SDCL Energy Efficiency Income Trust — Portfolio growth ahead of budget

SDCL Energy Efficiency Income Trust’s (SEEIT’s) interim update (for the six months to 30 September 2024) has highlighted that its operational assets, on a consolidated basis, are performing in line with management’s expectations and that the portfolio is well positioned for growth. SEEIT is actively pursuing additional financing, co-investment and disposal opportunities to support the capital needs of Onyx and EVN, which are growing ahead of budget. Surplus capital will be used to pay down SEEIT’s revolving credit facility (RCF). Management believes SEEIT is on track to deliver its target dividend of 6.32p per share for FY25 (10% current yield), which is fully covered by net operational cash received from investments.

Written by

Harry Kilby

Analyst

Year end	NAV (£m)	NAV per share (p)	DPS (p)	Dividend cover (x)
03/20	323.5	101.0	5.00	1.5
03/21	694.0	102.5	5.50	1.2
03/22	1,073.0	108.4	5.62	1.2
03/23	1,125.0	101.5	6.00	1.2
03/24	982.0	90.5	6.24	1.1

Source: SEEIT

Onyx, now SEEIT’s largest asset, provides on-site generated solar power to the commercial and industrial sectors across 14 US states and has continued to create and convert a significant pipeline through its development activity. Onyx has already met its 70MW notice to proceed target for the year and is on track to meet, or exceed, its annual power purchase agreement target. Onyx is also due to meet its commercial operation date target for 2024, which is the point at which new projects begin generating revenue. EVN has seen increased demand for ultra-fast electric vehicle charging stations across the UK and has brought three additional sites online (26 total sites). Management forecasts that RED-Rochester (one of the US’s largest district energy systems), however, will miss its budgeted FY24 EBITDA by c 17%, due to lower demand from one of its key customers. Management believes the underperformance seen is predominantly short term, with current negotiations on tariff amendments expected to improve its EBITDA. RED-Rochester’s co-generation power plant project remains on track to come online by Q125.

At end-FY24, management guided for £75–125m of organic investments in FY25. During H124, SEEIT invested c £74m into Onyx and c £4m into EVN. However, management still expects the total for FY24 to remain within the forecasted range. With equity financing not viable, due to the current discount to NAV, SEEIT is seeking other sources of financing to support shareholder value. These include extending its project level financing, asset disposals and re-investment, and SEEIT is also looking to introduce co-investment in some assets.

Management has entered discussions to increase and extend its RCF beyond the maturity date of 2026, with the process expected to conclude during Q424. The refinanced RCF will be used to provide capital to protect shareholder value at Onyx and EVN until the completion of co-investment or disposal processes and/or the project level financing. The proceeds of this will be used to pay down the RCF (c £165m at end-H124), which is c £35m above management’s expected target for 30 September 2024 due to the accelerated deployment at Onyx, which has required construction funding on a short-term basis from SEEIT.

This report has been commissioned by SDCL Energy Efficiency Income Trust and prepared and issued by Edison, in consideration of a fee payable by SDCL Energy Efficiency Income Trust. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

There only 3 dividends left to be declared for this year, the payments may slip into next year.

Dividends received to date £8,136, so the fcast has been met

Dividends still to be received £1,959* so the target will be also met.

* See proviso above.

The Snowball is ahead in time also.

SUPERMARKET INCOME REIT PLC  

(the “Company”)  

  

DIVIDEND DECLARATION

   

Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust with secure, inflation-linked, long-dated income from grocery property, has today declared an interim dividend in respect of the period from 1 July 2024 to 30 September 2024 of 1.53 pence per ordinary share (the “First Quarterly Dividend”).

The First Quarterly Dividend will be paid on or around 15 November 2024 as a Property Income Distribution (“PID”) in respect of the Company’s tax-exempt property rental business to shareholders on the register as of 11 October 2024. The ex-dividend date will be 10 October 2024.

£3k to invest? 2 UK REITs I’d buy in an ISA this month

I’ve been looking for the top UK REITs to add to my ISA. Here are two stocks that I think have terrific long-term passive income potential.

Zaven Boyrazian, MSc❯

Published 2 October

been looking for the top UK REITs to add to my ISA. Here are two stocks that I think have terrific long-term passive income potential.

Zaven Boyrazian, MSc❯

Published 2 October

FSFL UKW

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

The UK stock market’s filled with awesome real estate investment trusts (REITs). By capitalising on these unique financial vehicles, investors can indirectly own a small piece of lucrative assets that are often prohibitively expensive as a direct investment.

Most REITs own and operate a commercial or residential real estate portfolio. However, some focus on alternative assets, such as renewable energy infrastructure.

While fossil fuels aren’t likely to disappear any time soon, the rising threat of climate change is sparking a lot of investment in renewables. And even the new British government’s targeting the creation of 650,000 clean energy jobs by 2030.

With that in mind, I’m looking at two REITs that look set to thrive under a renewable-friendly government, Greencoat UK Wind (LSE:UKW), and Foresight Solar Fund (LSE:FSFL).

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Wind and solar-powered REITs

Both firms have almost identical business models. They invest in renewable energy infrastructure (wind for Greencoat, solar for Foresight), generate clean electricity, and sell it to energy suppliers.

The constant and rising demand for electricity has enabled both companies to be highly cash-generative. And both significantly benefited from the sharp rise in energy prices over the last few years. As a result, dividends have been hiked nine years in a row, keeping up with inflation and helping shareholders build chunky passive incomes.

This trend should continue, in my opinion. As previously mentioned, energy demand’s climbing thanks to the rising popularity of electric vehicles (EVs) and power-hungry artificial intelligence (AI) models. Needless to say, this could be a lucrative opportunity, attracting investment from the private sector, even if Labour falls short of its targets.

What could go wrong?

Looking across the renewable REIT landscape, these two stocks appear to offer terrific value. While they operate as leveraged businesses, both generate sufficient cash to comfortably meet interest expenses as well as dividends. And to top things off, both trade at a double-digit discount to their net asset value, indicating a potential buying opportunity.

That’s obviously an encouraging trait. So much so that I’ve already added Greencoat to my income portfolio, with plans for Foresight to join the mix once I have more capital at hand. However, these investments, while promising, are far from risk-free.

Like many businesses operating within the energy sector, neither Greencoat nor Foresight have any pricing power. Electricity prices are determined by supply and demand imbalances while being kept in check by regulators like Ofgem. And as a result, energy’s long been a cyclical sector.

When energy prices fall, the earnings of these REITs fall as well. And while the management teams can execute a bit of price hedging with fixed-rate customer contracts, prolonged drops in energy prices could compromise dividends, especially if debt‘s left unchecked in a higher interest rate environment.

Nevertheless, both these businesses are seemingly in a strong position right now. And with a solid track record of navigating fluctuating market conditions, it’s a risk I feel is worth researching, given the long-term passive income that could be unlocked.

Not Naval gazing that’s a completely different topic.

I’ll try to update the dividend information from the Watch shares but it’s best to DYOR before u part with your hard earned and further information released by watch list shares can be found at

Investegate | RNS | Company Announcements | Home | FTSE 100, 250, AIM, techMARK

Dividends and Earnings

During this financial year, the Company declared four interim dividends totalling 5.9pps (2023: 5.7pps), with the total dividends declared for 2023 being 6.045pps, which included 0.345pps relating to monies received following the successful settlement of a historic legal case), which was in line with the previously announced dividend target of 5.9pps (2023: 5.7pps), representing a 3.5% increase on the previous year. I am pleased to report that these dividends were covered by cash earnings.

As set out in Note 8 to the consolidated financial statements, these dividends were covered by the Group’s Adjusted EPS (representing cash) of 5.99pps (2023: 6.43pps). Furthermore. All dividends were paid as Property Income Distributions (‘PIDs’).

Historically the Board has paid dividends in four instalments each financial year. The Board intends to continue with this practice by making dividend payments in November, February, May and August each year. In order to do this, all dividends need to be declared and paid as interim dividends.

Discount

The discount of the share price to NAV at 30 June 2024 narrowed to 18.4% from 23.1% at the previous year end. The Board monitors the discount level throughout the year and has the authority to both issue and buy back shares. Although these powers have not been used to date, the Board believes these authorities are important powers for it to have available, if required, and therefore recommends that shareholders vote in favour of their continuance at the forthcoming AGM.

£££££££££££

Current share price 72.8p dividend 5.99p a yield of 8%

olxtoto login
certilag.net
rosellasiggers@ig.com.br
114.234.110.224

hujantoto 
Hello there! Would you mind if I share your blog with my twitter group?
There’s a lot of folks that I think would really appreciate your
content. Please let me know. Cheers

££££££££££

Yep, no problem with that. If the content is from another source it would be polite to include their name.

UKW

Dividends and Returns

The Company’s aim remains to provide investors with an attractive and sustainable dividend that increases in line with RPI while preserving capital on a real basis. In each of the first 10 years since listing, the Company increased its dividend target by RPI and for 2024, the 11th year, the Company increased its target significantly above RPI to 10 pence per share. The Company paid an underlying 2.5 pence per share with respect to Q1 2024 and has declared a dividend of the same amount per share with respect to Q2 2024, giving a total of 5 pence per share for the period. The Company also paid an additional £29 million of dividends to shareholders in February, increasing the total dividend to 10 pence per share for 2023.

In line with the current higher interest rate environment, the Company forecasts a 10 per cent return to investors on NAV (net of all costs). This includes reinvestment of excess cash generation (dividend cover) in addition to the dividend yield. Since listing, the Company has reinvested £935 million of excess cash generation and paid £1,074 million of dividends.

£££££££££££

Price was 165p dividend 10p yield 6%
Price now to buy 142p yield 7%
Now a belt and braces Trust. As always timing and then time in.
7% compounded doubles your hard earned in ten years.

Discount Watch

The number of investment companies trading at 52-week high discounts fell to just nine. It wasn’t a good week all round though, one sector saw all five of its constituents set new discount highs for the year.

By Frank Buhagiar• 30 Sep

We estimate there to be nine investment companies that saw their share prices trade at 52-week high discounts over the course of the week ended Friday 27 September 2024 – two less than the previous week’s 11.

It’s not often all funds in one sector see their share prices set new 52-week high discounts to net assets on the very same day. But that’s what happened with the five-strong Japan sector. True, the share prices of the five investment companies – Baillie Gifford Japan (BGFD), CC Japan Income & Growth (CCJI), Fidelity Japan (FJV), JPMorgan Japanese (JFJ), Schroder Japan (SJG) – had been bobbling close to the year-high marks for some time now, but all saw their discounts set new highs for the year on Friday 27 September 2024.

Of the five, only SJG released results this week but a +21% NAV total return for the full year hardly cause for concern, more like celebration. The reason for the sector-wide discount doldrums have a political driver. After Japan’s markets closed on Friday, former defence minister, Shigeru Ishiba, narrowly defeated Economic Security Minister, Sanae Takaichi, in the Liberal Democratic Party’s leadership contest. That means Ishiba becomes Japan’s next prime minister.

With Ishiba considered to be on the hawkish side when it comes to monetary policy, expectations are that he will likely not stand in the way of further interest rate hikes as the Bank of Japan looks to normalise monetary policy after years of tackling deflation. Cue the election result causing the yen to gain more than 1% against the dollar and stock futures to sink, indicating a selloff in equities lies ahead when markets reopen on Monday. But with UK markets still open, the share prices of all five Japan-focused investment companies were always likely to come under pressure, and so it proved.

The top five

FundDiscountSectorCeiba Investments CBA-71.81%Property

Schroder Capital Global Innovation

INOV-57.50%Growth Capital

JPEL Private Equity JPEL-51.34%Private Equity

Atrato Onsite Energy ROOF-31.76%Renewables

Fidelity Japan FJV-19.53%Japan

The full list

FundDiscountSector

Schroder Capital Global Innovation

INOV57.50%Growth Capital

Fidelity Japan FJV19.53%JapanSchroder Japan SJG14.69%JapanBaillie Gifford Japan BGFD16.79%JapanCC Japan Income & Growth CCJI11.87%JapanJPMorgan Japanese JFJ14.50%Japan

JPEL Private Equity JPEL51.34%Private Equity

Ceiba Investments CBA71.81%Property

Atrato Onsite Energy ROOF31.76%Renewables