Q2 2022 Net Asset Value and BSS Acquisition
1 August 2022
Foresight Solar Fund Limited ("Foresight Solar" or the "Company")
Q2 2022 Net Asset Value ("NAV"), BSS Acquisition, Operational and Trading Update
Foresight Solar Fund Limited, a fund investing in a diversified portfolio of ground-based solar PV and battery storage assets in the UK and internationally, announces that as at 30 June 2022 its unaudited NAV was £754.9 million (31 March 2022: £714.4 million), resulting in a NAV per Ordinary Share of 123.8 pence (31 March 2022: 117.1 pence per share).
Summary of NAV Key drivers for Q2 2022:
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Item |
p/share movement |
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NAV at 31 March 2022 |
117.1 |
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Power forecasts |
+3.4 |
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Inflation |
+3.3 |
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Project actuals |
+0.4 |
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Other movements |
-0.4 |
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NAV at 30 June 2022 |
123.8 |
Two significant factors drove the NAV for the second quarter. Firstly, a further upward revision in the power price forecasts, based upon the forecasts of the Company's three independent advisors, which resulted in a 3.4 pence per share uplift for Q2. This uplift was itself slightly offset by an increase to the long-term solar capture price discounts. The corresponding total H1 uplift from power prices forecasts was 9.3 pence per share.
The second factor relates to the short-term inflation assumption that has been updated for actual inflation figures to May, equating to a 6% increase for the first five months of 2022 alone. The forecast for the remainder of 2022 remains unchanged at 5% (annualised). This added a further 3.3 pence per share to the NAV.
Discount rates for the portfolio remain unchanged, reflective of the current fair value of assets.
Acquisition of a 50MW BSS project
The Company is pleased to announce the acquisition of a 50% equity stake in Clayfords Energy Storage Limited ("CESL") from Intelligent Land Investment Group. CESL holds the development rights to construct a 50MW lithium-ion battery energy storage plant based in Buchan, Aberdeenshire, UK.
The investment has been made alongside JLEN Environmental Assets Group Limited, which will also acquire a 50% equity stake, and will see the Company invest up to £14.1m. The project is fully consented and construction-ready and is expected to start commercial operations in Q4 2024.
CESL represents the Company's second investment into standalone battery storage systems, adding to the Sandridge Battery project in Wiltshire, England, which was acquired in May 2021. Additionally, Foresight Solar continues to review a strong pipeline of battery storage projects, similar to CESL, that provide vital support to the National Grid by reducing system imbalance and enhancing the grid's ability to harness a greater level of intermittent renewables on the system.
Spanish portfolio moves towards operations
The Company is pleased to announce that good progress has been made towards commencing operations on the Spanish portfolio of assets. The 98.5MW Lorca solar portfolio in Granada ("Project Lorca") energised across all three sites in early July and is scheduled to reach full operations by mid-August. The 26MW Virgen del Carmen solar park in Huelva has now completed all necessary commissioning and is awaiting a final energisation date with the Spanish grid operator.
Asset construction update
The Company's 50% investment in Sandridge Battery Storage Limited, a 50MW lithium-ion Battery Storage System located in the UK, has experienced delays to construction due to a programme delay to the grid connection and, to a lesser extent, increased lead times for battery components. While this means that operations will likely now commence in 2023 rather than in Q4 2022 as previously expected, the effects of delayed completion are expected to be offset by the improved market outlook for large-scale battery assets.
Trading Update
Electricity generated by the Global portfolio was 2.8% above base case for the six-month period driven by strong operational performance. UK production was well ahead of budget driven by strong irradiation whereas production in Australia was below budget primarily due to lower than forecast irradiation.
Strong power prices in all markets, good availability and high irradiation for the UK portfolio resulted in total revenues for Q2 2022 that were 12% ahead of budget (H1 2022: +18%). Consolidated EBITDA was 13% ahead of budget for the quarter (H1 2022: +26%).
Based on this strong operational performance and further price fixes the Investment Manager currently forecasts an increased minimum target dividend cover of 1.5x for FY22.
Pipeline
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The Company is pleased to announce that it has secured further exclusive positions on ready-to-build battery storage projects totalling approximately 60MWp that it is targeting to complete in the coming months. |
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In addition, the Company has preferential rights on a further pipeline of UK solar projects totalling over 500MW once they reach ready-to-build. |
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The Company is also reviewing an attractive pipeline of investment opportunities that includes development stage assets following the recent change in investment policy. |
Gearing Update
The Gross Asset Value ("GAV"), including Company and subsidiaries, as at 30 June 2022, was £1,294.9 million (31 March 2022: £1,244.2 million). The Company's total outstanding debt is approximately £540.0 million, representing 41.7% of GAV (31 March 2022: 42.6%), well within the 50% limit on total gearing of the Company's GAV.
The total outstanding long-term debt of £414.1 million represents approximately 32.0% of GAV of the Company and subsidiaries as at 30 June 2022.
Dividend
The Company remains on target to deliver an annual dividend of 7.12 pence per share for the year ending 31 December 2022. The first interim dividend payment of 1.78 pence per share is scheduled to be paid on 26 August 2022 as previously announced.
2022 Interim Results date
The Company intends to publish its interim results for the six-month period to 30 June 2022 on 15 September 2022. A further Notice of Results announcement will be released in due course.
For further information, please contact:
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Foresight Group |
+44 (0)20 3911 2318 |
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Nish Sivarajan |
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(InstitutionalIR@ForesightGroup.eu) |
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Jefferies International Limited |
+44(0)20 7029 8000 |
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Neil Winward |
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Gaudi Le Roux |
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Citigate Dewe Rogerson |
+44(0)20 7638 9571 |
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Toby Moore |
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Lucy Gibbs |
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