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• Share Buyback Program: GBP20 million launched, with GBP5 million deployed during the period.

• Capital Recycling Program: Phase 3 raised GBP30 million, a 21.5% premium to holding value.

• Dividend Yield: Approximately 11%, one of the highest in the FTSE 350.

• Dividend Target: 8.43p for the current year, a 1% increase over the prior year.

• Net Asset Value (NAV) per Share: 97.8p.

• Gross Asset Value: Just over GBP1 billion.

• Cash Income Generated: GBP45 million during the period.

• Portfolio Generation: 595 gigawatt hours.

• Net Income Available for Distributions: GBP37 million.

• Total Gearing: Approximately 48%.

• Operational Assets: 102 assets with an installed capacity of 983 megawatts.

• Weighted Average Cost of Debt: 4.9%.

• Weighted Average Cost of Capital: 6.6%.

• Long-term Debt: GBP156 million.

• Short-term Debt: GBP153 million.

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Release Date: November 21, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NextEnergy Solar Fund Ltd (LSE:NESF) announced a GBP20 million share buyback program to reduce the share price discount to its net asset value.

• The company completed the third phase of its capital recycling program, selling Staughton for GBP30.3 million, resulting in a 21.5% premium to the holding value.

• NESF offers an attractive dividend yield of approximately 11%, one of the largest in the UK equity market, with dividends comfortably cash covered 1.3 times.

• The company has a strong market-leading portfolio of solar energy assets, positioning it well to assist the UK government in its net zero ambitions.

• Shareholders showed strong support for the company's continuation, with 94% voting in favor at the annual meeting.

Negative Points

• The net asset value per ordinary share decreased from GBP618.6 million to GBP572.2 million over the six-month period.

• The dividend cover is expected to be towards the lower end of the 1.1 to 1.3 times range for the full year.

• The total gearing for the fund is relatively high at around 48%, which may pose risks in a volatile market.

• The company experienced a higher number of unplanned DNO outages, impacting operational performance.

• The M&A market for solar assets remains challenging, with sluggish activity affecting potential asset sales.

Q & A Highlights

Q: Can you provide more detail on the DNO outages during the period and whether there's any scope to reclaim losses? A: Stephen Rosser, Investment Director & UK Legal Counsel, explained that there are planned and unplanned outages. Planned outages are coordinated with DNOs to minimize impact, while unplanned outages, often weather-related, are unpredictable. The distributed nature of NESF's portfolio helps mitigate widespread impact.