Register Log-in Investor Type

News

Solid set of results from NextEnergy Solar

NextEnergy Solar adds Cambridgeshire plant to portfolio

NextEnergy Solar (NESF) reported annual results to March 31 2021, with the following highlights:

  • Despite unprecedented times, NESF delivered a solid set of financial results, its target of 150MW of subsidy-free development assets, and updated its investment policy to unlock growth opportunities
  • Power price fluctuations were effectively managed through the successful hedging strategy implementation and NESF consistently generated electricity over budget:
    • Electricity generation +6.2% above budget for year (2020: +4.7%)
    • Additional revenues of £7m delivered through hedging strategy (2020: £9m)
  • Continued portfolio growth with 4 new high-quality assets
  • 2022 Target dividend increased in line with RPI to 7.16p per ordinary share in respect of the year ended 31 March 2022, payable quarterly
  • Electricity generated in the year equivalent to a saving of 317,600 tonnes of CO2e equivalent emissions and sufficient to power 195,000 UK homes for an entire year

Financial highlights

  • NAV per ordinary share of 98.9p (2020: 99.0p)
  • Total group revenue of portfolio £101m (2020: £108m)
  • Ordinary shareholder annualised total return since IPO of 6.1% (2020: 6.3%)
  • Gearing (including preference shares) of 43% (2020: 42%)
  • Cash dividend cover before scrip 1.1x (2020: 1.2x)

Operational highlights

  • Total capacity installed of 814MW (2020: 755MW)
  • 94 operating solar assets (2020: 90)
  • Successful energisation of High Garrett, a 8.5MW extension to the 5MW ROC asset known as Kentishes acquired in 2016, was achieved in October 2020.

ESG highlights

  • 195,000 UK homes powered for one year (2020: 189,000 UK homes)
  • 317,600 tonnes of CO2e emissions avoided (2020: 307,700 tonnes)
  • 738GWh clean electricity generated (2020: 712GWh)
  • 14 sites have completed to full Universal Biodiversity Management Plan (UBMP) level
  • Achieved compliance with the European Union Sustainable Finance Disclosure Regulation
  • Committed to making disclosures in accordance with Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector

Drivers of NAV performance

The main detractors during the year were a decrease in long-term power price forecasts (-3.0p per ordinary share), a downward revision in short-term inflation forecasts (-1.1p per ordinary share) and increased corporation tax rate from 2023 onwards (-1.8p per ordinary share). The main contributors during the year were a reduction in the unlevered discount rate (+3.4p per ordinary share) and the company’s operating outperformance (+1.4p per ordinary share).

View from Kevin Lyon, chair of NESF

“In a period dominated by the uncertainty and challenges brought about by the CPVOD-19 pandemic, NESF has continued to perform well and implement its strategy, resulting in portfolio growth and an attractive dividend.

While the period saw power price fluctuations, NESF’s ability to effectively manage its exposure through its hedging programme, as well as generating electricity significantly over budget, meant that the period was a successful one. During the year, the Company was again able to increase its dividend in line with RPI, paying a total of £38.1m of cash dividends as well as an additional £2.9m of scrip shares to ordinary shareholders who elected for the scrip dividend alternative.

On the acquisition front, the uncertain environment did not stop NESF being able to grow its portfolio.  The Company reached its subsidy-free development target of 150MW and took steps in establishing a foothold in the long-term, high-credit UK corporate PPA market by acquiring the Camden portfolio, comprising two projects totalling 100MW.

Recent changes to the Group’s investment policy mean that NESF can increase its geographic, asset class and structure diversity, offering a truly unique investment opportunity for shareholders.  I would like to thank everyone at NESF for their commitment as well as our stakeholders for their continued support.”

NESF: Solid set of results from NextEnergy Solar

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…