Removal of subsidies takes TRIG earnings down

Number 11 Downing Street had a direct effect on earnings at The Renewables Infrastructure Group (TRIG) in the year to 31 December 2015, though the firm's investment strategy saw its total assets continue to rise.

The recent addition to the FTSE 250 saw operational performance and distributions from its portfolio of onshore wind and solar photovoltaic projects in line with its expectations, with what the board described as strong portfolio generation in 2015.

Generation capacity increased to 658MW during the year, with seven additional projects bringing the total to 36 investments in the UK, Ireland and France.

The directors' valuation of the portfolio at 31 December was £712.3m, up 50.6% from £472.9m in 2014.

Profit before tax was £17m, down 27% from £23.3m. TRIG's board said this reflected the £20.2m adverse impace of the UK Summer Budget, in which the government withdrew revenue from Climate Change Levy Exemption Certificates.

"2015 has been a dynamic year for TRIG. Generation has been strong and the company has shown resilience in the face of twin challenges posed by further weakening in power prices and UK government changes to renewables incentives," said chairman Helen Mahy CBE.

"TRIG has significantly increased the scale and diversification of its portfolio and in December became the first renewables investment company to be included in the FTSE 250 Index. As a market leader in both portfolio scale and diversification, TRIG is well-positioned for 2016 and beyond," she added.

The Renewables Infrastructure Group reported its net asset value per ordinary share as 99p, down from 102.4p in 2014, again reflecting the impact of the Summer Budget.

An interim distribution of 3.11p per ordinary share for the six months to 31 December was declared with a scrip dividend alternative. Total distributions for the year totalled 6.19p per share, up from 6.08p in 2014.

During the year, the company raised total equity capital of £316m, and now had a pipeline of further investment opportunities under consideration across multiple technologies and markets.

"The growth trajectory of renewables in Europe has been reinforced following the UN meetings in Paris in December," said Richard Crawford, director, infrastructure at TRIG's investment manager InfraRed Capital Partners.

"TRIG's ability to invest selectively across markets and proven technologies, combined with the potential to take advantage of maturing technologies such as offshore wind and renewables-supporting infrastructure, provides excellent opportunities for 2016," he added.

Post year-end, the company had acquired interests in a portfolio of 15 French solar photovoltaic projects for €57m (£44m), increasing TRIG's portfolio to 51 investments and 680 MW generating capacity.

It was also moving to quarterly dividends commencing with first quarter 2016, payable in June 2015, with a target aggregate of 6.25p per share for the year.

The company also intended to seek shareholder approval at its Annual General Meeting to increase its investment limit in technologies other than onshore wind and solar photovoltaic from 10% to 20%, to enable broader investment including in operational offshore wind.