UK's Foresight Solar Fund H1 NAV falls on higher discount rates

Overview

• UK solar and battery asset investor's H1 NAV fell to £517.9 mln, mainly on higher discount rates

• H1 EBITDA was on budget at £57.7 mln, but cash flow from operations dropped sharply

• Company is considering all strategic options to address persistent share price underperformance

Outlook

• Company says strong UK solar resource and power price hedging support favourable net operating cash flow outlook

• Foresight Solar is considering all strategic options to maximise shareholder value due to persistent market challenges

• Enhancement programme across nine sites expected to deliver up to £2.5 mln of annual revenue improvement once completed

Result Drivers

• DISCOUNT RATES AND REGULATION - Co said higher discount rates, regulatory changes and revised UK electricity price forecasts drove NAV decline

• PRODUCTION SHORTFALL - Production was 5.6% below forecast, with UK irradiation marginally above budget offsetting weaker performance elsewhere

• TAX LIABILITIES - Cash generation was negatively impacted by payment of historical tax liabilities, with further payments expected

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the closed end funds peer group is "buy."

• Wall Street's median 12-month price target for Foresight Solar Fund Ltd is GBp76.00, about 6.1% above its September 21 closing price of GBp71.60

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 8 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)