Greencoat º£½ÇÊÓƵ Wind's underlying assets experienced a 0.4 per cent decrease in value over the quarter, with power generation falling nine per cent below budget, as reported by .
Stifel analyst Iain Scouller commented: "We suspect that many of the managers' expectations have been optimistically biased," and added, "We think we will see a similar generation undershoot at many of the other wind and solar funds for this period."
The investment trust, which focuses on wind farms and is favoured by retail investors, announced today that it has continued its share buyback plan, purchasing 11.8m shares in the last quarter, with a total of £70.5m now spent on share buybacks.
Upon market opening this morning, the trust's stock price increased by 0.9 per cent.
In its Q3 update, Greencoat revealed it had acquired full ownership of the Kype Muir wind farm in Scotland for £14.3m, in which it previously held a minority stake.
Lucinda Riches, Greencoat's chair, stated: "We continue actively to progress selective disposal opportunities, with a view to reducing the company's gearing and providing flexibility for further capital allocation,".
The trust announced yesterday that it had altered the terms of its revolving credit facility, reducing the amount it can borrow from £600m to £400m, but with a lower interest rate of just 1.5 per cent, down from 1.75 per cent.
The company also refinanced £325m of term loans that were nearing maturity and placed an additional £100m of term debt, which was utilised to decrease the amount borrowed from its revolving credit facility to £300m.
"We do like Greencoat º£½ÇÊÓƵ's dividend growth policy, being the only renewable fund linking its dividend size to RPI [Retail Price Index] growth," Scouller commented.
"However, this does mean the rate of dividend increase in 2025 is likely to be much lower than the 14.2 per cent increase delivered this year, given RPI has fallen to 2.7 per cent in September 2024."
"We retain a Positive recommendation and would argue given the solid long-term track record and dividend growth profile, the shares should trade on a sub-10 per cent discount."
