REG - Foresight Solar Fund - Annual Results to 31 December 2023

Foresight Solar FundAnnouncement

12/03/2024 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240312:nRSL4303Ga&default-theme=true

RNS Number : 4303G  Foresight Solar Fund Limited  12 March 2024

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              As at

                                                31 December 2023   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 10(th) 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
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The Annual Report
can also be seen on Foresight Solar's website (fsfl.foresightgroup.eu
(https://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
(mailto: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
(http://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
(http://www.linkedin.com/showcase/foresight-solar/)  or contact:

 

 Foresight Group                  +44 (0)20 3911 2318

 Matheus Fierro

 (fsflir@foresightgroup.eu)

 Jefferies International Limited  +44 (0)20 7029 8000

 Gaudi Le Roux

 Harry Randall

 Singer Capital Markets           +44 (0)20 7496 3000

 Robert Peel

 Alaina Wong

 Powerscourt                      +44 (0)20 7250 1446

 Justin Griffiths

 Gilly Lock

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACSFFFEVVFILLIS