Foresight Solar Fund (FSFL) H1 2024 earnings summary

Executive summary

• Capital allocation strategy centers on share buybacks, divestments, and selective growth investment, with the buyback program increased to £50 million and over £35 million repurchased since 2023, the largest in the sector, delivering 1.9p/share NAV accretion.

• Divestment process for the entire Australian portfolio (170MW solar, 122MW BESS) has commenced, aiming to close in H1 2025, with proceeds intended for debt reduction and a refocus on UK and European markets.

• Despite record wet weather, revenue for H1 2024 was only 6.6% below budget at £74.5 million, demonstrating portfolio resilience.

• Maintained a strong development pipeline, targeting 2–3GW in the UK and Spain, including a 400MW BESS framework agreement in Spain with no upfront investment.

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

Financial highlights

• NAV at 30 June 2024 was £656.8m (114.9p/share), down from £697.9m (118.4p/share) at year-end, mainly due to poor weather and lower power price forecasts.

• Revenue for H1 2024 was £74.5 million, 6.6% below budget due to adverse weather.

• EBITDA for H1 2024 was £60.6m (H1 2023: £79.1m); operating expenses were £13.9m.

• Shareholder distributions reached £38.6m (+46% YoY), with a target dividend of 8.00p/share (+6% YoY).

• Total outstanding debt reduced to £428.4m; long-term debt at £354.0m.

Outlook and guidance

• On track to pay the 8.00p/share target dividend for 2024 with a 1.4x cover; 2025 dividend expected to be at least 1.3x covered, supported by strong contracted revenue.

• Proceeds from Australian divestment will be used to reduce debt and lower gearing.

• Continued focus on UK and Spanish markets, with a proprietary pipeline of nearly 1GW in Spain and first projects expected in 2025.

• Power prices have stabilized, and forward markets show more favorable pricing for the rest of the decade.