TIDMTRIG
RNS Number : 8638U
Renewables Infrastructure Grp (The)
21 October 2014
21 October 2014
The Renewables Infrastructure Group Limited
Interim Management Statement
The Renewables Infrastructure Group Limited ('TRIG' or the
'Company'), the listed renewable energy infrastructure investment
company, is issuing this Interim Management Statement ('IMS') in
accordance with FCA Disclosure and Transparency Rule 4.3. This
statement relates to the period since 1 July 2014. References to
the Group below refer to the Company and its wholly-owned corporate
subsidiaries.
Highlights for the period since 1 July 2014
*Acquisition of three solar PV electricity generating projects,
approximately doubling TRIG's solar PV capacity to 119 MW;
*Successful equity raising of GBP38.6 million via an
oversubscribed tap issue;
*Continued benefits of portfolio diversification coming through
- low British Isles wind speeds over the summer months, mitigated
in part by strong solar production;
*Payment of a first interim dividend of 3.0 pence per share in
respect of the six months to 30 June 2014. On target to declare a
second interim dividend of 3.08 pence per share in respect of the
six months to 31 December 2014; and
*Progress on a broad pipeline of further investment
opportunities in TRIG's target markets with an expectation of
further equity issuance in the near term.
Helen Mahy, Chairman of The Renewables Infrastructure Group
Limited, said:
"A year on from IPO, TRIG is continuing its robust performance
and the Company looks forward to further portfolio expansion and
diversification. The Board appreciates the support of its
shareholders who are attracted by TRIG's delivery of stable
dividend returns linked to inflation as well as the potential for
capital growth from reinvestment of surplus cash flows."
Richard Crawford, Director, Infrastructure of InfraRed Capital
Partners, said:
"TRIG's strategy of investing across multiple technologies and
markets is proving itself with its large and diversified portfolio
balancing production in a wide range of weather conditions. Looking
ahead, we are well-positioned to source further projects for TRIG
from a range of suitable opportunities in the onshore wind and
solar PV segments."
Portfolio - Acquisitions
In August TRIG acquired 100% interests in three large-scale
ground-mounted fully operational solar PV generating projects, on
agricultural sites in the South and East of England with an
aggregate generating capacity of 56.6MW, for consideration of
GBP73.7 million, subject to certain performance adjustments. All
three projects have received ROC accreditation at 1.6 ROCs per
MWh.
The projects do not have project-level debt, although in due
course TRIG may introduce project-level debt and/or sell down a
minority interest in the projects to optimise the capital structure
and enhance overall returns to the Group.
These acquisitions, funded by the Group's cash resources and
utilising the revolving acquisition facility, bring the overall
portfolio to 27 projects with approximately 398 MW generating
capacity (the largest among UK listed investment companies) and
approximately doubles TRIG's solar PV capacity to 119 MW, now
representing 39% of the portfolio by value.
Portfolio - Performance
In the third quarter portfolio performance was beneath long term
average expectations, as a result of low wind in the British Isles
where production was more than a fifth down on expectations. Solar
performed strongly and, with further mitigation from the French
wind portfolio, TRIG's total production for the quarter was within
15% of long term average expectations and within 3% for the last
four quarters as a whole.
A degree of variability in electricity production levels is to
be expected from period to period and from site to site due to
reliance on actual weather conditions. However, the benefits of
diversification continue to be in evidence in TRIG's production
performance, with offsetting factors in terms of both geography and
weather source.
There are no other material operating issues to report.
Portfolio - Valuation
A number of power forecasters have materially reduced their
wholesale power price projections, based on a number of factors
including the build-up of Liquefied Natural Gas (LNG) supply
influencing gas prices and a lower expectation for carbon prices
combined with a near term reduction in demand resulting from
warmer-than-usual weather conditions in Europe over the last 12
months.
At the same time, there is evidence that strong demand for
income-producing infrastructure assets, including renewable energy
infrastructure projects as the secondary market matures, has
resulted in a reduction in prevailing discount rates for operating
projects which partially offsets the changes in power price
forecasts.
The weighted average portfolio discount rate used to value the
portfolio at 30 September 2014 was 9.1%, down from 9.6% at 30 June,
resulting from a combination of lowering discount rates in the
market and the addition of ungeared solar projects to the
portfolio.
Netting off all factors contributing to the valuation - notably
generation in the quarter, future power price expectations and
market discount rates - the Investment Manager has calculated
TRIG's unaudited net asset value (NAV) per share at 30 September
2014 to be 100.2 pence. This represents an increase in NAV per
share of 0.9 pence since 30 June 2014 after adjusting for the
interim dividend of 3.0 pence per share paid in September.
Outlook - Acquisition Pipeline
The Investment Manager, InfraRed Capital Partners, continues to
evaluate a selection of new investment opportunities for the Group
from its pipeline of opportunities in both onshore wind and solar
PV that meet the Company's Investment Policy to create further
scale and diversification of the portfolio. TRIG is in exclusive
and advanced discussions currently to acquire further investments
in several projects.
TRIG notes the recent announcements regarding the new UK
Government programme for Contracts-for-Difference (CfD) intended to
underpin a large portion of additional capacity in the UK
renewables market, and replacing the programme for Renewables
Obligation Certificates (ROCs) for new projects. The solar PV
market is expected to be most affected by this in the year ahead,
with any larger projects above 5 MW in capacity unable to be
grid-connected by 31 March 2015 (and therefore unable to qualify
for ROCs) having to compete for a limited budget of support under
the CfD programme. While further large-scale ground-mounted
projects may be successful in winning allocations under the CfD
programme, some shift in volume of new delivered capacity towards
smaller-scale and rooftop projects is likely. Further onshore wind
projects are still expected to qualify for ROCs for new connections
up to March 2017.
Elsewhere, and as referred to in the interim results, the Irish
Single Electricity Market (SEM) is going through a period of
re-design to bring it into line with the European Electricity
Target Model by 2016. TRIG continues to monitor this for any
potential effects on the SEM market. The Company also notes the
further support given this month to the renewable energy market in
France following the National Assembly's consent to the text for
France's energy transition bill. France is currently targeting 32%
of its energy consumption to be sourced from renewables by 2030. If
passed into law in 2015, the bill is expected, among other
enhancements, to ease approvals processes for new renewables
developments including onshore wind.
Outlook - Equity Raising and Acquisition Facility
Given the exclusive discussions underway as well as TRIG's
broader acquisition pipeline, the Company is contemplating a
further equity raising in the near term which may form part of a
share issuance programme subject to shareholder approval. Further
details on this fund-raising plan will be published in due course.
In addition, TRIG is considering increasing the size of its
acquisition facility, should this be required to facilitate
acquisitions currently under review.
Calendar
TRIG will announce its annual results for the year to 31
December 2014 in February 2015, together with its second interim
dividend for year to 31 December 2014 which is targeted to be 3.08
pence per share, an increase over the first interim dividend for
2014 of 3.0 pence per share, incorporating an adjustment for
inflation as expected.
Ends
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Richard Crawford
Matt Dimond
Phil George
Tulchan Communications +44 (0) 20 7353 4200
Martha Walsh
Camilla Cunningham
Canaccord Genuity Limited +44 (0) 20 7523 8000
Andrew Zychowski
David Yovichic
Jefferies International Limited +44 (0) 20 7029 8000
Gary Gould
Stuart Klein
NOTES TO EDITORS:
The Renewables Infrastructure Group Limited (TRIG)
TRIG is a leading renewable energy infrastructure company
delivering long-term, stable dividends from a diversified portfolio
of onshore wind and solar photovoltaic projects in the UK and
Northern Europe. The Company is seeking to provide investors with
long-term, stable dividends, while preserving the capital value of
its investment portfolio through re-investment of surplus cash
flows after payment of dividends. TRIG is targeting an initial
annualised dividend of 6.16 pence per Ordinary Share in aggregate
for the 12 months to 30 June 2015 and aims to increase this
dividend progressively in line with inflation over the medium
term.
TRIG currently owns a portfolio of 27 wholly-owned assets in the
UK, France and the Republic of Ireland. Of these, 11 are solar PV
parks and 16 are onshore wind farms. The Group is progressing
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
TRIG's Investment Manager is InfraRed Capital Partners Limited
(InfraRed). InfraRed is an independent investment business,
managing a range of infrastructure and real estate funds and
investments. It has a strong record of delivering attractive
returns for its investors, with total equity under management of
more than US$ 7 billion.
InfraRed currently has staff of over 100 employees and partners,
based mainly in offices in London and with smaller offices in
Paris, Sydney, Hong Kong and New York. The infrastructure
investment team within the InfraRed Group currently consists of
over 50 investment professionals, all of whom have an
infrastructure investment background and a broad range of relevant
skills, including private equity, structured finance, construction,
renewable energy and facilities management.
Since 1998, InfraRed has launched 15 funds including two
companies listed on the London Stock Exchange: HICL Infrastructure
Company Limited (HICL) and The Renewables Infrastructure Group
Limited (TRIG). To date, six of these funds have been completely or
materially realised.
The InfraRed Group has a long and successful proven track record
in sourcing, structuring, acquiring, managing and financing
infrastructure equity investments. It has been responsible for over
160 infrastructure equity investments for the InfraRed Group
(including predecessor organisations) and its funds to date.
InfraRed Capital Partners Limited is authorised and regulated by
the Financial Conduct Authority.
Operations Manager
The Operations Manager of the Group is Renewable Energy Systems
Limited (RES). RES is one of the world's leading renewable energy
developers, with extensive experience in developing, financing,
constructing and operating renewable energy infrastructure projects
globally across a wide range of low carbon technologies including
wind, solar and biomass.
RES has been at the forefront of wind energy development for
over 30 years. Since incorporation, RES has developed and/or
constructed more than 140 individual wind farms and PV parks around
the world with a combined capacity of over 8,000 MW.
In recognition of extraordinary business success in growing
revenues from international markets, RES was awarded its second
Queen's Award for Enterprise in 2013, this time for International
Trade. Today, projects developed and/or built by RES are
contributing to meeting the needs of a rapidly-evolving energy
market and, in doing so, are actively contributing to a more
sustainable world.
RES's global headcount totals over 1,000 staff based in thirteen
countries across five continents.
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
END
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