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Jan 30 2020, 15:45 GMT
Greencoat Renewables’ (GRP) Q4 performance confirms that it is far from insulated from the long-term power price headwind which the sector currently faces. Arguably, the modest decline in NAV (to 103.1c per share) demonstrates some resilience in the face of a very stiff headwind (the power price forecast is understood to have impacted on NAV by -4c in Q4 alone). The final 2019 quarterly dividend (1.5075c) means the annual pay-out reached 6.03c per share. Gross dividend cover was actually 1.7x, with cashflow ahead of expectation in 2019. Looking forward, its recent capital raise means that it has ample capacity to expand further. We expect its portfolio (acquisitions), balance sheet (debt structure) and cashflow (year-on-year growth) to mature further throughout the course of the current year. We reiterate our ‘Outperform’ recommendation.