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Foresight Solar (LSE:FSFL), a fund focused on sustainability through investments in solar and battery storage assets, has released its results for the six months ended 30 June 2024. The report highlights key financial and operational metrics, reflecting a challenging but strategically progressive period for the fund.
Net Asset Value (NAV) and Financial Performance
- Net Asset Value: The NAV stands at £656.8 million, with an NAV per Ordinary Share of 114.9 pence. This marks a decrease from the £697.9 million NAV and 118.4 pence per share reported at the end of December 2023. The decline is attributed to lower-than-expected generation due to adverse weather conditions and reduced power price forecasts.
- Revenue: Despite experiencing one of the wettest first quarters on record in the UK, as well as poor weather conditions in Spain and Australia, Foresight Solar achieved revenue of £74.5 million. This figure is only 6.6% below budget, reflecting a significant improvement in the second quarter.
Strategic Developments and Initiatives
- Divestment Programme: The Board has initiated the second phase of its divestment strategy, beginning the sale process for its Australian portfolio. The sale, expected to close in the first half of 2025, is part of the company’s strategy to reduce debt. Proceeds from this divestment will be primarily used to further decrease the company's debt levels.
- Share Buyback Programme: In August, Foresight Solar extended its share buyback programme, increasing it by £10 million to a total of £50 million. Since its inception in 2023, the programme has repurchased over £35 million of stock, resulting in a 1.9 pence per share increase in NAV.
- Battery Storage Framework Agreement: The company announced a significant 400MW framework agreement with Chelion Iberia to develop early-stage battery storage projects in Spain. This agreement, which required no upfront investment, nearly doubles the company's proprietary development pipeline and sets the stage for future growth.
- Dividend Target: Foresight Solar is on track to meet its 2024 dividend target of 8.00 pence per share, with a forecast dividend cover of 1.4x. The Board anticipates that the 2025 dividend will be covered at least 1.3x based on current projections.
Australian Portfolio Divestment
Following the previous sale of a 50% stake in the Lorca portfolio, Foresight Solar is now focusing on divesting its Australian assets, which include 170MW of operational solar capacity and 122MWp of development-stage battery storage. This strategic move aims to refocus the company on the UK and European markets. The removal of these assets and their associated long-term debt from the balance sheet is expected to reduce overall gearing as a percentage of gross asset value (GAV).
