12 March
2024
Foresight Solar Fund
Limited
("Foresight Solar",
"FSFL" or "the Company")
Annual Results to 31 December
2023
Foresight Solar, a sustainability-focused fund
investing in solar and battery storage assets in the UK and
internationally, announces its results for the year ended 31
December 2023.
Highlights
· Net Asset Value (NAV) of
£697.9 million (31 December 2022: £771.5 million). The uplift
from the sale of the Lorca portfolio stake at a 21% premium to
holding value, alongside an active power price hedging strategy,
mitigated the negative impacts from higher discount rates and
softening power price forecasts.
· Record electricity generation
with 1,094GWh exported to the grid, enough to power over 400,000 UK
households for a year - avoiding 390,000 tonnes of carbon dioxide
emissions.
· Record cash distribution from
the underlying assets of £120 million, the highest in Foresight
Solar's 10-year history.
· FSFL delivered on the first
phase of its divestment programme with the sale of a 50% stake in
the Lorca portfolio. The proceeds from this transaction, alongside
free cash, were used to pay down £40 million of variable rate debt
on the RCF, bringing the drawn balance down to £75
million.
· Foresight Solar grew its
proprietary pipeline with the acquisition of the rights to a 467MWp
portfolio of development-stage solar projects in Spain. The move
exemplifies the Company's capital allocation strategy, focused on
new investments with limited upfront capital requirements to drive
long-term growth and total shareholder returns.
· Foresight Solar returned £20
million to shareholders via share buybacks, deploying half of the
£40 million allocation in the year and delivering 1.1 pence per
share of NAV accretion.
· Total dividend of 7.55 pence
per share declared for the full year, in line with the Company's
target. Dividend cover for 2023 was 1.61x.
· Target dividend of 8.00 pence
per share for 2024, an increase of 6% compared to the previous
year. The 2024 target is expected to be 1.50x covered from cash
generated in the period, with around 1.35x cover for 2025 -
assuming current revenue forecasts.
· The sale of several large
ROC-backed solar portfolios in the UK offers reliable market
benchmarks for the Company's assets. The price at which the latest
deal closed indicates a value per megawatt approximately 15% above
Foresight Solar's £1.17m/MW valuation of its UK
portfolio.
Key
Metrics
|
As
at
31 December
2023
|
As
at
31 December
2022
|
Net Asset
Value (NAV)
|
£697.9m
|
£771.5m
|
NAV per
Share
|
118.4p
|
126.5p
|
Total Dividend
per Share for the period
|
7.55p
|
7.12p
|
Gross Asset
Value (GAV)
|
£1,140.5m
|
£1,296.3m
|
Gearing (as a
% of GAV)
|
38.8%
|
40.5%
|
Annualised
Total NAV Return since IPO
|
8.0%
|
9.0%
|
Annualised
Total Shareholder Return since IPO
|
6.2%
|
7.8%
|
UK portfolio
valuation
|
£1.17m/MW
|
£1.29m/MW
|
Commenting on
the results, Alexander Ohlsson, Chairman of Foresight Solar,
said:
"Foresight
Solar delivered resilient performance with record electricity
production and cash distribution against a challenging market
backdrop. Our operational strength, the powerhouse behind our
progressive dividend, enabled us to comfortably meet our dividend
target of 7.55p per share for 2023 and allows us to propose an
above inflation increase of 6.0% for the 2024 target dividend of
8.0p per share.
"During the
year, we have remained focused on initiatives to address the
discount to NAV at which the Company's shares have traded and to
place the fund in the best possible financial position to support
shareholders' interests. We paid down £40 million of variable rate
RCF debt, reducing financing costs, and returned £20 million to
investors via share buybacks. The Board is adhering to its
disciplined approach to capital allocation and the only new project
investments currently under consideration are modest investments to
expand the development stage pipeline.
"In the year
Foresight Solar celebrated its 10th anniversary, we
successfully completed the Company's first divestment. The partial
sale of the Spanish Lorca portfolio at a 21% premium to holding
value validates our valuation methodology and supports our
investment model. Bringing projects through development to
construction and then into operation offers optionality and allows
the Company to capture financial upside, a strategy we intend to
replicate through our development pipeline.
"The Lorca
transaction was also a key driver of NAV uplift, and the Investment
Manager continues to make progress on the next phases of the
divestment programme. We look forward to providing more details to
shareholders in due course.
"By
leveraging the Investment Manager's local networks in Spain,
Foresight Solar purchased the rights to six development-stage solar
projects, totalling over 460MWp. Over the medium-term, we will
expand this growing proprietary development pipeline and focus on
the huge potential for solar and storage to be unlocked throughout
Europe.
"As power
price forecasts softened across markets during the year, Foresight
Solar's active hedging strategy enabled the fund to lock in higher
prices. These favourable terms will help insulate the NAV against
market fluctuations in 2024 and beyond, providing greater
visibility on dividend cover.
"After a
challenging year for markets, we believe there are reasons for
optimism. The energy transition is one of the biggest investment
themes of our generation. The solar power opportunity alone is
immense. Industry fundamentals remain attractive and solar
generation continues to be one of the cheapest and most reliable
sources of electricity available. This promising outlook, coupled
with Foresight Solar's improved financial position and clear
strategy to deliver income and growth, positions the fund well to
capitalise on the opportunities ahead."
Annual
Report
A copy of the Annual Report has been submitted
to the National Storage Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The
Annual Report can also be seen on Foresight Solar's website
(fsfl.foresightgroup.eu),
where you can find all the information about the
Company.
Results
Presentation
Foresight Solar is holding a presentation for
analysts at 9:30 today. Analysts wishing to attend should
contact fsfl@powerscourt-group.com.
The presentation will also be uploaded to the Company's
website.
Ross Driver, Managing Director, and Toby Virno,
Senior Investment Manager, will present the full-year results
to retail investors via Investor Meet Company (IMC) on
Wednesday, 20 March 2024, at 10:00.
The meeting is open to all existing and
potential shareholders. Questions can be submitted before the event
through the IMC dashboard or at any time during the
presentation.
Investors can sign up to Investor Meet Company
for free, follow Foresight Solar and gain access to the meeting
via: www.investormeetcompany.com/foresight-solar-fund-limited/register-investor.
Dividend
Declaration
Foresight Solar confirmed total dividends of
7.55 pence per ordinary share for 2023, in line with its
target.
The Board is pleased to announce the final
interim dividend relating to 2023 of 1.895 pence per ordinary
share. The shares will go ex-dividend on 25 April 2024 and the
dividend will be paid on 24 May 2024 to shareholders on the
register as at the close of business on 26 April 2024.
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
|