NextEnergy Solar reports strong year-end NAV performance

NextEnergy Solar Fund said in its final results on Monday that its net asset value per ordinary share increased to 114.3p, up from 113.5p for the 2022 financial year.

The FTSE 250 fund said ordinary shareholders' net asset value rose to £674.4m for the 12 months ended 31 March, compared to £668.5m a year earlier.

It said the ordinary shareholder annualized total return for the year was 8.6%, slightly lower than the 11% recorded on 31 March 2022.

Earnings per ordinary share for the year totalled 8.2p, a decrease from 21.7p in the previous year.

NESF declared a total dividend of 7.52p per share for the period, up from 7.16p year-on-year.

The board said the cash dividend cover for the period was 1.4x.

It said it was planning to increase its dividend target by 11% to 8.35p per share for the financial year ending 31 March 2024.

The forecast target cash dividend cover for the same period was expected to be between 1.3x and 1.5x, with fixed revenues contributing approximately 1x to 1.1x.

Since its initial public offering, NextEnergy Solar Fund had declared total dividends of £305.8m, or 55.72p per share.

The fund’s total installed operating capacity reached 889MW as at 31 March, compared to 884MW in the prior year.

It said it manages 99 operating solar assets, remaining consistent with 2022’s figures.

The portfolio achieved a generation outperformance of 3.8% against budget for the 12 months ended 31 March, resulting in additional revenues of around £4.8m.

That surpassed the prior year's outperformance of 1.8%, equivalent to about £2m.

In a strategic move to expand its international presence, NextEnergy Solar Fund invested $50m in NextPower III ESG, a private solar infrastructure fund.

NextPower III ESG had acquired 1.8GW from 149 individual solar projects across several countries, including the United States , Chile, Portugal, Spain, Greece, Poland, and India.

The investment provided the fund with immediate exposure to international solar projects and opened up co-investment opportunities alongside leading institutional investors.

NextEnergy Solar also engaged in two solar co-investments, totalling 260MW, in partnership with NextPower III ESG.

The co-investments included a 13% stake in a 210MW solar asset in Portugal, and a 25% stake in a 50MW solar asset in Spain.

Additionally, NextEnergy Solar said it initiated the construction of its first standalone 50MW battery storage project, expected to be operational later in the year.

Moreover, the company acquired the development rights for a high-quality 250MW lithium-ion battery storage project in the East of England.

“The 12 months to 31 March were a productive period, as the company made strong progress across various strategic initiatives announced during the year to generate value and provide future growth for investors,” said chairman Kevin Lyon.

“It is a real testament to the company's performance during the period that we were able to announce an 11% dividend target increase to 8.35p per share, which remains well covered as one of the largest dividend increases in the peer group.

“Looking forward, the Board and I were delighted to welcome Helen Mahy as a non-executive director and chair-elect, a vital component of succession planning.”

At 0804 BST, shares in NextEnergy Solar Fund were up 0.73% at 100.94p.

Reporting by Josh White for Sharecast.com.