Octopus Renewables Infrastructure Trust (LSE:ORIT) — Annual General Meeting

0:00 The time is now 10:00, the time appointed for the Annual General Meeting convened by the notice of the meeting to shareholders dated the 03/24/2026. My name is Philip Austin, Chair of the Board and also present are my fellow directors, James Cameron, Sally Duckworth, Elena Elsinger and Sarim Sheikh. All directors are standing for election today with the exception of James, who's retiring from the Board. The Board is extremely grateful to James for all his contributions to the company over the past six, seven years, And in particular, for his deep understanding of renewable energy of the renewable energy industry and the chairmanship of his chairmanship of the Management Engagement Committee, and we wish James well for the future. James is an iconic figure in renewables.

0:59 And if you know anything about renewables, you'll know the name of James Cameron. And he's been an enormous influence and help to us with his experiences, expertise and his contacts within the industry. So James, we wish you well. We thank you for what you've done for us, and we're sure we'll keep in touch with you. We're also joined by David Bird, Chris Gayden and Charlotte Edgar, representing our Investment Manager, OCTOPUS RENEWABLES. We have Hannah Shaw and Jeremy Jones, representing our company's Secretary and Administrator, Apex Listed Companies Services UK Limited as well as Carol Fung representing Registrar's Computershare. So in accordance with the company's articles, I will act as Chair of the meeting and represent the proxy votes that have been submitted in advance. I can confirm that a quorum is present, and so I declare the meeting open.

1:53 The format for proceedings today is that we'll start with the formal business of the meeting. And once completed, we'll then proceed to a presentation from our Investment Managers, David Bird and Chris Gaydon. This presentation will be filmed and it will be made available on the company's website after the meeting. Attendees will have the opportunity to ask questions after the presentation. Questions can also be submitted via the Investor Meet company platform during the meeting itself. Let me now turn to the formal business of the meeting. I propose that the notice of the meeting be taken as read. With your permission, ladies and gentlemen, I should like to proceed by dealing with any questions from shareholders on any matters relevant to the business of the meeting at the outset before we move on to voting on the resolutions themselves.

2:45 This is because we have a number of resolutions. And in my view, we'll be able to deal with the voting more expeditiously in this manner, while still giving shareholders time to ask all the questions they may wish to ask. Before asking your questions, please give your name and state whether you are a shareholder, proxy or corporate representative. If you are a proxy or corporate representative, please state your name and the name of the shareholder you are representing. To start, I'll deal with those questions on the formal business of the meeting, which have been submitted in advance if there are any and then invite questions from the floor. And we're also monitoring the Investor Meet company platform so that we can respond to questions submitted there.

3:31 Charlotte, have there been any questions in advance on the formal AGM meeting? I'm not aware of any questions that have been submitted in advance. So we now open up any questions from the floor of shareholders who are here. Do they have any questions on the formal AGM meeting? I think if you want to ask questions about the performance of the business, I think your opportunity will be better later on after the presentation. So if there's anything on the formal AGM meeting, we're happy to answer questions now. Thank you. We'll move on. To reflect the views of shareholders of the company more accurately, voting today will be done by way of a poll on each of the resolutions.

4:20 This is seen as in the best interest of the company and shareholders as it gives all shareholders the opportunity to participate in the decision making of the company and have their votes recorded in proportion to the number of any number of the shares they hold. The poll would be administered by a registrar's computer share. Poll voting cards were distributed when you registered this morning. If you're entitled to vote and do not have a poll card, please raise your hands. If you already if you have already lodged a proxy form appointing me or one of my fellow directors as your proxy and you do not wish to change any of your votes, there's no need to complete your poll card. However, if you wish to change any of your votes, you should complete your poll card for every resolution.

5:09 I will now move to the resolutions. I propose the resolution set out in the notice of the meeting be put to the meeting. We have taken the contents of the notices read. And unless otherwise requested, I do not, therefore, propose to read the text of the resolutions in full so that we can proceed directly with the voting formalities. Please would you now complete your poll card by marking how you wish to vote on each resolution and sign your poll card. You can vote in favor of proposed resolution, against the proposed resolution or you may withhold your vote. If you require any assistance, please raise your hand. Poll cards should be handed to the registrar on leaving the AGM. The final results of voting on each of the resolutions will be announced to the London Stock Exchange and via the company's website as soon as practical following this meeting.

6:04 Voting will close ten minutes after the end of the meeting. So that concludes the formal business of the Annual General Meeting. So I thank you for your attendance and declare the meeting closed. So now I'll invite David, Bird and Chris Gaydon to provide an update on OCTOPUS Renewables investment activities. Chris, you go first. Great. Thank you, Phil, and thank you to everyone who is joining us today for this Investment Manager Presentation for OCTOPUS RENEWABLES INFRASTRUCTURE TRUST. So my name is Chris Gayden. I'm an investment director at OCTOPUS Energy. And today, I'm joined by my colleague and co manager, David Bird.

7:07 Over the six years since IPO, we've built a track record of delivering on what we say we're going to do. And that's particularly true over ORIT's last financial year. During the period, we completed GBP 74,000,000 of asset sales, bringing the total to GBP $235,000,000, which by our reckoning is more than any other renewables trust pro rata to size. We bought back GBP 26,000,000 of shares, and we've also set out our ORIT 2030 strategy, which is our plan for growth while maintaining a robust level of income. On the financials, we've reduced our debt and the average cost of debt, and we've also delivered strong dividend cover of 1.14x during the period.

7:54 And all the while, we've continued our track record of increasing production, increasing EBITDA and improving the operational performance of our assets. Now if we just take a step back for a minute and look at what's going on in the world right now. The war in Iran and closure of the Strait Of Hormuz is really just highlighting how dependent we are on foreign sources of energy, and it highlights the need for The UK and other markets, to improve their energy security. And meanwhile, in The Pacific, climate models are predicting one of the strongest El Nino warming events perhaps on record, and that highlights the need to combat the impacts of climate change. And the combination of these events and others means higher prices and lower living standards for society.

8:46 And only renewables can really solve this trifecta of global issues. It's homegrown, locally sourced. It helps mitigate the impacts of climate change, and it's cheap and getting cheaper, especially as the cost of storing electricity continues to plunge. Now against this backdrop, we released our ORIT 2030 strategy, and that's our plan to grow investor value while continuing to pay an attractive level of income. Our plan has four pillars. So growth is our disciplined deployment into higher return in construction and development opportunities, driving NAV accretion. Scale is our ambition to grow ORIT to a NAV of around GBP 1,000,000,000 by 2030 through a combination of organic and inorganic growth.

9:37 On return, we've increased our return target to 9% to 11% over the medium to long term. And on impact, we can do all this while still delivering positive change to the climate and also the communities where we operate. And over the next few slides, David and I will go through each of these pillars individually. And with that, I'll hand over to David. Thanks, Chris, and good morning, everybody. So I'm going to start with the growth pillar. And this is really getting back to what ORIT was set up to do when we launched in 2019, which was bringing an element of capital growth to investors' returns alongside their dividend income.

10:22 And the way that we deliver that is by investing into projects at an earlier stage in their life cycle, particularly at the construction stage, and that allows us to, in successfully delivering that construction, crystallize capital gains that investors can see coming through the NAV. Doing this and doing this repeatedly over time allows us to keep recycling investment into new projects and grow NAV sustainably over the medium to long term. Now we set out this strategy back in September and investors haven't seen any new construction investments yet, but rest assured we have been working very hard behind the scenes. We have some well progressed opportunities. We have a healthy pipeline following on behind, so I hope that we can announce some new investments into construction stage assets in the not too distant future.

11:19 But it's not just new investments that allow us to deliver growth. We can also look to grow investor value within our existing portfolio, and that's something that we are continually doing with the large asset management team that we have within OCTOPUS Energy Generation, including lots of people from engineering backgrounds, lots of highly technical renewable energy specialists constantly reviewing our portfolio and seeing where we can add value for investors. That can come in a number of different ways. For example, we've been looking at some of our more mature solar assets in The UK and France, which we expect to be able to run for forty years. But there may be opportunities actually to replace panels earlier than that with larger, more modern, more efficient technology and actually crystallize an uplift in shareholder value before we get to the end of the planned operating life. So that's something that we're looking at right now. We can also look at making use of the access to the grid and the land that we already control around our sites by adding new technologies where existing ones are in place.

12:29 Perhaps the most likely example of that is the potential to add battery storage to existing wind and solar plants. Again, we have a number of sites in our portfolio where we're in detailed feasibility studies as to whether that could make sense and again deliver enhanced returns for investors. And that's something that will continue over the coming months and years. Another way that we can deliver the growth is by our investments into developers. So when we talk about development, we mean everything that happens before you start building a project. So that requires getting access to the land, it requires getting access to the electricity networks, and it requires getting all of the permits and planning permissions which are required to be allowed to go and build these sites. So when we talk about our development pipeline, those that you can see on this slide that we refer to as being an advanced development have already secured two out of those three things that you need to go ahead and start building.

13:32 And you can see we have a significant pipeline, so around 800 megawatts of assets that are already at that stage with more coming through behind, principally from our developers focusing on onshore renewables in The UK and Finland. And what you can see on the right hand side of this slide is this is not some nebulous thing many, many years out of the future. Again, 800 megawatts of those assets are ones that we expect to receive that last stage of either planning consent or grid access within the next year to eighteen months. Moving on now to return, as Chris mentioned, we have increased our return target to 9% to 11%. That will continue to be underpinned by the attractive level of income that we are and have been paying out since IPO.

14:25 That will be the core of that return, and we have every intention of continuing to grow that dividend. But what the construction investment and the other growth opportunities I just talked about allows us to do is deliver further return on top of that through the capital growth that comes alongside. On the dividend specifically, we have been very clear that we have no intention of freezing or cutting the dividend. Our intention is to keep paying a progressive dividend and to ensure that it is fully covered by the operating cash flows coming from the assets. That's something that we've been able to do every year, both growing the dividend and keeping it fully covered. So in the 2025 financial year, that dividend was 1.14 times covered.

15:13 But it's important to note that that is after deducting all of the principal repayments that we've made on the debt within the company. Excluding those repayments, the dividend was 1.86 times covered. That shows just how much headroom we have with particularly looking at some of the structure of our debt. We've got a lot of flexibility to be able to keep paying out that dividend whilst we're recycling and selling assets to reinvest in growth opportunities. You can see that at the level the shares are currently trading, the income that we are paying out with a target of 6.23 per share for this year represents a 10% dividend yield, which we think is a really attractive level.

16:00 So one of the reasons that we're able to pay out these dividends and have confidence in growing them is our portfolio benefits from a very high level of fixed and inflation linked cash flow. So this chart is showing the high level of fixed cash flows we have in our portfolio represented by the dark blue and pink colors on the chart. And so in the next couple of years, we've got 86% of our revenues, which are contractually fixed price in nature. But it's not just in the next few years. You can see from the chart that going right out into the early 2030s, we benefit from that high level of fixed revenues, giving us confidence that changes in electricity prices are not going to compromise the ability to keep paying out a covered dividend.

16:47 And this slide shows the same dimension but with inflation linkage. So over 40% of our revenues benefit from contractual inflation linkage, either from a government support scheme or in some of the contracts that we've entered into with large corporates to buy power from our sites. And again, that inflation linkage embedded within the portfolio is what gives us confidence in our ability to keep growing the dividend over time. Lastly from me for now, I wanted to touch on what we've been doing on debt within the portfolio. You can see that the gearing has been reasonably consistent over recent quarters at about 45%, but that masked the fact that actually during the last calendar year, we did pay down a lot of our borrowings over 50,000,000.

17:40 And not only that, but the work we've been doing on refinancing has allowed us to reduce the average cost of our debt from 4% down to around 3.4% at the end of the most recent quarter. And being very active in how we structure the debt within the portfolio is a key part of how we deliver the ORIT 2030 strategy, allowing us to keep balancing the ability to pay out dividends whilst investing for growth. And with that, I'll hand back to Chris. Thank you, David. So we think one of the keys to building scale is by having a strong portfolio, high quality portfolio. And that's what we've built over the course of the past six years. We have focused on building diversification into the portfolio.

18:34 We're now present across five different countries. That's after we've recycled out of Sweden, Poland and Spain. We now have seven forty megawatts of operational capacity, and that's spread across 39 different assets. So where we've got ORIT to today, we think, is in a very strong position and one which we will be able to scale at pace over the course of the next four to five years. Now just focusing on that diversification. So from the very start, we wanted to build diversification into the portfolio. And the reason why was to reduce concentrations of risk. And we think that's even more important today, especially as renewables becomes more mainstream and regulators and governments are adjusting policy to accommodate that.

19:32 For our portfolio, you can see on the left wheel, we are spread across five different countries. Looking ahead, as we continue to invest into the portfolio, we will be looking to diversify deeper within each of those countries. We may add one or two others. But generally speaking, we'll be looking at the technology diversification. You can see that on the middle wheel. We're maintaining a fairly even split between solar and wind, both on and offshore wind. I think as time goes on, you can expect to see some flexibility assets start to make their way into that mix. And where we stand today, we're currently almost fully operational, except for our developer investments.

20:20 But as David was saying, as we start to focus on growth, we can expect to see that construction allocation start to creep up. And then just a few words on the developers. So why do we invest into developers? Well, it's because we think there are attractive risk adjusted returns. Secondly, it's because it gives us access to proprietary pipeline of investment opportunities. It gives us the opportunity to invest closer to the primary economics of those projects without having to pay big developer premiums. Now many of you will have heard that grid remains an issue across many markets and certainly does across all the markets where we operate. But we can see policy changes looking to address those issues, looking to speed up the availability of grid connections.

21:15 We've also had some good progress on planning, in particular with BLC and Nordic generation, where we have many hundreds of megawatts, which are currently consented or in the consenting process. Simply Blue also scored some success during the period. So they attracted some strategic investment from Kansai Electric and that was at a time when most other floating offshore wind developers have been struggling. And they also won one of the two CFDs that were awarded for a consented floating offshore wind farm in the Celtic Sea. We look forward to helping them take that closer to FID. And then finally is impact.

22:05 So I think the first three points sort of speak for themselves. ORIT strategy delivers additional renewable capacity to help combat the impacts of climate change and reduce the amount of carbon that's being emitted into the atmosphere. Distributed generation like renewables also provides a huge amount of energy system resilience and also contributes towards the energy security that is top of politicians' minds at the moment. But what's really, really important to us is the impact that we're having in local communities. We partner with charities. The example that we've provided on this slide is our relationship with BizGive, who connect us up with those local charities so that we can have the biggest impact possible.

23:01 Now we don't consider our investments into local communities as being a drag on investor returns. In fact, we consider it as an investment in the future of those projects. If we can be a better corporate citizen, when it comes time for us to go and repower our projects to extend their lives, we expect that the local communities will welcome that. The sorts of things that we do, we invest into greening in urban areas, pocket forests, retraining. We've got kids in schools working on projects to see how they can reduce the environmental impact of their school. We have retraining programs amongst many others.

23:51 So with that, I'll hand back to David. Thanks, Chris. So we've talked about what ORIT two thousand thirty is and how we think about the four pillars, but what can you expect over the coming months and years? So 2026 is a year where we intend to continue on from the success we had late in 2025 in selling down some of our operational assets. So those 74,000,000 or so of asset sales we achieved last year, we're working right now on the next wave of asset sales that will release capital both to pay down debt but also to reinvest into construction, which is the second column here. And as I said before, you can expect to see some of those construction investments coming through during the course of this year.

24:40 What that's likely to mean in terms of gearing is that in all likelihood, gearing will trend up before it comes down because those new construction investments we expect to happen first with asset sales coming slightly later on. But we have maintained our commitment to bring gearing down below 40% regularly over this five year strategy and that's something we fully expect to do. In all of this, we will continue to pay a progressive dividend. So the FY 2026 target is a 1% increase on the prior year. And again, we fully intend to make sure that, that dividend is covered by the operational cash flows from the portfolio. So 2026 is the first year of really delivering on the strategy and aiming to deliver that 9% to 11% total return. It is important to note that is a medium to long term return target over the five year period.

25:37 And so that will accelerate as we get into the later years of the strategy because the construction investments that we're making right now are going to deliver their capital growth later in later years rather than all coming through this year. So to sum up, if you look at the diversified portfolio that we already have within ORIT and the high level of contractually fixed and inflation linked cash flows that we have, we think that gives us a really solid base to grow from. We've demonstrated in the past years our ability to deliver on this strategy. We have successfully built projects. We have successfully recycled and sold down £235,000,000 worth of those projects, and we've been able to bring the cost of debt down and keep growing the dividend.

26:32 So we think we're really well positioned to now move on and deliver the ORIT 2030 strategy, investing for growth and delivering attractive returns for investors.