Foresight Solar Fund (FSFL) H2 2024 earnings summary

Executive summary

• 2024 saw the lowest solar irradiation in 20 years, leading to a 7% production shortfall versus budget, but the portfolio maintained 1.4x dividend cover on the 8p per share target.

• Ongoing divestment program includes the sale of the Australian portfolio and a further 75 MW of operational assets, with proceeds prioritized for capital returns to investors.

• Revised management fee structure now equally weighted between market cap and NAV, resulting in a 19% cost saving and better alignment with investors.

• Board and management are proactively exploring strategic options to maximize shareholder value.

• Development pipeline expanded, especially in Spain (400 MW BESS and 500 MW solar), with a focus on optionality and capital recycling.

Financial highlights

• NAV at 31 December 2024: £634.4m, down from £697.9m at end-2023, primarily due to lower power price forecasts and reduced solar resource, partially offset by share buybacks which added 1.1p per share.

• 2024 portfolio generated over 1 TWh of electricity, powering 360,000 UK homes and avoiding 350 kilotons of CO2 emissions.

• 2024 dividend of 8.00pps confirmed, with 1.4x cash cover; 2025 target dividend increased to 8.10pps and expected to be 1.3x covered, supported by high levels of contracted revenues (88% for 2025).

• Share buyback program repurchased 24.5 million shares in 2024, with a target of 50 million, delivering 2.2pps of NAV accretion since May 2023.

• Total operating profit (EBITDA) for 2024: £105.4m, compared to £136.1m in 2023.

Outlook and guidance

• 2025 revenue highly contracted at attractive prices, but 2026–2027 will see normalization of power prices and a return to typical hedging strategies.

• Board focused on further divestments and capital returns, with a proactive approach to market challenges.

• Policy tailwinds expected from grid and planning reforms, and potential interest rate cuts in the UK and Europe.

• Ongoing focus on capital returns, debt reduction, and maintaining FTSE 250 status.

• Board and management expect further sector consolidation and are proactively considering all strategic options.