Full Year 2025 SDCL Efficiency Income Trust PLC Earnings Call Transcript
Key Points
- SDCL Efficiency Income Trust PLC (LSE:SEIT) reported a stable net asset value (NAV) per share of 90.6p, slightly up from the previous year.
- The company generated cash inflows of nearly GBP100 million, a 4% increase from the prior year, fully covering the cash dividend from net distributions.
- Investment in Onyx Renewables in the U.S. has been successful, with a new financing facility allowing it to be self-financing going forward.
- The portfolio is diversified across 10 countries, with a strong presence in the U.S. and Europe, and includes about 50 projects with a weighted average contract life of 16 years.
- The company has maintained a progressive dividend policy, with dividends covered by cash every year since its IPO in 2018.
- The market capitalization of SDCL Efficiency Income Trust PLC is significantly dislocated from its net asset value, with shares trading at a 45% discount.
- The company faces challenges from a distressed UK investment trust market, exacerbated by interest rate and inflation increases since September 2022.
- There is a high level of gearing, with total debt at 34% of enterprise value, and plans to reduce leverage are in place but not yet realized.
- The policy environment, particularly in the U.S., presents uncertainty and challenges for renewable energy projects, impacting valuations and acquisition offers.
- The company has not made any new acquisitions in the past year, focusing instead on existing investments due to the discount at which shares trade.
Good morning. Thank you for joining us. I'm looking forward to discussing the annual results for the SDCL Efficiency Income Trust, or SEIT.
Just starting today with the key facts, the net asset value per share has been announced at 90.6p per share. That's approximately in line, just up a little bit from this time last year. The weighted average discount rate that was applied in SEIT's valuation to get to the 90.6p is 9.6% on a levered basis. That compares to 9.4% at the last annual results, just reminding people that that levered basis assumes substantially that SEIT's portfolio gearing is run through rather than maintained at current levels.
From a performance perspective, investment management activity, balance sheet and market capitalization -- I'm going to be joined today by colleagues -- we will discuss today the performance of the portfolio. My colleague, Ben Griffiths, will take us through the details, as well as the investment activity that we've been conducting. We will be working through the financial
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