DAVY VIEW

Greencoat delivered a strong underlying performance in 2022. Its portfolio was further enhanced in the period, as the company took advantage of its strong balance sheet and funding position. It has resulted in a higher returning proposition, evidenced by a structurally improved gross dividend cover. All else equal, this should be a powerful driver of net asset value (NAV) growth going forward. It confirms the group as a total returns opportunity (dividend plus capital growth) – it can continue to deliver c.9% annual returns over the coming years. With the stock trading in line with December 2022 NAV, we think this value creation is currently being overlooked.