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Update from Bluefield Solar

Bluefield Solar (BSIF) published the following update:

“BSIF reconfirms its guidance of a full year dividend of 7.90pps for the financial year ending June 2020. This will be fully covered by earnings and post debt amortisation. Based on yesterday’s closing share price the dividend yield on the forecast full year dividend was 7.05%.” 

COVID-19 Contingency Planning

“The company’s key service providers have all successfully implemented remote working policies for the individuals working on BSIF.

Bluefield Partners, the London based manager, has moved ten BSIF focused personnel out of its London office and they are now working remotely overseeing the investment performance of the existing assets, portfolio enhancement (including lease extensions) and the Company’s power sales strategy. Bluefield Services, the Bristol-based business that oversees asset monitoring, reporting, technical asset management and financial reporting has 28 employees successfully working remotely. Bluefield Operations has 19 employees who are regionally based and focused on the operation and maintenance of the assets. It is anticipated that a number of these employees will be categorised as ‘Key Workers’ as defined by the Government’s recent announcement, a status that should enable them to carry out their activities effectively.

In addition, as part of the winter maintenance programme, Bluefield Services has undertaken a major review of the status of the portfolio’s spare parts and has ordered replacements where necessary. Bluefield Operations has been working on general maintenance across the portfolio and transformer and inverter replacement on specific sites.”

General Update: Visibility of Earnings and Financial Headroom

“Over 60% of the company’s revenues are regulated and non-correlated to market based power prices, increasing in line with RPI and with an average duration remaining of 15 years. The balance of revenues is derived from the sale of electricity via power purchase agreements (PPAs). The Company has 94% of its revenues contracted until the end of the current financial year, 88% of its revenues contracted until the calendar year end and 77% until the end of the financial year 2021, providing excellent visibility of earnings over the current and next financial year. The PPAs providers are investment grade entities. The Company has no subsidy free assets and no assets are in construction.

The Company’s current leverage level is 32% (a combination of long term debt and short term credit facility) to gross asset value. All long term debt is fully amortising over an average tenor of 14 years and is without the requirement for refinancing. The debt service cover ratio is over 2.5 times covered. The company has also drawn £44m from its short-term credit facility and is in place until 30 September 2022 (if the facility’s one year extension is exercised by the company). 

As indicated in previous announcements the company’s policy of increasing the dividend in line with RPI in future financial years remains under review, especially in light of the recent fall in power prices.”

[Bluefield Solar’s shares are up by 4% as of 3:30pm today, helping to narrow what was one of widest discounts in the renewable energy infrastructure sector. This seemed strange given Bluefield’s pure focus on solar, widely seen as the most predictable source of renewable energy.

Bluefield noted that it has 88% of its revenues contracted until the calendar year end. In the current climate, that is a luxury few industries very few industries have.]

BSIF: Update from Bluefield Solar

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