Greencoat UK Wind (UKW) H2 2024 earnings summary

Executive summary

• Cash generation remained resilient in 2024 despite wind generation being 13% below budget, with net cash generation of £278.7m and dividend cover of 1.3x.

• Net Asset Value (NAV) declined to £3,409.1m (151.2p/share) at year-end, impacted by normalisation of power prices and a downward P50 energy yield revision.

• £250m in dividends paid, including a £28.6m top-up for 2023; 2025 dividend target increased to 10.35p, up 3.5% in line with RPI.

• Successful £725m debt refinancing completed, and a second £100m share buyback programme announced.

• First asset disposal completed at NAV, with further disposals in progress, supporting capital allocation flexibility.

Financial highlights

• Net cash generation for 2024 was £278.7m, down from £405.5m in 2023, reflecting lower wind generation and power prices.

• Dividend cover for 2024 was 1.3x (adjusted for 2023 top-up), compared to 2.1x in 2023.

• Gross debt stood at £2,244m, with gearing at 39.7% of GAV and a weighted average cost of debt of 4.68%.

• Portfolio IRR at NAV remained strong at 11%, delivering a net return to shareholders of over 10%.

• Over £1bn in cumulative excess cash generation since IPO, with £1.2bn of dividends paid.

Outlook and guidance

• 2025 dividend target set at 10.35p, a 3.5% increase, with future increases to remain linked to RPI.

• Five-year average dividend cover guidance of 1.9x, with robust cover even in downside power price scenarios.

• UK wind market expected to more than double by 2030, with Clean Power 2030 targets driving 2-3x growth in investible market.

• Capital allocation to focus on buybacks, gearing, and further disposals to optimise shareholder returns.