Nextenergy Solar sells assets as it tries to deliver ‘optimal returns’

Nextenergy Solar Fund has swung heavily into the red for the first half of fiscal 2024 as it looks to recycle assets.

For the six-month period ending September 30th, the company recorded a loss before tax of £11.6m with a loss per ordinary share of 2p. This represented a marked decline from the £77.1m profit and 13.1p earnings per share reported this time last year.

The net asset value (NAV) total return for the period was 5.2 per cent.

In a statement accompanying the interim results, company chair Helen Mahy said the company had started the first phase of a programme to sell off assets, recycle capital, strengthen its balance sheet and improve dividend cover.

Nextenergy has started the programme with the disposal of Hatherden, a 60MW ready-to-build solar project, for £15.2m.

Historically, the FTSE 250 company’s dividend record is strong, with a compound annual growth rate (CAGR) of just over 2.5 per cent in the last three years.

The company raised its dividend by around 13 per cent on the year prior and said it remains committed to implementing a share buyback programme if the share price continues to trade at a discount to NAV.

Michael Bonte-Friedheim, CEO of Nextenergy Group said: “Nextenergy Solar Fund has built up an excellent portfolio of high value renewable energy assets. We continue to manage this portfolio to deliver optimal returns for shareholders, whilst continuing to look for opportunities to develop it further.”

Despite the losses, the company has been steadily ramping up production from its facilities in recent years.

During the six-month period the company’s assets generated power sufficient for 334,200 homes, more than double the equivalent period in 2019.

Eyes from the sector will be on Chancellor Jeremy Hunt today in anticipation of attention on solar in his Autumn Statement.

The government was criticised for the absence of attention on solar in the Spring Budget, despite a targeted five fold increase in generation from the solar and onshore wind sectors by 2035 as part of its energy security strategy