Sparks - Foresight Solar Fund

Foresight Solar Fund released H124 results this morning, with the board announcing the initiation of the second phase of its divestment programme and the start of the sale of the its Australian portfolio. Management expects the sale to close in H125 and it intends to use the proceeds predominantly to pay down the company’s debt. FSFL reported operating revenue of £74.5m, only 6.6% behind budget despite one of the wettest first quarters recorded in the UK and suboptimal weather conditions in both Spain and Australia, although this was down c 24% y-o-y. The company’s NAV and NAV/share fell 6% and 3% respectively to £656.8m and 114.9p (vs £697.9m and 118.4p in FY23), predominantly driven by lower-than-expected generation due to poor weather and a decline in power price forecasts. FSFL unveiled a 400MW framework agreement with Chelion Iberia to develop early-stage battery storage projects in Spain, requiring no upfront investment but almost doubling its proprietary development pipeline. The board increased its share buyback programme post-period by £10m, taking the total allocation to £50m, having added 1.9p in NAV uplift since its launch in 2023. Management stated that the fund is on track to deliver a DPS of 8p for FY24 with a forecast dividend cover of 1.4x. Based on current assumptions, the dividend cover for FY25 will be at least 1.3x.