Premier Miton Global Renewables Edison issues update on Premier Miton Global
September 01 2021 - 2:00AM
RNS Non-Regulatory
TIDMPMGR
Premier Miton Global Renewables
01 September 2021
London, UK, 1 September 2021
Edison issues update on Premier Miton Global Renewables Trust
(PMGR)
Premier Miton Global Renewables Trust (PMGR) is arguably unique
among UK investment companies for its broad global focus on
renewable energy securities, aiming for both income (current yield
c 5.5%) and capital growth. Fund manager James Smith believes that
renewable infrastructure operators, in which the trust invests, are
likely to greatly benefit from a sustainable potential upward shift
in power prices. He views this as driven primarily by increasing
demand for electricity as the world transitions to cleaner sources
of energy. The trust changed its mandate in late 2020, having
shifted in recent years towards renewable energy stocks from its
previous wider focus on utilities, water and energy companies.
Given that most closed-ended renewable peers trade at a premium, a
narrowing of PMGR's discount over time could present an opportunity
for investors.
Rising commodity prices and higher CO(2) emission costs have led
to higher power prices. Coupled with potential increase in
electricity consumption, this should lead to higher demand for
renewably generated electricity and increase expected investment
returns on renewables. We agree with the manager that if power
prices continue to climb into Q421, the likelihood of a scenario of
higher power prices over the long term increases. If this scenario
materialises, PMGR will continue to perform strongly. Its one-year
performance (35.0% NAV TR versus 17.2% for peers to end-July 2021)
has already benefited considerably from the strong recovery in
renewable energy stocks bought during the March 2020 sell-off.
While the dividend per share has come down by 3.2p, this was more
than compensated for by the reduction in finance costs of c 3.6p,
following the refinancing of zero dividend preference shares or
ZDPs (see our initiation note for details).
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