JLEN Environmental Assets Group Ltd (LON: JLEN) has increased its NAV in the year to March 2022 and this year cash generation will benefit from higher energy prices.
At the end of March 2021, NAV was reduced from 97.5p a share to 92.2p a share. Higher energy prices and well-timed investments have help to boost NAV to 115.3p a share by the end of March 2022. JLEN has maintained its annualised total shareholder return at 7.4%.
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In the year to March 2022, there was £46.2m of cash generated from operations. The total dividend for the year is 6.8p a share, which was covered 1.1 times. JLEN is targeting a 7.14p a share dividend for 2022-23. This year’s estimated dividend could be covered 1.5 times. The policy is to steadily increase the dividend rather than raise it significantly in a single year that benefits from shorter-term economic conditions.
Assets
During the year three new assets were acquired and two French wind assets sold for €5.9m. There are 37 investments in six subsectors. JLEN’s assets generated 1,314GWh of energy, up from 977GWh the previous year.
Anaerobic digestion remains the largest contributor, generating 508GWh. The newer waste and bioenergy portfolio generated 363GWh and accounted for most of the increase in total energy generated – mainly due to the Cramlington biomass CHP plant acquired from administrators. That means it has pushed wind generation into third place.
The French wind generation assets were sold in January, so that is a small part of the reason why wind energy generation fell from 432GWh to 359GWh. Lower than expected wind levels was the main reason and this can fluctuate significantly from year to year.
The battery storage asset will not be up and running until next year. New investment areas being considered include waste to fuels, energy efficiency and low carbon transport.
Cash
In January, JLEN raised £66.1m at 101p a share. Gearing is 24% and there is scope to fund more investments with debt at that level. The revolving credit facility is £170m and it expires in May 2024. There was £53.6m was drawn at the end of March 2022.
The higher asset base means that in the coming years debt facilities could be increased without moving to an uncomfortably high gearing figure. More cash will be generated from assets and that will provide further funds.
The share price has risen by 16% to 121.5p since the beginning of 2022. The forecast yield is 5.9%.
