DAVY VIEW

Greencoat UK Wind’s (UKW) Q3 performance is along expected lines, with net asset value (NAV) declining modestly to 158.6p/share. However, it has also confirmed an additional investment in Kype Muir Extension (bringing its stake from c.50% to 66%). The investment was funded via available cash and is accretive to NAV (gearing unchanged at 39%). It has also successfully refinanced and ‘termed out’ key debt tranches (next facility falls due in Nov 2026) while maintaining its average cost of debt at c.4.7%. Currently trading on 0.86x price to last reported NAV, the stock currently offers levered returns of 12.8% at the current share price – a premium over the UK 10-year gilt of 7.6%. It also represents a dividend yield of 7.3%.