NextEnergy Solar Fund (NESF) investor relations material

Executive summary

• The year was challenging, with persistent sector-wide discounts to NAV impacting share price and necessitating a strategic reset, including a revised dividend policy and capital allocation framework.

• Initiated a six-pillar strategic reset to drive sustainable returns and long-term value creation, including a shift to a 75% cashflow-based dividend policy and a clear capital allocation framework linking dividends, debt reduction, and reinvestment.

• Completed the initial Capital Recycling Programme, disposing of 245MW and raising £119m, with proceeds used for debt reduction and reinvestment.

• Achieved a NAV uplift of 2.44p per ordinary share from asset disposals and delivered 844GWh generation (+2% vs budget), benefiting from strong irradiation and asset management.

• The board's priority is restoring shareholder value, narrowing the share price discount to NAV, and delivering sustainable long-term returns.

Financial highlights

• Total income rose to £141.3m from £135.5m year-over-year; portfolio and holdco EBITDA increased to £104.5m from £96.9m.

• Cash available for ordinary shareholder distributions was £56.2m, up from £50.3m; cash income rose to £71.9m from £67.1m.

• Dividend per ordinary share held at 8.43p, with dividend cover improving to 1.2x.

• Gross asset value declined to £922m; NAV per share fell to 76.1p, reflecting valuation pressures.

• Ordinary shareholder's NAV declined to £437.5m (from £547.4m).

Outlook and guidance

• New 75% cash flow-based dividend policy is expected to free up £8.6m–£9.8m in FY 2026/27 for debt reduction and reinvestment.

• Dividend guidance for FY 2026/27 is 4.5p–5.1p per ordinary share, above previous guidance.

• Long-term total return target is 9%–11% gross, with core returns of 7%–9% and additional value from portfolio recycling and discount reduction.

• Roadmap initiatives expected to generate £60m–£100m of additional value through asset life extensions, hybridisation, and development pipeline realisation.

• Board proposing to increase energy storage policy limit to 30% at the upcoming AGM.