Interim Management Statement

RNS Number : 3984G

Renewables Infrastructure Grp (The)

07 May 2014

 



7 May 2014

The Renewables Infrastructure Group Limited

Interim Management Statement

The Renewables Infrastructure Group Limited ('TRIG' or the 'Company'), the listed renewable energy infrastructure investment company, is issuing this Interim Management Statement ('IMS') in accordance with FCA Disclosure and Transparency Rule 4.3. This statement relates to the period since 1 January 2014. References to the Group below refer to the Company and its wholly-owned corporate subsidiaries.

Highlights for the period since 1 January 2014

Continued strong operational performance of TRIG's diversified portfolio for the quarter to 31 March 2014 with over 240 GWh of electricity produced across UK, Ireland and France in both onshore wind and solar PV;

Acquisition of a further two solar PV electricity generating projects in Southern England from independent private developers, with capacity of 30.4 MW, bringing the overall portfolio to 22 wholly-owned projects with approximately 319 MW generating capacity (the largest among UK listed investment companies) and more than doubling the solar PV capacity to 62 MW, now representing 26% of the portfolio by value;

Successful completion of the Placing, Open Offer and Offer for Subscription of C Shares, raising gross proceeds of £66.2 million;

Arrangement of an £80 million revolving acquisition facility for the Group from Royal Bank of Scotland and National Australia Bank, providing additional flexibility to acquire projects;

Appointment of a fourth independent non-executive director, Mr Klaus Hammer, who brings considerable experience of the energy market to complement the existing board;

On target to declare an interim dividend of 3.0 pence per share for the six months to 30 June 2014; and

Progress on additional investments referred to in the C Share Prospectus of 3 March 2014 with a healthy pipeline of further suitable investments also under evaluation - both solar PV parks and onshore wind farms.

Helen Mahy, Chairman of The Renewables Infrastructure Group Limited, said:

"Nine months after the IPO, TRIG continues to achieve its goals in line with our intentions at listing: the steady growth and further diversification of the portfolio through acquisitions; the success in capital-raising and the new revolving credit facility; and the solid start to 2014 in terms of operational performance. The Board looks forward to continuing this success."

Richard Crawford, Director, Infrastructure of InfraRed Capital Partners, said:

"TRIG's solid operating performance from the largest and most diversified portfolio within the peer group gives comfort that TRIG will meet its target returns. The Investment Manager's team continues to make progress in evaluating an extensive pipeline of opportunities in both onshore wind and solar PV to expand TRIG's portfolio of 22 investments, bringing investors further benefits from diversification and scale."

Portfolio

In March, the Group successfully completed the acquisitions of a further two solar PV projects in Devon and Essex. These latest acquisitions approximately double TRIG's solar generating capacity to 62MW and increase the value of the solar PV projects to approximately 26% of the total portfolio (from 10% at IPO). Further details on the Company and the portfolio can be found on the Company's website www.trig-ltd.com.

In the first quarter the portfolio continued to perform above expectations in terms of electricity production, based largely on a strong wind performance in the British Isles, and comfortably within the range of expectations upon acquisition for all the projects. There are no material operating issues to report. As expected, there is a degree of variability in electricity production levels from period to period and from site to site, but the Company is pleased to see the offsetting effects within the diversified portfolio, even in the recent volatile weather conditions experienced in many parts of the Northern hemisphere over the winter.

TRIG's report and accounts for the period to 31 December 2013 referred to the possible impact on wholesale electricity price forecasts and project valuations from changes to carbon taxes in Great Britain. Accordingly TRIG adopted caution in its power price forecasts at 31 December and noted that a potential adverse impact on the net asset value ("NAV") at 31 December of up to 2p per share was possible. The Investment Manager is pleased to advise that, while the UK Budget on 19 March 2014 did include changes to carbon taxes, taking into updated power price forecasts, there is no resulting negative impact on NAV.

There have been recent announcements by the UK Government and the Conservative Party relating to the possibility of reductions in or eliminations of subsidies for some future renewable energy projects. The Investment Manager takes this opportunity to make it clear that discussions relating to subsidies for future plants have no impact on the returns expected from TRIG's acquired portfolio. To the extent that reductions in the rate of subsidy granted to future plants occur, the appropriate level of subsidy will be taken into account when pricing acquisition opportunities.

Pipeline of new opportunities

The Investment Manager, InfraRed Capital Partners, continues to evaluate a selection of new investment opportunities for the Group from an extensive pipeline of opportunities that meet the Company's Investment Policy to create further scale and diversification of the portfolio.  Beyond the two additional solar PV projects acquired in March, the Group is progressing with a number of additional acquisitions - those onshore wind farms from Renewable Energy Systems Limited ("RES"), the Company's Operations Manager, referred to in the March prospectus, as well as a number of other new opportunities in both wind and solar PV from third parties.

As well as sourcing assets from third parties, the Company benefits from a right of first offer over assets developed by RES. RES is one of the world's leading developers of renewable assets with a substantial pipeline of projects currently in development in the UK and Northern Europe.

Governance

With the addition to the Board in March of Klaus Hammer, bringing his broad experience in the UK and European power industry, the Board now comprises four independent non-executive directors from relevant and complementary backgrounds.

The first AGM of the Company was held in Guernsey on 29 April 2014 at which all motions were passed, including renewed permissions for the Company to issue further shares by way of equity tap issuance for up to 10% of the Ordinary Shares in issue (increasing to up to 10% of the Ordinary Shares in issue immediately following conversion of the C Shares).

Calendar

Following the Placing, Open Offer and Offer for Subscription of C shares completed in March, the Company is scheduled to announce the conversion of the C Shares into Ordinary Shares no later than the end of June 2014 with conversion to be effective by the end of July.

TRIG will announce its interim results for the six months to 30 June 2014 in August together with the first interim dividend for this year to be paid in September.  It is planned that a scrip dividend will again be offered.

Further details of the Company's corporate calendar can be found on the Company's website.

Ends

Enquiries

InfraRed Capital Partners Limited                              [phone]

Richard Crawford

Matt Dimond

Tulchan Communications                                           [phone]

Martha Walsh

Victoria Huxster

Canaccord Genuity Limited                                         [phone]

Andrew Zychowski

Lucy Lewis

Jefferies International Limited                                    [phone]

Gary Gould

Stuart Klein

NOTES TO EDITORS:

The Renewables Infrastructure Group Limited (TRIG)

TRIG is a leading renewable energy infrastructure company delivering long-term, stable dividends from a diversified portfolio of onshore wind and solar photovoltaic projects in the UK and Northern Europe. The Company is seeking to provide investors with long-term, stable dividends, while preserving the capital value of its investment portfolio through re-investment of surplus cash flows after payment of dividends. TRIG is targeting an initial annualised dividend of 6 pence per Ordinary Share and aims to increase this dividend progressively in line with inflation over the medium term.

TRIG currently owns a portfolio of 22 wholly-owned assets in the UK, France and the Republic of Ireland. Eight of the assets are solar PV parks and 14 of the assets are onshore wind farms. The Group is progressing further suitable investment opportunities which fit its stated Investment Policy.

Further details can be found on TRIG's website at www.trig-ltd.com.

Investment Manager

TRIG's Investment Manager is InfraRed Capital Partners Limited (InfraRed). InfraRed is an independent investment business, managing a range of infrastructure and real estate funds and investments. It has a strong record of delivering attractive returns for its investors, with total equity under management of more than US$ 7 billion.  

InfraRed currently has staff of over 100 employees and partners, based mainly in offices in London and with smaller offices in Paris, Sydney, Hong Kong and New York. The infrastructure investment team within the InfraRed Group currently consists of over 50 investment professionals, all of whom have an infrastructure investment background and a broad range of relevant skills, including private equity, structured finance, construction, renewable energy and facilities management.

Since 1998, InfraRed has launched 15 funds including two companies listed on the London Stock Exchange:  HICL Infrastructure Company Limited (HICL) and The Renewables Infrastructure Group Limited (TRIG). To date, six of these funds have been completely or materially realised.

The InfraRed Group has a long and successful proven track record in sourcing, structuring, acquiring, managing and financing infrastructure equity investments. It has been responsible for over 160 infrastructure equity investments for the InfraRed Group (including predecessor organisations) and its funds to date.

InfraRed Capital Partners Limited is authorised and regulated by the Financial Conduct Authority.

Operations Manager

The Operations Manager of the Group is Renewable Energy Systems Limited (RES). RES is one of the world's leading renewable energy developers, with extensive experience in developing, financing, constructing and operating renewable energy infrastructure projects globally across a wide range of low carbon technologies including wind, solar and biomass.

RES has been at the forefront of wind energy development for over 30 years.  Since incorporation, RES has developed and/or constructed more than 130 individual wind farms and PV parks around the world with a combined capacity of over 8,000 MW. 

In recognition of extraordinary business success in growing revenues from international markets, RES was awarded its second Queen's Award for Enterprise in 2013, this time for International Trade. Today, projects developed and/or built by RES are contributing to meeting the needs of a rapidly-evolving energy market and, in doing so, are actively contributing to a more sustainable world.

RES's global headcount totals over 1,000 staff based in thirteen countries across five continents.

Ends

 

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