Investing in Green Infrastructure Funds (ITs)

[BusyBumbleBee]

Thought it might be helpful to have the updated prices, yields, NAV and PREMIUM to NAV for the Green Infrastructure Funds. Hope it is useful

Code: Select all

Stock Bid     Offer      DIVIDEND  Yield BID    Yield/OFFer   NAV   Premium
BSIF    131.50 133.50     7.68    5.84%   5.75%    113.44    17.68%
Jlen    118.00 119.00     6.66    5.64%   5.60%    104.70    13.66%
TRIG    127.00 127.20     6.64    5.23%   5.22%    111.60    13.98%
FSFL    119.50 121.00     6.76    5.66%   5.59%    110.00    10.00%
UKW  138.80 139.00     6.94    4.99%   4.99%    123.20    12.82%
NESF    118.50 119.50     6.87    5.80%   5.75%    110.90    7.75%


regards - BBB

[BusyBumbleBee]

TRIG posted its interim results today. On the face of it they were good

~~ NAV now 116 pence per share : an increase of 6.1 pence in the six months (but see below)
~~ Capacity increase by 36% in the period with £347 million invested
~~ Dividend cover 1.3

But I can't make the maths work the same way they do.

~~ No of Shares = "The NAV per share at 30 June 2019 is calculated on the basis of 1,447,171,075 ordinary shares in issue and to be issued at 30 June 2019, including scrip issues and Managers' shares". {front page virtually}
~~ NAV = £1,663,800,000 {from balance Sheet}

~~ NAV per share : 1,447,171,075 divided by 1,663,800,000 = 1.15 (as near as dammit)

Now to changes in NAV in £Million

~ Changes in forecast power prices minus £30.9
~~ Foreign exchange movement £6.8
~~ Movement in discount rates £29.1
~~ Asset life extension £37.4
~~ Balance of portfolio return £90.9
~~ Total £133.3

Now dividing £133.3 million by 1,447,171,075 shares gives about 9.21 pence per share

But, but, but : they say this about "Balance of Portfolio Return"

Balance of portfolio returns: This refers to the balance of valuation movements in the period (excluding (i) to (iv) above) and represents an uplift of £90.9m and a 6.1% increase in the rebased value of the portfolio. The balance of portfolio return mostly reflects the net present value of the cash flows brought forward by six months at the prevailing portfolio discount rate (7.6% per annum before acquisitions and period end reduction) and also reflects efficient portfolio management plus some additional valuation adjustments. These additional valuation adjustments include items such as reduced maintenance costs on renewal of contracts, improved power purchase agreement terms and the completion of a large debt refinance.

and they have used the 6.1% increase mentioned here to mean the six month increase in NAV

Is this is a completely new factor in working out NAV? Cos it has mostly passed me by if it has been used before. Baffling.

[PrefInvestor]

Hi BBB, Had a skim read of the results just now and didn’t see any obvious red flags. Need to spend a deal long on it if I’m going to check your calculations though.

I see that they are planning to issue another batch of 185 million shares so doubtless we will see another corporate action turning up in the portfolio at some point. Unlike me I just sold about half my holding here as I felt that I was too overweight in renewables at close on 20% and TRIG was by far my largest holding, almost twice the value of my other renewables after its big run up in price. Doubtless the SP will take a hit again if they issue at NAV + a few pence as seems to be the norm ?.

ATB

Pref

[midgesgalore]

I read in section 10 of their interim results announcement,
https://otp.tools.investis.com/clients/uk/renewables_infrastructure_group1/rnsteaser/regulatory-story.aspx?cid=669&newsid=1320179

As at 30 June 2019, 875,047 shares equating to £991,780, based on a Net Asset Value ex dividend of 113.34 pence per share (the Net Asset Value at 30 June 2019 of 115.0 pence per share less the interim dividend of 1.66 pence per share) were due but had not been issued. The Company intends to issue these shares on or around 30 September 2019.

My underline


A minimal number of shares to be issued compared to those already in circulation: 1,447,171,000 (approx in sect. 10 again).

I don't hold but I would like to at a best price. Does anyone have any pointers to the best tactics to that end?
I would think the shares will be offered to the existing shareholders first though.

midgesgalore

[PrefInvestor]

Hi midgetsgalore, Well TRIG have certainly done well and are now trading at about an 11% premium to their NAV of 115 declared in their interim results yesterday 7th August. Their last share issue was in March 2019 when they sold 150 million new shares which were offered to existing shareholders at a 4% discount to NAV (114p) you can read the prospectus here

https://www.londonstockexchange.com/exc ... 94354.html

There was a previous issue though in November 2018 that was open to all, for prospectus see here

https://www.londonstockexchange.com/exc ... 62498.html

This new issue is to be slightly larger by the look of it 185 million shares I think and I could not immediately see from their announcement whether they intend to restrict it to existing shareholders or not.

I wish you luck if you are wanting to get on board, personally I would say that it has become pretty expensive now - I recently sold about half of mine....not sure if I will be buying more this time round. I am a bit too overweight on renewables !.

ATB

Pref

[BusyBumbleBee]

As at 30 June 2019, 875,047 shares equating to £991,780, based on a Net Asset Value ex dividend of 113.34 pence per share (the Net Asset Value at 30 June 2019 of 115.0 pence per share less the interim dividend of 1.66 pence per share) were due but had not been issued. The Company intends to issue these shares on or around 30 September 2019.

A minimal number of shares to be issued compared to those already in circulation: 1,447,171,000 (approx in sect. 10 again).

I don't hold but I would like to at a best price. Does anyone have any pointers to the best tactics to that end?
I would think the shares will be offered to the existing shareholders first though... midgesgalore

Part of the Manager's fees are paid in shares and that is what the 875,047 shares referred to here are : see:

In line with the Investment Management Agreement and the Operations Management Agreement, 20 per cent. of
the management fees (up to an Adjusted Portfolio Value of £1 billion) are settled in Ordinary Shares.

As to when you should buy - I know not : but both PrefInvestor and I think they are a bit toppy at the moment so I am out of these and will wait for them to drop..

[PrefInvestor]

Hi Again All, Personally IMHO the share price is almost certain to fall back to a level close to wherever they pitch the next share offer - unless they leave it open to offers as they did once before. Buying right now wouldnt be a great idea IMHO - just my personal take you understand.

ATB

Pref

[PrefInvestor]

Hi All, TRIGs last 3 share issues have been at approximately the following dates Mar 2018, Nov 2018 and Mar 2019 with another coming soon. If you look at a chart of the share price covering that period (preferably one showing the NAV) as per the one at this link:-

https://www.hl.co.uk/shares/shares-sear ... are-charts

Then it definitely looks to me that you can see definite dips in the share price at those dates followed by a subsequent rise.

When the new prospectus gets issued if it contains a price for the new issue then I am seriously contemplating selling the balance of my holding immediately with a view to buying back when it drops to closer to the offer price......

ATB

Pref

[midgesgalore]

Thanks PrefInvestor & BBB.

I have been keeping up with the thread and I agree with your collective wisdom and will be patient.
My holdings in green infrastructure funds is quite small, with approx 2% holding in Greencoat UK Wind PLC, UKW. I bought in the open market on May 29th at 134p, which is about as low as they went for folks like me not already in the club.

My hope is, in time, to buy some JLEN (a more general infrastructure fund) as well as some TRIG (wind, solar & a little battery storage not too far away from where I live).

This would be buy and hold for the dividend and not buying in & out as the reasonable well rehearsed strategy I see you guys finding hard to resist

So i'll wait for the next issue and hope for a reasonable entry point.


midgesgalore

[richfool]

Thanks PrefInvestor & BBB.

I have been keeping up with the thread and I agree with your collective wisdom and will be patient.
My holdings in green infrastructure funds is quite small, with approx 2% holding in Greencoat UK Wind PLC, UKW. I bought in the open market on May 29th at 134p, which is about as low as they went for folks like me not already in the club.

My hope is, in time, to buy some JLEN (a more general infrastructure fund) as well as some TRIG (wind, solar & a little battery storage not too far away from where I live).

This would be buy and hold for the dividend and not buying in & out as the reasonable well rehearsed strategy I see you guys finding hard to resist

So i'll wait for the next issue and hope for a reasonable entry point.


midgesgalore

I concur. I hold both JLEN and TRIG (the latter added earlier this year), which I stick with and don't trade in and out of.

[PrefInvestor]

Thanks PrefInvestor & BBB.

I have been keeping up with the thread and I agree with your collective wisdom and will be patient.
My holdings in green infrastructure funds is quite small, with approx 2% holding in Greencoat UK Wind PLC, UKW. I bought in the open market on May 29th at 134p, which is about as low as they went for folks like me not already in the club.

My hope is, in time, to buy some JLEN (a more general infrastructure fund) as well as some TRIG (wind, solar & a little battery storage not too far away from where I live).

This would be buy and hold for the dividend and not buying in & out as the reasonable well rehearsed strategy I see you guys finding hard to resist

So i'll wait for the next issue and hope for a reasonable entry point.


midgesgalore

I concur. I hold both JLEN and TRIG (the latter added earlier this year), which I stick with and don't trade in and out of.

Hi midgesgalore & richfool, I hold most of the renewable stocks mentioned in this thread (BSIF, FSFL, JLEN, NESF, TRIG & UKW) having built up my holdings since the start of 2018. My normal mode of operation is, as you guys say, to just buy and hold for the dividends. My only reason for selling half of my TRIG recently was that with the run up in the price this had become the largest holding in my whole portfolio AND renewables as a whole were ~20% of the portfolio - too high a proportion I felt.

But watching all of these stocks they are ALL periodically issuing more shares to raise new capital to either reduce their debt or buy new assets or whatever. And when they do their price dips. BBB has said (as I recall, hope I am not mis-quoting him) that he tries to take advantage of this by trading in and out, but as I say I havent really been doing that. BUT if TRIG were to come out with a new offer to buy new shares at below 120 (for example), still 5p above NAV but a good 7p less than the current SP, then selling and buying back seems like a good possible solution to me. Otherwise as a holder I will just have to watch the price drop to close to the new issue price with the resulting capital loss. If the offer was pitched around 124/125 I wouldnt bother though. I do prefer to just hold.

ATB

Pref

[Walkeia]

But watching all of these stocks they are ALL periodically issuing more shares to raise new capital to either reduce their debt or buy new assets or whatever. And when they do their price dips.

Pref

Is there any consensus which renewable fund is the front runner to be issuing shares soon? TRIG, UKW and Greencoat Renewables all have come to market this year I believe.

[PrefInvestor]

Is there any consensus which renewable fund is the front runner to be issuing shares soon? TRIG, UKW and Greencoat Renewables all have come to market this year I believe.

Hi Walkeia, Well if you take a look at the RNSs for each of the renewable stocks you should get a pretty good idea.

GCP did an issue in March 2019 and if I read one of their RNSs correctly it sounds like they exhausted their capacity for issuing new shares till the next AGM - so not them ?
UKW just did an issue in May 2019, too soon for another ?.
TRIG have actively said that they are going to be doing an issue and just issued a prospectus on Aug 7th.

Haven’t checked the others, will leave that to you !. TRIG looks to be favorite to me based on the above. Not interested myself as already overweight renewables !. Just sold some TRIG as it had become my largest holding. May sell the rest if the offer price is much below the current share price and buy back later. Won’t be losing any dividends as just gone XD.

ATB

Pref

[Walkeia]

Thanks Pref investor.

I sold my TRIG yesterday and this morning. Solid premium + 185 millions shares left to issue of the programme until March 2020. Sept would seem an opportune time given where we’re trading but with Brexit, trade war, recession warnings who knows?

No underlying concerns - just I have solid renewable holdings as a proportion of portfolio and use interactive brokers margin facility which seems sensible to taper somewhat over 31st Oct.

[richfool]

Is there any consensus which renewable fund is the front runner to be issuing shares soon? TRIG, UKW and Greencoat Renewables all have come to market this year I believe.

Hi Walkeia, Well if you take a look at the RNSs for each of the renewable stocks you should get a pretty good idea.

GCP did an issue in March 2019 and if I read one of their RNSs correctly it sounds like they exhausted their capacity for issuing new shares till the next AGM - so not them ?
UKW just did an issue in May 2019, too soon for another ?.
TRIG have actively said that they are going to be doing an issue and just issued a prospectus on Aug 7th.

Haven’t checked the others, will leave that to you !. TRIG looks to be favorite to me based on the above. Not interested myself as already overweight renewables !. Just sold some TRIG as it had become my largest holding. May sell the rest if the offer price is much below the current share price and buy back later. Won’t be losing any dividends as just gone XD.

ATB

Pref

Pref, I've looked at the "Supplementary prospectus" dated 7th August (for TRIG), but can't see that it's a new offer. It seems to be adding supplementary information to the offer which took place in March 2019. Am I missing something?

https://www.investegate.co.uk/renew-inf ... 08052724I/

[PrefInvestor]

Hi richfool, Well the situation as I see it is as follows, they always planned (and had AGM approval for) issuing 450 million shares. They have 185 million left that they plan to issue “soon”. To do so they need to update the financial info which they have done in a different PDF file to the one you posted, I went in via the LSE RNS and the prospectus doc there includes a link to a PDF containing the updated financials. Maybe it’s in what you posted I haven’t had time to go through that in detail.

Anyway so it seems to me that they are all set for another issue. Just waiting for the offer document to appear.

That’s how I see it anyway. Could be wrong...

ATB

Pref

PS The link to the second PDF is in what you posted, it’s in very small italics right at the end....

[richfool]

Hi richfool, Well the situation as I see it is as follows, they always planned (and had AGM approval for) issuing 450 million shares. They have 185 million left that they plan to issue “soon”. To do so they need to update the financial info which they have done in a different PDF file to the one you posted, I went in via the LSE RNS and the prospectus doc there includes a link to a PDF containing the updated financials. Maybe it’s in what you posted I haven’t had time to go through that in detail.

Anyway so it seems to me that they are all set for another issue. Just waiting for the offer document to appear.

That’s how I see it anyway. Could be wrong...

ATB

Pref

PS The link to the second PDF is in what you posted, it’s in very small italics right at the end....

Thanks Pref, I have found and read that. I noted that it gave the NAV at various points in time (audited and unaudited), though it doesn't give any actual offer prices.

What I was trying to determine was whether a new offer was being made at a lower price than the current SP, as recently happened with RGL (Regional REIT) and which then under-mined the current SP. As TRIG is at a significant premium, I might then sell all or some of my holding at the current price and then re-purchase at a lower SP., (if that is likely to happen), as you mentioned to Walkeia you have done.

[PrefInvestor]

[Hi Again richfool, Well if I’m right they have laid all of the groundwork for a new issue and just now need to publish an RNS with the offer details. So if you want to know the details ASAP then if I were you I would be taking a look at TRIGs RNSs every day looking for the offer.

Btw I sold almost half my TRIG not because a new issue was likely but because I was too overweight renewables and TRIG had become my largest holding. When the offer comes out I MAY sell the rest if the offer price is way below the current share price, but will wait for the announcement before I decide. Really I would prefer to just hold.....

ATB

Pref

[BusyBumbleBee]

Every so often Quoted Data puts out a piece of research on JLEN. The latest is here https://quoteddata.com/research/jlen-en ... otential2/ and is well worth a read, not only because it focuses on JLEN but for the background info it gives on the whole sector.

It also has comment/analysis on other Green ITs such as https://quoteddata.com/2019/02/bluefiel ... cial-year/

Hope this is useful - BBB

[BusyBumbleBee]

duplicate post!