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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.

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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Recommended Acquisition of Infinis by Monterey

Recommended Cash Acquisition

of

Infinis Energy plc ("Infinis")

by

Monterey Capital II S.à r.l. ("Monterey")

a Terra Firma group company

To be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

· The board of directors of Monterey and the Infinis Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by which the entire issued and to be issued ordinary share capital of Infinis that Monterey does not already own will be acquired by Monterey.

· Monterey currently owns 205,667,740 Infinis Ordinary Shares, representing approximately 68.5 per cent. of the issued ordinary share capital of Infinis.

· Under the terms of the Acquisition, each Scheme Shareholder will receive 185 pence in cash for each Infinis Ordinary Share, which represents a premium of approximately:

40.4 per cent. to the closing price of 131.75 pence per Infinis Ordinary Share on 21 October 2015 (being the last Business Day before this Announcement); and

38.2 per cent. to the average closing price of 133.86 pence per Infinis Ordinary Share for the one-month period ended 21 October 2015 (being the last Business Day before this Announcement).

· The Acquisition values Infinis' entire issued and to be issued ordinary share capital at approximately £555 million.

· It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

· The Infinis Independent Directors, who have been so advised by Barclays Bank PLC, acting through its Investment Bank ("Barclays"), and RBC Capital Markets, as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Barclays and RBC Capital Markets have taken into account the commercial assessments of the Infinis Independent Directors. RBC Capital Markets is providing independent financial advice to the Infinis Independent Directors for the purposes of Rule 3 of the Code.

· Accordingly, the Infinis Independent Directors have unanimously approved the Acquisition and intend to recommend that Infinis Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings of, in aggregate, 1,002,826 Infinis Ordinary Shares representing approximately 0.33 per cent. of the issued ordinary share capital of Infinis on 21 October 2015 (being the last Business Day prior to the date of this Announcement). Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to the following Announcement.

· It is expected that the Court Meeting and General Meeting will be held by the end of November 2015. Subject, amongst other things, to the satisfaction or waiver of the Conditions, it is expected that the Scheme will become effective by the end of this year.

· Infinis is the leading independent renewable power generator in the UK and operates 137 power plants with an installed capacity of 585 MW generating renewable power from landfill gas and onshore wind. It also has four onshore wind projects under construction which are expected to deliver 135 MW of incremental onshore wind capacity by 31 March 2017. The Infinis Group is the largest power generator from landfill gas in the UK and one of the UK's leading onshore wind power generators.

· Paragraph 5 of the following Announcement provides further information on the background to and reasons for the Independent Directors' recommendation and paragraph 3 of the following Announcement provides further information on the background to and reasons for the Acquisition.

· Commenting on today's Announcement, Guy Hands, Chairman and Chief Investment Officer of Terra Firma, said:

"The transaction announced today is part of Terra Firma's strategy of monetising its investment in Infinis, a business that we have owned and invested in over more than a decade. We have considered gradual sell-downs of our interest in the company since its IPO in November 2013 and more recently we have also explored other strategic options, but the change in the regulatory environment for Infinis has prompted us to rethink our strategy.

We believe that this transaction offers Infinis' shareholders an attractive cash consideration for their shares in Infinis and allows Terra Firma to pursue alternative options to monetise its investment in Infinis once it is a private company. We are pleased that the Infinis Independent Directors have unanimously recommended the transaction and are grateful to the Infinis board and management team for their support, in particular as we have jointly completed the preparations for the offer announced today."

· Commenting on today's Announcement, Ian Marchant, Chairman of Infinis said:

"Since the IPO of Infinis two years ago, our management and employees have delivered what was promised in terms of both operational performance and the development of the business, with 135 MW of new wind capacity in construction. However, the challenging regulatory and political environment and the reduction in power prices in the last two years have adversely affected both the cash generation and the growth prospects of the business. Accordingly, the Infinis Independent Directors have been actively exploring ways to maximise value and have looked at offers for the whole business as well as selling the assets separately. Following this work, the Infinis Independent Directors firmly believe that the offer from Monterey represents the best combination of risk and return for shareholders."

· The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be posted to Infinis Shareholders and (for information only) to participants in the Infinis Share Schemes as soon as practicable and, in any event, within 28 days of the date of this Announcement (unless the Panel agrees otherwise).

This summary should be read in conjunction with, and is subject to, the full text of the following Announcement (including its Appendices). The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following Announcement. Appendix 3 contains details of the irrevocable undertakings received by Monterey. Appendix 4 contains the definitions of certain terms used in this summary and the following Announcement.