Downing Renewables weighs up more share buybacks as market cap plummets
Downing Renewables and Infrastructure Trust (DORE) has suffered a sharp drop in the overall value of its assets this year, reflecting increasingly challenging economic conditions for green energy projects.
The London-listed renewable investment trust, this morning posted a 12.4 per cent drop in market capitalisation over the first six months of trading, plummeting from £210m in December 2022 to £184m at the half-year point.
Over the first nine months of this year, DORE has bought back over 1.5m shares at a cost of £1.3m, with company mulling further purchases in a bid to bolster its flagging share price.
DORE’s share price has nosedived 26.5 per cent over the same time period – slipping from 113.5p per share to 84.2p per share over nearly nine months of trading – with the company still operating at a discount on the FTSE All-Share.
Clean energy investors such as DORE have struggled to make the same returns for low carbon generators and renewable assets this year with soaring inflation eating into the costs of operations and acquisitions.
This has been reflected in the latest auction round for offshore wind, which failed to attract any major bids for new projects.
DORE manages a £1.8bn portfolio of assets across Europe, including solar, wind and hydropower, with its UK operations providing enough power to meet the needs of over 150,000 homes.
Its spending over the half-year included a portfolio of operational solar PV assets located in the UK for £12.6m.
The company has also committed £18m to new investments following the period end, including acquisitions for Mersey Reactive Power, a UK based shunt reactor for £11m, and Blasjon, a Swedish electricity distribution system operator for £7m.
This means it has now fully deployed all its cash, with the company expecting a revival in the performance of its portfolio as conditions improve.
Hugh Little, chair of DORE, said: “We believe DORE is well positioned to continue providing its shareholders with attractive and sustainable long-term returns, taking advantage of the global transition to net zero. We look forward to providing further positive news in the second half of the year.”