Interim Management Statement

RNS Number : 5211H

Bluefield Solar Income Fund Limited

19 May 2014

 



19 May 2014

BLUEFIELD SOLAR INCOME FUND LIMITED (BSIF)

Unaudited Interim Management Statement

Bluefield Solar Income Fund Limited (the "Company") is publishing this Interim Management Statement in accordance with DTR 4.3 of the FCA Handbook.

This interim management statement relates to the period from 01 January 2014 to 19 May 2014.

Unless otherwise noted herein, the financial information provided in this interim management statement, and the asset valuations underlying that financial information, are unaudited.

Highlights

•      The proceeds of the Company's Initial Public Offering ("IPO") were fully deployed by February, 2014, whereupon it successfully completed an oversubscribed placement, increasing shareholder funds by £13,028,999, from £130,290,000 to £143,318,999

•      The Company made two acquisitions in the period with Sheppey (10.62 MegaWatts Peak ("MWp")), in Kent and Pentylands (19.23MWp) in Wiltshire

•      The Company announced an interim dividend of 2.0 pence in February and paid on 11 April, 2014 and remains on course to deliver a dividend of 4.0 pence for the full year to June

•      The Company has retained a prudent approach to valuations and has kept the portfolio valued at cost minus expenses

•      Strong growth in the construction and installation of new large-scale, ground-based assets is expected to continue throughout 2014 creating new acquisition opportunities for the Company

Investment Activity

In the period to the date of this announcement, the Company has announced two further acquisitions, Sheppey and Pentylands, for an aggregate consideration of over £33 million and a capacity close to 30MWp. The Company has acquired a 100% interest in each of the plants and has no leverage.

Current Portfolio

Project	Contractor	Region	MWp	Total Investment (£m)
Hardingham	Ikaros Solar	Norfolk	14.84	17.00
Goosewillow	Solar Century	Oxfordshire	16.93	19.03
North Beer	Parabel UK	Cornwall	6.87	9.35
Hill Farm	Solar Century	Oxfordshire	15.19	17.30
Hall Farm	Ikaros Solar	Norfolk	11.48	13.37
Saxley	Solar Century	Hampshire	5.88	7.05
Betingau	Prosolia	Glamorgan	10.56	11.90
Sheppey	Solar Century	Kent	10.62	12.00
Pentylands	Wirsol	Wilshire	19.23	21.40
		Total	111.60	128.40

Portfolio Overview

North Beer, in Cornwall, was purchased as an operational asset. All other projects have been invested as new build plants. All of the Company's portfolio is operational and/or revenue producing.

Future Pipeline

There are a significant number of fully consented sites yet to be constructed in England and Wales, ranging from 2MWp up to 50MWp. The Company's Investment Adviser, Bluefield Partners LLP, is working closely with its chosen contractor partners to select the next acquisition targets from this primary asset base.  The Company benefits from strong, established relationships with some of the leading solar specialist contractors operating in the UK. It expects, therefore, to be well placed to continue building the Company's asset base using its highly selective acquisition strategy that has resulted, thus far, in attractively priced, high quality assets. The Company also benefits from an agreement to acquire assets from a proprietary pipeline of developments, should the Company choose to proceed with those opportunities. This further reinforces the Company's strong access to new acquisitions.

Financial Information:

As at 31 March 2014, the Company's net asset value per share was 95.44p (ex-February, 2014 dividend). This net asset value per share reflects the cost of issuance, quarterly operating costs, dividend payable and interest on cash deposits. The Company has no borrowings and in line with valuation policy has not re-valued its assets in the period. The assets are currently valued at cost minus expenses.

The net asset value per share and share price of the Company for the period was as follows:

	12 July 2013	30 September 2013	31 December 2013	31 March 2014
	£	£	£	£
Net Asset Value per Share (pence)	98.05	97.84	97.31	95.44
Share price (pence)	103.00	103.88	100.50	102.25
Premium	5.05%	6.17%	3.28%	7.14%
Market Capitalisation (million)	134.20	135.35	130.94	146.54

Outlook

The Company continues to be pleased with progress made so far. The deployment of the proceeds of the IPO, and the tap issue, has delivered a portfolio that is in line with the target return expectations, even allowing for cautious underlying assumptions, such as zero leverage and a zero real energy price inflation.

Relative to the Company's peer group of listed solar funds, the publicly disclosed information shows that the Company has been acquiring assets with very similar characteristics to the peer group but at more attractive prices. This should be to the benefit of the Company's shareholders in the long run.

2014 is expected to be a strong year for UK solar installations and there is a growing base of primary and secondary assets that are potential acquisition targets for the Company.

The Company's interim dividend of 2.0 pence was announced in February 2014.  The Company remains on course to deliver a dividend of 4.0 pence for the full year to June.

Solar PV Strategy and Consultation

The Company released an RNS Reach on Thursday 13 May, 2014 to update its shareholders on the UK  Government's solar strategy and subsequent consultation. The Company sees the strategy as an important and positive statement for the prospects of the UK solar industry. It is targeting a significant increase in the installed capacity of solar energy in the UK from current levels in the next few years across all types of installation.

The consultation from Government is seeking to move the solar industry from the Renewable Obligation Scheme ("RO Scheme") over to a Contracts for Difference ("CfD") support mechanism in 2015, two years earlier than originally scheduled, for assets greater than 5MWp in capacity. This is a reflection of the substantial growth experienced in the large scale UK market in the past twelve months and expected through 2014. The UK solar market is now well established, highly successful and highly adaptable. The Company expects to see this success continuing.

The proposals for regulatory changes are exclusively forward looking and will have no impact on existing installed capacity. There are no proposed changes for any capacity installed up to 31 March, 2015.

Enquiries:

James Armstrong / Mike Rand / Giovanni Terranova

Bluefield Partners LLP - Company Investment Adviser

Tel: [phone]

Tod Davis / David Benda/Jamie Lillywhite

Numis Securities Limited - Company Broker

Tel: [phone]

Nick Bastin, Liam Clark, Giles Abbott

Capital MSL, Financial Communications

Tel: [phone]

Kevin Smith

Heritage International Fund Managers Limited - Company Secretary & Administrator

Tel: [phone]

This interim management statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules and the interim management statement should not be relied on by any other party or for any other purpose.  It does not constitute an invitation to subscribe for or otherwise acquire or dispose of securities in the Company in any jurisdiction.  The information contained in this interim management statement is subject to updating and amendment, and does not purport to be full or complete.  No reliance may be placed for any purpose on the information contained in this interim management statement in connection with the Company or the purchase of securities in the Company.  This interim management statement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract or commitment whatsoever.  Any decision to purchase shares should be made solely on the basis of the information contained in the final prospectus issued by the Company.

 The potential acquisition by the Company of any of the investments referred to in this interim management statement is subject, among other things, to those projects reaching legal completion and to the Company having conducted satisfactory due diligence in relation to such investments. There is therefore no guarantee that any of the investments will be acquired and if they are on what terms. 

This IMS contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events; forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document.  Subject to their legal and regulatory obligations, the Company and its Investment Manager expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Note to editors

About Bluefield Solar Income Fund Limited (BSIF)

BSIF is a Guernsey-registered investment company focusing on large scale agricultural and industrial solar assets. It raised gross proceeds of £130 million in July 2013 through an initial public offering of shares on the main market of the London Stock Exchange. It raised a further £13 million in February, 2014 in an oversubscribed placement.

BSIF seeks to provide shareholders with an attractive return, principally in the form of semi-annual income distributions, by investing in a diversified portfolio of solar energy assets, each located within the UK, with a focus on utility scale assets and portfolios on greenfield, industrial and/or commercial sites.

About Bluefield Partners LLP

Bluefield was established in 2009 as a specialist investor into solar energy. Bluefield's team has a proven track record in the selection, acquisition and management of large scale energy and infrastructure assets in the UK and Europe.

The managing partners have been involved in over £355 million of solar funds and/or transactions in the UK and Europe since 2008 including over £185 million in the UK since December, 2011. Bluefield has led the acquisitions, and currently advises, on over 50 UK based solar assets. The majority of the assets are situated on industrial and commercial sites.

Bluefield was appointed investment adviser to the Company in June, 2013.

Website: www.bluefieldllp.com 

 

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