Australian firms to inject £28.5bn in UK infra: Where you can focus now?

Highlights

• Australian businesses have vowed to invest over £28billion in renewables, technology, and infra projects across the UK over the next ten years.
• The huge investment pledge will support Prime Minister Jonson’s plan to improve the quality of infrastructure and housing in the country.

UK Prime Minister Boris Johnson announced that leading Australian businesses have committed an investment of over £28 billion in renewable energy, technology, and infrastructure projects across the UK over the coming ten years.

The development follows a UK-Australia investment roundtable at Downing Street that was hosted by UK Prime Minister. The huge investment pledge will support Mr Jonson’s plan to improve the quality of infrastructure and housing in the country and will also drive Green Industrial Revolution.

The Prime Minister met leading Australian businesses, including investment fund IFM Investors, Australia’s biggest pension provider AustralianSuper and financial services company Macquarie Group, that have committed to invest in the UK, which will stimulate an economic recovery as the pandemic subsides. It will also create thousands of jobs initially and many more expected in the coming years.

Investments in infrastructure

• Australia’s financial services company Macquarie Group has confirmed its plans to invest £12 billion by 2030 in sustainable infrastructure projects, which include offshore wind farms in North Scotland and Lincolnshire, a hydrogen hub in Southampton and Orkney, and gigabit broadband in rural England.
• Meanwhile, the investment fund IFM Investors has urged the government to attract more foreign capital to the country and has pledged to invest £3 billion over the next five years in new sustainable projects in energy transition and to upgrade its existing UK assets.
• Australia’s pension provider AustralianSuper has been an active investor in the UK for decades and is further planning an £8 billion investment across the UK over the next five years.
• Lendlease, a real estate and investment group along with its partners have pledged to invest £5.5 billion across major regeneration projects in Birmingham and London over the next five years. They will work for delivering thousands of new low-carbon homes and will offer training and employment for locals.
• However, IFM and AustralianSuper said that they would be willing to invest more if the UK government would take more risk in developing infrastructure projects and allow more stake in these projects in return for long-term equity support from offshore partners.
• Worley and Global green renewable energy company Fortescue Future Industries is mulling to create around 1,000 new jobs.

Let us look at three FTSE-listed renewable energy stocks that may show some impact on the development.

The Renewable Infrastructure Group (LON: TRIG)

The Renewable Infrastructure Group is an investment fund. It has been investing in functional renewable energy projects. The company has recently announced the acquisition of 49% equity interest in project Valdesolar, which is an operating solar park in Spain, from Repsol, a global energy company listed in Spain.

With a market cap of £3,329.56 million, the FTSE 250 -listed investment company’s share price has appreciated by 11.77% over the last one year as of 31 March 2022.  The Renewable Infrastructure Group’s shares were trading at GBX135.20, up by 0.60%, at 13:20 PM (GMT).

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Good Energy Group Plc (LON:GOOD)

Good Energy Group Plc is a renewable energy company. It is involved in business of providing services in the electrification of transport. It also works for decentralized renewable energy generation. The company has reported an increase in revenue by 11.8% to £146.0 million in FY2021, from £130.6 million in FY2020, which is driven by significant price rises in response to rising wholesale costs. The company’s underlying profit before tax stood at £2.6 million in FY 2021, up from £0.5 million in FY2020.

With a market cap of £47.83 million, the FTSE AIM All-Share-listed investment company’s share price has appreciated by 20.54% over the last one year as of 31 March 2022. Good Energy Group Plc’s shares were trading at GBX265.00, down by 7.02%, at 13:20 PM (GMT).

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ITM Power Plc (LON: ITM)

ITM Power Plc is a manufacturer of hydrogen energy solutions to enhance the consumption of renewable power. The company recently entered a strategic partnership with Vitol Holdings SARL to become an equal partner in ITM Motive Limited. Vitol will be investing up to £30 million in the company which will be matched by the company.

With a market cap of £2,196.33 million, the FTSE AIM UK 50 Index-listed hydrogen economy company’s share price has depreciated by 18.67% over the last one year as of 31 March 2022. ITM Power Plc’s shares were trading at GBX355.00, down by 0.89%, at 13:20 PM (GMT).

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.