The Renewables Infrastructure Group Limited (TRIG) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us for The Renewable Infrastructure Group's results for the year ended 31st of December 2025. Before we begin, just a quick word on logistics. Today's session will be recorded and will be uploaded to the website and the presentation materials are already on the website. We'll start with opening remarks from the company's Chairman, Richard Morse, and we'll follow that with the formal presentation by the management team. This will be followed by a Q&A session at the end. As usual, for those online, please submit questions through the portal and we'll take questions from the room first. We have no fire drills planned so if the alarm does go off, please do follow the instructions of the fire marshal. So with that, I'll hand over to Richard Morse to open the presentation. Thank you.

A warm welcome to TRIG's full year results. 2025 was in many ways a difficult and frustrating year for TRIG. The company's share price and NAV performance both fell short of the Board's expectations and the persistent discount to NAV at which the company's shares are trading continues to focus the Board's attention. 2025 was also, however, a year that demonstrated the resilience of our investment proposition, central to which is the robustness of our cash flows and the reliability of our dividend. These are what give TRIG the potential to provide its investors with a sustainable progressive dividend and the opportunity for capital growth, which is driven by the high quality earnings and underpinned by balance sheet strength. TRIG has a pipeline of opportunities reflecting the high demand for additional secure and sustainable electricity generation in the U.K. and in Mainland Europe. All of this is giving us a more positive outlook for 2026. In 2025, we had to manage 2 particular external challenges that impacted the whole sector. Wind speeds were low. But against that, TRIG's wind exposure was offset by a diverse portfolio invested in solar, which currently represents 13% of our portfolio and building out our battery storage pipeline will further aid the diversification of the portfolio. And the first project from that pipeline, Ryton, is due to come online this summer. In addition, the REMA and ROC consultations were widely perceived to signal policy headwinds for the whole sector, particularly in the U.K. But TRIG has a geographically diverse portfolio with 41% of its assets in Continental Europe. This means that the proportionate impact of the ROC decision was limited. TRIG has also been notably successful in securing long-term offtake contracts, PPAs. These represent good value and show TRIG as an attractive investment partner to corporate counterparties who are mandated to improve their long-term energy security. Our experience is that corporates are maintaining their focus on sustainability to TRIG's advantage. While the proposed merger with HICL could have brought several benefits to TRIG shareholders, including scale and liquidity, we retain every confidence in TRIG's stand-alone strategy, which seeks to achieve a total NAV return of more than 10% per annum on average over the long term anchored by resilient income which in turn supports our dividend policy, the principal focus for the majority of our shareholders. Despite all the challenges of 2025, the portfolio's quality of underlying earnings and distributable cash flow meant that we met our annual dividend target and we have confidence in our ability to deliver that target again in 2026 and beyond as well as restoring our net cash dividend cover to 1.1x to 1.2x with the real prospect for NAV growth going forward. The company has also delivered on its guidance with respect to refinancing following the successful completion of an upsized GBP 200 million private placement debt issuance post the period end. We have completed over half of our targeted GBP 150 million share buyback program and we are from today increasing the pace of buybacks while also being well on our way to delivering the level of disposal proceeds that were projected at last year's Capital Markets seminar. In June this year, the company will hold its first continuation vote. The Board will use the upcoming Capital Market Seminar in May to present how it intends to drive long-term shareholder value and meet investors' needs. In the meantime, our efforts are focused on fulfilling the targets established last year and validating our confidence in TRIG's delivery and future prospects. Thank you for your continued support. Many of you have invested considerable time engaging constructively with the company and with the Board in the last 12 months and I am grateful for that. I look forward to speaking with more of you as we progress throughout the year.

Thank you, Richard, and thank you to everyone both in the room and online for joining us. Welcome to the 2025 Annual Results presentation for The Renewables Infrastructure Group. Now as Richard said, it's been a challenging year for the renewable sector in Europe with low wind speeds and curtailment of generation in Sweden. These factors together with a reduction in power price forecast resulted in a NAV of 104p per share at the end of the year and is reflected in the share price sentiment. In this context, I'm pleased to report that the underlying business remains resilient reflected in gross cash cover of the dividend 2.1x. Operating cash generation was GBP 375 million, which was used to fund GBP 192 million of portfolio debt repayment with net dividend cover of 1.0x, in line with expectations. Amortizing and fixed rate nature of debt on the balance sheet is a result of deliberate structuring resulting in low refinancing risk and low interest rate risk. Mirroring the balance sheet, we seek revenue price fixes and maintain good inflation correlation. This provides resilience to our cash flow forecasts, which has given the Board the confidence to maintain the dividend at 7.55p per share representing an 11% cash yield. Based on our current projections, we see this level as one that can be maintained with a path to resuming dividend growth in the medium term. We presented our projections to support this at the Capital Markets Seminar in May 2025 and we'll step through them again over the next few slides. I will then cover the strategic areas of capital allocation, active management and portfolio construction before handing over to Phil to run through the financials. So on this slide, we show our cash flow projections from the current portfolio before reinvestment in the shaded area in blue. It is similar to the chart that we showed at the Capital Markets Seminar and reflects the lower cash flow assumptions that are in the current NAV. The stability in cash flow projections reflects that TRIG's revenues are resilient with 75% of prices fixed per unit generated over the next 5 years and over half the revenues directly linked to inflation. For us, distributable cash flow is after the repayment of long-term debt. This means that distributable cash flow from the current portfolio peaks in 2040, at which point the current portfolio is also debt-free. Thereafter, as the current portfolio ages and in order to keep distributable cash flows increasing into perpetuity, it is important that we reinvest accretively. This is achieved through the projected dividend cover and reinvesting at returns in excess of 10%. When this is achieved, then you can see through the dash lines on this chart that the higher revenues result in increasing distributable cash flows into the future and eternal life. And of course investing in line with the buyback hurdle rate, which is shown by the red dash line, is even higher still. On this next slide, we focus on the next 5 years through the lens of free cash flow per share to demonstrate the resilience of the current dividend level and the pathway to resuming dividend growth in the medium term. We show the split of cash flow per share between the current portfolio, new projects coming online, both those that are currently in construction and future projects in the development pipeline and the impact of share buybacks. What this slide shows is GBP 100 million to GBP 150 million retained cash in excess of the dividend over the 5-year period during which time, we will also have repaid GBP 1 billion of project level debt and would leave gearing at just 28% at the end of the 5 years. We now turn to capital allocation. On this slide, we show how we've implemented the Board's capital allocation priorities. You can see that the approach to capital allocation has been flexible. In response to a weaker share price, we have pivoted to a greater emphasis on shareholder returns, including buybacks when they reflect the best use of capital with over 50% of available capital allocated to shareholder returns in 2025 and a similar allocation expected in 2026 and you can see that is up from previous years. Last year, we also invested GBP 116 million particularly into new projects as well as technical enhancements to existing operational sites. In each case, we benchmark the returns against the hurdle rate set by buybacks and given where the share price is trading, we refer the major construction investment decisions for Cuxac repowering and the Spennymoor battery to the Board. We are seeing the major construction projects with IRRs in the teens and operational enhancements well over 20% IRR. Now it is worth noting that the operational enhancements are smaller in quantum relative to the construction projects. On this next slide, we revisit the 4 limbs of the enhanced strategy that we set out at the Capital Markets Seminar and good progress has been made. In the year, we have raised GBP 280 million of capital. GBP 80 million was from completing the sell-down of the Gode offshore wind farm and GBP 200 million from the private placement debt issuance in February and further sale processes are entrained. Three projects representing GBP 180 million CapEx are in construction. The Cuxac repowering extends the life of the portfolio and adds to our fixed price inflation-linked revenues and the Ryton and Spennymoor batteries will add to portfolio diversification. We have a proactive approach to revenue management and we think that a high percentage of fixed prices is good. And we're delighted that in the year to have signed a 10-year fixed price arrangement with Virgin Media. It is great to see that corporates continue to value green affordable power. We've also rolled out a whole series of operational upgrades across over 200 megawatts of the portfolio with more to come. And finally, before I hand over to Phil, whilst the last few slides are focused on the financial fundamentals, the resilience of TRIG is built on our diversified asset portfolio. Our portfolio spans 6 markets and 4 technologies that support both energy security and the decarbonization of the U.K. and European economies. We continue to see the benefits of diversification. So far in 2026 whilst it is early in the year, we've seen a reversal of some of the trends that we saw in '25. Good wins in the U.K. and good electricity prices in Sweden though it is worth noting that in Iberia where there's been heavy rainfall, power prices are a little lower. On this slide, a brief reminder of our portfolio. We have a 59%-41% split between the U.K. and Europe. The portfolio is 79% wind, 13% solar and 8% battery storage. And our medium-term objective remains to increase technology diversification, which means more solar and more batteries in the portfolio. Now reflecting our capital allocation priorities, this is currently being met through the sale of wind projects and the building of batteries in our development pipeline. Phil, TRIG's CFO, will now take us through the financials.

Thank you, Minesh. I'll take you through the financial highlights and the valuation movements for 2025. The valuation of the investments and therefore, the net asset value have declined in the year mostly driven by macroeconomic factors, regulatory change and low wind speeds. The largest movement in the year has been a reduction in power price forecasts across geographies with power price projections being lower in the near term. There's also been a modest offset in the valuation from active management, including energy yield enhancements delivered in the year. NAV at the 31st December is 104p per share with a portfolio value of GBP 2.9 billion. Being an investment company, the valuation movement reduces earnings which in the year of minus 5.4p; which means after dividends paid in the year of 7.5p and with the benefit of share buybacks, the NAV has reduced by 11.9p in the year. Dividend cover before project level repayments in the year of GBP 192 million was 2.1x. Dividend cover after those repayments was 1.0x. Dividend cover has been tighter than usual. Low wind speeds across many of our geographies over the year has reduced cash flows. We expect dividend cover to improve to more normal levels with an expected net dividend cover level of 1.1x for 2026 and 1.1x to 1.2x for future years. And the target dividend for 2026 of 7.55p is reaffirmed by the Board. We report EBITDA for 2025 of GBP 459 million, which covered debt, amortization and the dividend. 2025 EBITDA is slightly lower than 2024 reflecting the disposal of a stake in the Gode wind farm that completed in March '25 and also reflects low wind speeds and a higher level of uncompensated grid downtime in 2025. I shall return to revenue and EBITDA on a later slide. Stepping through the valuation bridge shows a trail from the opening valuation of GBP 3.1 billion to the rebased valuation of GBP 2.9 billion and on the next slide, a closing valuation of GBP 2.875 billion. Starting from the left. Investments of GBP 116 million have been made in the year mostly funding the construction of the Ryton and Spennymoor batteries in the U.K. and the repowering of the Cuxac wind farm in France. Disposal proceeds of GBP 84 million relate to the sale of a partial stake in the Gode offshore wind farm that completed in March. And cash flows from the investments in the year were GBP 220 million. So the rebased valuation is GBP 2.9 billion. On the next slide, we have the rest of the valuation bridge with this section showing items that affect NAV and they reflect the operating income shown in the profit and loss account. I'll be going into detail on most of these items in the following slide. Briefly on the bridge, we show the impact of the movement in FX on our euro-denominated assets. Sterling has weakened 5% against the euro resulting in a gain before hedge offset GBP 59 million as shown in the bridge. And the company hedges FX outside of the portfolio and the losses on these hedges partially offset this impact resulting in a net FX gain for the company for the year of GBP 33 million. Power price forecasts have declined in the short to medium term with the power curve that have reduced NAV quite significantly and I'll come back to that in more detail shortly. We have increased discount rates for our European assets in Q1 '25 by 0.3% reflecting increases in EU government bond yields. And in Q4, we increased discount rates for our U.K. offshore wind farms by 0.5% reflecting the greater availability of U.K. offshore wind farm investment opportunities relative to the available investment capital in the market. There's been slightly higher actual inflation in 2025 than forecast, which has increased now slightly. And the negative impact from regulatory change includes the change to ROC and FiT indexation to CPI in the U.K. that is effective in April '26, which had an adverse NAV impact for TRIG of GBP 14 million. TRIG has a relatively limited exposure to U.K. ROC and FiT revenues. They comprise a little less than 20% of projected revenues in 2026 given the nature of TRIG's diversified portfolio. Changes in the U.K. Autumn 2025 Budget reduces capital allowance rates and increases business rates for some of our larger wind farms, which had an adverse NAV impact of GBP 9 million. And offsetting this, we had a reduction in German corporation tax over the next few years that has a positive valuation impact of GBP 4 million. And the final item on the bridge, portfolio return for the year is GBP 75 million and represents an annualized 2.6% increase, which is lower than would be expected predominantly due to lower cash generation in the year due to unusually low wind speeds in H1 and a higher level of uncompensated grid downtime. The next slide provides more detail on power price forecasts. As a reminder, TRIG takes a conservative approach to power price forecasting. We receive forecast curves from 3 mainstream providers. We then reduce that baseload curve to adjust for the lower price captured by renewables generators known as cannibalization. We then take the average of these 3 curves. This approach means we capture a range of views in the market in relation to the evolution of supply and demand of electricity. The spread of forecast is a little wider at December '25 than December '24 having been much wider at June '25. The impact on returns of adopting the highest or the lowest curve compared to the average will be around plus or minus 1%. We include charts in the appendix of the presentation showing the range of forecast for GB wind being the region with our largest merchant exposure and also one of the regions with the largest range between forecasts. Overall, there have been reductions in power price forecasts over the year across most of the geographies TRIG is invested in with the largest reductions being in GB and Swedish markets with most of the reductions being in the near term and being related to lower gas prices. On the top right of this slide, we continue to provide data on our average assumed power prices. And in the appendix of the presentation, you'll find the year-by-year assumed capture power price by region that we use in the valuation. In the bottom right, the donuts show the proportion of our forecast revenues that are fixed per megawatt hour and exposed to merchant pricing. The point to note is a high proportion of the fixed 82% over the next 12 months, 68% over the next 10 years, providing some level of variation against -- some level of protection against the variation in power prices and good inflation linkage. This next slide covers valuation discount rates. The slide shows the risk-free rates of benchmark government bond yields relative to the portfolio discount rate. The overall portfolio weighted average discount rate has increased by 0.4% during the year to 9.0%, which implies a just over 5% risk premium over the U.K.-EU blended risk-free rate. And as I covered earlier, we have increased the valuation discount rates in the year applied to European assets and we increased the valuation discount rates applied to U.K. offshore wind farms in the final quarter. The next slide includes the inflation assumptions and other portfolio return items. Out turn inflation for 2026 came in a little higher than the level forecast. Our forecast inflation assumptions looking forward are unchanged. And also on this slide, we cover the more significant items included in the balance of portfolio return. We've validated many of the technical enhancements installed on wind farms across the portfolio and have applied a 0.8p per share valuation uplift accordingly. Development and disposal activity in the year have added 0.3p per share with more to come as we commission projects currently in construction. Active revenue management refers to fixing power price revenues and also entering into an accretive corporate PPA in the year. Actual generation was below budget in the year due to unusually low wind speeds and high grid downtime, which detracted from NAV by 4.2p per share. And we have updated REGOs and Guarantee of Origin forecast that have declined reflecting reduced demand for these green certificates both in the U.K. and in Europe. Finally, buying back the company's own shares at a significant discount to NAV has added 0.8p per share over the year. This slide bridges the NAV per share during the year and analyzes the movements between macro items including regulatory change, actuals which includes the impact of lower generation and active management in the year with NAV gains from active management delivered principally from energy yield enhancements, revenue management and share buybacks. This slide shows our continued focus on reducing the short-term RCF balance. During the year, we invested GBP 116 million in construction projects and GBP 58 million on share buybacks. In H1, we received EUR 100 million proceeds from the sale of the partial stake in Gode. And post year-end in February 2026, we completed the private placement debt issue for TRIG, adding attractively priced fixed rate long-term amortizing debt to term out half of the RCF balance, reducing the RCF to around GBP 200 million. Overall, the RCF balance has been reduced by GBP 110 million. In 2026, we expect to deploy around another GBP 80 million on higher returning construction projects and to conclude the company's GBP 150 million share buyback program. We are actively working on disposals and we expect to reduce the RCF balance to between GBP 100 million and GBP 200 million subject to timing of transactions and therefore, the receipt of proceeds. This next slide shows TRIG's debt position with gearing reducing over time with scheduled repayments on the long-term debt over the subsidy and fixed income term. TRIG has long-term fixed rate nonrecourse project level debt that is shown in the chart in light blue. And earlier this month, we put in place a fund level private placement with an average 10-year life that is shown in green with scheduled repayments of this debt from 2033 to 2038. And the private placement repaid around half of the RCF balance with the RCF drawn now around GBP 200 million. The private placement was provided by a group of high quality institutional lenders with a strong demand and we're pleased with the pricing level achieved. The repayment profile of the private placement within the subsidy and other funds have a fixed revenue term and it slightly extends the long-term debt profile, which benefits the fund's overall cost of capital. TRIG has a conservative capital structure with the majority of our debt long-term, fixed rate and amortizing during fixed revenue periods. And the long-term debt is repaying at the rate of around GBP 190 million per year in the near term. The project level gearing at 37% is moderate. Long-term gearing as a percentage of enterprise value, i.e., project level debt and private placement, is 41%. Total debt as a proportion of enterprise value, including the RCF balance, is 46%. Note, we plan to reduce the RCF balance during this year through further disposals and so we expect this level to reduce. Our revenue management program and our development program will provide further debt capacity over time in addition to the existing fixed revenues and enable debt to be carried for longer to optimize the capital structure and grow shareholder returns. Our final slide covers look-through revenue and EBITDA for the portfolio. We'll just turn to the next slide here. Revenues for 2025 were GBP 642 million, portfolio EBITDA was GBP 459 million and operational cash flows were GBP 375 million. These measures were slightly lower than the previous year and reflect the disposal of the stake in Gode that completed in March 2025 and also the low wind speeds and uncompensated grid downtime in 2025. The impact of the partial sale of Gode was to remove around GBP 25 million from the full year 2025 EBITDA as well as reducing project level debt repayments for the year. With normal weather and lower grid downtime, we'd expect to see stronger performance in these measures in 2026. Absent disposals, we could expect 2026 EBITDA to be in the range of GBP 500 million to GBP 550 million. This slide also provides some detail on the average power prices achieved, fixed revenue levels and the direction of travel for 2026 showing a high level of fixed revenues per megawatt hour for 2026 and a fairly level power price outlook for 2026 compared to '25. That brings me to the end of the financial items. I shall now hand over to Chris, who will cover the operational performance.

Thanks, Phil. Hello. In 2025, TRIG generated 5.4 terawatt hours of electricity. That's enough to power equivalent of 1.6 million homes and avoid 1.8 million tonnes of CO2. TRIG's portfolio of 85 projects is spread across the weather systems and markets of Western Europe in onshore wind, offshore wind, solar and batteries with a wide range of manufacturers and models delivering diversification at multiple different risks. Generation was 7% below budget in the year and you can see how each region performed against budget in the column on the right. Of this 7% shortfall: 2% related to weather variations, which I'll come to shortly; 3% related to grid outages on equipment owned by third parties with Uverse in Sweden and Midill in the U.K. particularly affected; 1% related to aging assets ahead of their repowering for which development activities are progressing alongside additional take-up in strategic spares; and 1% related to economic curtailment during which wind turbines are deliberately turned off so that they only operate when it's economic to do so, which mainly impacted Sweden. On the next slide, you can see how the weighted average wind and solar resource varies over time in the TRIG sites in each region compared to the long-term mean. Wind resource improved notably across the second half of the year with unusually high variances in the first half all reducing. In the first half of the year, German offshore variances exceeded 15% while France and the U.K. had 10% variances. With all of these ended the year much closer to the long-term mean with Sweden's plus 7% partially offsetting the U.K.'s minus 4% with a portfolio just 2% below overall. Solar radiance was 1% down in each of Spain and France, but 9% up in the U.K. bringing the overall region once again very close to the long-term mean. The portfolio diversification by geography and technology continues to be a key strength of TRIG's portfolio construction both within and between years. You can see this very clearly in the final column on the right-hand side of the graph showing the variance by region since TRIG's launch in 2013 compared to the long-term average. Delivering management alpha through value enhancements, amongst other things, continues to be a key focus for TRIG. The target of achieving GBP 70 million of enhancement value over 2025 and 2026 is well progressed with GBP 32 million secured to date. This is through some of the activities shown on the right-hand side. I'm not going to go through everything. But you can see from the diagram, the range of different activities being performed. Touching briefly on a few of them. Increased revenues will flow from the value-accretive Virgin Media corporate PPA, the 20-year Claves repowering feed-in tariffs as well as short-term hedges for 2026 within Sweden to make the most of some higher forward prices. Increases to project lives continue to be secured both through early engagement with landowners as well as adapting the maintenance regimes of older sites such as placing greater emphasis on holding additional spare parts to help reduce operating costs. I'll talk about the ways in which we're evolving the portfolio on the next slide, but ultimately, these activities all contribute towards the GBP 70 million targeted value enhancements over 2025 and 2026. As ever, safety remains a top priority with a 7-day lost time accident frequency rate per 100,000 hours at 0.27, in line with industry averages. This slide provides a sense of how the homegrown development pipeline has been built up. Repowering development works of existing sites may take several years before they're ready to commence construction and so work has started nice and early. As the portfolio ages, new repowering opportunities will present themselves. Colocation is installing new technology such as batteries on an existing operational site, typically progress when wider strategic opportunities also progressed such as providing additional electricity price stability. Greenfield relates to the development of entirely new project locations, which for TRIG are all battery storage projects, which also provide a wider price hedge within the GB market. I'll touch upon a few of these projects on the next slide. This timeline of development and construction activities provide some additional insights into how some of the homegrown development projects have been progressed both towards and through construction. Picking out a few themes. A number of stand-alone GB battery projects have been awarded capacity market revenue agreements supporting them on their development journey. Whilst others such as Ryton, Spennymoor and Drakelow have progressed through various stages of detailed design and construction with Ryton to be fully operational in the second half of the year and Spennymoor in mid-2027. Fig, our battery development company, continues to make good progress on its portfolio. Similarly, the development of electrically co-located battery projects have been initiated alongside our solar projects in Spain to provide both revenue stability as well as value enhancement to the portfolio. In addition to these activities, as previously reported, a legal challenge against the Venelle wind farm in France was heard in court. This resulted in the environmental permits reinstatement being stopped. The case is being escalated through the courts, but in the meantime, wind farm generation has been suspended. So 0.3p per share provision has been included within the NAV. Repowering or replacement of existing wind turbines and associated infrastructure with new equipment is now well progressed at Cuxac in the south of France. All old turbines have now been removed from the sites and the new large foundation is constructed with full operation targeted by the end of year. The repowering will make good use of existing tracks and crane work sandings, local relationships with landowner, local authorities and the local population along with decades of wind data to help drive an accurate forecast energy yield for the new site. Claves is another wind farm in the south of France, which is a little earlier in its repowering journey with a final investment decision to proceed targeted for the third quarter of 2026, which has also secured a long-term government-backed indexed revenue contract. With that, I'll now hand back to Minesh.

Thank you, Chris. Before I conclude, it's worth spending a moment on the structural trends in the energy sector. Fundamentally, the energy transition remains an important investment theme. Governments remain exercised by the need for greater energy security and corporates continue to see value in affordable decarbonized energy supply chain as shown with our new contract to sell power to Virgin Media. Now electricity demand is set to accelerate particularly driven by transportation, heating and cooling as well as data centers and AI. Our investment strategy is well aligned to this trend. Renewables will be an important component of the generation mix to deliver this electrification and batteries will be critical to providing storage to the electricity system. Focusing back on TRIG, our business model is deliberately designed to ensure resilient income for our shareholders through a diversified portfolio, a high proportion of fixed price revenues and an amortizing debt structure. The 2025 dividend was covered. And this year, we expect to start heading back towards the more normalized net dividend cover levels of 1.1x to 1.2x. And with share buybacks and new capital expenditure propelling that further. We also have additional growth levers through portfolio rotation, revenue management and operational and technical enhancements. So I'll conclude today's presentation with a recap of the key strategic drivers of TRIG that underpin our aim to deliver an average 10% annual NAV return going forward. Firstly, TRIG benefits from a large diversified portfolio and inflation correlated revenues. This provides resilience to our cash flows. And whilst 2025 was a challenging year that is reflected in the reduction in the NAV and the share price sentiment, nonetheless, we covered the dividend and repaid GBP 192 million of project level debt. Secondly, responsible investment. We are focused on prudent capital allocation and have continued to progress the buyback program with nearly 100 million shares repurchased to date. And the Board has announced its commitment to accelerate the share buyback program alongside these results. The private placement debt raise provides external validation of the strength of the business model. We have progressed investment decisions where they beat share buybacks as a hurdle rate and support the strategic direction of the company, including the Cuxac repowering and the Spennymoor battery totaling around GBP 100 million CapEx spend. And finally, operational excellence is core to our management team's mindset seeking to achieve more with the portfolio we have through commercial and technical enhancements. Today, we've demonstrated that we are delivering against the bold enhanced strategy that we set out at the Capital Markets Seminar. We will have another Capital Markets Seminar this May ahead of the continuation vote in June. We've also demonstrated why we have the confidence in the long-term resilience of the balance sheet and the dividend, which is managed as part of our capital allocation framework. And we've demonstrated that we continue to optimize the portfolio, reduce gearing and deliver an attractive dividend to shareholders concurrently. Thank you for your time.

That concludes the formal presentation and we move to Q&A and we'll start with the room. So any questions in the room, just please state your organization and your question clearly.

Elliott Hardy, Investec. Two questions for me. Firstly, could you give some sort of more color on what you're seeing in terms of PPA pricing? And secondly, transaction activity?

Yes, absolutely. So let's start with the PPAs. Naturally, the pricing of individual PPAs is commercially sensitive. What we said in relation to the PPA we secured at the end of last year was that it was accretive both in relation to cash flow and value and you can see our power price projections. So that should give you a feel as to where that is. And then the repowering sites in France, the Cuxac feed-in tariff is at EUR 86 a megawatt hour. The Claves is EUR 87 a megawatt hour at 20 years inflation linked. In relation to the transaction market, I think when we all met at the half year results, we said the transaction market was very slow. I think we're beginning to see some transactions, most notably recently, the kind of [indiscernible] sale of onshore to CIP. We've said that we are progressing our transactions. Discount rate moves have been informed by what we are seeing in the market. So we're beginning to see some people returning, but I think the general sentiment remains that the transaction market is slow and challenging.

It's Conor Finn from Barclays. Two for me as well, please. So firstly, on curtailment. I guess at what point does colocation become viable in Sweden given kind of the ongoing issues there? And secondly, on the organic cash flow number where you mentioned 2% CAGR over the period to 2030. Obviously that's measured against '25, which was a below budget year for generation. So how much of that 2% is really from the assumption of on-budget generation?

Yes, I'll take colocation. We've looked at colocation in Sweden absolutely so that would be for us replacing batteries alongside the wind farms. The wind farms are large sites and so to have meaningful impact upon your price stability, you would need a very large battery as well. And for us, it's important that the investments work from a stand-alone perspective as well. So when we looked at it and given the available good capacity in the region because you'll need import good capacity as well as export, we didn't consider it was attractive. We had better opportunities elsewhere and so that's where we've been focusing.

And on the cash flow CAGR point. So if we take the 4%, I think if you did the CAGR from 2026 which is a more normalized level to 2030, that's about a 3% CAGR. So effectively you can break the 4% down into 1% a return to kind of more normalized levels, 1% is current portfolio growing and then 2% from construction activity and the share buybacks.

Okay. Any further questions in the room before we move online? No. First question, this one is probably for you, Minesh. As disposals are made, what proportion of proceeds will go into reinvestment, buybacks and debt repayment?

That's a decision to be made at the time depending on market conditions. You've heard from Richard and then reinforced by us about approach to capital allocation, the mindfulness we have towards where the share price is and how we evaluate new investment and share buybacks. And you've seen some of the kind of thinking around the hurdle rate as well as the returns we think we can achieve from those new investments. So I think all to be assessed as those disposals crystallize.

One for you, Phil. Page 19 suggests the RCF could be GBP 100 million to GBP 200 million drawn at 31st of December '26 versus GBP 198 million currently. This only implies modest disposals. Is that correct?

Yes. So in the year, we have around GBP 80 million of capital that we expect to deploy in higher returning projects and GBP 70 million to complete the share buyback program. So we're expecting to have disposal proceeds that are greater that number. So it seems a fairly decent disposal number and if we can manage more, we will and we'll certainly carry on the disposal program after that as well.

Another one for you, Minesh. The U.K. government recently changed the subsidy calculation method, which had an impact on the NAV. Does management see similar trends in other European geographies?

Yes. So public policy I think has continued to be one of the kind of key risks that the company faces reflected in our kind of high proportion of the revenues linked to government-backed contracts. I think the reassuring thing after the change in the ROC calculation methodology is that government has reinforced the importance of maintaining investor confidence going forward and we would look to see that reflected in future policy. And certainly, we are engaging both at a business and a treasury level and reminding them of their objectives there. In other European countries, I mean we've seen through kind of passage of legislation in France, a reaffirmation of kind of the desire for repowering of existing sites and that's very much where our investment activity is focused in France. We've seen in Spain the challenges that the grid has had and that very much informs the fact that our strategy for new investment there is targeted towards co-located batteries. So I think public policy will evolve differently in different countries. The fact that our portfolio is diversified across 6 power markets means that we can respond to the evolving public policy environment and allocate capital where we see the best return opportunities.

One for you, Chris. How much have you adjusted forecast this year to take account of the issues such as curtailments in Sweden and grid outages seen this year and the possibility we see the same again going forwards?

It's probably worth touching upon what was the driver of the curtailment. So we suffered the most of the order of 90 gigawatt hours. Essentially there was off-site work, it curtailed the output to between 50% and 80% of generation and had sort of GBP 2 million to GBP 3 million impact. That's now resolved. No expectation for any recurrence there. Midill was second largest around about 50 or so gigawatt hours, but had a higher cost impact edging towards GBP 5 million. That's ongoing and so we've made a provision. We expect that to be resolved by the end of Q2. It may just creep into Q3 into July. So there's a provision there and we'll continue to monitor it. We're taking active steps to reinforce the grid with the wider parties involved and been engaging with NESO and Ofgem and others there as well to help resolve that. And Beatrice was another cause, only around about 30 gigawatt hours, but it's a high-priced site so it has an outsized impact. That was resolved very promptly in the first half of the year. Insurance proceeds were obtained there as well. So we do make allowance going forward for all sites and so we do have some protection there, but we're not expecting anything notable going into the next year beyond those provisions I've already referenced.

And 1 for you, Minesh. We've had a couple of questions around the dividend broadly talking about the decision to freeze the dividend and what drove that? And then how confident you are in the deliverability of the dividend to the medium to long term?

Yes. I think look, maintenance of the dividend in a period where we've seen the NAV come down I think really shows the strength and resilience of the business model. What's really important is that that dividend is sustainable into the long term and represents an attractive income for investors. And at north of 11% of the share price at more than 7% of NAV, we think that's absolutely the case. And the feedback we've heard through the Board from their engagement with shareholders is that shareholders also see that level as healthy. So we think we're comfortable with where the dividend level is. You see our objective to restore and then build on the net dividend cover. That's all really important to making sure that in the medium term, we return to dividend growth as well.

And one for you, Phil. On gearing, you have an amortizing debt structure. When does your portfolio become debt free?

There are some projects which are quite young. So for instance Cuxac will have a 20-year feed-in tariff so it will have debt against it when that debt is put in that will go all the way out into the mid-2040s. So I think it's probably more relevant to say when does it get really low and it gets really low in the mid-2030s. And Minesh talked earlier about 28% overall gearing by 2030. So we think we've got pretty good headroom being created for additional debt should we think it's right to do so over the next few years and certainly in the 2030s as the debt is much lower.

Chris, can you talk about the base level performance budgets you are using for the portfolio? How have these evolved over time for the various subsectors?

We've touched upon this in the past. Fundamentally, you go from a new site where it's quite a complex calculation, what we call a preconstruction energy yield. But then once you've got 2 years' worth of site data, you move into a post-construction energy yield with much greater confidence and certainty on the performance and then we continue to monitor that through time. So within the portfolio now we've got very few projects, which are still on that preconstruction energy yield. So that gives us high confidence on the broader energy yields within the portfolio. Remembering of course these are 10-year P50s so that's the energy yield you expect on average over 10 years. So half the time you're going to be a bit above, half the time you're going to be a little bit below. We expect that natural variation. That's why we have the diversification by technology and by region. I think when you look at one of the charts I showed with the weather variation, you can see there that it's not the case that you've got one particular region, which is always above or always below. So I'm not concerned that there's a theme there in any particular region. They just naturally offset each other over time given the portfolio construction.

That concludes the questions that we've had submitted online. Just another check in the room if there are any questions before we draw this to a close.

Andy Rees, Deutsche. Just picking up on what we touched on in terms of PPA pricing and the market evolving there. Obviously the government recently announced a kind of consultation on how it can evolve and progress and help mature the U.K.'s corporate PPA market. Just kind of thinking about the success that you had with the Virgin Media PPA, sort of what from your perspective needs to happen? So what were the learnings there to kind of to see that implemented kind of more widely or kind of more readily available across the market kind of beyond the near-term sort of 2- to 3-year PPAs that we see more broadly?

Yes. The coffer evidence that the government put out on corporate PPAs just before Christmas was a real positive for us in relation to the U.K. market, something we've been calling government to do for quite some time and we will be engaging with them both directly. We've already started engaging with them through investment trade bodies as well. As someone who has delivered over 200 megawatts of contracts with corporates over the last 3 years, we feel well placed to do that. I mean look, 2 of the particular learnings we've had from that. One is that these things tend to take a long time to get into contract, maybe even a year or more. I think that process needs to be more efficient. Also, every contract is bespoke between the parties. That needs to be more efficient. And actually if we want it to be available to SMEs not just high credit counterparties, then you need some sort of aggregation. And what we're saying to government is actually they can have a role in that to help promote the industry through standardization of contracts that will help with the timeline, that will help with the cost of getting into contract and also some of the aggregation, which will then help SMEs. One idea we're promoting with government is actually instead or alongside the CFD auction, you could actually just run an auction on the demand side, aggregate demand across corporates and then run an auction on the supply side and match across the 2. The consultation closes I think it's the 8th of March. So we'll be engaging very proactively with government on that. As you can tell, it's an area we have a lot of ideas. It's an area we've been really successful and I think that really stands us out having that capability within the management team to do that and I think it's something that I know the Board and shareholders really value that we do to continue to advance the portfolio forward.

Perfect. And just 1 final one on the Fig power pipeline and some of those assets. Obviously the NESO sort of grid connection reform process remains ongoing. Can you just sort of clarify where Spennymoor sort of stands in that regard and also Drakelow in terms sort of gate to priority, kind of when are grid connection timelines there potentially being shifted by an uncertain outcome from NESO there?

Spennymoor and Drakelow are not actually developed by Fig. They're being co-developed with RES. So they're progressing well with their detailed design as they move into construction with high confidence on grid dates there. So not concerned about grid dates for those projects. For Fig, Templeton is the first project and again high confidence on grid date there. So we've got that natural pathway. You need to remember, you almost don't want all of the grid dates too soon either because you've got to do a bunch of work before you get to there and it's good for us to guess with those investments out over time as well.

Coming online that I think Minesh would be good for you to answer, please. Does the 4% distributable cash CAGR take into account required disposals to meet the exit gearing figure of 28%?

So the 28% reflects the amortization of the existing balance sheet. You see that actually on Phil's debt chart. So no, you don't need disposals to do that. What disposals or debt raising would do is provide that capital for reinvestment into the construction assets or share buybacks and the contribution to the CAGR for construction assets and share buybacks is net of the yield and return you forgo from the disposals that are used to fund them. So whilst those we showed the construction assets typically and share buybacks, both double-digit returns. When you net that off against, say, a project that's an average 9% return, that's why kind of -- that's how you get to the calculation of how it contributes to the CAGR.

So the 4% CAGR, it does reflect disposals. The 28% gearing does not reflect disposals. Correct?

Yes.

Okay. So with that, we'll conclude the presentation. Thank you very much.