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JM | Oct 23, 2020

Wigton Windfarm returning to equities market

/ Our Today

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Additional funding needed for expansion plans and exploiting opportunities

 

The Wigton Windfarm in Rose Hill, Manchester. (Photo: Wigton Windfarm)

By Durrant Pate

Wigton Windfarm Ltd has given the clearest indication that it will be returning to the equities market to source more funds for its expansion projects in Jamaica throughout the region.

Managing Director Earl Barrett did not indicate the method of sourcing the necessary funds, whether by a rights issue or through an additional public offer, but emphasised that both options are open for consideration.

Speaking at Wigton’s 2020 annual general meeting, which was hosted virtually on October 21, Barrett highlighted that with several opportunities being opened up for expansion locally and regionally, there is the need for adequate capital to exploit them.

As such, returning to the equities market for funding is definitely on the cards. He made reference to the government’s publicly stated expansion of renewables, pointing out that Wigton would need to have adequate cash on hand to exploit such opportunities.

Earl Barrett, managing director of Wigton Windfarm Ltd.

According to the Wigton Windfarm MD, “if there was to be a call by the Government of Jamaica for additional renewable energy to go on the grid, there is a stipulation in the Jamaican market for such call that whosoever is going to make a bid, which of course Wigton is going to be in that bid, would have to have a minimum of 20 per cent equity. So you can only borrow up to 80 per cent, so chances are that for any sizable project Wigton would be going back to the market seeking funds.”

Methodology for sourcing funds undetermined

Barrett stated that the methodology for sourcing the necessary funding is dependent on where the project is being implemented and the amount of capital that is needed. He told shareholders that the near-term outlook for the company is very positive, pointing out that “the future lies in diversification and regional expansion, exploring potential projects in the local and regional markets and preparing for aggressive implementation post-COVID-19”

Wigton Windfarm Chairman Oliver Holmes put up a stout defense to questions raised by shareholders about offering more dividends. Holmes pointed to the imperative of having sufficient funds on hand to exploit business opportunities while at the same time preserving shareholder value in the company.

“While we will consider borrowing, we have to have appropriate equity.”

Oliver Holmes, Chairman of Wigton Windfarm Ltd

Holmes told shareholders that the board would consider quarterly dividend payments but was adamant about keeping cash within the company to finance particularly large projects.

“While we will consider borrowing, we have to have appropriate equity,” Holmes argued.

Financial performance

Turning to the financial performance of the company, Barrett told shareholders that net profit for the just ended financial year came in at $662.75 million, from total revenues of $2.64 billion and total expenses amounting to $1.24 billion.

Sales revenue amounted to $2.42 billion, while gross profit reached $1.65 billion. Total assets accumulated to $10.60 billion, while liabilities reached $7.14 billion leaving shareholders’ equity at $3.46 billion.

Earnings per share for the just past year were $0.06. The average plant availability rate was 94.6 per cent with total production output of 157 million KWh.

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