REG - Foresight Solar Fund - Annual Results to 31 December 2024

Foresight Solar FundAnnouncement

20/03/2025 07:15

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RNS Number : 3810B  Foresight Solar Fund Limited  20 March 2025

20 March 2025

 

Foresight Solar Fund Limited

("Foresight Solar", "FSFL" or "the Company")

Annual Results to 31 December 2024

 

Foresight Solar, the fund investing in solar and battery storage assets to
build income and growth, announces its results for the year ended 31 December
2024.

 

Financial highlights

·    In the year with the lowest amount of sun hours in the UK since 2013,
global portfolio performance proved resilient, confirming the 8.00 pence per
share (pps) target dividend with 1.4x cover.

·    Net Asset Value (NAV) of £634.4 million (31 December 2023: £697.9
million), primarily driven by lower-than-expected irradiation across all
markets, coupled with lower power price forecasts.

·    This downside was partially mitigated by the ongoing share buyback
programme and higher realised inflation along with revised expectations for
2025.

·    Considering dividends and buybacks, Foresight Solar returned £66.5
million to Shareholders in 2024.

·    Announced the target dividend of 8.10pps for 2025, representing a
1.25% increase on the 2024 dividend and c.10% yield on the closing share price
on 19 March 2025. The 2025 target is expected to be 1.3x covered based on
current forecasts.

 

Operational highlights

·    1,009GWh of renewable electricity exported to the grid, enough to
power 367,504 UK households for a year - avoiding 351,451 tonnes of carbon
dioxide emissions.

·    Global generation 7.0% below budget with irradiation 4.5% under
forecast.

·    UK production was 6.0% lower than expected primarily due to
irradiation 4.7% below expectations. This was only the third time the UK
portfolio underperformed in its 11 years of operation.

·    With the aim of providing greater certainty on future income, the
Investment Manager has been actively hedging production into the future and
securing advantageous prices to deliver revenue visibility and dividend cover.

·    Post period, Foresight Solar implemented NAV-accretive hedges,
increasing total contracted revenues for 2025 to 88% and for 2026 to 69%, both
at an average price of £86/MWh.

·    Foresight Solar continued to deliver on its income and growth
strategy, building its proprietary pipeline and creating opportunities to
drive long-term total returns.

·    Entered a Spanish BESS framework to double the size of its
development pipeline.

·    Subsequently bid for 398MWp-worth of battery storage connection
capacity in Spain.

·    The first Spanish solar development project is expected to reach
ready-to-build status in the second half of this year.

·    Considering the in-house development of BESS in Australia, total
solar and battery storage capacity under development is now 989GWp.

 

Strategic highlights

·    The planned sale of the Australian portfolio continues to progress,
although it has taken longer than initially expected due to the delivery and
review of third-party inputs. The target is now to agree a deal in the third
quarter of 2025.

·    In addition, the Board and the Investment Manager have agreed to
extend the Company's divestment programme, earmarking at least another 75MW of
operational assets for disposal.

·    With certain Shareholders seeking a material return of capital, the
Board envisages that proceeds from these additional sales should be used to
facilitate enhanced liquidity for those Shareholders seeking it.

·    Post period, the Board and the Investment Manager agreed a revised
fee arrangement to more closely reflect share price performance, generating
substantial cost savings for investors.

·    The new structure is based on an equal weighting of market
capitalisation and NAV, with lowered tiers of 0.95% per annum up to £500
million and 0.8% p.a. over £500 million. This equates to a 19% saving (see
RNS of 18 February 2025
(https://www.londonstockexchange.com/news-article/FSFL/corporate-and-strategic-update/16903311)
for calculation).

·    The Board is of the view that consolidation is likely to be a major
feature in the sector in the year ahead. Directors are fully aware of the
benefits that successful consolidation can deliver to Shareholders, and this
forms a critical part of the ongoing strategic considerations.

 

Key investment metrics

                                           31 December 2024  31 December 2023
 Net Asset Value (NAV)                     £634.4m           697.9m
 NAV per share                             112.3p            118.4p
 Dividend declared per share for the year  8.00p             7.55p
 Gross Asset Value (GAV)                   £1,044.7m         £1,140.5m
 UK portfolio valuation                    £1.10m/MW         £1.17m/MW
 Cash flow from operations                 £61.7m            £71.3m
 Total operating profit (EBITDA)           £105.4m           £136.1m
 Net debt/EBITDA                           3.2x              2.7x
 Enterprise value (EV)/EBITDA              8.7x              7.8x

 

Key operational metrics

                   Year ended 31 December 2024                                                                                       Year ended 31 December 2023
                   Total generation (GWh)  Budgeted generation (GWh)  Generation variance to budget  Irradiation variance to budget  Total generation (GWh)  Budgeted generation (GWh)  Generation variance to budget  Irradiation variance to budget
 Global portfolio  1,009                   1,085                      (7.0)%                         (4.5)%                          1,094                   1,162                      (1.9)%                         3.4%

 

 

Commenting on the results, Alex Ohlsson, Chair of Foresight Solar, said:

"Foresight Solar delivered resilient performance in a year marked by poor
weather and persistent macroeconomic headwinds in the UK. Despite the
challenges, the portfolio's strength has allowed us to confirm another full
year dividend. In more than a decade since listing, Foresight Solar has never
missed its income target. The quality of our assets, combined with our active
power price hedging strategy, gives us confidence to increase the dividend
target to 8.10p per share for 2025 - and we expect it to be 1.3x covered based
on current forecasts.

"Addressing the discount remains our top priority. We have implemented actions
to confirm valuations, generate cash, return capital and reduce leverage. As
we progress the sale of the Australian portfolio, we recognise the need to do
more. That is why we are expanding the divestment programme to dispose of at
least another 75MW of operational assets. Proceeds from these further
divestments will be prioritised for the return of capital to investors.

"Meaningful returns of capital will inevitably lead to a reduction in the
listed renewables asset class, and we are likely to see examples of successful
consolidation. The Directors are fully aware of the potential value this can
bring, and it is a critical part of the Board's ongoing strategic
considerations. Ultimately, our intention is to explore all options available
to provide the best outcome for the majority of our Shareholders in an
efficient and effective manner.

"Whilst our focus is squarely on the challenges in front of us, we cannot lose
sight of the future. Longer term, we believe our income and growth strategy
will position Foresight Solar to reap the benefits of a low-carbon future. Our
proprietary development pipeline will be the growth engine of the business,
and, through a capital light model, we can generate opportunities to improve
total returns for Shareholders over time. We've achieved this with the Lorca
portfolio in Spain and plan on replicating this success with the solar and
BESS projects coming through in the country."

 

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 (foresightsolar.com
(http://www.foresightsolar.com) ), where you can find all the information
about the Company.

 

Results Presentation

Foresight Solar is holding a presentation for analysts at 9:30 a.m. today.
Analysts wishing to attend should contact fsfl@sodali.com
(mailto:fsfl@sodali.com) . The presentation will also be uploaded to the
Company's website.

Ross Driver, Managing Director, and Toby Virno, Associate Director, will
present the full-year results to retail investors via Investor Meet Company
(IMC) on Thursday, 27 March 2025, at 11:00 a.m.

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)
.

 

Investor feedback

Please take a moment to share your feedback on Foresight Solar and your
thoughts on this announcement here:
https://www.investormeetcompany.com/feedback/9e6a0bd8-d7e4-4c14-ab78-823a159e089c

For more information, follow Foresight Solar on LinkedIn
(https://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

 Alaina Wong

 Sodali & Co                      +44 (0)20 7100 6451

 Gilly Lock

 Madeleine Gordon-Foxwell

 JTC (Jersey) Limited             +44 (0) 1534 700 000

 Hilary Jones

 

LEI: 213800VO4O83JVSSOX33

 

 

 

 

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