Downing Renewables & Infrastructure (DORE) has announced its annual report for the financial year ended 31 December 2024. Despite strong return on capital deployed, during the year the NAV per ordinary share decreased marginally by 0.8% from 117.7 pence at 31 December 2023 to 116.7 pence at 31 December 2024. The reduction in NAV was largely driven by future power prices being forecast to return to more normalised levels more rapidly than anticipated at the start of the year. Including dividends paid of 5.695 pence per ordinary share during the year, the NAV total return in 2024 was 3.8% resulting from share buybacks in the year and the payment of the dividend.

The company paid interim dividends to shareholders of 1.45 pence per share for each of the first three quarters of 2024, and a further dividend of 1.45 pence per share was announced on 19 February 2025 in respect of the quarter to 31 December 2024. Together, these amount to the 5.80 pence per share target for the 2024 financial year, announced on 11 April 2024.

In cash terms, the company and its subsidiary achieved a cash dividend cover of 1.20x against the dividends of 5.695 pence per share actually paid during the year. When amortisation of debt is added back, the dividend cover was 1.88x.

The company will target a dividend of 5.95 pence per share for the year to 31 December 2025, a 2.6% increase from 2024. The increased dividend is expected to be covered by cash in excess of 1.15x by the current portfolio.

The underlying portfolio generated £22.8m (2023: £24.7m) operating profit during the period, an 11.4% return (2023: 11.6%) on equity capital deployed. The 4,860 core renewable energy assets produced approximately 343 GWh of renewable electricity, enough to power 126,916 UK homes annually, with the two new grid infrastructure assets in particular performing well.

[QD Comment: After a challenging couple of years, DORE appears to be in a much better place following some positive investment developments and the reduction of its RCF in full thanks to sale of its Swedish windfarm for an impressive premium. This has been well received by the market with the discount narrowing, and we believe there is further to go on this front.]

Hugh Little, chair, Downing Renewables & Infrastructure Trust plc, commented:

“The board is pleased with DORE’s performance during a challenging year and is greatly encouraged by the returns crystallised by the sale of the Gabrielsberget wind farm, which has enabled the company to repay the RCF in full. This has strengthened the company’s capital availability and enables further opportunities to enhance the portfolio. Continued revenue generation from hydropower and grid infrastructure assets provided further diversification and stability of revenues, which is testament to the company’s commitment to building a resilient portfolio. We are confident that DORE is well positioned to navigate ongoing macroeconomic uncertainties, and it will use all the tools available to continue delivering sustainable returns for shareholders.”

Tom Williams, partner, head of energy and infrastructure at Downing, commented:

“Revenue and portfolio optimisation remained a strong focus for DORE, as we leveraged the expertise of Downing’s in-house asset management team to optimise and deliver value from our assets. We are pleased with the further diversification of the portfolio, having acquired hydro assets in new regions across the Nordics and facilitated additional revenue streams from our entry into the FCR markets. Looking ahead, we continue to see opportunities to invest and further add value to the portfolio, whilst continuing to focus on the optimisation of shareholder returns.”

DORE: Falling power prices dampen otherwise solid year for Downing Renewables