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Infinis Energy(INFI) Fundamentals

Infinis was established as an independent company in May 2006 prior to Terra Firma, the private equity group, selling the Waste Recycling Group Limited (WRG), its former parent company, in July 2006. Since then, our business has grown both organically and by strategic acquisitions.

Infinis Energy is the third largest renewable power
generator in the UK. It operates three technologies:
landfill gas (about 40% market share), onshore wind
and hydro.

Infinis Energy owns and operates 147 power plants
distributed across the UK and has a total installed
capacity of 621 MW. In the last financial year Infinis
Energy generated 2.5TWh of clean, reliable and
relatively affordable power, enough to meet the needs
of more than 1 million electricity users.

Barclays Capital Overweight 222.10 216.10 - 275.00 Initiates/Starts

Interim Results

Highlights
· Revenue of £105.3 million driven by a strong operational performance in our LFG business and an increase in the average selling price (ASP) across the Group, partially offsetting lower wind speeds;
· EBITDA before operating exceptional items¹ of £59.1 million, a fall of £4.8 million, principally driven by below average UK wind speeds;
· Strong balance sheet position with leverage at 3.8 times and cash balances of £77.2 million (as at 31 March 2014: 3.7 times and £81.1 million);
· Delivery of our growth plans with new funding facilities of £52 million in place for the construction of A'Chruach wind farm (43MW) and binding agreements signed to supply turbines, balance of plant services and a 15 year power purchase agreement;
· Work on site has commenced and A'Chruach is expected to be in operation by 31 March 2016;
· Procurement processes have commenced in support of the development and construction of Galawhistle wind farm (up to 55 MW);
· Interim dividend of 6.1p / share (equivalent to £18.3 million).

Outlook

· Whilst wind speeds trended below average for the six months to 30 September 2014 compared to the comparative period, we are starting to see more usual weather patterns occur in the United Kingdom;
· Our contracted position for Winter 14 protects our LFG business from power prices falling from current levels. We have continued to contract power prices forward into next financial year in line with our contracting strategy;
· We continue to believe that the medium term fundamentals for Infinis remain strong. The most recent instances of plant shutdowns in the UK only serve to highlight the risks of tightening reserve margins and the impact that may have in supporting power prices going forward;
· We expect to declare a dividend in respect of our full year results in accordance with our stated dividend policy of £55 million per annum increasing at least in line with inflation.

Barclays Capital Overweight 225.75 275.00 275.00 Reiterates

Deutsche Bank Hold 225.75 230.00 230.00 Reiterates

Ouch - ANNOUNCEMENT BY TERRA FIRMA INVESTMENTS

Adage Capital Partners @1.562%

MFS Investment Management @1.98%

Interim Management Statement

Preliminary results year ended 31 March 2015

Financial and operating highlights

· Revenue of £236.0 million, 1.0% lower than the prior year
Ø LFG revenue and gross profit were 5% higher than last year;
Ø Lower contribution from our Wind business due to lower wind speeds;
Ø Weaker wholesale power prices for assets priced on a day-ahead basis;

· EBITDA before operating exceptional items of £142.8 million was 3.8% lower than the prior year;
· Strategic divestment of our non-core Hydro business for £20.5 million in February 2015, the proceeds of which will be reinvested in our onshore wind pipeline;
· Net debt reduced to £534.7 million and leverage was flat year on year at 3.7x;
· Final dividend declared of 12.2 pence per share, bringing the total dividend for the year to 18.3 pence per share.


Outlook

· Our landfill gas and wind businesses are performing in line with expectations. Due to our contracted position, combined with 50% of expected revenues increasing in line with inflation, we have good visibility of cash generation for the coming year. The increase in the carbon price floor to £18 per tonne of CO2 on 1 April 2015 and the ongoing tightness of the reserve margin during the Winter season are supportive of wholesale power prices for Summer and Winter 2015;
· Our onshore wind capacity growth plans are on track with A'Chruach (43 MW) in full construction. Pre-construction work has begun at Galawhistle (66 MW) with financial close expected shortly. Sisters (8MW) is at advanced stages of contract negotiation. Our IPO commitment to increase operational wind capacity by 130 to 150 MW by March 2017 remains unchanged;
· We have a strong operational platform and a track record of delivery which we believe will allow us to take advantage of opportunities for further growth in the clean and affordable energy space in the future.

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Still a bit of an uncertain industry skinny, though as you say the yield is pretty good.
The sentence " Lower contribution from our Wind business due to lower wind speeds.." is a bit bizarre though. Surely it goes without saying that the amount generated is always going to fluctuate depending on the wind???

Yes, its not without controversy and I bought at float - so am sitting on a paper loss - at least now the increased yield may attract some attention.

Do you follow TATE?

I follow TATE in as much as the divi interests me, but I don't currently hold and it has been a serial disappointer over the last year or so.

The final dividend of 19.8 gives an interim yield @3.45% @577p - although I see the price has recovered since I did the calc earlier!

Quite a daily candle - now touching the 200ma.

Earlier end to subsidies for new UK onshore wind farms

Infinis acquires 18.5MW wind farm project

Infinis Energy plc ("Infinis" or the "Company") is pleased to announce that it has acquired an 18.5MW consented onshore wind farm project from Peel Group.

The wind farm is sited on former surface mining land in Northumberland and neighbours the 8MW consented Sisters Wind Farm project developed by Infinis. Both projects are at an advanced stage of pre-construction and will enable Infinis to secure grid connection, turbine procurement and further ongoing operational synergies. Infinis anticipates funding both projects with project finance whilst the consideration will be paid from available funds. Grid energisation for both projects is expected in June 2016.

Both projects are fully consented, with a signed connection agreement in place and have entered into their leases. Consequently, both will qualify for the RO, complying with the grace period conditions announced last week by the Government applicable to new projects which become operational after 31 March 2016. Construction works on both projects are scheduled to commence in July.

Eric Machiels, Infinis CEO, said: "Today's announcement represents a further milestone in the Infinis growth strategy announced at the time of our IPO. In conjunction with the A'Chruach (43MW) and Galawhistle (66MW) construction projects, Infinis has made significant progress with its growth plans and will be comfortably within the 130-150MW IPO target for additional RO-accredited onshore wind generating capacity by March 2017".

Ex-divi 9th July (12.2p)

UK Government Scraps Climate Change Levy, Reiterates North Sea Support

Climate Change Levy Announcement

Infinis notes yesterday's announcement in the Budget that the government intends to discontinue the Climate Change Levy (CCL) exemption for renewable generators from 1 August 2015. The CCL has been a key component of the renewable support regime in the UK since 2001 and all parties in the renewable industry had understood that phase-out would not commence until after 2020.

Based on our initial assessment of this measure, Infinis expects a reduction in EBITDA of approximately £7 million in the year ending 31 March 2016 and approximately £10-11 million in the year ending 31 March 2017.

Eric Machiels, CEO of Infinis, said: "The announcement of the government's intention to discontinue the CCL at this time was quite without warning. We are disappointed by the several recent changes to the regulatory framework which will disincentivise long-term investment in the build-out of new energy infrastructure in the UK. Infinis generates low cost, reliable, renewable energy and we now look to the government for regulatory stability."

Infinis Energy plc announces the proposed appointment of Tom Hinton as Chief Financial Officer

Investec Buy 155.25 155.25 240.00 185.00 Reiterates

Trading Statement

Group operating and financial performance

The Group had a strong first quarter with total power generation up 14 GWh to 586 GWh. Day ahead pricing and operating costs were in line with expectations. We have maintained our focus on operational performance with high engine reliability in our LFG business of 96% and wind availability also at 96% over the period.

Landfill Gas

The LFG business continues to deliver solid output, exporting 435 GWh in the three months to 30 June 2015 compared to 463 GWh in the three months to 30 June 2014. The reduction in output of 6.0% was due to a combination of the natural decline in landfill gas, drier weather conditions and planned full grid outages at two of our larger sites initiated by the local network operators which lasted for 11 days. Adjusting for the one-off outages, the output decline would have been 4.7%.

The proportion of electricity exported under the RO regime for the three months to 30 June 2015 was 93% compared to 84% for the comparative period in 2014 and the total average selling price ("ASP")(2) for the three months to 30 June 2015 was £93.51/MWh, an increase of £4.43/MWh on the comparative period figure of £89.08/MWh.

Onshore Wind

Our onshore wind business exported 152 GWh in the three months to 30 June 2015, all under the RO regime. This was a 46% increase (+48 GWh) over the comparative period in FY15. On a rolling 12 month period to 30 June 2015 wind output was in line with long term average (P50) wind conditions. The wind ASP for the three month period to June 2015 was £88.59/MWh compared to £88.06/MWh in the comparative period to June 2014.

Onshore wind construction and development activities

The construction of the A'Chruach wind farm (43MW) is progressing according to plan. All 21 turbine bases are complete and, in addition, all site access roads are complete. Turbines will be erected over the Summer with final commissioning still expected by March 2016.

We have completed phase 1 construction works on the Galawhistle project (66MW) which included site access road construction and the sub-station floor. Construction work is underway on the main site infrastructure works.

We are also at advanced stages of procurement and financing on our wind farm projects at Sisters and North Steads (formerly known as Blue Sky) with financial close expected in early Autumn 2015.

We are on target to deliver 135MW of new onshore wind capacity by 31 March 2017.

Regulatory update

The Government has begun the legislative process to close the RO regime for new onshore wind power plants on 31 March 2016. Projects which met the grace period criteria of planning consent, evidence of land rights and a grid offer and acceptance on the 18th June 2015 will qualify for a 12 month extension. In practical terms this means that these projects need to be built and operating by 31 March 2017 to qualify for support under the RO. We are highly confident that A'Chruach, Galawhistle, Sisters and North Steads meet the grace period criteria and therefore qualify as RO projects.

In addition, the Government announced its intention to remove the exemption from the Climate Change Levy (CCL) previously enjoyed by renewable generation. As previously announced, we anticipate that this will reduce our EBITDA in this financial year by £7.5 million and in FY17 by £10-11 million. The removal of exemption from the CCL was disappointing and was unexpected by the Industry. We continue to make representations at the highest levels of Government. The Board is reflecting on how these policy changes will affect the future strategy of the Group in delivering shareholder value and it is our intention to provide an update to the market by the time of our interim results.

Financial position

Cash and cash equivalents stood at £107.7 million as at 30 June 2015 and net debt at the same date was £527.2 million. There were term loan drawings of £5.7 million on the A'Chruach funding facility. The Galawhistle funding facility was undrawn.

Contracted position

Our contracted position as at 31 July 2015 is summarised in the table below. Summer 15 and Winter 16 corresponds with our financial year ending 31 March 2016.

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