Foresight Solar Fund has published results for the year ended 31 December 2023.
The highlights are:
- Net Asset Value (NAV) of £697.9m or 118.4p per share, down from £771.5m or 126.5p
- Higher discount rates (used to value the fund’s future cash flows to calculate the NAV) took 6.8p off the NAV – the discount rate used to value levered (assets funded in part by debt) UK assets was increased from 7.0% to 8.0%. The rates applied to the valuations of the Australian and Spanish assets were also revised upward.
- Lower power price forecasts took off 3.9p.
- Selling the fund’s 50% stake in the Spanish Lorca portfolio at a 21% premium to holding value added 1.6p
- Record electricity generation with 1,094GWh exported to the grid, enough to power over 400,000 UK households for a year – avoiding 390,000 tonnes of carbon dioxide emissions.
- The Lorca sale helped fund a £40m reduction in the fund’s variable rate debt, bringing the drawn balance on the revolving credit facility down to £75m.
- Foresight Solar grew its proprietary pipeline with the acquisition of the rights to a 467MWp portfolio of development-stage solar projects in Spain.
- Returned £20m to shareholders via share buybacks, another £20m to go on the £40m programme. The buybacks added 1.1p to the NAV.
- Total dividend of 7.55p with dividend cover for 2023 of 1.61x.
- Target dividend of 8.00p for 2024, an increase of 6%. The 2024 target is expected to be 1.50x covered from cash generated in the period, with around 1.35x cover for 2025 – assuming current revenue forecasts.
- The sale of several large ROC-backed solar portfolios in the UK offers reliable market benchmarks for the company’s assets. The price at which the latest deal closed indicates a value per megawatt approximately 15% above Foresight Solar’s £1.17m/MW valuation of its UK portfolio. (I talked about this in my recent Citywire article – “A recent deal in January 2024 saw Greencoat buy 513.5MW of capacity from Toucan Energy for about £700m or £1.36m per MW.”)
FSFL : Higher rates impact on Foresight Solar NAV