Mark Williamson Group Business Correspondent
RENEWABLE energy investor Greencoat UK Wind has said it is in talks to buy
more assets in Scotland after investing around £240 million in deals in the
country in last year.
Announcing the results for another profitable year’s trading, managers said
Greencoat has shown it can deliver good returns for investors with a policy
that has involved using acquisitions to build an extensive wind farm
portfolio in Scotland.
The London-based company spent £181m buying the Corriegarth wind farm by
Loch Ness in August, from US renewables firm Invenergy. It is managed by
the Greencoat Capital private equity business.
Greencoat UK Wind paid £38m to acquire a 2.8 per cent stake in the giant
Clyde wind farm development in South Lanarkshire in September after it was
extended, from SSE. It has a near 20% interest in the 206 turbine development.
The company has an option to acquire a further 8.4% for £114m, which is
exercisable from April 1 to June 30.
Stephen Lilley of Greencoat Capital said the company will weigh up the pros
and cons of exercising the option before making a decision. But he made
clear the manager has faith in the quality of the Clyde project as an
investment proposition.
“It’s a great wind farm,” he said. “Its production is more than we expected
and availability is astronomically high.”
Mr Lilley said the wind farm is well managed by Perth-based SSE. It covers
four related developments. Greencoat bought its original stake in the
project in March 2016, in a £355m deal in which pension funds also bought
into the asset.
Greencoat UK Wind bought the Langhope Rig wind farm near Hawick for £39.8m
in March, from US giant GE.
Mr Lilley noted the company has been pleased with the performance of its
assets in Scotland, where it has nine wind farms out of a group total of 29.
He said Scottish wind farms had on average performed ahead of budget in the
year to December 31.
“We like Scotland as a country,” said Mr Lilley. “It’s got good wind
resource and lots of assets.”
Greencoat UK Wind said it was in discussions about 17 potential
acquisitions. The manager confirmed some are in Scotland, without giving
details.
Mr Lilley said Greencoat would only do deals that meet its investment
criteria. The company was “blown out of the water” on price in some
transactions that it looked at last year.
The comments suggest there is strong interest among investors in wind farm
assets, which can generate relatively stable returns over long periods.
Greencoat UK Wind raised £340m through an over-subscribed share placing in
October.
Its chairman Tim Ingram said yesterday: “Looking ahead, wind remains the
most mature and widely deployed renewable energy technology in the UK, and
the Group is well placed to continue to take advantage of the abundant pool
of operating wind assets in the UK. I remain confident we will continue to
meet our objectives of dividend growth in line with RPI and capital
preservation in real terms.”
Greencoat UK Wind declared total dividends worth 6.49 per share for 2017,
against 6.34p last time. Mr Ingram said: “We can confidently target a
dividend of 6.76 pence per share with respect to 2018.”
The company made £58.5m profit before tax in 2017, compared with £59.9m in
the preceding year.
Shares in Greencoat UK Wind closed up 1.4p at 121.4p. That left it with a
market capitalisation of around £1.25 billion.
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