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Bluefield Solar Income announces “an excellent start to its 2018/19 financial year”

Bluefield Solar Income Fund - Walking on sunshine

Bluefield Solar Income Fund (BSIF) has announced its results for the six months ended 31 December 2018. Analysts from QuotedData attended the company’s results presentation and the company key operational highlights are listed below. However, underlying earnings for the period were £18m, which is 38.5% ahead, year-on-year (underlying earnings for the six-months ended 31 December 2017 were £13.0m) with earnings per share, prior to debt amortisation, of 4.90p (2017: 3.53p), an increase of 38.8%. The company describes this as “an excellent start to its 2018/19 financial year”. Higher than average irradiation and higher power prices have been matched by a high performing portfolio, producing above expected generation. John Renock’s BSIF’s chairman, says “It has laid the foundations for another strong year”.

Key operational highlights

  • The Company enjoyed an excellent start to its 2018/19 financial year and delivered underlying earnings1 of £18.0m in the period (31 December 2017: £13.0m), equating to earnings per share of 4.90 pence (31 December 2017: 3.53 pence).
  • NAV has increased to 114.41pps (30 June 2018: 113.28pps).
  • The Company, through its subsidiary BSIFIL, successfully increased its RCF from £30m to £50m and extended the facility tenure from September 2019 to September 2021.
  • The Company’s levered equity discount rate has marginally fallen to 7.20% (7.26% as at 30 June 2018) due to progressive leverage reduction due to debt amortisation, whilst the Weighted Average Cost of Capital, “WACC”, discount rate remains unchanged at 5.65% (5.65% as at 30 June 2018).
  • The Company completed one acquisition during the period, in October 2018, amounting to 5MWp. This took the Company’s total capacity to 465.3MWp as at 31 December 2018.
  • As at 31 December 2018, the Company had a total of 46 large solar assets, 39 micro solar assets and 2 roof top assets, all of which were operational.
  • Portfolio outperformed operational expectations by 0.5%, delivering an aggregate PR of 80.2% versus forecast of 79.8%.

Focused on maximising revenues from the existing portfolio

BSIF’s management says that they have sought to maximise revenues in the existing portfolio, have continued to amortise BSIF’s long term financing and have continued to elect not to expand its asset base due to high valuations and/or poor quality portfolios.

Management say that they expect this approach will soon be rewarded with the potential arrival of an economic UK market for solar assets without subsidy, for which the Company is well prepared to apply its highly effective investment model for primary market assets by funding through construction. Shareholder approval will be sought before they proceed with investment in unsubsidised solar but management say that their approach has allowed BSIF to create a high quality and well-priced portfolio, delivering in excess of 50% total return to our shareholders since IPO in July 2013.

About Bluefield Solar Income Fund

Bluefield Solar Income Fund (BSIF) is a Guernsey-domiciled fund. It has been listed on the main market of the London Stock Exchange (LSE) since 12 July 2013 and has a premium main market listing. While its portfolio has some exposure to small-scale assets, its focus is on the acquisition and management of a diversified portfolio of large-scale (utility scale) solar energy in the UK (its earnings are all in sterling). It targets portfolios on greenfield, industrial and/or commercial sites.

BSIF’s primary objective is to deliver long-term stable sterling income via quarterly dividends. The majority of its regulated revenues are linked directly to the retail prices index (RPI). Since its launch, BSIF has had an annual dividend target that increases in line with RPI each year. The investment advisers’ fee incentivises it to beat the dividend target (7.68p for the year ending 30 June 2019). BSIF’s exclusive focus on the UK is a differentiating factor against its wider peer group.

The underlying investments are held in SPVs (special purpose vehicles) which, in turn, are held through BSIF’s wholly owned and UK-domiciled portfolio holding company, Bluefield SIF Investments Limited (BSIFIL).

BSIF is designed for investors who are looking for a high level of income with regular distributions, want stable returns that do not move in line with traditional equity markets, wish to see their capital protected and would like some modest capital appreciation over the long term.

Click here to read more about BSIF in QuotedData’s most recent note.

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