8 May 2024
Foresight Solar Fund
Limited
(the
"Company", "Foresight Solar" or "FSFL")
Q1 2024 Net Asset Value and
Trading Update
Foresight Solar, a
sustainability-focused fund investing in solar and battery storage
assets in the UK and internationally, announces that its
unaudited net asset value (NAV) was £665.0 million at 31 March 2024
(31 December 2023: £697.9 million). This results in a NAV per
Ordinary Share of 114.7 pence (31 December 2023: 118.4 pence per
share).
Summary of key NAV
drivers:
Item
|
p/share movement
|
NAV on 31
December 2023
|
118.4p
|
Power price forecasts
|
-2.1p
|
Revaluation of the UK BESS portfolio
|
-0.7p
|
Project actuals
|
-0.6p
|
Foreign exchange
|
-0.4p
|
Share buyback programme
|
+0.4p
|
Other movements
|
-0.3p
|
NAV on 31
March 2024
|
114.7p
|
UK power price forecasts continued
to trend down in the first three months of 2024. The fall brings
estimates in line with current market forward rates for this year,
which hover around £60/MWh. Forecasts for Australia and Spain were
marginally lower for the quarter as well. The reductions were
mitigated by Foresight Solar's high proportion of fixed price
contracts for energy sales through to 2027, although, in aggregate,
the moves resulted in a negative impact to NAV of 2.1 pence per
share.
To reflect full transparency on the lower
revenue outlook for battery storage assets in the UK, confirmed by
both actual results and independent forecasts, alongside
market-based pricing, the Company has revised down the holding
values of its UK BESS portfolio, resulting in a negative impact to
NAV of 0.7pps.As previously stated, FSFL will not build its
pre-construction BESS assets until such time as this becomes
appropriate under its capital allocation policy. The
Company is considering all options to progress the
projects.
Foresight Solar continued to
progress with its accretive share buyback programme, repurchasing a
further 9.7 million shares during the quarter to 31 March 2024 and
delivering an additional 0.4pps of NAV accretion
to shareholders. FSFL has now deployed over £30
million of its £40 million allocation and delivered a cumulative
1.5pps uplift to NAV since the buyback programme started in May
2023.
Trading
update
The first quarter of the year was among the
wettest on record in the UK. Lower-than-expected irradiation in the
country culminated in production 13% below forecast to 31 March
2024, with Australia and Spain similarly impacted by poor weather.
Notwithstanding this period of lower generation, the Company
continues to be highly cash generative and remains confident of
meeting its target dividend cover for the year.
Capital
allocation
The board and the investment manager
recognise the discount that persists between FSFL's net asset value
and its share price. Foresight Solar remains committed to its
disciplined capital allocation approach, focusing on a balance
between returning capital to shareholders via the buyback programme
and repaying debt. The directors will continue to evaluate the
allocation to share repurchases whilst also targeting a significant
reduction in the balance of the revolving credit facility (RCF) by
the end of the year. In line with the capital allocation approach,
the Company will continue to assess divestments and new investments
selectively and opportunistically.
Post quarter-end, the Company agreed
with lenders to voluntarily repay A$6.5 million (£3.4 million) of
the joint debt facility for the Oakey 1 and Longreach projects in
Australia. The amount is equivalent to 12% of the outstanding
balance scheduled to be refinanced in 2027. The repayment and a
debt re-sculpting exercise, still subject to final lender consent,
will bolster cover ratios so the projects may continue with
distributions unhindered.
Power price
hedging and dividend cover
The Investment Manager continues to
forward-fix electricity sales at attractive rates under power
purchase agreements and build on the proportion of contracted
revenue for the medium term. Overall, the proportion of contracted
revenue for the global portfolio now stands at 90% for 2024, 84%
for 2025 and 64% for 2026.
Foresight Solar is on target to pay
its full year dividend, and the revenue stability and solid cash
distribution provide confidence in the targeted 1.5x net dividend
cover for 2024.
Gearing
The Gross Asset Value (GAV) on 31 March 2024
was £1,094.5 million (31 December 2023:
£1,140.5 million). The Company's total outstanding debt was £429.5
million, representing 39.2% of GAV (31
December 2023: £442.6 million and 38.8%), comfortably within the
50% limit. The RCF balance remains £75 million drawn (31 December
2023: £75 million).
For more information, follow Foresight Solar on
LinkedIn
or contact:
Foresight
Group
Matheus Fierro
(fsflir@foresightgroup.eu)
|
+44 (0)20 3911 2318
|
Jefferies
International Limited
Gaudi Le Roux
Harry Randall
|
+44 (0)20 7029 8000
|
Singer Capital
Markets
Robert Peel
Alaina Wong
|
+44 (0)20 7496 3000
|
Powerscourt
Justin Griffiths
Gilly Lock
|
+44 (0)20 7250 1446
|