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NextEnergy Solar hikes target dividend by 5%

NextEnergy Solar Fund says that it is targeting a dividend of 7.52p for the financial year ended 31 March 2023, up 5% from the target for FY22 of 7.16p. The increase is higher than the rate of inflation over the course of 2021 (4.1%) and the biggest dividend increase announced by any of the UK-listed renewable energy funds for this year.

The board says that the target dividend increase is supported by the high degree of visibility of revenues for 2023, primarily driven by its active power price hedging strategy. This has locked in about 80% of the fund’s budgeted power generation at a fixed price for the 2023 financial year. Then there is the RPI-linked increase in revenues from subsidies (renewable obligation certificates) which cover around 60% of the fund’s total revenues to factor in. The board also highlights the portfolio’s strong operational track record of technical and operational outperformance.

This will mark eight years of consecutive dividend increases from NextEnergy Solar. Since launch, it has paid out over £250m in dividends. Each year, these have been covered by earnings and the statement says that the company is aiming to maintain that record.

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Kevin Lyon, chairman of NextEnergy Solar Fund said “We are pleased to announce a dividend target of 7.52 pence per ordinary share, representing a 5.0% increase on the previous year’s dividend and, importantly, the eighth consecutive year of dividend growth. We are particularly pleased, in the current macroeconomic environment, to announce a dividend increase well in excess of RPI. This target dividend reflects the strong position of the company, its secured revenue flows, strong operational asset base and attractive growth prospects. It also demonstrates the resilience of the renewables sector, particularly solar and battery storage, and underlines the fact that NextEnergy Solar Fund offers investors an attractive dividend yield.”

NESF : NextEnergy Solar hikes target dividend by 5%

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