Q2 2026 Trading Update and Net Asset Value
11 August 2026
Foresight Solar Fund Limited
("Foresight Solar", "FSFL" or the "Company")
--
Trading Update, Q2 2026 Net Asset Value
Foresight Solar, the fund investing in solar and battery storage assets to generate income and deliver long-term growth, announces its unaudited net asset value (NAV) was £517.9 million at 30 June 2026 (31 March 2026: £543.0 million). This results in a NAV per ordinary share of 94.9 pence (31 March 2026: 99.2 pence).
Summary of key changes to NAV
|
Item |
p/share movement |
|
NAV on 31 March 2026 |
99.2p |
|
Interim dividends paid |
-2.0p |
|
Time value |
+1.9p |
|
Discount rate adjustment |
-1.4p |
|
Inflation assumptions |
+0.9p |
|
Project actuals |
-1.3p |
|
Power price forecasts |
-1.1p |
|
Carbon Price Support (CPS) removal |
-0.5p |
|
Share buyback programme |
+0.1p |
|
Other movements |
-0.9p |
|
NAV on 30 June 2026 |
94.9p |
Discount rate adjustment
Yields on reference 10-year UK government bonds increased during the calendar year. Reflecting the sustained higher interest rate environment, the Company raised its levered discount rate for UK solar by 25 basis points to 8.25%, representing an equity risk premium of 360bps over the six-month reference rate average to 30 June 2026. The adjustment reduced NAV by 1.4 pence per share (pps).
Inflation assumptions
UK inflation assumptions also moved higher, with RPI and CPI now expected to be 3.5% and 3.0% in 2027, respectively. From 2028 to 2030, RPI is forecast at 3.0% and CPI at 2.5%, before easing to 2.4%1 and 2.25%, respectively, from 2031. The updated assumptions added 0.9pps to NAV.
Project actuals
Project actuals reduced NAV by 1.3pps, primarily reflecting the timing of cash receipts, payments and power price hedging settlement related to the UK portfolio, as well as lower-than-budgeted generation in Spain and Australia during the second quarter.
Power price forecasts
Updated forecasts from independent market consultants reflected lower near-term power price expectations across Foresight Solar's markets, following an easing of geopolitical risk during the period, as well as wider UK solar capture price discounts in the long term. Overall, this reduced NAV by 1.1pps.
CPS removal
The UK government announced earlier this year that it will remove the Carbon Price Support mechanism from April 2028. The move is intended to reduce wholesale electricity prices for consumers and industry in the medium term. The change reduced NAV by 0.5pps, in line with the Company's estimate of between 0.5pps and 1.0pps disclosed at the time of the government's announcement.
Share buyback programme
Foresight Solar continued to buy back its shares, adding 0.1pps to NAV in the second quarter of 2026. More than £56 million of the £60 million programme has been deployed, delivering a cumulative NAV uplift of 3.4pps since repurchases began.
Other movements
Other movements, including foreign exchange, working capital movements and minor portfolio adjustments, resulted in a net negative impact of 0.9pps.
Independent valuation
Given the persistent share price discount to NAV and the limited number of recent comparable market transactions, the Board commissioned an independent third party to undertake a review of the valuation of the Company's UK operational solar portfolio. The review considered the valuation methodology, key assumptions and supporting market evidence, and concluded that the valuation is within a reasonable range of fair values.
Trading update
Above-budget production in the UK was partly offset by higher-than-expected curtailment in Spain and below-forecast irradiation in Australia. Overall, global production for the quarter was 3.6% under budget, with solar resource 4.7% above expectations.
In the six months to 30 June 2026, global portfolio generation was 5.6% lower than forecast and irradiation was marginally above budget.
Taking advantage of the macro environment, the investment manager continued to actively manage the Company's power price hedging strategy. Global contracted revenues are now 84% for 2026, 82% for 2027 and 64% for 2028 of forecast total revenues for each year, with average UK prices at £75.48/MWh, £72.14/MWh and £75.05/MWh for those years, respectively.
Since the end of the second quarter, UK day-ahead electricity prices have risen in reaction to consecutive heatwaves, low wind output and tighter gas markets. Middle East tensions have added pressure to natural gas prices. Solar generators are likely to benefit from these factors, as well as from the sunniest month on record in July, according to the Met Office.
Gearing
The gross asset value (GAV) on 30 June 2026 was £908.0 million (31 March 2026: £931.5 million), with total outstanding debt of £390.1 million, which represented 43.0% of GAV (31 March 2026: £388.5 million and 41.7%) - comfortably within the 50% limit. The modest increase in gearing reflects seasonal working capital requirements.
Interim results date
Foresight Solar expects to publish its interim results for the six months to 30 June 2026 on 15 September 2026. A Notice of Results with more details will be released in due course.
- Ends -
1 UK RPI transitions to CPIH in 2030, in line with HM Treasury and UK Statistics Authority planning.
About Foresight Solar
Foresight Solar Fund Limited (FSFL) is a FTSE 350 closed-end investment company investing in the energy transition to generate income and deliver long-term growth. The trust has approximately £1 billion deployed into solar and battery storage assets, managing roughly 1 GW of renewable energy infrastructure and a growing proprietary pipeline. Foresight Solar's strategy combines steady income today with the potential for capital growth in the future, delivering value through the acquisition, development, construction and operation of utility-scale projects predominantly in the UK. Underpinned by a progressive, sustainable dividend, the business model provides the optionality to hold or sell assets, generating profits and capturing financial gain for shareholders. FSFL is managed by Foresight Group, a specialist global manager with £13.0bn in assets under management and offices in the UK, Europe and Australia.
For more information, follow Foresight Solar on LinkedIn or contact:
|
Foresight Group Matheus Fierro (fsflir@foresightgroup.eu)
|
+44 (0)20 3911 2318 |
|
Jefferies International Limited Gaudi Le Roux Harry Randall-Knowles
|
+44 (0)20 7029 8000 |
|
Singer Capital Markets Mark Bloomfield
|
+44 (0)20 7496 3000 |
|
Sodali & Co Gilly Lock Madeleine Gordon-Foxwell
|
+44 (0)20 7100 6451 |
|
JTC Claire Brazenall |
+44 (0)15 3470 0000 |
LEI: 213800VO4O83JVSSOX33
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