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Thrive Renewables (Buchan) Ltd

Financial Performance

The turbines at Auchtygills and Clayfords have performed in line with expectations. Both projects achieved full accreditation during 2016 for the government’s guaranteed 20-year Feed In Tariff (FIT) pricing support.

The Company raised £3,000,000 through their 2016 Bond Issue to repay an intercompany loan to Thrive Renewables plc.

Annual return

The bond pays 5.5% gross per year, fixed and payable (net of UK basic tax) annually in arrears on 15 July each calendar year. 

Payment of interest and capital is not guaranteed and is dependent on the successful operation of the Auchtygills and Clayfords windfarms. 

Financial Summary for 2017

Buchan Consolidated Operating Statement Full Year to December 2016 (£) Full Year to December 2017 (£)
Income 517,059 571,505
Operating Costs (89,078) (172,561)
Depreciation (176,375) (193,333)
Profit before interest and tax 251,606 205,611
Bond Interest (82,500) (165,000)
Profit before tax 169,106 40,611
Operating Profit (%) 32.7% 7.1%

The 2017 full year profit before tax was £40,611, a material decrease from £169,106 in 2016. Despite increasing income, this reduction in profitability relates to a budgeted increase in operational costs andthe first full year of Bond interest costs. The company’s income has improved by 10.5% in 2017 when compared with 2016. The majority of this increase relates to the 6.7% year on year increase in energy yield and also the increase in the powersales prices.

For 2017, the operating costs have almost doubled from 2016 levels. This increase in budgeted costs relates to the first full year of turbine maintenance costs and the costs of the third party asset management arrangements. Under the terms of the turbine maintenance agreement, there was a period at the beginning of the service period which was provided at no charge. During 2017 the company has seen the full twelve months bond interest payments. The interest rate of the Bond is fixed going forwards.

Financial Forecasts

The table below shows the income and expenditure over the lifetime of the project, all figures are in thousand of pounds (£'000).

Income and Expenditure
Year ended 31 December
Actual 2015 £'000 Actual 2016 £'000 Actual 2017 £'000 Projected 2018 £'000 Projected 2019 £'000 Projected 2020 £'000 Projected 2021 £'000
Income 310 517 572 762 778 796 820
Operating costs (74) (89) (173) (167) (171) (174) (178)
Depreciation (124) (176) (193) (202) (202) (202) (202)
Profit before interest and tax
Profit before interest and tax (%)
112


36%
251


49%
388


51%
206


7.1%
406


52%
420


53%
441


54%
Bond interest
Interest receivable
-

-
(0)

1
(83)

1
(165)

2
(165)

2
(165)

3
(83)

5
Profit before tax 112 169 41 230 243 258 364

Notes

  • Forward looking statements are merely unaudited forecasts and projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these forecasts or projections will be achieved.
  • Both windfarms began generating electricity part way through 2015. 2016 was the the first full year of operations.
  • Income is derived from the sale of electricity generated by the two windfarms and payments through the Feed-in Tariff scheme linked to the generation of renewable electricity.
  • Operating costs principally include annual rent and rates, insurance and operation and maintenance costs and community benefit contributions.

Balance Sheet

Notes

  • Forward looking statements are merely unaudited forecasts and projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these forecasts or projections will be achieved.
  • Fixed assets are represented by plant and machinery and land and buildings in respect of the two operating windfarms. The intercompany loan is an unsecured non-interest bearing loan due to Thrive Renewables plc.

Key assumptions

  • Auchtygills and Clayfords generate 5,570 MWh of electricity each year.
  • The £3 million through the Bond Issue is used to repay £2.6 million of the intercompany loan due to Thrive Renewables plc, which the Group will invest in new renewable energy projects. The remaining £400,000 is used to pay post commissioning and retention costs on Auchtygills and Clayfords.
  • The remaining balance of the intercompany loan due to the Thrive Renewables plc is repaid by 2019 using the profits generated by the Company.
  • The Bond is repaid in full in July 2021, 70% through bank debt secured against the assets of the Company and 30% from retained cash.

Covenant

A debt service reserve covenant, which limits the cash which can be distributed from the Company as dividends, is in place.

The bonds were issued by Thrive Renewables (Buchan) Limited a subsidiary of Thrive Renewables plc. In the event that Thrive Renewables (Buchan) Limited is unable to pay bond interest or repay the capital, bondholders will have no recourse to Thrive Renewables Plc.

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