The Renewables Infrastructure Group (TRIG) disclosed a steeper-than-expected quarterly decline in net asset value (NAV), with NAV falling 5.2% to 104 pence per share. The investment trust attributed the movement to weaker power price forecasts and higher discount rates applied to its UK offshore wind assets, a combination that pressured valuations and contributed to a share price decline of 2% on Monday.
On a per-share basis the trust said NAV decreased by 5.7 pence in the fourth quarter from 109.7 pence at the end of September. For the year, that translated into a negative total NAV return of 3.7% for 2025.
TRIG broke down the primary drivers of the quarter's NAV movement. The largest single item was a 1.8 pence per share reduction tied to lower consultant revenue forecast curves. A separate 1.2 pence per share hit came from a 50 basis point increase in discount rates applied to UK offshore wind projects. Operational performance and generation shortfalls together accounted for an additional 1.8 pence per share decline.
The company also recorded a 0.6 pence per share reduction linked to a change in the indexation methodology for UK Renewables Obligation Certificates (ROCs), which will now be tied to the Consumer Price Index rather than the previous metric.
Operationally, TRIG reported generation for the fourth quarter was 5% below budget. Management said the shortfall was principally the result of economic and grid curtailment in Sweden. The trust noted this outcome nonetheless represented an improvement relative to the first half of 2025, when generation missed budget by 10%.
Analysts have highlighted Sweden as a recurring area of underperformance within TRIG's portfolio. Sweden accounts for roughly 14% of the portfolio by NAV, and that geography has shown a pattern of weaker-than-expected generation outcomes in recent reporting, according to market commentary.
"While generation missed budget by 5% in Q4, this is an improvement versus the performance earlier in the year," said Joseph Pepper, analyst at RBC Capital Markets, which maintains an "outperform" rating on the stock with a 90 pence price target. "We think management’s target future cover of 1.1-1.2x looks credible given inflation-linked cash flows and an improving debt amortisation profile, although we note that Sweden remains a consistently underperforming geography in the portfolio."
TRIG confirmed it is maintaining its dividend target for fiscal 2026 at 7.55 pence per share, the same level as the prior year. For fiscal 2025 the company reported net dividend cover of 1 times. Excluding annual amortising debt payments, TRIG said gross dividend cover stood at 2.1 times. Management continues to aim for net dividend cover in the 1.1-1.2x range going forward, and had previously warned that net dividend cover would be "tight" for fiscal 2025.
At Friday’s close, TRIG shares were trading at 69.20 pence, which equates to a discount of approximately 34% to the newly reported NAV. The trust's discount to NAV is roughly in line with the peer group average, which the company cited at about 35%.
Commenting on market reaction to the quarter's NAV movement, RBC's Pepper said given the size of the change reported in the quarter, he expected the shares to trade lower on the day the results were released.
TRIG’s portfolio spans about 90 renewable energy assets across six geographies. Approximately half of those assets are located in the British market, leaving the trust exposed to UK regulatory dynamics and fluctuations in domestic power prices. The portfolio is concentrated on operational wind and solar facilities, with UK offshore wind forming a significant portion of the holdings.
Summary of key facts:
- NAV fell 5.2% quarter-on-quarter to 104 pence per share.
- NAV decline of 5.7 pence in Q4 from 109.7 pence at end-September; annual total NAV return -3.7% for 2025.
- Primary NAV drivers: -1.8 pence from lower revenue forecast curves; -1.2 pence from a 50 bps rise in UK offshore wind discount rates; -1.8 pence from generation and operational shortfalls; -0.6 pence from ROC indexation change to CPI.
- Generation 5% below budget in Q4, improving from a 10% shortfall in the first half of 2025; Sweden represents about 14% of NAV and has consistently underperformed.
- Dividend target for fiscal 2026 unchanged at 7.55 pence; net dividend cover 1x for fiscal 2025; gross cover 2.1x excluding annual amortising debt payments; management target net cover 1.1-1.2x.
- Shares trading at 69.20 pence at Friday’s close, a c.34% discount to NAV, close to peer average of 35%.