Update: Greencoat Renewables (GRP), the £749m Ireland-focused wind and solar fund trailing on a 31% discount, is looking to sell €350m of assets over 18 months to reduce debts and buy back €100m (£87m) of shares. Alongside annual results, showing an already disclosed 10.3% fall in net asset value (NAV), it also announced a plan to build a datacentre in Drogheda.
Electricity generation rose 7% last year to 3,684 GWh but was 10% below budget due to low wind speeds in all its European markets except Sweden. Net cash generation slid 28.6% to €114.6m but was enough to cover the dividend target of 6.81c per share by an expected 1.5 times, down from 1.9 in 2024. The board is holding this year’s target at the same level and forecasts average dividend cover will improve to 1.6 times over the next five years.
Weak power prices meant NAV per share fell 10.3% to 99c although the €156m sale of six mature Irish assets at 4% above book value, gives some confidence in the valuation despite the wide discount. The board intends to buy back an initial €25m tranche of shares as part of its 12-month target of €100m.
Alongside this chair Ronan Murphy announced an initial €300m asset disposal programme “to recycle capital and tighten focus on our strongest markets” as it scaled up efforts to combat the persistent discount it and other renewables funds face, and reduce debt of €1.2bn equal to 52% of total assets.
Murphy said it was important to continue “making measured but important investments for the medium term” as the company unveiled a joint venture with another of its fund manager’s funds to build green energy data centres and energy parks in Ireland.
Shares in the 10%-yielder rose 4.7% to 72c, making it a good day for a stock that has lost 16% over five years including dividends.
Our view
David Batchelor, senior analyst at QuotedData, said: “Greencoat’s move into data centres powered by renewable energy brings together two megatrends. Any initial scepticism will perhaps rest on how an intermittent energy source can reliably power something that requires access to 24/7 electricity. However, Greencoat’s new platform will focus on opportunities where land, energy infrastructure and – crucially – grid access are available. Therefore, renewables can supply a large share of needed electricity, with the grid acting as a backup when required – with further flexibility provided by potential battery storage.
“That is the case for the initial investment, the Premier Periclase facility in Drogheda Energy Park on the east coast of Ireland. Here the energy park combines on-site generation, storage and grid balancing.
Ireland offers particular advantages as a market given the government’s commitment to renewables, and the presence of the European headquarters of a number of the hyperscalers. Already 20% of Irelands’s electricity consumption is for data centres.
“The new platform is a joint venture with Schroder Greencoat’s evergreen vehicle SCSL Global Energy Infrastructure. It is described as capital-light, with the hyperscaler end users bearing much of the cost.
Given fears about the negative impact of energy demand caused by the current AI and cloud computing revolutions, any measures that mitigate this through the use of renewables are to be applauded, and make this an interesting announcement – combined with the €100m share buyback also announced.”
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