TIDMUKW
RNS Number : 3267R
Greencoat UK Wind PLC
26 October 2023
26 October 2023
This announcement contains inside information
Greencoat UK Wind PLC
Capital Allocation Update
Increase in Annual Dividend & Commencement of Share Buyback
Programme
Greencoat UK Wind PLC (the "Company" or "UKW"), the leading
listed renewable infrastructure fund, invested in UK wind farms,
today announces an increase in its annual dividend target to 10p
and the launch of a share buyback programme of up to GBP100 million
(the "Programme").
Background
From admission to the London Stock Exchange on 27 March 2013 to
30 September 2023, the Company has generated GBP1,764 million of
cash flow, paid GBP887 million of dividends and reinvested GBP877
million of excess cash generation. The Company has increased its
dividend in line with RPI every year and additional funds generated
have been reinvested in UK wind power assets to drive NAV growth
above RPI, with UKW now delivering net returns to investors of 10%,
assuming shares purchased at NAV.
The Company is very well capitalised enabling UKW to benefit
from its market leading position, as evidenced by the Company's
recent investment in the London Array offshore wind farm.
In line with UKW's capital allocation policy, which is regularly
reviewed by the Board, the Company always considers a range of
options to optimise shareholder returns from its leading market
position. Given continued operational strength, which the Board and
Manager believe is not reflected in the current share price, the
Company is launching a share buyback programme of up to GBP100
million and increasing the annual dividend target to 10 pence per
share.
Increase in Annual Dividend
As a consequence of the Company's prospects, strong balance
sheet and cash flow generation, the Board has determined it will
increase its annual dividend target to 10 pence share for the 2024
financial year, an increase of 14.2% over the 2023 target dividend
of 8.76p. This increase is significantly higher than forecast
December 2023 RPI inflation.
In recognition of the very strong cash flow delivered by the
business through 2023 to date, the Board also has decided to pay a
3.43 pence per share dividend for Q4 2023 increasing the 2023 full
year dividend target to 10 pence per share.
Since listing, the Company's aggregate dividend cover has been
2.0x and the average dividend cover is projected to remain strong
over the long term, whilst also remaining robust in the face of a
range of extreme downside power price sensitivities. The Board
expects that future dividends will continue to be increased in line
with RPI, as has been the policy since IPO.
Commencement of Share Buyback Programme
Reflecting the discount to NAV that the shares are currently
trading at, as well as the Company's prospects, strong balance
sheet and cash flow generation, the Board has determined that the
commencement of a share buyback programme will also provide greater
flexibility to achieve an optimal use of cash to deliver value for
shareholders and represents a highly attractive investment
opportunity for the Company.
The Programme will commence shortly, and subject to market
conditions, end by no later than 25 October 2024. The sole purpose
of the Programme is to reduce the issued share capital of the
Company and therefore the repurchased shares will either be held in
Treasury or cancelled, either immediately or at a later date.
Treasury shares are not entitled to dividends and have no voting
rights at general meetings.
The Programme will be executed under the authority granted by
shareholders at the Greencoat annual general meeting on 23 April
2023 to acquire up to 347,506,861 shares, equating to c.14.99% of
the issued share capital at the time.
The Company is entering into a non-discretionary arrangement
with RBC Europe Limited and Jefferies International to conduct the
Programme during closed periods. Any purchase of shares during a
closed period pursuant to the Programme shall be made independently
of the Company.
Any purchase of ordinary shares pursuant to the Programme will
be announced no later than 07:30 am on the business day following
the calendar day on which the purchase occurs.
The Programme will be conducted within certain pre-set
parameters, including those prescribed by the Market Abuse
Regulation 596/2014 (as it forms part of domestic law by virtue of
section 3 of the European Union (Withdrawal) Act 2018 (as amended))
and Chapter 12 of the Listing Rules.
The Board will keep the programme under regular review and
continue to assess it against its capital allocation priorities in
light of the then market conditions and opportunities.
Lucinda Riches, Chairman of Greencoat UK Wind, said: "Since
listing in 2013, UKW has established a strong track record of
delivering significant shareholder value, having paid GBP887
million of dividends to date and reinvested GBP877 million of
excess cash generation. Reflecting our market leading position, as
well as the Company's strong prospects, balance sheet and cash flow
generation, I am pleased to announce an increase in the annual
dividend target by over 14% to 10p per share for the 2024 financial
year and an increase in the 2023 dividend target to 10p, as well as
the launch of a share buyback programme of up to GBP100 million, to
the benefit of our shareholders."
For further information, please contact:
Greencoat UK Wind PLC 020 7832 9400
Stephen Lilley
Laurence Fumagalli
.
Ocorian Administration (UK) Limited - Company Secretary 028 9693 0219
Josh Finlay
Headland 020 3805 4822
Stephen Malthouse
Rob Walker
Charlie Twigg
ukwind@headlandconsultancy.com
RBC Europe Limited 020 7653 4000
Matthew Coakes
Duncan Smith
Max Avison
Jack Wood
Jefferies International Limited 020 7029 8000
Stuart Klein
Gaudi Le Roux
Notes to Editors:
Greencoat UK Wind PLC is the leading listed renewable
infrastructure fund, invested in 48 operating UK wind farms with
net generating capacity of 1,973MW. The Company's aim is to provide
investors with an annual dividend hat increases in line with RPI
inflation (10p for 2023) while preserving the capital value of its
investment portfolio in the long term on a real basis through
reinvestment of excess cash flow.
UKW provides investors with the opportunity to participate
directly in the ownership of UK wind farms, so increasing the
resources and capital dedicated to the deployment of renewable
energy and the reduction of greenhouse gas emissions.
UKW is managed by an experienced team at Schroders Greencoat
LLP, a leading European renewable investment manager with over
GBP10 billion of assets under management. UKW is governed by a
strong and experienced independent board.
UKW is incorporated in England and Wales and is a UK Investment
Trust.
For more information about UKW, please visit http://www.greencoat-ukwind.com
For more information about Schroders Greencoat LLP, please visit
http://www.schrodersgreencoat.com
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October 26, 2023 02:01 ET (06:01 GMT)
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