Foresight Solar Fund (FSFL) H1 2024 earnings summary

Executive summary

• Portfolio demonstrated resilience despite the wettest H1 in a decade, with revenue only 6.6% below budget at £74.5m for H1 2024, and NAV declined to £656.8m (114.9p/share) as of 30 June 2024, mainly due to poor weather and lower power price forecasts.

• Capital allocation strategy centers on share buybacks (expanded to £50m, with over £36m repurchased since 2023), divestments (notably the Australian portfolio), and selective investment in future growth.

• Total shareholder return over the last 12 months exceeded 10%, with £38.6m distributed via buybacks and dividends, a 46% increase year-over-year.

• Refocus underway toward UK and European markets, with a proprietary development pipeline targeting 2–3GW, including a 400MW BESS framework agreement in Spain.

• Interest rate cuts and policy support for renewables in core markets provide industry tailwinds.

Financial highlights

• Revenue for H1 2024 was £74.5m, 6.6% below budget due to adverse weather; EBITDA was £60.6m (H1 2023: £79.1m).

• NAV at 30 June 2024 was £656.8m (114.9p/share), down from £697.9m (118.4p/share) at year-end.

• Shareholder distributions reached £38.6m (+46% YoY), with a target dividend of 8.00pps (+6% YoY) and dividend cover at 1.4x for 2024, 1.3x forecast for 2025.

• Total outstanding debt reduced to £428.4m from £442.6m at year-end 2023; long-term debt at £354.0m.

• Renewable energy generation was 531.1GWh, enough to power 196,000 UK households.

Outlook and guidance

• On track to pay the 8.00pps target dividend for 2024 with a 1.4x net cover; 2025 dividend expected to be at least 1.3x covered.

• Proceeds from the Australian portfolio divestment are expected to materially pay down RCF debt and reduce gearing.

• Forward power price markets are showing more favorable trends for the rest of the decade, with cautious optimism from interest rate cuts and government support.

• Development pipeline expected to deliver first projects in 2025, with optionality to sell rights or recycle capital.

• Continued focus on UK and Spanish markets, with a proprietary pipeline of nearly 1GW in Spain.