A fair wind - everyone's a winner!

by DOUGLAS SHEPHERD

A single wind farm in the Lammermuir Hills generates millions of pounds for one of the biggest landowners in the Scottish Borders, has allowed its operators to pay over £64 million in dividends last year, and has provided the cash to support 140 local environmental projects over a decade.

Fallago Rig's 48 turbines with a capability to produce 144 megawatts of electricity is the primary source of income for Sunlaws Development Company Ltd. [SDC], a business based at Floors Castle, near Kelso, home to the Duke of Roxburghe and his family. The company is controlled by the Roxburghe Second Discretionary Trust.

Newly published accounts for SDC which invests in land assets for residential and commercial development as well as land rental show turnover derived from its principal activities increased by over 26% last year, from £8.877 million to £11.273 million. The business's trading arm, Floors Castle Enterprises [FCE] operates the tourism business of Floors Castle, the largest inhabited property in Scotland.

The document published on the Companies House website indicates that 88% of investment property in the SDC portfolio which has a total value at £40 million relates to the lease interest in the wind farm.

According to a strategic report from the company's directors: "Overall the company has seen its operating profit increase to £8,445,736 (£6,614,937 in 2022)". The rise in profitability is equivalent to 27.6%.

The report adds: "We remain a cash positive business and seek opportunities to invest in our operating assets and expand our business through acquisition development assets to ultimately maximise shareholder returns".

A high proportion of SDC's rental incomes relate to a tenant operating the wind farm. "The pricing and regulations enforced on the tenant can impact the level of income received on an annual basis".

The tenant in question is Fallago Rig Windfarm Ltd., whose controlling party is the Edinburgh-based Federated Hermes Diversified Infrastructure Fund.

Figures published by Fallago Rig Windfarm Ltd. reveal revenue of £97 million last year and an operating profit of £69.2 million. The equivalent number of households powered in the year was 139,376. Dividends distributed totalled £64 million, up from £58.2 million in 2022.

The accounts show the company has no employees while the future outlook is set to deliver "strong profitability and cash flows".

So far as Floors Castle Enterprises is concerned, the visitor attraction and its top class facilities generated income of £1,719, 121 last year compared to £1,620,915 in 2022.

The strategic report notes: "National and global economic conditions affect the ability of potential customers to spend on travel and tourism.

"2021 and 2022 saw an increase in national travel due to continuing international travel restrictions which positively affected Floors Castle Enterprises tourism business. During the current financial year (2022/23) there has been a clear downturn in national travel with UK residents choosing to resume international travel.

"Floors Castle offers premium experiences to international High Net Worth individuals. Changes in international travel restrictions may have a direct affect on our ability to host clients for premium experiences where their country of origin or the UK are imposing travel restrictions".

Roxburghe Estates has one of the largest land holdings in Scotland, totalling 52,000 acres.

Meanwhile, the Fallago Environment Fund, co-ordinated by the Tweed Forum on behalf of Roxburghe Estates, EDF Renewables and Hermes Investment Management has been awarding grants to Scottish Borders projects since its creation in 2014. As of November 2023 the fund had donated £1.87 million to 142 individual projects.