NextEnergy Solar Fund Limited (LON:NESF), a leading specialist investor in solar energy and energy storage, has announced the Board has approved a dividend target of 8.43p per ordinary share for the financial year ending 31 March 2025.
In line with the Company’s progressive dividend policy, the Board considers that a 1% increase in the dividend target appropriately balances the interests of the Company, investors and other stakeholders whilst taking into account the strength of the prior year’s dividend and the Company’s attractive c.11% dividend yield, which is currently one of the largest amongst renewable investment companies as at closing share price on 14 May 2024.
The target dividend cover is forecasted to be between 1.1x-1.3x, supported by a high degree of visibility of the Company’s revenues. The Company’s RPI-linked subsidised revenues represent approximately 50% of total revenues. The remaining revenues are derived from budgeted electricity generation, of which prices for 82% of revenues have already been fixed to 31 March 2025 through the Company’s active power hedging strategy.
The Company has declared total ordinary dividends since inception of £345m or 67.8p per ordinary share. This announcement represents NextEnergy Solar Fund’s eleventh consecutive dividend target increase, in line with the Company’s progressive annual dividend policy. The Company has an impressive track record having achieved all its dividend targets whilst maintaining a covered dividend throughout the last ten years and continues to target a covered dividend beyond the current financial year.
In deciding the target dividend, the Board considers projected future power prices and associated price hedges, inflation in renewable markets, historic and budgeted technical, financial and operational performance of NESF’s portfolio, and the ratio of cash cover to proposed dividend payments.
Helen Mahy, Chairman of NextEnergy Solar Fund, commented:
“We are proud to announce NextEnergy Solar Fund’s eleventh consecutive year of dividend growth which evidences the strong position the Company finds itself in despite a challenging macroeconomic backdrop for the wider sector. NextEnergy Solar Fund’s dividend per ordinary share is one of the highest among the listed renewable energy investment company sector demonstrating its resilience, which offers investors an attractive dividend yield through access to a high-quality portfolio of solar energy and battery storage assets. The Company continues to service its progressive dividend by securing future revenue flows, maintaining a robust operational asset base, and continually looking for attractive growth prospects. We look forward to continuing to deliver on plans like the Capital Recycling Programme, which should leave NextEnergy Solar Fund in a stronger position than ever.”
Notes:
The dividend target stated in this announcement is a target only and not a profit forecast. There can be no assurance that this target will be met, and it should not be taken as an indication of the Company’s expected future results. Potential investors should not place any reliance on this target and should decide for themselves whether or not the target dividend is achievable.
