SEEIT on track to achieve target dividend despite coronavirus crisis
The Board of Directors of SEEIT, a UK-listed investment company investing in the energy efficiency sector, and the Company’s Investment Manager, Sustainable Development Capital (SDCL), believe that the Company’s portfolio is well placed to continue to generate an attractive total return for investors.
The Company’s portfolio currently consists of 26 energy efficiency investments located in the UK, continental Europe and North America. The assets provide essential and critical energy services, which are typically availability rather than demand based, with the Company’s clients including the public sector as well as large, well-capitalised commercial and industrial counterparties. The Company’s priority is the continuation of these services to its counterparties. The portfolio is well diversified by asset and source of revenue and, as a whole, is insulated against material short term energy market volatility as off-take agreements are typically structured and contracted on pre-determined terms.
The Investment Manager is monitoring the performance of all the projects in its portfolio and can confirm that all the assets are currently performing as expected. While it is, of course, too early to provide any meaningful assessment of any possible future financial or operational effects from COVID-19 given the uncertainty over the duration and impact of the virus, appropriate contingency plans have been put in place for operations and maintenance.
The Investment Manager is working closely with key subcontractors and co-shareholders, implementing contingency plans where required. Where individuals are required to be physically present for operations and maintenance, the Company and the Investment Manager are focused on taking appropriate steps to ensure the health, safety and wellbeing of the workforce and to allow for an uninterrupted service to continue. To date, none of the Company’s counterparties have raised any COVID-19 project specific concerns that are material to the Company’s current performance.
The Company remains on track to achieve the target dividend of 5.0p per share for the year to 31 March 2020. Based on current portfolio performance and assuming the return to more normal operating conditions post COVID-19 in the short to medium term, the Board remains confident in the forecast future portfolio cashflows which allows it to reiterate the previously published dividend guidance of 5.5p per share for the next financial year to March 2021 and a progressive dividend thereafter.
The Company has a healthy liquidity position and benefits from holding significant cash balances.
Both the Company and the Investment Manager are taking all necessary steps to protect its staff members from health risks associated with COVID-19. All staff members that are able to work remotely have been doing so.