JLEN offers attractive income despite Coronavirus crunch

Despite the rough end to the year caused by Coronavirus, renewables asset management company JLEN (LON:JLEN) reported on its ability to remain a dependable source of income for its investors, and on recent additions to its portfolio, in its full-year results published on Thursday.

The company reported that power price forecasts had driven down its NAV per share from 104.7p on 31 March 2019, to 97.5p a share on the 31 March 2020. However, it managed to achieve its impressive dividend target of 6.66p per ordinary share for the year ended March 31 – up from 6.51p the previous year, and with a target of 6.76p per share for the year ended 31 March 2021. It added that it had a 54.6% share price total return for the period since its IPO, or 7.5% annualised.

The JLEN portfolio looked similarly healthy as the year ended, with its overall valuation increasing from £523.6 million to £537.1 million for the full year.

This increase includes three new acquisitions and its first entries into the hydro, battery and food waste sectors, as well as a €25m commitment to FEIP, which JLEN described as a ‘ limited partnership investing in predominantly greenfield European energy infrastructure assets’.

The company noted that its overall portfolio performance was slightly above expectations, with its anaerobic digestion assets outperforming during the year and its wind portfolio generation above budget as a result of ‘particularly good’ wind resource in the last quarter. On the contrary, its solar assets were slightly below budget for the year, due to grid outages and repair works, and its food waste project was negatively impacted by Coronavirus.

Outside of these considerations, the company said its other projects were displaying resilience. Its portfolio is now comprised of 36% wind, 25% AD, 23% Solar, 15% waste and wastewater and 1% Hydro and battery by value.

Responding to the results, JLEN Chairman Richard Morse, commented,

“In an extraordinary year featuring falling power prices and the onset of the Covid-19 pandemic, JLEN has provided reliable income for investors while continuing to diversify its portfolio.”

JLEN moving past Coronavirus and onto future green opportunities

Noting that the renewables sector remains comparatively robust versus other sectors, the JLEN statement read:

“While the Covid-19 pandemic has introduced a significant level of uncertainty into the global economy, established environmental infrastructure assets such as those favoured by the Company have generally performed resiliently and continued to generate cash even as other asset classes and market sectors have struggled. Investors have noted this, and the listed renewables sector is expected to continue to see investor support.”

Remaining confident in the good sentiment for expansion of green initiatives and carbon neutral projects, it continued:

“In the UK, there were also positive signs that the government was becoming increasingly committed to tackling climate change. The UK became the first major economy to make a legally binding commitment to reaching “net zero” carbon emissions (compared to 1990 levels) during the period, and there have also been positive signals regarding the inclusion of onshore wind and solar in future government subsidy rounds.”

Investor insights

Following the update, the company’s share price rallied modestly by 0.43% or 0.50p to 115.50p per share 11/06/20 16:35 BST. Its dividend yield stands at a generous 5.77%

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.