returns
for shareholders.
Notice of Annual Results
The Company has announced that it
plans to release its Full Year Results for the year ended 31
December 2023 on Wednesday, 28 February 2023.
Enquiries
InfraRed Capital Partners
Limited
+44 (0) 20 7484 1800
Richard Crawford
Phil George
Minesh Shah
Mohammed Zaheer
Brunswick
+44 (0) 20 7404 5959 / TRIG@brunswickgroup.com
Mara James
Investec Bank Plc
+44
(0) 20 7597 4000
Lucy Lewis
Tom Skinner
BNP Paribas
+44
(0) 20 7595 9444
Virginia Khoo
Carwyn Evans
The Company
The Renewables Infrastructure Group
("TRIG" or the "Company") is a leading London-listed renewable
energy infrastructure investment company. The Company seeks to
provide shareholders with an attractive long-term, income-based
return with a positive correlation to inflation by focusing on
strong cash generation across a diversified portfolio of
predominantly operating projects.
TRIG is invested in a portfolio of
wind, solar and battery storage projects across six countries in
Europe with aggregate net generating capacity of over 2.8GW; enough
renewable power for 1.9 million homes and to avoid over 2.4 million
tonnes of carbon emissions per annum. TRIG is seeking further
suitable investment opportunities which fit its stated Investment
Policy.
Further details can be found on
TRIG's website at www.trig-ltd.com.
Investment Manager
InfraRed Capital Partners is an
international infrastructure investment manager, with more than 170
professionals operating worldwide from offices in London, New York,
Sydney, Seoul and Madrid. Over the past 25 years, InfraRed has
established itself as a developer and steward of infrastructure
assets that play a role in supporting communities. InfraRed manages
US$14bn of equity capital1 for investors around the
globe, in listed and private funds across both core and value-add
strategies.
A long-term sustainability-led
mindset is integral to how InfraRed operates as it aims to achieve
lasting, positive impacts and deliver on its vision of Creating
Better Futures. InfraRed has been a signatory of the Principles of
Responsible Investment ("PRI")2 since 2011 and has
achieved the highest possible infrastructure rating for eight
consecutive PRI assessments, having secured a 5-star rating for the
2023 period3. It is also a member of the Net Zero Asset
Manager's Initiative and is a TCFD supporter.
InfraRed is part of SLC Management,
the institutional alternatives and traditional asset management
business of Sun Life. InfraRed represents the infrastructure equity
arm of SLC Management, which also incorporates BGO, a global real
estate investment management adviser, and Crescent Capital, a
global alternative credit investment asset manager.
www.ircp.com
[1] Uses
5-year average FX as at 30th September 2023 of GBP/USD of 1.2944;
EUR/USD 1.1291. EUM is USD 13.597m
2 Principles
for Responsible Investment ("PRI") ratings are based on following a
set of Principles, including incorporating ESG issues into
investment analysis, decision-making processes and
ownership policies. More information is available
at https://www.unpri.org/about-the-pri
3 In the 2023
Principles for Responsible Investment ("PRI") assessment, InfraRed
achieved a 5 star rating for the Policy Governance and Strategy and
Infrastructure and a 4 star rating for the newly created Confidence
Building Measures. Please find InfraRed's report available for
download on our website here:
https://www.ircp.com/sustainability/
Operations Manager
TRIG's Operations Manager is RES
("Renewable Energy
Systems"), the world's largest
independent renewable energy company.
RES has been at the forefront of
wind energy development for over 40 years, with the expertise to
develop, engineer, construct, finance and operate projects around
the globe. RES has developed or constructed onshore and offshore
wind, solar, energy storage and transmission projects totalling
more than 23GW in capacity. RES supports over 12GW of operational
assets worldwide for a large client base. Headquartered in
Hertfordshire, UK, RES is active in 14 countries and has over 2,500
employees engaged in renewables globally.
RES is an expert at optimising
energy yields, with a strong focus on safety and sustainability.
Further details can be found on the website
at www.res-group.com.