Greencoat UK Wind’s 2025 scorecard: cash still strong, policy now linked to CPI
Greencoat UK Wind PLC (UKW) has published full-year results to 31 December 2025. The headline: cash generation held up well despite lighter winds and softer power prices, the dividend rose again, and the Board has reset the dividend policy to track CPI inflation from 2026 after changes to the Renewables Obligation (RO) framework.
For anyone newer to the trust: UKW is the FTSE-listed specialist that owns UK wind farms. The model is simple – pay an inflation-linked dividend and preserve real capital by reinvesting surplus cash. Key acronyms you’ll see below: CPI (consumer price index), RO (Renewables Obligation), CFD (Contracts for Difference), NAV (net asset value), GAV (gross asset value).
Key numbers investors will care about
| Metric | 2025 | 2024 |
|---|---|---|
| Net cash generation (Group and SPVs) | £291 million | £279 million |
| Dividend per share (with respect to year) | 10.35 pence | 10.00 pence |
| Dividend cover | 1.3x | 1.3x |
| NAV per share | 133.5 pence | 151.2 pence |
| Share price (year end) | 98.1 pence | 127.7 pence |
| Market capitalisation | £2,118.8 million | £2,878.5 million |
| GAV / NAV | £5,008.6m / £2,882.4m | £5,652.7m / £3,409.1m |
| Total electricity generated | 5,403 GWh | 5,484 GWh |
| TSR | (15.7)% | (8.6)% |
Dividend policy: shifting from RPI to CPI, with a 2026 target of 10.70p
After the Government decided to index the RO scheme to CPI from 1 April 2026, UKW has aligned its dividend policy accordingly. The trust will now “aim to provide an annual dividend that increases in line with CPI inflation”. For 2026, the target dividend is 10.70 pence, a 3.4% uplift (matching December 2025 CPI).
For 2025, the declared dividend was 10.35 pence per share, covered 1.3x by net cash generation. That’s now twelve consecutive years of dividend increases in line with or ahead of inflation.
What drove 2025 performance
Cash generation resilient; wind speeds not so much
- Net cash generation came in at £291 million, supporting the dividend and leaving room for buybacks and debt reduction.
- Output was 5,403 GWh, 8.5% below budget due to low wind, particularly in H1. This is weather, not asset failure, and the portfolio is designed to smooth that variability over time.
NAV movement explained in plain English
NAV per share fell 17.8 pence to 133.5 pence. The biggest headwind was lower power price forecasts (driven by lower gas prices), alongside routine depreciation and the change in RO indexation. The company also noted smaller negative updates at asset level (budget tweaks and fair value of debt).
Capital allocation: disposals, buybacks and lower debt
- Disposals: £181 million of partial stakes sold at prevailing NAVs (including Hornsea 1, Andershaw and Bishopthorpe). Total proceeds over the last 14 months reached £222 million.
- Buybacks: £109 million repurchased in 2025 at an average 23% discount to NAV, taking total since October 2023 to £199 million. Management estimates buybacks added 2.1 pence to NAV per share.
- Debt: principal reduced by £168 million year on year. Aggregate Group Debt was £2,126 million and gearing stood at 42.5% of GAV at year end. Weighted average cost of debt was 4.69%.
Opinion: in a market where shares trade at a wide discount to NAV, buying back stock at a 20%+ discount is an accretive use of cash. The flip side is higher gearing if you overdo it – which is why the Board is balancing buybacks with disposals and deleveraging.
Share price discount and sentiment
Shares ended the year at 98.1 pence versus a 133.5 pence NAV per share – a sizeable discount. The Board ran a continuation vote in April 2025 (89.24% in favour) and, given the average discount remained above 10% in 2025, there will be another vote at the 2026 AGM. The trust has also cut its management fee basis to the lower of NAV and market cap, reducing the ongoing charges ratio to 0.83%.
Revenue mix, hedging and dividend cover
Over the next 7 years, 59% of discounted cash flows are fixed and CPI-linked (from RO/CFD and certain PPAs). This fixed base is why dividend cover remains robust even in stress tests. The company has also begun fixing power prices for part of its offshore output for two years and plans further hedges in 2026 if merchant exposure grows.
Debt profile and refinancing
Term debt maturities are spread from November 2026 to March 2036. UKW expects to refinance £350 million of tranches maturing between November 2026 and May 2027 in Q4 2026 and does not expect a material increase in average debt cost. Cash across Group and wind farm SPVs was £171 million at year end.
Market backdrop: big CFD awards and rising electricity demand
January and February 2026 saw Allocation Round 7 results: over 8GW of offshore wind CFDs (CPI-linked) awarded at £89.50-£91.20/MWh and 1.3GW of onshore at £72.24/MWh. UKW highlights rising electricity demand – at least 44TWh new generation needed in the next five years – alongside the retirement of older nuclear and gas capacity. That’s supportive for wind investment, and should create secondary sale opportunities from developers recycling capital.
What to watch in 2026: the Board’s priorities
- Further divestments to recycle capital at NAV.
- Reduce gearing to below 40% of GAV.
- Continue share buybacks while the discount persists.
- Disciplined reinvestment to maintain the balance of fixed and merchant revenues.
Management also flags about £1 billion of excess cash flow over the next five years, before any extra proceeds from disposals – useful firepower for all of the above.
ESG, safety and communities
UKW’s portfolio powered about 2.0 million homes in 2025 and avoided roughly 2.2 million tonnes of CO2. The Board formed an Asset Operations Committee in February 2026 to sharpen oversight of performance and health and safety. £6.7 million was channelled into community projects during the year.
My take: why this matters for retail investors
- Income: a 10.35p 2025 dividend, moving to a 10.70p target for 2026, CPI-linked, with 1.3x cover – that’s still the core of the UKW proposition.
- Valuation: the share price sits well below NAV. Buybacks at a 23% discount are sensible and accretive, but the real rerating lever is sentiment – power prices, rates and confidence in the dividend path.
- Risk: NAV fell on lower power price forecasts and low wind – both outside management’s control. The fixed revenue base and hedging plan help, but these remain the key variables.
- Balance sheet: gearing at 42.5% is reasonable for the asset class; the stated aim to dip below 40% is the right direction. The 2026-27 refinancing is one to track.
- Capital discipline: disposals at NAV, fee cuts, and a clear pecking order for capital allocation are exactly what investors want to see while discounts persist.
Net-net, this is a year where cash did the heavy lifting while the mark-to-model NAV faced macro headwinds. If you own UKW for inflation-linked income, the CPI shift is logical and cover remains sound. If you’re eyeing total return, the path to closing that discount runs through steady execution on disposals, deleveraging, and a bit of help from power markets and rates.
