The defining event of Renewable Energy Generation's (WIND) last financial year was the alliance formed with global investment manager BlackRock. The onshore wind developer sold two of its newly-built wind farms at Sancton Hill and South Sharpley that have a combined capacity of 16 megawatts (MW) to BlackRock for a total enterprise value of £32m. The sale of the two farms generated a £9.1m net profit for REG, which drove a swing into the black at the profit before tax line.
The BlackRock deal marked the start of a long-term strategic partnership that will see REG sell off completed wind farms to BlackRock and recycle the cash back into the development of new wind projects. REG currently operates 14 wind projects with a total generating capacity of around 67MW and aims to push 100MW of new projects out to planning each year. The alliance with BlackRock also creates a new earnings stream in asset management as the company will manage the sold assets for a fee.
Analysts at Arden Partners expect the underlying loss per share to halve to 0.9p this year, pencilling in EPS of 3.4p next year. The broker values the shares at 105p using a discounted cash-flow model.
RENEWABLE ENERGY GENERATION (WIND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 78p | MARKET VALUE: | £80.2m | |
| TOUCH: | 76-79p | 12-MONTH HIGH: | 82p | LOW: 47p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 69p* | NET DEBT: | 4%** | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 5.6 | -2.40 | -2.00 | 2.00 |
| 2010 | 6.2 | -3.50 | -2.89 | 2.00 |
| 2011 | 9.8 | -2.98 | -2.56 | 2.00 |
| 2012 | 12.1 | -1.96 | -1.74 | 2.00 |
| 2013 | 13.4 | 5.83 | 6.30 | 2.00 |
| % change | +11 | - | - | - |
Ex-div: 27 Nov Payment: 18 Dec *Includes intangible assets of £7.4m, or 7p a share **Excludes restricted cash of £8.2m | ||||
