DAVY VIEW

Greencoat’s net asset value (NAV) was unchanged in Q1 (103.4c/share), with longer-term power price forecasts offsetting a strong operational performance in the quarter. We suspect Q1 cash generation added over 1c in the quarter (compared to its 1-2c annual target), demonstrating the potential of the constructed portfolio. However, this was fully offset by a further negative revision to Irish longer-term power price assumptions – beyond its control but unfortunate nonetheless. The company’s strong position in Ireland (and potential beyond) supports an attractive dividend yield (5.5% at present) while also generating ongoing NAV growth. Trading at just a 5.5% premium to NAV, we believe the longer-term opportunity remains undervalued. We reiterate our ‘Outperform’ recommendation.