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 £100 million (the "Programme").
Background
From admission to the London Stock Exchange on 27 March 2013 to 30 September 2023, the Company has generated £1,764 million of cash flow, paid £887 million of dividends and reinvested £877 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 £100 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.
https://www.investegate.co.uk/announcem ... e-/7840038
Also posted on Company News here; viewtopic.php?p=623139#p623139
I hold these and know others hereabouts do too, so this may be of interest here.
Ian.