Foresight Solar’s recent Capital Markets Event provided a wealth of insights into the current state and future prospects of renewable infrastructure investment. Below are the key highlights from the sessions on the afternoon of 13 May 2024.

 

Operational excellence

FSFL’s operating solar portfolio is the best in the UK. Our sites consistently outperform peers in converting solar irradiation into electricity – a true measure of asset management's contribution – thanks to our dedicated team's decade-long experience and consistent application of advanced techniques.

Our focus remains on improving operational availability and maximising revenue potential. This commitment to operational excellence underpins our goal of enhancing both financial performance and investor returns.

 

Sustainable, progressive income

Ross Driver, Foresight Solar’s lead fund manager, and Toby Virno, a member of the fund’s investment team, highlighted our robust capital allocation strategy, demonstrating that net operational cash flows of £71 million comfortably covered the £44 million in dividend payments for 2023.

This financial strength allowed the Board of Directors to propose a 6.0% increase in the annual dividend to 8.00 pence per share for 2024, reflecting our dedication to delivering consistent income to shareholders.

With a UK portfolio of 50 assets, Foresight Solar is well-positioned to capitalise on the energy transition, presenting significant investment opportunities and ensuring long-term dividend cover and growth.

 

Amplifying returns with an element of growth

In the current environment, merely generating income isn’t enough. Foresight Solar is also focusing on delivering total shareholder returns.

During the CME, Ross, Toby and Carlos Rey, Foresight Group’s Head of Iberia, outlined FSFL’s strategy to build a 2GW to 3GW development pipeline. This approach aims to deliver a steady flow of ready-to-build assets that can be sold or constructed, generating direct financial upside for investors.

This proprietary pipeline is set to be Foresight Solar’s growth engine. By buying projects early, building them, refinancing on favourable terms, and securing income streams through the likes of long-term PPAs, we can feed cash back into the fund and to our shareholders.

 

Acting in shareholders’ best interests

Despite a challenging 2023 for renewable infrastructure investment trusts, marked by rising interest rates and sector-wide de-rating, Foresight Solar delivered on its promises to investors:

• Increasing the 2024 target dividend by 6.0% to 8.00 pence per share, reflecting over 30% growth since IPO.
• Returning £32 million to investors through a £40 million share buyback program.
• Reducing £40 million of the revolving credit facility (RCF) from free cash flow, achieving a £75 million undrawn balance and minimizing interest rate exposure.
• Expanding our proprietary development pipeline to ensure future growth and income.

These initiatives protected shareholder interests and demonstrated our Board’s confidence in the fund’s operations and valuations. That’s also why directors unanimously recommend investors vote against discontinuation at the upcoming June annual general meeting.

 

A general election and the future of renewables

As the UK heads towards a potential change of government, the implications for renewable infrastructure investors and the country’s net zero ambitions are significant. Ross was joined by Claire O’Neill, former Minister of State for Energy and Clean Growth and COP26 President-Designate, to discuss solar power in an evolving political landscape and the global decarbonisation race.

Claire emphasised the urgency for the UK to reclaim its leadership in renewable energy by streamlining planning processes and accelerating project deployment. These actions are critical to meeting the country's ambitious decarbonisation targets.