UK income seekers may want to take a look at ContourGlobal (GLO), which was one of the largest companies to float on London’s main market so far this year when it made its debut on 9 November. The US-based power generator raised net proceeds of £281m via an institutional offering, giving it a market capitalisation of £1.68bn, or 250p a share. Part of this has been used to pay down debt, with the remainder retained to fund future growth. ContourGlobal’s parent has reduced its holding to 73 per cent in the process. The shares began unconditional trading on 14 November.
Founded by chief executive Joseph Brandt 12 years ago, ContourGlobal owns and operates 69 power generation assets across 19 countries. During that time, it has grown by acquiring and developing assets in countries with insufficient generating capacity, including Brazil and parts of sub-Saharan Africa. It also entered the European market via a partnership with Coca-Cola Hellenic to operate co-generation facilities.
As of December 2016, adjusted cash profits were split roughly 59 per cent to 41 per cent between thermal assets (plants that use conventional fuels) and renewable assets (plants that primarily use wind, solar and hydropower). However, the renewables business is growing at a much faster rate – it represented just 12 per cent of adjusted cash profits in 2014 – as management has ramped up investment in the renewable asset base.