London, UK, 13 October 2023

Edison issues update on Premier Miton Global Renewables Trust (PMGR) - Potential for real return

Renewable energy investment trusts are out of fashion at present and, in our view, this represents an opportunity for investors. Premier Miton Global Renewables Trusts (PMGR), like all its peers, is now trading at a discount to NAV (14.3%) as its performance has been affected by the underperformance of many of its key public holdings. In our view, short-term energy price weakness and questions over the policy environment are missing the longer-term shift in competitiveness and energy security that consumers are seeking from renewables. We believe the current state of the market presents an attractive entry point for investors.

PMGR reported good results on the back of high power prices in the six months to June 2023 and this, coupled with the continued growth of its assets, resulted in earnings per ordinary share increasing by 12.3% to 4.43p. The first two quarterly dividends (1.85p each) of FY23 were 5.7% higher than H122. Investor sentiment surrounding the renewable energy sector has weighed on valuations and widened discounts to NAV, negatively affecting PMGR’s holdings. We argue that the monetary flow towards fixed income will not be permanent and the combination of positive real yields and growth in underlying end-use in the renewables sector could present an attractive buying opportunity.

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