Half Year 2026 Renewables Infrastructure Group Ltd Earnings Call Transcript
Key Points
- Operational cash generation of £209 million and gross cash cover of the dividend at 2.3 times, with net cover of 1.1 times after debt repayments.
- Dividend reaffirmed at 7.55p per share, representing a nearly 10% cash yield, supported by a high proportion of fixed-price revenues (78% for the next 12 months).
- Strong progress on capital allocation: over 60% of available capital allocated to shareholder returns in H1 2026, including share buybacks that added 0.7p per share to NAV.
- Excellent progress on the £400 million capital realization target, with the Beatrice disposal signed for £155 million and further sale processes in train.
- Construction pipeline advancing: 200 MW in construction, with 100 MW (Wrighton battery and Cooksack repowering) expected to come online by end of 2026, and over 150 MW of further investment decisions in H2.
- Conservative balance sheet with long-term, fixed-rate, amortizing debt, low interest rate and refinancing risk, and gearing reducing to 39% post-Beatrice disposal.
- Portfolio diversification across six power markets and four technologies, with a 56/44 UK/Europe split, providing resilience and stability.
- Active management enhancements, such as LiDAR technology at Hill of Tarry, delivering energy yield uplifts and adding to NAV.
- Improved dividend cover to more normal levels, with generation and revenues close to budget, and expectations of further improvement as higher-returning projects come online.
- Post-period-end, NAV could be up to 1p higher due to increased near-term power prices from the Middle East situation.
- NAV declined to 101.1p per share, driven by lower medium-term power price forecasts and reduced green certificate income.
- Power price forecasts are lower from around year three for five years, due to expected increased US LNG exports, impacting UK and European power prices.
- UK carbon price support tax removal in April reduced forecast power prices, with an adverse impact of 0.3p on NAV.
- Grid outages at some UK wind farms had a small adverse impact on NAV, offsetting otherwise good generation.
- Reduced demand for REGOs and Guarantees of Origin in the UK and Europe led to lower revenue forecasts.
- High long-term interest rates continue to weigh on share price recovery, despite improved investor sentiment.
- Beatrice disposal was at a small discount to NAV, reflecting asset-specific factors, and the sale is part of a portfolio risk management strategy.
- The RCF balance remains elevated at £276 million, though reduced by £122 million in H1, with further disposals needed to bring it down.
- Potential for further discount rate increases if UK government bond yields remain elevated, which could reduce NAV by 0.8p per 25 basis points.
- The market for asset transactions is still challenging, though improving, and the company faces uncertainty from the Middle East conflict and its impact on power prices.
Good morning, everyone, and welcome to TRIG's 2026 interim results. This morning's session will consist of a presentation by the usual TRIG management team, followed by a Q&A session with questions taken both in the room and online.
And with that, I'll hand over to Manesh.
Good morning, and thank you to everyone joining us both in the room and online.
Welcome to TRIG's 2026 interim results. This has been a more supportive year so far for the renewables sector in Europe with higher wind speeds in the UK, higher power prices in the UK and Sweden and the market beginning to reopen for asset transactions.
These factors have somewhat improved investor sentiment. As reflected in the share price, though there is still some way to go with high long-term interest rates still weighing on the share price recovery.
We reported a NAV of 101.1p per share, which principally reflects the mechanical flow-through of medium-term reduction in revenue forecasts.
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