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NextEnergy SolFnd Ld (NESF)

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Tuesday 20 November, 2018

NextEnergy SolFnd Ld

Half-year Report

RNS Number : 8284H
NextEnergy Solar Fund Limited
20 November 2018
 

20 November 2018

 

 

NextEnergy Solar Fund Limited

 

("NESF" or "Company")

 

Interim results for the period ended 30 September 2018

 

NextEnergy Solar Fund announces its interim results for the period ended 30 September 2018.

Highlights for period ended 30 September 2018

·      Net asset value per share of 105.1p (31 March 2018: 105.1p)

·      Net asset value of £610m (31 March 2018: £605m)

·      Gross asset value of £975m (31 March 2018: £875m)

·      Target dividend of 6.65p per share for the 2018/19 financial year

·      Cash dividend cover before scrip of 1.2x (31 March 2018: 1.0x)

·      Gearing  of 37% as at 30 September 2018 (31 March 2018: 31%)

·      87 solar assets as at 30 September 2018 (31 March 2018: 63)

·      Total capacity installed of 691MW (31 March 2018: 569MW)

·      Total electricity generation of 480GWh

·      Electricity generation 7.9% above budget

 

Kevin Lyon, Chairman of NESF, commented:

 

"Over the course of the last six months, we have fully deployed the capital raised in the previous financial year in the acquisition of operating solar assets.

 

The first half of this financial year was characterised by a notable overperformance of the Company's portfolio, driven by high levels of solar irradiation during the summer.  At the same time, we continued to focus on the portfolio's core technical and operating performance and reduction in operating expenditure, and selectively entered into new power purchase agreements and hedges to take advantage of rising short-term power prices.

 

Following the end of the period, we implemented an innovative financing transaction, issuing Preference Shares, which will improve the Company's cashflows available for re-investment and distribution."

 

NESF's Investment Adviser will host a presentation for analysts this morning.

 

If you would like to attend or have any further questions, please contact MHP Communications on 020 3128 8100 or [email protected].

 

For further information:

 

 

NextEnergy Capital Limited

020 3746 0700

Michael Bonte-Friedheim


Aldo Beolchini




Cantor Fitzgerald Europe

020 7894 7667

Robert Peel




Fidante Capital

020 7832 0900

John Armstrong-Denby




Shore Capital

020 7408 4090

Anita Ghanekar




Macquarie Capital (Europe) Limited

020 3037 2000

Nick Stamp




MHP Communications

020 3128 8100

Oliver Hughes




Ipes (Guernsey) Limited

01481 755 137

Nicholas Robilliard


 

 

Notes to Editors:

NESF is a specialist investment company that invests primarily in operating solar power plants in the UK. It is able to invest up to 15% of its Gross Asset Value in operating solar power plants in OECD countries outside the UK. The Company's objective is to secure attractive shareholder returns through RPI-linked dividends and long-term capital growth. The Company achieves this by acquiring solar power plants on agricultural, industrial and commercial sites.

 

NESF has raised equity proceeds of £592m since its initial public offering on the main market of the London Stock Exchange in April 2014. It also has preference shares of £100m in issue and credit facilities outstanding of c.£365m in place (£149m from a syndicate including MIDIS, NAB and CBA; MIDIS: £54m; ING £32m; UniCredit £32m; Santander £40m; and Bayerische Landesbank £58m).

 

NESF is differentiated by its access to NextEnergy Capital Group (NEC Group), its Investment Manager, which has a strong track record in sourcing, acquiring and managing operating solar assets.  WiseEnergy is NEC Group's specialist operating asset management division and over the course of its activities has provided operating asset management, monitoring, technical due diligence and other services to over 1,300 utility-scale solar power plants with an installed capacity in excess of 1.9 GW.

 

Further information on NESF, NEC Group and WiseEnergy is available at www.nextenergysolarfund.com, www.nextenergycapital.com and www.wise-energy.eu.

 

 



 

Overview

Chairman's Statement

"Over the course of the last six months, we have fully deployed the capital raised in the previous financial year in the acquisition of operating solar assets.

The first half of this financial year was characterised by a notable overperformance of the Company's portfolio, driven by high levels of solar irradiation during the summer. At the same time, we continued to focus on the portfolio's core technical and operating performance and reduction in operating expenditure, and selectively entered into new power purchase agreements and hedges to take advantage of rising short-term power prices.

Following the end of the period, we implemented an innovative financing transaction, issuing Preference Shares, which will improve the Company's cashflows available for re-investment and distribution."

I am pleased to present, on behalf of the Board, the Interim Report and Condensed Interim Financial Statements for NextEnergy Solar Fund Limited for the period ended 30 September 2018.

As at 30 September 2018, the Company's portfolio comprised 87 operating assets amounting to 691MW installed solar capacity and an invested capital of £894m (31 March 2018: 63 assets, 569MW and £734m invested capital).

As envisaged in the last Annual Report, we have now fully deployed all the capital raised through the equity raising and debt financings in the previous financial year. With new acquisitions undertaken during the period, the gearing ratio has increased to 37% at the period end.

We have also continued with our programme of reducing operating costs and have focussed on the portfolio's technical and operating performance, with the aim of increasing efficiencies across our plants.

Our plans to begin construction of subsidy-free projects are on track for an announcement in the second half of this financial year. We have a pipeline of subsidy-free assets to develop and the Investment Manager is working on the supply chain to reduce investment and operating costs of these development projects.

The changing power curves in the short-term provided us with the opportunity to lock-in electricity prices higher than the budget, although the longer-term projections by our market consultants continued to show price declines.

Elsewhere, we are pleased with our first acquisition of two battery energy storage systems connected to two different solar PV assets in May 2018. This investment will provide us with ongoing effective insight into the potential value addition to NESF's portfolio of the energy storage market opportunity.

As mentioned in the last Annual Report, we have been looking to optimise the capital structure and, after the period end, on 13 November 2018, we were pleased to announce the issue of an initial tranche of £100m of Preference Shares. This was an innovative financing transaction that optimises NESF's capital structure, reduces exposure to secured debt financing and significantly increases cashflows available for distribution and dividend cover, as detailed further in the Investment Manager's report. We expect to issue another tranche of £100m before the end of the financial year.

Financial Results

Profit for the six-month period was £18.7m (2017: £14.0m) with earnings per share of 3.23p (2017: 2.69p).

Cash dividend cover was 1.2x (2017: 1.0x). When taking into account the significant scrip election, the dividend cover was 1.7x (2017: 1.1x).

The Company's annualised Ongoing Charges Ratio ("OCR") was 1.1% (2017: 1.1%) for the period, which is in line with the budget for the full year ending 31 March 2019 of 1.1%.

Portfolio Performance

The months of June, July and August saw exceptional solar irradiation in the UK. As irradiation levels across our portfolio were 8.4% over our expectations, energy generation also was notably above budget. High temperatures reduce the technical efficiency of solar systems and peaks in generation can also result in grid curtailment, so that the resulting actual net generation increase amounted +7.9% (including unexpected and expected grid outages of various solar plants). The resulting negative Asset Management Alpha of -0.5% (2017: +1.5%) was an expected result of these high irradiation and temperature conditions.

The portfolio of assets recorded total energy generated during the period of 480GWh (2017: 307GWh). This was also as a result of the integration of new operating assets compared to previous periods, as detailed further in the Investment Manager's report.

Net Asset Value

At the period end, the Company's NAV was £610m, equivalent to 105.1p per share (31 March 2018: NAV of £603m, 105.1p per share).

Portfolio Growth

During the period, the portfolio's installed capacity increased by 122MW. The Investment Manager is in negotiation for another 606MW of pipeline assets, of which 470MW represent subsidy free assets and 136MW are with subsidies.

We believe the development of subsidy-free solar plants will provide selected attractive opportunities for the Company. We have already acquired a number of sites and have several options available in this space, including developing the solar plant from the ground-up. This allows us to retain control over the entire value chain and increase the return on investment whilst mitigating risks.

Capital Raising and Debt Financing

At period end, the Company had total financial debt outstanding of £365.3m (31 March 2018: £270.4m) on a pro-forma look-through basis, including project level debt. Of the total financial debt, £324.0m was long-term fully amortising debt, and £40.0m was drawn under the Company's short-term credit facility. This represents a gearing level of 37% (31 March 2018: 31%), which is below the stated maximum debt-to-GAV level of 50%.

The Company intends to deploy the proceeds from the first Preference Share issue to repay existing debt facilities, resulting in a capital structure with lower financial debt outstanding and significantly reduced annual cash costs to NESF. A further Preference Share issue is expected to be employed primarily to further repay existing debt facilities, with incremental benefits to the Company as described above.

Dividend and Dividend Growth

The Company continues to achieve all its dividend and dividend growth objectives. For the year 2018/19, the Company has targeted a total dividend of 6.65p per share (2017/18: 6.42p), to be paid in four quarterly distributions. In September the first quarterly dividend of 1.665p was paid. The next dividends are due for payment on 29 December 2018, 29 March 2019 and 29 June 2019.

As mentioned in the last Annual Report, we have been monitoring the ability of the Company to maintain its dividend target linked to RPI, despite declining long-term power price forecasts. The initial £100m issuance of Preference Shares provides a significant improvement in the capital structure of the Company and materially increases its ability to sustain a growing dividend and provide positive dividend cover going forward.

Outlook

The Company will focus on future opportunities on several fronts including:

(i)    increasing the technical and operating performance;

(ii)   optimising revenues and reducing operating costs across our existing portfolio of assets;

(iii)  continuing to identify UK opportunities in the secondary market with ROC accreditations, despite a narrowing pipeline as competition for ROC assets has increased substantially over the last year; and

(iv)  progressing preparation of construction of subsidy free assets: our plans to begin construction of the first sites are on track for the second half of the financial year.

Kevin Lyon

Chairman

19 November 2018

Investment Objective

KPIs and Investment Objective

Key Performance Indicators ("KPIs")

The Company sets out below its KPIs which it utilises to track its performance over time against its objectives. Alternative Performance Measures used by the Company are defined in the Glossary.

Financial KPI

Period ended 30 September 2018

Year ended 31 March 2018

Year ended 31 March 2017

Year ended 31 March 2016

Year ended 31 March 2015

Shares in issue

580.2m

575.6m

456.4m

278.0m

240.3m

Share price

111.5p

111.0p

110.5p

97.75p

103.75p

Market capitalisation

£647m

£639m

£504m

£272m

£249m

NAV per share

105.1p

105.1p

104.9p

98.5p

103.3p

Total NAV

£610m

£605m

£479m

£274m

£248m

Premium/(discount) to NAV

6.1%

5.6%

5.3%

(0.8%)

0.4%

Earnings per share

3.23p

5.88p

13.81p

0.78p

9.13p

Dividend per share

3.325p

6.42p

6.31p

6.25p

5.25p

Cash dividend cover - pre scrip

1.2x

1.0x

1.1x

1.2x

1.8x

Debt outstanding

£365m

£270m

£270m

£217m

£0m

Gearing level (Debt/GAV)

37%

31%

36%

44%

0%

Weighted Average Cost of Capital

5.6%

5.8%

5.9%

5.8%

7.5%

Weighted Average Lease Life

23.4 years

23.3 years

24.6 years

25.7 years

26.2 years

Shareholder total return - cumulative since IPO

37.4%

33.6%

26.7%

6.1%

5.9%

Shareholder total return - annualised since IPO

8.4%

8.5%

9.1%

3.2%

6.3%

Shareholder total return for period

3.4%

6.2%

21.1%

0.2%

5.9%

FTSE All Share total return for period

7.9%

1.4%

20.9%

(3.6%)

5.5%

NAV total return

3.1%

6.3%

14.4%

3.7%

3.3%

NAV total return - annualised since IPO

7.0%

7.0%

4.9%

1.9%

4.0%

Invested Capital

£894m

£734m

£522m

£481m

£252m

Ongoing Charges Ratio

1.1%

1.1%

1.2%

1.2%

1.5%

Weighted Average Discount Rate

7.3%

7.3%

7.9%

7.7%

7.5%







Operational KPI






Number of assets

87

63

41

33

16

Total capacity

691 MW

569 MW

454 MW

414 MW

217 MW

Electricity production (generation)

480GWh

451GWh

394GWh

225GWh

23GWh

% increase (period-on-period)

6%

14%

75%

870%

-

Irradiation (delta vs. budget)

+8.4%

(0.9%)

(0.3%)

+0.4%

(0.4%)

Generation (delta vs. budget)

+7.9%

+0.9%

+3.3%

+4.1%

+4.8%

Asset Management Alpha

(0.5%)

+1.8%

+3.6%

+3.7%

+5.2%

Structure

The Company is a Guernsey registered closed-ended investment scheme.

The Company has a premium listing and its shares are traded on the London Stock Exchange under the ticker "NESF". The Group comprises the Company and HoldCos which invest in SPVs which hold the underlying solar PV assets.

Investment Objective

The Company seeks to provide investors with a sustainable and attractive dividend that increases in line with RPI over the long-term. In addition, the Company seeks to provide investors with an element of capital growth through the reinvestment of net cash generated in excess of the target dividend in accordance with the Company's investment policy.

Investment Policy

The Company's investment policy can be viewed at www.nextenergysolarfund.com

Investment Manager's Report

Investment Portfolio


Power plant

Location

Announcement Date

Regulatory Regime(1)

Status(8)

Plant Capacity (MWp)

Investment (£M)

Remaining life of the plant (years)

% of
Equity Proceeds

1

Higher Hatherleigh

Somerset

01/05/2014

1.6

Completed

6.1

7.3(5)

19.5

1.2%

2

Shacks Barn

Northamptonshire

09/05/2014

2.0

Completed

6.3

8.2(5)

18.8

1.4%

3

Gover Farm

Cornwall

23/06/2014

1.4

Completed

9.4

11.1(5)

20.5

1.9%

4

Bilsham

West Sussex

03/07/2014

1.4

Completed

15.2

18.9(5)

21.1

3.2%

5

Brickyard

Warwickshire

14/07/2014

1.4

Completed

3.8

4.1(5)

26.5

0.7%

6

Ellough

Suffolk

28/07/2014

1.6

Completed

14.9

20.0(5)

21.5

3.4%

7

Poulshot

Wiltshire

09/09/2014

1.4

Completed

14.5

15.7(5)

21.5

2.7%

8

Condover

Shropshire

29/10/2014

1.4

Completed

10.2

11.7(5)

21.1

2.0%

9

Llywndu

Ceredigion

22/12/2014

1.4

Completed

8.0

9.4

20.4

1.6%

10

Cock Hill Farm

Wiltshire

22/12/2014

1.4

Completed

20.0

23.6

21.2

4.0%

11

Boxted Airfield

Essex

31/12/2014

1.4

Completed

18.8

20.6(5)

21.1

3.5%

12

Langenhoe

Essex

12/03/2015

1.4

Completed

21.2

22.9(5)

21.2

3.9%

13

Park View

Devon

19/03/2015

1.4

Completed

6.5

7.7(5)

21.5

1.3%

14

Croydon

Cambridgeshire

27/03/2015

1.4

Completed

16.5

17.8(5)

31.2

3.0%

15

Hawkers Farm

Somerset

13/04/2015

1.4

Completed

11.9

14.5(5)

20.7

2.4%

16

Glebe Farm

Bedfordshire

13/04/2015

1.4

Completed

33.7

40.5(5)

21.5

6.8%

17

Bowerhouse

Somerset

18/06/2015

1.4

Completed

9.3

11.1(5)

36.2

1.9%

18

Wellingborough

Northamptonshire

18/06/2015

1.6

Completed

8.5

10.8(5)

21.7

1.8%

19

Birch Farm

Essex

21/10/2015

FiT

Completed

5.0

5.3(5)

27.5

0.9%

20

Thurlestone Leicester

Leicestershire

21/10/2015

FiT

Completed

1.8

2.3

27.6

0.4%

21

North Farm

Dorset

21/10/2015

1.4

Completed

11.5

14.5(5)

22.3

2.4%

22

Ellough Phase 2

Suffolk

03/11/2015

1.3

Completed

8.0

8.0(5)

26.2

1.4%

23

Hall Farm

Leicestershire

03/11/2015

FiT

Completed

5.0

5.0(5)

20.9

0.8%

24

Decoy Farm

Lincolnshire

03/11/2015

FiT

Completed

5.0

5.2(5)

14.6

0.9%

25

Green Farm

Essex

26/11/2015

FiT

Completed

5.0

5.8

21.8

1.0%

26

Fenland

Cambridgeshire

11/01/2016

1.4

Completed

20.4

23.9(2,3)

21.9

4.0%

27

Green End

Cambridgeshire

11/01/2016

1.4

Completed

24.8

29.0(2,3)

21.5

4.9%

28

Tower Hill

Gloucestershire

11/01/2016

1.4

Completed

8.1

8.8(2,3)

22.5

1.5%

29

Branston

Lincolnshire

05/04/2016

1.4

Completed

18.9


27.0


30

Great Wilbraham

Cambridgeshire

05/04/2016

1.4

Completed

38.1


23.0


31

Berwick

East Sussex

05/04/2016

1.4

Completed

8.2

97.9(2,4)

26.5

16.5%

32

Bottom Plain

Dorset

05/04/2016

1.4

Completed

10.1


26.6


33

Emberton

Buckinghamshire

05/04/2016

1.4

Completed

9.0


26.4


34

Kentishes

Essex

22/11/2016

1.2

Completed

5.0

4.5

23.2

0.8%

35

Mill Farm

Hertfordshire

04/01/2017

1.2

Completed

5.0

4.2

23.2

0.7%

36

Bowden

Somerset

04/01/2017

1.2

Completed

5.0

5.6

23.4

0.9%

37

Stalbridge

Dorset

04/01/2017

1.2

Completed

5.0

5.4

23.5

0.9%

38

Aller Court

Somerset

21/04/2017

1.2

Completed

5.0

5.5

23.5

0.9%

39

Rampisham

Dorset

21/04/2017

1.2

Completed

5.0

5.8

23.2

1.0%

40

Wasing

Berkshire

21/04/2017

1.2

Completed

5.0

5.3

24.0

0.9%

41

Flixborough South

Humberside

21/04/2017

1.2

Completed

5.0

5.1

24.0

0.9%

42

Hill Farm

Oxfordshire

21/04/2017

1.2

Completed

5.0

5.5

21.7

0.9%

43

Forest Farm

Hampshire

21/04/2017

1.2

Completed

3.0

3.3

33.5

0.6%

44

Birch CIC

Essex

12/06/2017

FiT

Completed

1.7

1.7

23.5

0.3%

45

Barnby

Nottinghamshire

12/06/2017

1.2

Completed

5.0

5.4

23.8

0.9%

46

Bilsthorpe

Nottinghamshire

12/06/2017

1.2

Completed

5.0

5.4

24.2

0.9%

47

Wickfield

Wiltshire

12/06/2017

1.2

Completed

4.9

5.6

24.6

1.0%

48

Bay Farm

Suffolk

18/08/2017

1.6

Completed

8.1

10.5

21.3

1.8%

49

Honington

Suffolk

18/08/2017

1.6

Completed

13.6

16.0

21.4

2.7%

50

Macchia Rotonda

Apulia

01/11/2017

FiT

Completed

6.6


28.0


 

51

Iacovangelo

Apulia

01/11/2017

FiT

Completed

3.5


23.4


 

52

Armiento

Apulia

01/11/2017

FiT

Completed

1.9


26.1


 

53

Inicorbaf

Apulia

01/11/2017

FiT

Completed

3.0

116.2(2,6)

28.5

19.6%

 

54

Gioia del Colle

Campania

01/11/2017

FiT

Completed

6.5


27.4


 

55

Carinola

Apulia

01/11/2017

FiT

Completed

3.0


27.7


 

56

Marcianise

Campania

01/11/2017

FiT

Completed

5.0


17.3


 

57

Riardo

Campania

01/11/2017

FiT

Completed

5.0


17.6


 

58

Gilley's Dam

Cornwall

18/12/2017

1.3

Completed

5.0

6.4

17.6

1.1%

 

59

Pickhill Bridge

Clwyd

18/12/2017

1.2

Completed

3.6

3.7

17.4

0.6%

 

60

North Norfolk

Norfolk

01/02/2018

1.6

Completed

11.0

14.6

18.1

2.5%

 

61

Axe View

Devon

01/02/2018

1.2

Completed

5.0

5.6

18.1

1.0%

 

62

Low Bentham

Lancashire

01/02/2018

1.2

Completed

5.0

5.4

18.0

0.9%

 

63

Henley

Shropshire

01/02/2018

1.2

Completed

5.0

5.2

18.0

0.9%

 

64

Pierces Farm

Berkshire

30/05/2018

FiT

Completed

1.7

1.2

20.6

0.2%

 

65

Salcey Farm

Buckinghamshire

30/05/2018

1.4

Completed

5.5

6.5

20.6

1.1%

 

66

Thornborough

Buckinghamshire

25/06/2018

1.2

Completed

5.0

5.7

22.5

1.0%

 

67

Temple Normaton

Derbyshire

25/06/2018

1.2

Completed

4.9

5.6

22.8

1.0%

 

68

Fiskerton Phase 1

Lincolnshire

25/06/2018

1.3

Completed

13.0

16.6

31.5

2.8%

 

69

Huddlesford HF

Staffordshire

25/06/2018

1.2

Completed

0.9

0.9

22.3

0.1%

 

70

Little Irchester

Northamptonshire

25/06/2018

1.2

Completed

4.7

5.9

23.3

1.0%

 

71

Balhearty

Clackmannanshire

25/06/2018

FiT

Completed

4.8

2.6

23.2

0.4%

 

72

Brafield

Northamptonshire

25/06/2018

1.2

Completed

4.9

5.8

22.5

1.0%

 

73

Huddlesford PL

Staffordshire

25/06/2018

1.2

Completed

0.9

0.9

2.6

0.2%

 

74

Sywell

Northamptonshire

25/06/2018

1.2

Completed

5.0

5.9

22.6

1.0%

 

75

Coton Park

Derbyshire

25/06/2018

FiT

Completed

2.5

1.1

32.3

0.2%

 

76

Hook

Somerset

11/07/2018

1.6

Completed

15.3

21.9(2)

20.0

3.7%

 

77

Blenches

Wiltshire

11/07/2018

1.6

Completed

6.1

7.8(2)

20.2

1.3%

 

78

Whitley

Somerset

11/07/2018

1.6

Completed

7.6

10.5(2)

20.5

1.8%

 

79

Burrowton

Devon

11/07/2018

1.6

Completed

5.4

7.3(2)

20.0

1.2%

 

80

Saundercroft

Devon

11/07/2018

1.6

Completed

7.2

9.6(2)

21.0

1.6%

 

81

Raglington

Hampshire

11/07/2018

1.6

Completed

5.7

8.1(2)

35.3

1.4%

 

82

Knockworthy

Cornwall

11/07/2018

FiT

Completed

4.6

6.6(2)

19.5

1.1%

 

83

Chilton Canetello

Somerset

11/07/2018

FiT

Completed

5.0

9.0(2)

18.8

1.5%

 

84

Crossways

Dorset

11/07/2018

FiT

Completed

5.0

10.1(2)

19.4

1.7%

 

85

Wyld Meadow

Dorset

11/07/2018

FiT

Completed

4.8

7.1(2)

21.1

1.2%

 

86

Ermis - rooftops

Multiple

07/08/2018

FiT

Completed

1.0

3.0

18.1

0.5%

 

87

Angelia - rooftops

Multiple

07/08/2018

FiT

Completed

0.2

0.6

18.0

0.1%

 

Total





690.8

893.8


151.0%(7)

 

A

Francis/Gourton

Clwyd

16/06/2017

None

Option to build

10.0

-

-

-

 

B

Glebe

Worcestershire

16/06/2017

None

Option to build

19.6

-

-

-

 

C

Radbrook

Warwickshire

16/06/2017

None

Option to build

20.7

-

-

-

 

D

Moss

Cheshire

16/06/2017

None

Option to build

9.5

-

-

-

 

E

Staughton

Bedfordshire

-

None

Option to build

50.0

-

-

-

 

F

Llanwern

Gwent

-

None

Option to build

62.5

-

-

-

 

Total





172.3

-

-

-

 

 

(1)   An explanation of ROC regime is available at www.ofgem.gov.uk/environmental-programmes/renewables-obligation-ro.

(2)   Acquired with project level debt already in place.

(3)   Part of the Three Kings portfolio.

(4)   Part of the Radius portfolio.

(5)   Part of the Apollo portfolio.

(6)   Part of the Solis portfolio.

(7)   Greater than 100% due to debt financing.

(8)   Completed - the asset is operational, and the acquisition completed.

Portfolio Assets





Period ended 30 September 2018


Since acquisition



Operational

Acquisition


Irradiation

Generation


Irradiation

Generation


Power plant

date

date

Generation

delta

delta

Generation

delta

delta





(MWh)

(%)

(%)

(MWh)

(%)

(%)

1

Higher Hatherleigh

Apr-14

May-14

4,529

3.9

6.2

28,021

(0.6)

4.1

2

Shacks Barn

May-14

May-14

4,779

10.2

14.7

28,534

1.6

8.2

3

Gover Farm

Jan-15

Jun-14

5,484

3.9

(17.4)(1)

35,191

1.0

(1.4)

4

Bilsham

Jan-15

Jul-14

12,168

9.7

8.4

63,172

3.1

5.5

5

Brickyard

Jan-15

Jul-14

2,687

10.5

5.2

13,882

1.7

4.0

6

Ellough

Jul-14

Jul-14

11,722

7.5

10.7

64,487

(0.6)

5.5

7

Poulshot

Apr-15

Sep-14

10,658

4.8

8.7

46,746

(1.2)

3.6

8

Condover

May-15

Oct-14

7,478

6.8

8.7

33,367

(1.1)

1.0

9

Llywndu

Jul-15

Dec-14

5,897

1.5

6.6

24,776

(5.3)

0.0

10

Cock Hill Farm

Jul-15

Dec-14

14,427

6.4

3.6

64,307

0.3

1.9

11

Boxted Airfield

Apr-15

Dec-14

14,805

10.1

10.7

70,442

2.2

4.6

12

Langenhoe

Apr-15

Mar-15

17,505

12.7

15.7

82,862

4.8

8.5

13

Park View

Jul-15

Mar-15

4,786

(1.5)

0.3

21,329

(4.6)

(1.0)

14

Croydon

Apr-15

Mar-15

12,551

15.1

15.9

59,641

4.4

6.5

15

Hawkers Farm

Jun-15

Apr-15

8,915

2.6

4.3

40,049

(2.1)

1.4

16

Glebe Farm

May-15

Apr-15

26,599

13.8

18.9

118,438

3.7

9.7

17

Bowerhouse

Jul-15

Jun-15

6,505

5.6

(0.8)

29,825

0.1

0.2

18

Wellingborough

Jun-15

Jun-15

6,341

10.8

11.2

28,119

0.1

4.5

19

Birch Farm

Sep-15

Oct-15

3,899

10.4

9.6

15,364

2.6

4.9

20

Thurlestone Leicester -










rooftops(2)

Oct-15

Oct-15

N/A

N/A

N/A

N/A

N/A

N/A

21

North Farm

Oct-15

Oct-15

9,074

2.7

2.2

35,765

(5.2)

(3.3)

22

Ellough Phase 2

Aug-16

Nov-15

6,323

13.8

12.2

18,542

7.7

10.8

23

Hall Farm

Apr-16

Nov-15

3,676

10.7

10.7

8,763

2.4

(4.6)

24

Decoy Farm

Mar-16

Nov-15

3,921

11.1

13.8

10,310

2.7

7.6

25

Green Farm

Dec-16

Nov-15

3,894

9.2

8.9

9,587

2.8

2.7

26

Fenland

Jan-16

Jan-16

16,267

10.8

15.3

60,221

3.0

7.9

27

Green End

Jan-16

Jan-16

18,808

11.4

9.9

70,551

2.7

4.2

28

Tower Hill

Jan-16

Jan-16

6,196

5.6

9.8

23,239

1.4

5.5

29

Branston

Mar-16

Apr-16

12,894

14.2

1.8

48,591

4.8

1.6

30

Great Wilbraham

Mar-16

Apr-16

29,974

14.4

14.4

102,395

3.6

4.1

31

Berwick

Mar-16

Apr-16

6,816

9.5

9.8

25,084

4.5

7.4

32

Bottom Plain

Mar-16

Apr-16

8,104

9.4

9.5

28,560

1.6

2.5

33

Emberton

Mar-16

Apr-16

6,962

13.7

12.5

23,896

2.8

2.5

34

Kentishes

Jul-17

Nov-16

4,012

11.0

9.1

8,407

4.5

4.3

35

Mill Farm

Jul-17

Jan-17

3,920

14.7

12.1

8,273

6.9

7.6

36

Bowden


Sep-17

Jan-17

3,851

1.9

(0.6)

5,592

(1.6)

(1.3)

37

Stalbridge


Sep-17

Jan-17

3,912

2.2

4.1

5,706

(1.1)

3.8

38

Aller Court


Sep-17

Apr-17

3,829

3.0

2.4

5,568

1.4

2.3

39

Rampisham


Sep-17

Apr-17

3,961

0.9

(0.2)

5,564

(2.4)

(3.1)

40

Wasing


Aug-17

Apr-17

4,014

12.3

13.9

6,351

5.8

9.3

41

Flixborough


Aug-17

Apr-17

3,712

8.9

9.4

5,827

3.7

5.7

42

Hill Farm


Mar-17

Apr-17

3,892

13.1

15.0

5,221

7.6

8.5

43

Forest Farm


Mar-17

Apr-17

2,381

9.5

12.1

3,212

4.4

8.2

44

Birch CIC


May-17

Jun-17

1,340

10.5

7.4

2,806

4.0

3.3

45

Barnby


Aug-17

Jun-17

3,712

11.5

12.1

5,632

4.7

6.5

46

Bilsthorpe


Aug-17

Jun-17

3,783

10.9

12.5

5,757

3.8

7.0

47

Wickfield


Mar-17

Jun-17

3,555

8.2

4.0

4,930

4.3

2.7

48

Bay Farm


Sep-17

Aug-17

5,751

13.2

7.8

8,851

7.2

3.7

49

Honington


Sep-17

Aug-17

10,010

8.3

6.6

14,717

3.2

(0.3)

50

Macchia Rotonda


Nov-17

Nov-17

6,400

4.7

6.3

8,513

0.9

2.9

51

Iacovangelo


Nov-17

Nov-17

3,383

4.8

6.2

4,556

0.9

3.5

52

Armiento


Nov-17

Nov-17

1,825

4.4

5.9

2,472

0.6

3.2

53

Inicorbaf


Nov-17

Nov-17

2,889

2.8

6.1

3,938

(0.5)

2.8

54

Gioia del Colle

Italy

Nov-17

Nov-17

6,062

(3.1)

2.1

8,134

(4.5)

(0.9)

55

Carinola


Nov-17

Nov-17

2,744

0.2

4.8

3,605

(3.6)

0.1

56

Marcianise


Nov-17

Nov-17

4,437

(0.3)

0.8

5,923

(3.1)

(2.6)

57

Riardo



Nov-17

Nov-17

4,495

0.2

0.1

5,889

(3.1)

(4.9)

58

Gilley's Dam


Nov-17

Dec-17

3,697

(3.6)

(2.2)

4,649

(5.1)

(2.6)

59

Pickhill Bridge


Dec-17

Dec-17

2,804

12.1

14.1

3,396

8.7

11.3

60

North Norfolk


Dec-17

Feb-18

8,367

8.6

8.1

10,037

5.8

6.5

61

Axe View


Dec-17

Feb-18

3,759

7.4

6.6

4,562

5.4

5.5

62

Low Bentham


Dec-17

Feb-18

3,592

5.8

5.8

4,357

4.8

6.0

63

Henley


Jan-18

Feb-18

3,669

7.8

9.9

4,326

4.6

6.9

64

Pierces Farm


May-18

May-18

928

15.2

12.0

928

15.2

12.0

65

Salcey Farm


May-18

May-18

2,738

11.6

7.5

2,738

11.6

7.5

66

Thornborough


Jun-18

Jun-18

1,422

12.9

(27.3)(1)

1,422

12.9

(27.3)

67

Temple Normaton


Jun-18

Jun-18

1,744

15.3

(3.2)

1,744

15.3

(3.2)

68

Fiskerton Phase


Jun-18

Jun-18

5,092

17.8

4.0

5,092

17.8

4.0

69

Huddlesford HF


Jun-18

Jun-18

353

16.1

8.3

336

16.1

8.3

70

Little Irchester


Jun-18

Jun-18

1,385

17.1

(24.6)(1)

1,385

17.1

(24.6)

71

Balhearty


Jun-18

Jun-18

1,379

4.4

(16.8)(1)

1,379

4.4

(16.8)

72

Brafield


Jun-18

Jun-18

1,784

17.2

(7.1)

1,784

17.2

(7.1)

73

Huddlesford PL


Jun-18

Jun-18

386

15.4

13.0

363

15.4

13.0

74

Sywell


Jun-18

Jun-18

1,604

18.7

(16.4)(1)

1,604

18.7

(16.4)

75

Coton Park


Jun-18

Jun-18

942

13.9

9.8

942

13.9

9.8

76

Hook


Jul-18

Jul-18

4,996

8.7

4.0

4,996

8.7

4.0

77

Blenches


Jul-18

Jul-18

1,974

6.6

8.1

1,974

6.6

8.1

78

Whitley


Jul-18

Jul-18

2,440

4.2

3.2

2,440

4.2

3.2

79

Burrowton


Jul-18

Jul-18

4,019

2.1

3.0

4,019

2.1

3.0

80

Saundercroft


Jul-18

Jul-18

81

Raglington


Jul-18

Jul-18

1,963

9.0

6.9

1,963

9.0

6.9

82

Knockworthy


Jul-18

Jul-18

1,538

1.3

2.6

1,538

1.3

2.6

83

Chilton Canetello


Jul-18

Jul-18

1,755

9.1

10.4

1,755

9.1

10.4

84

Crossways


Jul-18

Jul-18

1,892

8.8

11.3

1,892

8.8

11.3

85

Wyld Meadow


Jul-18

Jul-18

1,680

0.5

4.5

1,680

0.5

4.5

86

Ermis - rooftops(2)


Aug-18

Aug-18

N/A

N/A

N/A

N/A

N/A

N/A

87

Angelia - rooftops(2)


Aug-18

Aug-18

N/A

N/A

N/A

N/A

N/A

N/A

Total




480,416

8.4

7.9

1,552,801

1.6

4.2

(1)   Underperformance is due to defects which were known at the time of acquisition and are currently in the process of being rectified. These are expected to be fully rectified within the next 12 months.

(2)   Rooftop assets are not monitored for generation and irradiation.

Investment Manager's Report

About NextEnergy Capital

The Investment Manager and Investment Adviser are both members of the NEC Group. The NEC Group is a specialist investment and operating asset manager focused on the solar energy sector, with over 125 staff across its offices in UK and Italy. Through its operating asset management division, WiseEnergy, the NEC Group has managed and monitored over 1,300 utility-scale solar plants and approximately 720 solar rooftop installations (comprising an installed capacity in excess of 1.9GW) for a client base which includes leading European banks and equity investors (including private equity funds, listed funds and institutional investors). The NEC Group also manages NextPower II LP, a €184m private equity fund dedicated to PV investments in Italy. Related party transactions with the Investment Manager, Investment Adviser and the Operating Asset Manager are detailed in note 17 of the Condensed Interim Financial Statements.

Portfolio Highlights

During the period, the portfolio grew from 63 to 87 assets, which represented an increase of 122MW to the portfolio capacity.

In May 2018, the Company announced the acquisition of two operating solar plants of 7.2MW with integrated battery energy storage systems of 1MW capacity.

In June 2018, the Company acquired ten operating solar plants with total installed capacity of 46.6MW with subsidies including ROC and FiTs.

In July 2018, the Company announced a further ten operating solar plants in the UK with installed capacity of 66.8MW. The assets were purchased with a long-term debt facility of £58.3m already in place. The Company entered into an RCF for £40m with Santander to finance part of the transaction.

These acquisitions utilised the remaining proceeds from the capital raised in the previous year. The Company has now fully invested all its share capital.

At period end, all the Company's assets that were completed, were operational and connected to the grid and qualified for ROC or FiT subsidies.

The summer of 2018 was one of the hottest in UK history and multiple solar irradiation records were broken. With these high temperatures, the asset manager had to cope with the adverse effects of this weather pattern on the performance ratios of the solar plants, which are optimal at lower than 25 degrees Centigrade. The estimated loss of generation due to high temperature is 1.8% of the total energy production. Furthermore, some plants suffered from grid curtailment, as generation peaks driven by exceptional irradiation levels exceeded at times the export capacity allocated by the grid authority to each plant.

In Italy, as the weather pattern was not unusual during the period, the Solis portfolio had an irradiation delta of +1.2%, generation delta of +3.6% which resulted in an Asset Management Alpha of +2.4%.

Overall, the operational performance of the portfolio during the period was positive and above budget. The resulting negative Asset Management Alpha of -0.5% (2017: +1.5%) was an expected outcome of these exceptional weather conditions and does not represent any change in the ability to obtain future overperformance.

As at 30 September 2018, the actual performance versus expectations for 84 of the portfolio solar PV assets had been managed and monitored by the Asset Manager for at least two months post completion. Rooftop assets are excluded as irradiation is not monitored. This sub-portfolio of solar PV assets generated an outperformance of +7.9% above the budgeted generation values, for a total generation of 480GWh.

The Asset Management Alpha measurement allows the Company to identify the "real" outperformance of the portfolio due to active management, excluding the effect of variation in solar irradiation. The "nominal" outperformance is calculated as GWh generated by the portfolio vs. the GWh expected in the assumptions used at the time of acquisition. The negative Alpha registered in the period was expected in such higher temperature and solar irradiation conditions which have driven the significant portfolio overperformance.

Period

Assets monitored

Irradiation
(delta vs. budget)

Generation
(delta vs. budget)

Asset Management Alpha

First half 2015/16

17

+2.9%

+5.7%

+2.8%

First half 2016/17

31

+0.0%

+3.2%

+3.2%

First half 2017/18

41

+0.5%

+2.0%

+1.5%

First half 2018/19

84

+8.4%

+7.9%

-0.5%

Cumulative from IPO to 30 September 2018

84

+1.6%

+4.2%

+2.6%

Current and Long-Term Power Prices

The Investment Manager continuously reviews multiple inputs for power price forecasts and takes the average of two of the leading independent energy market consultants' (the "Consultants") long-term projections to derive the power curve adopted in the valuation of the Company's portfolio. This approach allows mitigation of inevitable forecasting errors as well as any delay in response from the Consultants in publishing periodic (quarterly) or ad hoc updates following any significant market development.

During the period, the Consultants revised their forecasts for the UK wholesale power price upwards on average and project a lower real growth rate. Factors that contributed to these revisions include the stronger commodity prices in the near-term relative to recent years driven by the expectation of cold winters, a decline in gas storage as well as oil supply in the UK and the increasing demand from gas generation. In the long-term, wholesale prices are expected to increase in line with gas and carbon prices but counterbalanced by the growth in low-cost renewable generation.

The power price forecasts used by the Company also reflect an assumed "solar capture" discount which reflects the difference between the prices available on the market in the daylight hours of operation of a solar plant vs. the baseload prices included in the power price estimates. This solar capture discount is estimated by the Consultants on the basis of a typical load profile of a solar plant located in the UK and is reviewed as frequently as the baseload power price forecasts. The application of such a discount results in a lower long-term price expected for solar assets driven by the deployment projections of low-cost renewable capacity.

The Company's current long-term power price forecast implies an average growth rate of approximately 0.2% in real terms over the 20-year period and an average price of c.£53/MWh in today's terms. This represents an increase of 1.0% compared to those used at the end of the previous reporting year (and 35.3% below the assumptions employed at IPO).

Compared to the previous interim period end, electricity day ahead prices in the UK rose from c.£46/MWh in September 2017(1) to c.£67/MWh in September 2018(1). The Company continues to secure attractive prices for the energy generated by its portfolio through its electricity sales strategy with short to medium term prices significantly above the projections provided by its Consultants. Following a similar trend, the Italian purchasing price of electricity rose from c.€49/MWh in September 2017(2) to c.€76/MWh in September 2018(2). The Investment Manager continues to observe an upward trend both in the day ahead and forward electricity markets after the period end.

(1)   Source: N2EX - UK Baseload - day ahead

(2)   Source: Gestore del Mercato Elettrico S.p.A. 

Financial Results

Profit before tax was £18.7m (30 September 2017: £14.0m), with earnings per share of 3.23p (30 September 2017: 2.69p).

Dividends

During the period, the Company paid dividends in relation to two quarterly accounting periods: the fourth interim dividend for the financial year 2017/18 (of 1.605p per ordinary share) and the first quarterly dividend for the financial year 2018/19 (of 1.6625p per ordinary share). As a result, the Company achieved its target for total dividends for financial year 2017/18 of 6.42p per ordinary share.

As stated in the Chairman's Statement, the Company is targeting to pay a dividend of 6.65p per ordinary share for financial year 2018/19, which represents a growth in line with RPI applicable to the underlying portfolio revenues. During the period, the Company generated income of £26.3m and had net operating costs of £3.2m. The net cash dividend cover for the period before taking into account scrip dividends was 1.2x (2017: 1.0x). This improvement in the dividend cover was mainly driven by the greater levels in energy generation (+7.9% over expectations) during the period.

In future periods, it is expected that the dividend cover will significantly benefit from the optimised capital structure following the £100m issuance of Preference Shares. The Investment Manager expects to be able to maintain a dividend cover of 1.2x in the long term, based on current assumptions and a full deployment of the £200m Preference Shares programme.

The material difference between Dividend Cover pre and post scrip is due to the relatively high scrip election (4.6m shares) during the period. The Company still benefits from additional sources of capital to deploy in further assets, or extension of the current portfolio.

Income for the period ended 30 September 2018 includes £14.5m (2017: £4.1m) which has been retained in certain subsidiaries as their respective banking covenants only permit cash to flow out twice a year. This is shown as a receivable on the Condensed Interim Statement of Financial Position. If these banking restrictions did not exist, the cash would have flowed up to the Company on or before 30 September 2018.

Dividends paid

Month of payment

Amount per ordinary
share (p)

Total
pre scrip
£'000

Total
pre scrip
£'000

For the year 2014/15


5.2500

10,946

10,946

For the year 2015/16


6.2500

17,372

17,372

For the year 2016/17


6.3100

25,039

20,681

First quarterly dividend for year 2017/18

Sep-17

1.6050

9,171

7,336

Second quarterly dividend for year 2017/18

Dec-17

1.6050

9,197

6,922

Third quarterly dividend for year 2017/18

Mar-18

1.6050

9,232

8,719

Fourth quarterly dividend for year 2017/18

Jun-18

1.6050

9,239

6,760

First quarterly dividend for year 2018/19

Sep-18

1.6625

9,608

7,105

Total dividends declared to date


25.8925

99,804

85,841

Second quarterly dividend for year 2018/19

Dec-18

1.6625

9,646

9,646(1)






Income

Total
£'000




Income for period to 30 September 2018

26,349




Net operating costs for period to 30 September 2018

(3,293)




Net income

23,056









Dividends during period



18,847

13,865

Net Dividend cover



1.2x

1.7x






(1)   Before election of scrip dividend.










The forecast dividend calendar is set out in the table below:








Proposed dividend for year 2018/19



Date of expected payment

Forecast amount per ordinary
share (p)

Second interim



December 2018

1.6625

Third interim



March 2019

1.6625

Fourth interim



June 2019

1.6625

Total




4.9875

Operating Costs

The operating costs of the Company for the period amounted to £3.3m. The Company's annualised OCR for the period was 1.1% (2017: 1.1%), in line with the budget. The budgeted OCR for the year ending 31 March 2019 is 1.1%.

Valuation of the Investment Portfolio

The Investment Manager is responsible for carrying out the fair market valuation of the Company's underlying investment portfolio, as described in note 6 of the Condensed Interim Financial Statements. The resulting fair market value of the Company's investment portfolio is presented to the Company's Board for their review and approval. The valuation is carried out quarterly or more often if capital increases or other relevant events arise. The valuation principles used are based on a discounted cash flow methodology and take into account IPEV guidelines.

The Investment Manager reviews multiple sources and inputs in determining the fair market value of the underlying investments, including analysing all announced solar transactions in the UK during the period as well as undertaking a discounted cash flow analysis of each investment made by the Company. The Investment Manager exercises its judgement based on its expertise in the solar PV market and in assessing the expected future cash flows from each investment. In the discounted cash flow analysis, the fair value for each operating asset is derived from the present value of the investment's expected future cash flows, using reasonable assumptions and forecasts for revenues and operating costs, and an appropriate discount rate.

For solar PV assets not yet operational or where the completion of the acquisition is not imminent at the time of valuation, the acquisition cost is used as an appropriate estimate of fair value.

The Board reviews the operating and financial assumptions, including the discount rates, used in the valuation of the Company's underlying portfolio and approves them based on the recommendation of the Investment Manager. The valuation process comprises the analysis of multiple factors, all relevant to ascertain the fair value of the portfolio, including:

●     discount rates implied in the price at which comparable transactions have been announced in the solar PV sector (including those where the Investment Manager submitted a bid for the same projects that was not deemed competitive by the vendors);

●     discount rates publicly disclosed by the Company's peers in the solar PV sector;

●     discount rates applicable for other comparable infrastructure assets classes or regulated energy sectors;

●     capital asset pricing model analysis and risk premia over relevant risk-free rates;

●     macro-economic assumptions including inflation, taxation and regulation; and

●     key project specific assumptions.

During the period, the solar PV market continued to experience increased competition for operating and subsidised assets on the secondary market. In the context of high liquidity provided to international investors, a maturing renewable market, a scarcity of subsidised assets and lack of any incentive framework for new installations, demand for operating solar assets remained strong and sustained pressure on prices observed in the last year. These changing dynamics were evidenced by the experience of the Investment Manager in bidding for solar PV assets in the UK.

As a result, during the period the Company maintained its discount rate for unlevered operating solar PV assets at 6.75% and will continue to monitor this rate.

For those operating solar assets with fully-amortising long-term project level debt (the Apollo portfolio, the Radius portfolio, the Three Kings portfolio, the Solis portfolio and the ten projects acquired in July 2018), the Company adopts a levered discount rate to capture the greater level of risk associated with the cash flows available to equity investors after debt service. The appropriate level of risk premium due to project level debt was evaluated taking into account various factors for each specific asset, including the level of financial gearing, maturity profile, cost of debt and other factors mentioned above. This range was unchanged from the previous period (0.7% - 1.0%).

For solar assets outside the UK, an additional country risk premium has been applied. For the Solis portfolio this premium was 1.25%, which is substantial considering the difference in risk free rates on long-term securities ranging from 0.5% - 1.0% depending on maturity. It is also worth noting that the underlying revenues from the Solis portfolio have lower volatility due to market power prices than average UK assets, and that the currency hedge effectively mitigates FX exposure. As a result, the levered discount rate applied to the Solis portfolio was 9.0%.

The resulting weighted average discount rate for the Company's portfolio was 7.3%.

The Company does not adopt WACC as a discount rate for its investments, as it believes that the reduction in WACC deriving from the introduction of long-term debt financing does not reflect the greater level of risk to equity investors associated with levered assets or levered portfolios. However, for the purposes of transparency, the Company's pre-tax WACC as of 30 September 2018 was 5.6%. Compared to year end's WACC of 5.8% this value reflects an increase in the overall gearing from 31% to 37%, as further described below.

The value uplift generated by the assets valued for the first time on a DCF basis demonstrates how the new acquisitions are adding value compared to the applicable discount rates.

The DCF methodology implemented in the portfolio valuation assumes a valuation time-horizon capped to the current terms of the lease and planning permission on the properties where each individual solar PV asset is located. These leases have been typically entered into for a 25-year period from commissioning of the relevant PV plants (specific terms may vary). However, the useful operating life of the Company's portfolio of solar PV assets is expected to be longer than 25 years. This is due to many factors, including: a) solar PV assets with technology components similar to the ones deployed in the Company's portfolio have been demonstrated to be capable of operating for over 40 years, with levels of technical degradation lower than those assumed or guaranteed by the manufacturers; b) local planning authorities have already granted initial planning consents that do not expire and/or have granted permissions to extend initial consented periods; and c) the Company owns rights to supply electricity into the grid through connection agreements that do not expire. The Company continues to seek to extend the useful life of its assets, mainly by extending the terms of the property leases for some projects with the intention of extending leases for others in due course. During the period, four assets in the portfolio which had already secured unilateral lease extensions have received an extension to the planning consent for up to 15 years. The Company expects to secure further lease or planning extensions by the end of the financial year therefore securing additional value for the existing portfolio.

As at 30 September 2018, the remaining weighted average lease life of the Company's portfolio was 23.4 years. For illustrative purposes, should the entire portfolio of assets be valued on a 35-year basis from connection (assuming current lease terms) the Company's NAV would increase by c.7.4% (112.6p). The table on pages 8 to 9 provides the remaining lease duration for each of the Company's assets as at 30 September 2018. The DCF valuation assumes a zero-terminal value at the end of the lease term for each asset or the end of the planning permission, whichever is the earlier.

As to the other main operating assumptions adopted in the DCF valuation of the portfolio, the Company conservatively values each solar PV asset on the basis of the minimum Performance Ratio guaranteed by the vendor or on the basis of the Performance Ratio estimated by the appointed technical adviser during due diligence. These estimates are generally lower than the actual Performance Ratios that the Company has been experiencing during subsequent operations. The Investment Manager deems it appropriate to adopt the actual Performance Ratio after two years of operating history, when, typically the plants have satisfied the final acceptance tests and received FAC certification.

As at 30 September 2018, 49 of the UK solar PV assets in the investment portfolio had FAC certification and their actual Performance Ratio was used in the DCF valuation, generating an uplift. This represents 378MW of the portfolio. The remaining plants are expected to reach their two-year operating life milestone and begin relevant FAC tests according to the timeline below.

Financial quarter ending December 2018:

90MW

Financial quarter ending March 2019:

75MW

Financial quarter ending June 2019:

50MW

Financial quarter ending September 2019:

47MW

Financial quarter ending December 2019:

5MW

Period from January 2020 to June 2021:

47MW

 

The Company's NAV is calculated on a quarterly basis based on the valuation of the investment portfolio determined by the Investment Manager and the other assets and liabilities of the Company provided by the Administrator. It is then reviewed, questioned and approved by the Board of Directors. All variables relating to the performance of the underlying assets are reviewed and incorporated in the process of identifying relevant drivers for the discounted cash flow valuation.

The Company experienced a small NAV growth during the period ended 30 September 2018 driven by reinvested dividend from scrip elections. As a result, the Company's NAV grew over the period from £605.0m to £609.8m as at 30 September 2018.

The evolution of the NAV per share during the period was affected by positive and negative factors. During the period NAV per share remained static at 105.1p. The static NAV per share during the period was mainly driven by the following factors:

·      the cash dividends paid during the period, the reinvestment of dividend following scrip elections and the Company's operating costs;

·      upward revisions in the forecasts for power prices adopted by the Company, 1.0% higher compared to the assumptions employed at 31 March 2018 (taking into account the most recent forecasts released by the Consultants up to the date of preparation of this interim report); and

·      the value uplift generated by the Company completing acquisitions of assets whose IRR was higher than the discount rate applied when valuing them on a discounted cash flow basis.

The investment portfolio represents an investment value of £894m. Among the investments, the Apollo portfolio is considered as one investment consisting of 21 solar PV assets, the Radius portfolio is considered as one investment consisting of five solar PV assets, and the Solis portfolio is considered as one investment consisting of eight solar PV assets.

Sensitivity Analysis

Sensitivities on the Company's NAV and detailed disclosure on the asset valuation methodologies are provided below and in note 14 of the Condensed Interim Financial Statements.

Since the Company's IPO in April 2014, the long-term power price forecast used by the Company has been revised several times with a cumulative reduction of c.36%. For the purpose of illustration, had the power price forecasts remained in line with those at the time of the IPO, the Company's NAV would be 142.2p per share.

The chart above shows the percentage change in the portfolio resulting from a change in the underlying variables. It also shows the subsequent impact on the NAV per share.

In addition to the above sensitivities on NAV, the Investment Manager has performed further specific sensitivities on valuation and cash generation over the 12 months to September 2019.

First, sensitivity on energy generation is usually a P10/P90 probability analysis on solar irradiation over ten years, which is a technical standard employed across the broader renewable energy asset class and is particularly relevant for wind assets given the significant volatility of wind energy sources year on year. The Investment Manager, based on its experience, considers that for solar PV assets, more appropriate and meaningful information is provided by the sensitivity analysis of the aggregated effect of solar irradiation and technical performance (in a reasonable range of +/-5% over the life of the DCF valuation horizon). For reference purposes, the sensitivity based on P10/P90 would have resulted in c. +/-11% impact on portfolio valuation.

Secondly, should energy prices fall by 10% from current forecasts, NESF would experience a reduction of 2.2% in its net operating cashflows, such impact being mitigated by the fixed price PPAs in place over the period.

Finally, should the portfolio achieve an outperformance of 5% throughout the 12 months to September 2019 (whether due to higher solar irradiation or asset management), total operating cashflows would increase by 7.3%. Conversely, these sensitivities on cash generation would have similar but opposite results in their respective inverted scenario.

Capital Deployment Timeline

The Company's issued share capital comprised 580,232,465 ordinary shares as at 30 September 2018, which includes scrip dividends. The Company's capital raises are detailed below:

Date

Shares issued

Equity raised (£m)

Equity invested

Time to deployment

April 2014

85,600,000

85.6

100% by September 2014

5 months

November/December 2014

95,000,000

99.6

100% by January 2015

6 weeks

February 2015

59,750,000

61.4

100% by April 2015

6 weeks

September 2015

37,607,105

38.8

100% by November 2015

6 weeks

July/August/September 2016

64,100,926

64.7

Used to repay debt facility

Immediate

November 2016

110,300,000

115.3

100% by August 2017

10 months

June 2017

115,000,000

126.5

100% by August 2018

1.2 years






Date

Debt raised (£m)  

Lender  

Amount deployed

Status

July 2015

22.7

NIBC

100%

Repaid

January 2016

45.4

Bayern Landesbank

100%

Repaid

March 2016

55.0

MIDIS

100%

Drawn

February 2017

150.0

Macquarie/NAB/CBA

100%

Drawn

November 2017

68.1

UniCredit & ING

100%

Drawn

February 2018

20.0

NIBC

Not drawn

Not drawn

July 2018

40.0

Santander

100%

Drawn

July 2018

58.3

Bayern Landesbank

100%

Drawn

 

Share Price Movement

During the period the share price increased from 111.0p to 111.5p. The table below shows the returns:


Half Year 2018/19

Total since IPO

Annualised since IPO

Shareholder total return

3.4%

37.4%

8.4%

NAV per share total return

3.1%

31.0%

7.0%

 

The annualised returns since IPO are in line with the target range of seven to nine percent equity return for investors (at IPO both NAV per share and initial issue price was 100p).

NESF's shares are included in the FTSE All-Share Index as well as the FTSE Small Cap Index. NESF's shares outperformed the FTSE All-Share Index by 5.7% over the period from the IPO to 30 September 2018.

Shareholder total return and NAV total return are used to review the Company's performance against its objectives.

Financing and Cash Management

Preference Shares

On 8 November 2018, the Shareholders agreed to amend the Company's Articles of Incorporation to create a new class of Preference Share and approved the allotment of up to £200m of shares with no pre-emption rights. Subsequently, on the 13 November 2018, the Company announced the issuance of an initial tranche of £100m Preference Shares and advised that a subsequent issue of up to £100m Preference Shares may take place before the next AGM.

The Preference shares are non-redeemable and non-voting shares which carry a fixed preferred dividend of 4.75% as well as preferred capital entitlement at nominal value. From 1 April 2036, the Preference Shareholders have the right to convert all or some of their Preference Shares into either Ordinary Shares or B shares, at the election of the holder, with B shares being unlisted shares carrying rights to dividends and capital in a liquidation ranking pari passu with Ordinary Shares. Conversion price will be at nominal value (plus unpaid dividend if any) relative to NAV per Ordinary Share at the date of conversion.

The Preference Shares give limited redemption and voting rights to the holder - redemption only in the event of a delisting or change of control of the Company and voting in a single pool with the Ordinary Shareholders in the event of changes to the Investment Policy and changes to the Articles detrimental to the rights and terms of the Preference Shares.

From 1 April 2030, the Company may elect to redeem all or some of the Preference Shares. Dividends and redemption will remain at the sole discretion of the Board of Directors of the Company during the life of the Preference Shares therefore representing no refinancing risks for Ordinary Shareholders. Should more competitive sources of capital become available, the Company may choose at its sole discretion to issue new capital (debt or equity) to fund a full or partial redemption.

The Preference Shares represent a cheaper and more flexible source of funds in terms of lower annual cash cost compared to alternative financing sources, ranging from long-term debt financing to issuance of new Ordinary Shares. This reduced cost is achieved mainly in exchange for priority of dividend payments over the Ordinary Shares.

The proceeds of the initial £100m Preference Shares will be used to repay a portion of the existing long-term project financing facilities associated with portfolio investments, thereby generating cash savings starting in the current financial year. Should the Company repay the non-optimised debt and the RCF totalling £162m through issuance of Preference Shares, the total external debt outstanding would reduce from 37% to 21% of GAV.

Benefits of the preference shares for NESF include:

·      significant increase in dividend cover and equity returns for its Ordinary Shareholders by replacing debt facilities with high cash costs (including interest and principal amortisation);

·      the option to redeem Preference Shares starting from 1 April 2030 is at the sole discretion of the Company;

·      simplify its capital structure by reducing the number of loans outstanding and the number of financial covenants for the Company;

·      reduction in the exposure to secured debt financing;

·      in recognition of the priority granted to the Preference Shareholder, the Company amended its Investment Policy to add the Preference Shares to the total debt outstanding for the purpose of the calculation of the 50% Company's leverage limit over GAV (adjusted gearing ratio); and

·      the Investment Manager agreed to waive the investment management fees related to the Preference Shares payable by the Company to the Investment Manager under the Investment Management Agreement

Preference Shares are entitled to their fixed dividend before any dividend is distributed to Ordinary shareholders. Should the Company be unable to pay a preferred dividend in full, this will be rolled over onto the following periods until it can be paid. Unpaid preferred dividends accrue at a 4.75% interest rate. Payment of preferred dividends remains at the discretion of the Board. The Preference Shares holder has no redemption rights or voting rights in case of unpaid dividends. Should unpaid dividends be rolled over, they will be included in the calculation for the purposes of determining the conversion ratio post 31 March 2036. Effectively, any unpaid dividends will eventually convert into Ordinary Shares or B shares together with the issued preferred capital.

Debt Financing

As at 30 September 2018, the total pro-forma debt position of the Company on a look-through basis was £365.3m (31 March 2018: £270.4m). This represents gearing of 37% (31 March 2018: 31%) in terms of total debt outstanding vs. GAV (which is equal to NAV plus total debt outstanding). The average cost of debt is 3.7% (31 March 2018: 3.8%).

During the period, the Company closed a £40.0m RCF with Santander and immediately deployed the proceeds. The Company also acquired projects with debt facilities in place (£58.3m with Bayern Landesbank and £1.2m with Lombard).

The table below is a summary of the debt outstanding:

Provider/Arranger

Type

Borrower

Tranches

Facility amount
£'000

Amount outstanding
£'000

Termination (including options to extend)

Applicable
rate

MIDIS/CBA/NAB

Fully-amortising long-term debt

NESH (Apollo portfolio level debt)

Tranche A - Medium-term

48,387

48,387

31-Dec-26

2.91%(1)

Tranche B - Floating long-term

24,194

24,194

30-Jun-35

3.68%(1)

Tranche C - Index linked long-term

38,710

37,302

30-Jun-35

RPI index
+ 0.36%

Tranche D - Fixed long-term

38,710

38,710

30-Jun-35

3.82%

Debt Service Reserve Facility

7,500

-

30-Jun-26

1.50%

MIDIS

Fully-amortising long-term debt

NESH IV (portfolio level debt)

Inflation linked Tranche

27,500

25,281

30-Sep-34

RPI index
+ + 1.44%

Fixed Tranche

27,500

26,891

30-Sep-34

4.11%

UniCredit

Fully-amortising long-term debt

NESH V (portfolio level debt)

Floating long-term

32,920

31,330

30-Jun-29

3.04%(1)

ING

Fully-amortising long-term debt

NESH V (portfolio level debt)

Floating long-term

35,133

33,618

30-Jun-30

4.13%(1)

NIBC

RCF

NESH II

n/a

20,000

-

13-Feb-20

LIBOR+2.20%

Santander

RCF

NESH VI

n/a

40,000

40,000

03-Jul-20

LIBOR+1.30%

Bayerische Landesbank

Fully-amortising long-term debt

NESH III (project level debt)

Tranche A - Medium-term

5,615

5,615

30-Jun-20

2.89%(1)

Tranche B - Floating long-term

52,705

52,705

31-Mar-33

4.11%(1)

Lombard

Asset purchase agreement

NESH III (project level debt)

n/a

437

437

31-Jul-21

3.48%

Lombard

Term loan

NESH III (project level debt)

n/a

816

816

12-Jun-25

4.20%

Total





365,285



 

(1)   Applicable rate represents the swap rate.

As at 30 September 2018 the Company held cash of £3.8m in highly rated financial institutions.

Post Period End

Since 30 September 2018, the following relevant events occurred:

On 6 November 2018, the Company announced an interim dividend of 1.6625 pence per ordinary share for the quarter ended 30 September 2018, to be paid on 28 December 2018 to shareholders on the register as at close of business on 15 November 2018.

On 8 November 2018, the Shareholders of the Company voted to amend some provisions in the Articles of Incorporation of the Company and to change the Investment Policy for the purpose of the issuance of Preference Shares as detailed in the circulars dated 16 October 2018 and 23 October 2018.

On 13 November 2018, the Company announced the issuance of the initial tranche of £100m of Preference Shares and advised that a subsequent issue of up to £100m Preference Shares may take place before the next AGM.

Principal Risks

The Company has in place risk management procedures and internal controls to monitor and mitigate the main risks faced as well as a process to review the effectiveness of those controls over the Company and its subsidiaries as a whole. The Investment Manager assists the Company in regularly identifying, assessing and mitigating those risk factors likely to impact the financial or strategic position of the Company.

As detailed in the Company's Annual Report to 31 March 2018, the principal risks and uncertainties applicable to the Company remain as follows:

·      a decline in the price of electricity;

·      electricity generation falling below expectation;

·      adverse changes in government policy or regulatory framework for Solar PV;

·      the pipeline of acquisitions could decrease;

·      the financial model used for the valuation could have inaccurate assumptions:

·      the life of the land lease could change;

·      the operation and maintenance contractor could fail to fulfil their obligations;

·      a counterparty could become insolvent;

·      increased competition could make it difficult to acquire assets; and

·      adverse changes to the taxation rates.

Further information in relation to these principal risks and uncertainties, which are unchanged from 31 March 2018 and remain the risks most likely to affect the Company for the remaining six months of the year, may be found on pages 44 to 46 of the Company's Annual Report for the year ended 31 March 2018.

Governance

Statement of Directors' Responsibilities

To the best of their knowledge, the directors of NextEnergy Solar Fund Limited confirm that:

(a)   The Interim Report and Condensed Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting;

(b)   The Interim Report, comprising the Chairman's Statement and the Investment Manager's Report, meets the requirements of an interim management report and includes a fair review of information required by:

(i)    DTR 4.2.7R of the UK Disclosure and Transparency Rules, being an indication of important events that have occurred during the period from 01 April 2018 to 30 September 2018 and their impact on the Condensed Interim Financial Statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

(ii)   DTR 4.2.8R of the UK Disclosure and Transparency Rules, being related party transactions that have taken place in the period from 01 April 2018 to 30 September 2018 and that have materially affected the financial position or performance of the Company during that period, and any material changes in the related party transactions disclosed in the last Annual Report; and

(c)   The Condensed Interim Financial Statements give a true and fair view of the assets, liabilities, financial position and profit of the Company as required by DTR 4.2.4R of the UK Disclosure and Transparency Rules.

The Company's Directors believe that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the condensed interim financial statements. Note 14 to the Annual Report and Financial Statements for the year ended 31 March 2018 includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk and liquidity risk. The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the level of the Company's assets and significant areas of financial risk including the timing of future investment transactions, expenditure commitments and forecast income and cashflows. As a result, the Directors have, at the time of approving these condensed financial statements, a reasonable expectation that the Company has adequate resources to meet its liabilities and continue in operational existence for at least 12 months from the date of approval of the condensed interim financial statements. The Directors have therefore concluded that it is appropriate to adopt the going concern basis of accounting in preparing these condensed interim financial statements.

The maintenance and integrity of the Company's website is the responsibility of the Directors. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

By order of the Board

For NextEnergy Solar Fund Limited

Patrick Firth

Director

19 November 2018

Financial Statements

Condensed Interim Financial Statements

Condensed Statement of Comprehensive Income

For the period ended 30 September 2018


Notes

Unaudited
1 April 2018 to
30 September
2018
£'000

1 April 2017 to
31 March
2018
£'000

Unaudited
1 April 2017 to
30 September
2017
£'000

Income





Income

5

26,349

41,083

16,421

Net changes in fair value of financial





assets at fair value through profit or loss

6

(4,401)

(2,880)

528

Total net income


21,948

38,203

16,949

Expenditure





Management fees

16

2,675

5,070

2,418

Legal and professional fees


335

482

226

Administration fees


131

268

134

Regulatory fees


29

144

110

Audit fees


83

177

94

Directors' fees

19

86

146

70

Insurance


7

29

15

Sundry expenses


3

12

3

Total expenses


3,349

6,328

3,070

Operating profit


18,599

31,875

13,879

Finance income


55

285

141

Profit and comprehensive income  for the period/year


18,654

32,160

14,020

Earnings per share

11

3.23p

5.88p

2.69p

 

There were no potentially dilutive instruments in issue at 30 September 2018.

All activities are derived from ongoing operations.

There is no other comprehensive income or expense apart from expenditure that is disclosed above and consequently a Condensed Statement of Other Comprehensive Income has not been prepared.

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Interim Statement of Financial Position

As at 30 September 2018


Notes

Unaudited
30 September
2018
£'000

31 March 2018
£'000

Unaudited
30 September
2017
£'000

Non-current assets





Investments

6

590,448

526,221

377,612

Total non-current assets


590,448

526,221

377,612

Current assets





Cash and cash equivalents


3,836

75,893

220,750

Trade and other receivables

7

54,754

28,397

19,154

Total current assets


58,590

104,290

239,904

Total assets


649,038

630,511

617,516

Current liabilities





Trade and other payables

8

39,259

25,521

15,025

Total current liabilities


39,259

25,521

15,025

Net assets


609,779

604,990

602,491

Equity





Share Capital and Premium

10

598,370

593,388

590,600

Retained Earnings

10

11,409

11,602

11,891

Total equity attributable to shareholders


609,779

604,990

602,491

Net assets per share

13

105.1p

105.1p

105.1p

 

The accompanying notes are an integral part of these condensed interim financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 19 November 2018 and signed on its behalf by:

Patrick Firth                                                               Sharan Parr

Director                                                                         Director

Condensed Statement of Changes in Equity

For the period ended 30 September 2018


Share Capital and Premium £'000

Retained  earnings
£'000

Total Equity attributable to  Shareholders £'000

For the period 1 April 2018 to




30 September 2018 (Unaudited)




Shareholders' equity at 1 April 2018

593,388

11,602

604,990

Profit and comprehensive income for the period

-

18,654

18,654

Shares issued

4,982

-

4,982

Dividends declared

-

(18,847)

(18,847)

Shareholders' equity at 30 September 2018

598,370 

11,409

609,779

For the year 1 April 2017 to 31 March 2018




Shareholders' equity at 1 April 2017

464,341

14,242

478,583

Profit and comprehensive income for the year

-

32,160

32,160

Shares issued

129,047

-

129,047

Dividends declared

-

(34,800)

(34,800)

Shareholders' equity at 31 March 2018

593,388

11,602

604,990

For the period 1 April 2017 to




30 September 2017 (Unaudited)




Shareholders' equity at 1 April 2017

464,341

14,242

478,583

Profit and comprehensive income for the period

-

14,020

14,020

Shares issued

126,259

-

126,259

Dividends paid

-

(16,371)

(16,371)

Shareholders' equity at 30 September 2017

590,600

11,891

602,491

 

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Statement of Cash Flows

For the period ended 30 September 2018

Cash flows from operating activities

Notes

1 April 2018 to
30 September
2018
£'000

1 April 2017 to
31 March
2018
£'000

1 April 2017 to
30 September
2017
£'000

Profit and comprehensive income for the





period/year


18,654

32,160

14,020

Adjustments for:





Investment proceeds from HoldCos


4,654

104,248

98,385

Investment payments to HoldCos


(70,573)

(217,486)

(59,605)

Change in fair value on investments

6

4,401

2,880

(528)

Finance income


(55)

(285)

(141)

Operating cash flows before movements in working capital


(42,919)

(78,483)

52,131

Changes in working capital





Movement in trade receivables


(26,357)

(17,231)

(7,943)

Movement in trade payables


11,029

17,244

6,747

Net cash used in operating activities


(58,247)

(78,470)

50,935

Cash flows from investing activities





Finance income


55

285

96

Net cash generated from investing activities


55

285

96

Cash flows from financing activities





Proceeds from issue of shares


-

124,372

124,372

Dividends paid


(13,865)

(30,125)

(14,484)

Net cash generated from financing activities


(13,865)

94,247

109,888

Net movement in cash and cash equivalents during period/year


(72,057)

16,062

160,919

Cash and cash equivalents at the beginning of the period/year


75,893

59,831

59,831

Cash and cash equivalents at the end of the period/year


3,836

75,893

220,750

 

The accompanying notes are an integral part of these condensed interim financial statements.

Notes to the Condensed Interim Financial Statements

For the period ended 30 September 2018

1. General Information

The Company was incorporated with limited liability in Guernsey under the Companies (Guernsey) Law, 2008, as amended, on 20 December 2013 with registered number 57739, and is regulated by the GFSC as a registered closed-ended investment company. The registered office and principal place of business of the Company is 1, Royal Plaza, Royal Avenue, St Peter Port, Guernsey, Channel Islands, GY1 2HL.

On 16 April 2014, the Company announced the results of its initial public offering, which raised net proceeds of £85.6 million. The Company's ordinary shares were admitted to the premium segment of the UK Listing Authority's Official List and to trading on the Main Market of the London Stock Exchange as part of its initial public offering which completed on 25 April 2014. Subsequent fundraisings since the initial public offering also took place, increasing total equity to £598.4m as at 30 September 2018 (31 March 2018: £593.4m). Details can be found in note 10.

The Company seeks to provide investors with a sustainable and attractive dividend that increases in line with the retail price index over the long-term by investing in a diversified portfolio of solar PV assets that are located in the UK. In addition, the Company seeks to provide investors with an element of capital growth through the reinvestment of net cash generated in excess of the target dividend in accordance with the Company's investment policy.

The Company currently makes its investments through HoldCos and SPVs, which are wholly-owned by the Company. The Company controls the investment policy of each of the HoldCos and its wholly-owned SPVs in order to ensure that each will act in a manner consistent with the investment policy of the Company.

The Company has appointed NextEnergy Capital IM Limited as its Investment Manager pursuant to the Management Agreement dated 18 March 2014. The Investment Manager is a Guernsey registered company, incorporated under the Companies (Guernsey) Law, 2008, with registered number 57740 and is licensed and regulated by the GFSC and is a member of the NEC Group. The Investment Manager acts as the Alternative Investment Fund Manager of the Company.

The Investment Manager has appointed NextEnergy Capital Limited as its Investment Adviser pursuant to the Investment Advisory Agreement. The Investment Adviser is a company incorporated in England with registered number 05975223 and is authorised and regulated by the FCA.

The financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates.

2. Significant accounting policies

Basis of preparation

The condensed interim financial statements have been prepared on a going concern basis in accordance with IAS 34 Interim Financial Reporting. The condensed interim financial statements should be read in conjunction with the annual report and audited financial statements for the year ended 31 March 2018, which have been prepared in accordance with IFRS.

Seasonal and cyclical variations

The Company's results may vary during reporting periods as a result of the spread of irradiation during the period and, together with other factors, will impact the NAV. Other factors include changes in inflation and power prices.

Segmental reporting

The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged in a single segment of business, being investment in solar power to generate investment returns whilst preserving capital. The financial information used by the Chief Operating Decision Maker to manage the Company presents the business as a single segment.

Going concern

The Directors have reviewed the current and projected financial position of the Company making reasonable assumptions about future performance. The key areas reviewed were:

·      Timing of future investment transactions;

·      Expenditure commitments; and

·      Forecast income and cashflows.

The Company has cash and short-term deposits as well as projected positive income streams and an available credit facility (see note 20) and as a consequence the Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the next 12 months. Accordingly they have adopted the going concern basis of preparation in preparing the financial statements.

3. New and revised standards

i) Standards, amendments and interpretations that are in issue but not yet effective:

The following accounting standards and interpretations which have not been applied in these financial statements were in issue but not yet effective:

IFRS 16                                                                           Leases

IFRS 17                                                                           Insurance Contracts

The Directors do not expect that the adoption of the accounting standards, amendments and interpretations listed above will have a material impact on the financial statements of the Company in future periods.

ii) New standards adopted as at 1 April 2018:

IFRS 9 'Financial Instruments - Classification and Measurement' replaces IAS 39 'Financial Instruments: Recognition and Measurement'. It makes major changes to the previous guidance on the classification and measurement of financial assets and introduces an 'expected credit loss' model for the impairment of financial assets. Under IFRS 9, the classification of assets is driven by the business model in which the financial asset is managed and the contractual nature of the cash flows arising from the investment. The Company invests in financial assets with a view to profiting from their total return in the form of interest and changes in fair value, and so these investments are classified as fair value through profit or loss.

IFRS 15 'Revenue from Contracts with Customers' replaces IAS 18 'Revenue' and several revenue-related Interpretations. There are no changes to the recognition of income by the Company as a result of the new Standard.

The adoption of new standards has not had a material impact on the condensed interim financial statements, and there are no restatements of comparative information required.

4. Critical accounting judgements and key sources of estimation uncertainty

The Company makes estimates and judgements that affect the reported amounts of assets and liabilities. Estimates and judgements are continually evaluated and based on historic experience and other factors believed to be reasonable under the circumstances.

a) Critical accounting estimate: Investments at fair value through profit or loss

The Company's investments are measured at fair value for financial reporting purposes. The Board of Directors has appointed the Investment Manager to produce investment valuations based upon projected future cashflows. These valuations are reviewed and approved by the Board. The underlying investments are held through SPVs.

IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Board bases the fair value of the investments on the information received from the Investment Manager.

The Company classified its investments at fair value through profit or loss as Level 3 within the fair value hierarchy. Level 3 investments amount to £590m (31 March 2018: £526m) and consist of 87 investments in solar PV assets (held indirectly through the HoldCos) (31 March 2018: 63 held indirectly through the HoldCos), all of which have been valued on a look through basis based on the discounted cash flows of the solar PV assets (except for those solar plants not yet operational) and the residual value of net assets at the HoldCo level. The unlevered discount rate applied in the 30 September 2018 valuation was 6.75% (31 March 2018: 6.75%). The discount rate is a significant Level 3 input and a change in the discount applied could have a material effect on the value of the investments. Investments in solar PV assets that are not yet operational are held at fair value, where the cost of the investment is used as an appropriate approximation of fair value. Level 3 valuations are reviewed regularly by the Investment Manager who reports to the Board of Directors on a periodic basis. The Board considers the appropriateness of the valuation model and inputs, as well as the valuation result.

Information about the significant unobservable inputs used at 30 September 2018 in measuring financial instruments categorised as Level 3 in the fair value hierarchy and their sensitivities are disclosed in note 14. Unlisted investments reconcile to the Closing Investment Portfolio Value as per the Investments table in note 6.

b) Significant judgement: consolidation of entities

The Company, under the Investment Entity Exemption rule, holds its investments at fair value.

The Company meets the definition of an investment entity per IFRS 10 as the following conditions exist:

1.     The Company has obtained funds for the purpose of providing investors with professional investment management services;

2.     The Company's business purpose, which was communicated directly to investors, is investing for capital appreciation and investment income; and

3.     The investments are measured and evaluated on a fair value basis.

The Company does not have any other subsidiaries other than those determined to be controlled subsidiary investments. Controlled subsidiary investments are measured at fair value through profit or loss and are not consolidated in accordance with IFRS 10. The fair value of controlled subsidiary investments is determined as described in note 4(a).

5. Income


Period ended
30 September
2018
£'000

Year ended
31 March
2018
£'000

Investment income

22,474

35,242

Management fee income

3,875

5,841

Total Income

26,349

41,083

 

6. Investments

The Company owns the Investment Portfolio through its investments in the HoldCos. This is comprised of the Investment Portfolio and the Residual Net Assets of the HoldCos. The Total Investments at fair value are recorded under Non-Current Assets in the Condensed Interim Statement of Financial Position.


Period ended
30 September
2018
£'000

Year ended
31 March
2018
£'000

Brought forward cost of investments

517,474

404,236

Investment proceeds from HoldCos

(4,654)

(104,248)

Investment payments to HoldCos

70,573

217,486

Investments payable

2,709

-

Total investments at cost

586,102

517,474

Brought forward unrealised gains on investments

8,747

11,627

Movement in unrealised gains on valuation

(4,401)

(2,880)

Carried forward unrealised gains on investments

4,346

8,747

Total investments at fair value

590,448

526,221

 

The total change in the value of the investments in the HoldCos is recorded through profit or loss in the Condensed Statement of Comprehensive Income.

7. Trade and other receivables


Period ended
30 September
2018
£'000

Year ended
31 March
2018
£'000

Management fee income receivable

1,706

608

Prepayments

20

458

Distributions receivable from HoldCos

14,476

-

Due from HoldCos

38,552

27,331

Total trade and other receivables

54,754

28,397

 

Amounts due from HoldCos are interest free and payable within 12 months.

8. Trade and other payables


Period ended
30 September
2018
£'000

Year ended
31 March
2018
£'000

Other payables

248

290

Investments payable

2,709

-

Due to HoldCos

36,302

25,231

Total trade and other payables

39,259

25,521

 

Amounts due to HoldCos are interest free and payable on demand.

9. Subsidiaries

The Company holds investments through subsidiary companies ("HoldCos") which have not been consolidated as a result of the adoption of IFRS 10: Investment entities exemption to consolidation. The HoldCos are incorporated in the UK and 100% directly owned.

10. Share capital and reserves

Share Issuance

Number of  shares

Gross amount  raised £'000

Issue costs  £'000

Share premium  £'000

Total issued at 31 March 2018

575,643,840

600,853

(7,465)

593,388

Scrip Dividend - 29 June 2018

2,276,348

2,479

-

2,479

Scrip Dividend - 28 September 2018

2,312,277

2,503

-

2,503

Total issued at 30 September 2018

580,232,465

605,835

(7,465)

598,370

 

As at 30 September 2018, the Company currently had one class of ordinary share in issue. All the holders of the ordinary shares, which total 580,232,465, are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

Retained reserves

Retained reserves comprise the retained earnings as detailed in the Condensed Statement of Changes in Equity.

11. Earnings per share


Period ended
30 September
2018

Year ended
31 March
2018

Profit and comprehensive income for the period/year (£'000)

18,654

32,160

Weighted average number of ordinary shares

576,851,018

547,300,544

Earnings per ordinary share

3.23p

5.88p

 

12. Dividends


Period ended
30 September
2018
£'000

Year ended
31 March
2018
£'000

Amounts recognised as distributions to equity holders:



Interim dividend for the period ended 31 March 2017 of 1.577p per share,



paid on 30 June 2017

-

7,199

Interim dividend for the period ended 30 June 2017 of 1.605p per share,



paid on 29 September 2017

-

9,171

Interim dividend for the period ended 30 September 2017 of 1.605p per share,



paid on 28 December 2017

-

9,198

Interim dividend for the period ended 31 December 2017 of 1.605p per share,



paid on 28 March 2018

-

9,232

Interim dividend for the period ended 31 March 2018 of 1.605p per share,



paid on 26 June 2018

9,239

-

Interim dividend for the period ended 30 June 2018 of 1.6625p per share,



paid on 28 September 2018

9,608

-

Total

18,847

34,800

 

13. Net assets per ordinary share


As at
30 September
2018

As at
31 March
2018

Shareholders' equity (£'000)

609,779

604,989

Number of ordinary shares

580,232,465

575,643,840

Net assets per ordinary share

105.1p

105.1p

 

14. Financial risk management

Valuation methodology

The Directors have satisfied themselves as to the methodology used and the discount rates and key assumptions applied in producing the valuations in accordance with the IPEV guidelines. All operational investments are at fair value through profit or loss and are fair valued using a discounted cash flow methodology. Investments which are not yet operational are held at fair value, where the cost of the investment is used as an appropriate approximation of fair value.

Discount rates

The discount rate used for valuing a solar PV asset is based on the industry unlevered discount rate and the risk premium, which takes into account risks and opportunities associated with the investment earnings.

The discount rates used for valuing the investments in the Portfolio are as follows:


30 September
2018

31 March
2018

Weighted Average discount rate

7.30%

7.30%

Discount rates

6.75% to 9.00%

6.75% to 9.00%

 

A change to the weighted average discount rate by plus or minus 0.5% has the following effect on the valuation:

Discount rate

+0.5% change

Total Portfolio value

-0.5% change

30 September 2018

(£21.8m)

£591.3m

£23.3m

Fair value - percentage movement

(3.7%)


3.9%

31 March 2018

(£18.2m)

£481.4m

£19.4m

Fair value - percentage movement

(3.8%)


4.0%

 

Power price

NEC Group continuously reviews multiple inputs from market contributors and leading consultants and adjusts the inputs to the power price forecast when deemed most appropriate. Current estimates imply an average rate of growth of electricity prices of approximately 0.2% in real terms and a long-term inflation rate of 2.75%.

A change in the forecast electricity price assumptions by plus or minus 10% has the following effect on the valuation, with all other variables held constant:

Power Price

-10% change

Total Portfolio value

+10% change

30 September 2018

(£38.5m)

£591.3m

£40.6m

Fair value - percentage movement

(6.5%)


6.9%

31 March 2018

(£32.5m)

£481.4m

£31.5m

Fair value - percentage movement

(6.8%)


6.5%

 

Energy generation

The Portfolio's aggregate energy generation yield depends on the combination of solar irradiation and technical performance of the solar PV assets. The table below shows the sensitivity of the Portfolio to a sustained increase or decrease of energy generation by plus or minus 5% on the valuation, with all other variables held constant:

Energy generation

5% under  performance

Total Portfolio value

5% over  performance

30 September 2018

(39.7m)

£591.3m

£40.8m

Fair value - percentage movement

(6.7%)


6.9%

31 March 2018

(£32.6m)

£481.4m

£32.5m

Fair value - percentage movement

(6.8%)


6.7%

 

Inflation rates

The Portfolio valuation assumes long-term inflation of 2.75% per annum for investments (based on applicable RPI). A change in the inflation rate by plus or minus 0.5% has the following effect on the valuation, with all other variables held constant:

Inflation rate

-0.5% change

Total Portfolio value

+0.5% change

30 September 2018

(£26.6m)

£591.3m

£28.0m

Fair value - percentage movement

(4.5%)


4.7%

31 March 2018

(£20.1m)

£481.4m

£21.2m

Fair value - percentage movement

(4.2%)


4.4%

 

Operating costs

The table below shows the sensitivity of the Portfolio to changes in operating costs by plus or minus 10% at SPV level, with all other variables held constant.

Operating cost

+10% change

Total Portfolio value

-10% change

30 September 2018

(£10.7m)

£591.3m

£10.4m

Fair value - percentage movement

(1.8%)


1.8%

31 March 2018

(£8.7m)

£481.4m

£8.4m

Fair value - percentage movement

(1.8%)


1.7%

 

Tax rates

The UK corporation tax assumption for the Portfolio valuation was 19% to 2020, and 17% thereafter in accordance with the UK Government announced reductions.

The Italian tax rate used is 24% with an additional 2.7% local tax rate in accordance with the local tax authority of the incorporated entity.

15. Financial assets and liabilities not measured at fair value

Cash and cash equivalents are level 1 items on the fair value hierarchy. Current assets and current liabilities are Level 2 items on the fair value hierarchy. The carrying value of current assets and current liabilities approximates fair value as these are short-term items.

16. Management fee expense

The Investment Manager is entitled to receive an annual fee, accruing daily and calculated on a sliding scale, as follows below:

·      for the tranche of NAV up to and including £200m, 1% of the Net Asset Value ("NAV") of the Company.

·      for the tranche of NAV above £200m and up to and including £300m, 0.9% of NAV.

·      for the tranche of NAV above £300m, 0.8% of NAV.

For the period ended 30 September 2018 the Company has incurred £2.7m in management fees of which £nil was outstanding at 30 September 2018. For the year ended 31 March 2018 the Company incurred £5.1m in management fees of which £nil was outstanding at 31 March 2018. For the period ended 30 September 2017 the Company incurred £2.4m in management fees of which £nil was outstanding at 30 September 2017.

17. Related parties

The Investment Manager, NextEnergy Capital IM Limited, is a related party due to having common key management personnel with the subsidiaries of the Company. All management fee transactions with the Investment Manager are disclosed in note 16.

The Investment Adviser, NextEnergy Capital Limited, is a related party due to sharing common key management personnel with the subsidiaries of the Company. There are no advisory fee transactions between the Company and the Investment Adviser.

The Operating Asset Manager, WiseEnergy (Great Britain) Limited, is a related party due to sharing common key management personnel with the subsidiaries of the Company. Each of the operating subsidiaries of the Company entered into an asset management agreement with WiseEnergy (Great Britain) Limited. The total value of recurring and one-off services paid to the Operating Asset Manager during the reporting period amounted to £2.9m (for the year to 31 March 2018: £4.1m, for the period to 30 September 2017: £1.2m).

At the period end, £39.0m (31 March 2018: £25.2m, 30 September 2017: £14.8m) was owed to the subsidiaries. £3.9m of management fees were received from the subsidiaries during the period (year to 31 March 2018: £5.8m, period to 31 September 2017: £2.6m), £1.7m of which was outstanding at the period end (31 March 2018: nil, 30 September 2017: £0.2m).

NextPower Development Limited is a related party due to sharing common key management personnel with the subsidiaries of the Company. There are no advisory fee transactions between the Company, its subsidiaries and NextPower Development Limited.

At the period end, the Directors owned the following shares in the Company:

·

Kevin Lyon

160,000

·

Patrick Firth

78,104

·

Vic Holmes

110,000

18. Controlling party

In the opinion of the Directors, on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

19. Remuneration of the Directors

The remuneration of the Directors was £86k for the period (for the year to 31 March 2018: £146k, for the period to 30 September 2017: £70k) which consisted solely of short-term employment benefits. Sharon Parr was appointed with effect from 1 January 2018.

20. Revolving credit and debt facilities

In January 2017, NESH, closed a syndicated loan with MIDIS, NAB and CBA for £157.5m ("Project Apollo") to refinance its revolving credit facility. As part of the facility agreement, the lenders provide an additional Debt Service Reserve Facility of £7.5m and hold a charge over the assets of NESH. As at 30 September 2018, the outstanding amount was £148.6m.

In July 2015, NESH II agreed a loan with NIBC for £22.7m. In July 2016, £1m was repaid and in March 2018, the remaining balance was repaid. At the same time as the repayment the short-term facility was converted into a new £20m in revolving credit facility. As at 30 September 2018, the outstanding amount was £nil.

In 31 March 2016, NESH IV agreed the purchase of Project Radius. The acquisition was partially funded by a debt facility entered between NESH IV Limited and Macquarie Bank Limited for £55.0m, which was fully drawn down. In April 2016. As at 30 September 2018, the outstanding amount was £52.2m. In March 2018, Santander issued a Letter of Credit to the Security Trustee of the facility of £2.0m and NESF provided a counter indemnity to Santander.

In December 2017, NESH V acquired a portfolio of eight operating plants totalling 34.5MW which had a long-term fully-amortising project of £68.1m in place. As at 30 September 2018, the outstanding amount was £64.9m.

In May 2018, NESH III acquired a portfolio of two operating plants totalling 7.2MW which had a term loan and an asset purchase agreement in place with Lombard. As at 30 September 2018 the outstanding amount was £1.3m.

In July 2018, NESH III acquired a portfolio of ten operating plants totalling 66.8MW which had a long-term fully-amortising project financing of £58.3m in place. As at 30 September 2018, the outstanding amount was £58.3m

In July 2018, NESH VI closed a RCF with Santander for £40.0m which was subsequently fully drawndown. As at 30 September 2018, the outstanding amount was £40.0m.

21. Taxation

Under the current system of taxation in Guernsey, the Company is exempt from paying taxes on income, profit or capital gains. Therefore, income from investments in solar PV assets is not subject to any further tax in Guernsey, although these investments are subject to tax in the UK or Italy.

22. Reconciliation of Financing Activities


Opening   (£'000)

Cash flows  (£'000)

Net income allocation (£'000)

Non-cash
flows
(£'000)

Closing
(£'000)

Share Capital

593,388

-

-

4,982

598,370

Retained Earnings

11,602

(13,865)

18,654

(4,982)

11,409

Total

604,990

(13,865)

18,654

-

609,779

 

23. Events after the reporting period

Since 30 September 2018, the following relevant events occurred:

·      On 6 November 2018, the Company announced an interim dividend of 1.6625 pence per ordinary share for the quarter ended 30 September 2018, to be paid on 28 December 2018 to shareholders on the register as at close of business on 15 November 2018.

·      On 8 November 2018, the Shareholders of the Company voted to amend some provisions in the Articles of Incorporation of the Company and to change the Investment Policy for the purpose of the issuance of Preference Shares as detailed in the circulars dated 16 October 2018 and 23 October 2018.

·      On 13 November 2018, the Company announced the issuance of the initial tranche of £100m of Preference Shares and advised that a subsequent issue of up to £100m Preference Shares may take place before the next AGM.

Additional Information

Independent review report to

NextEnergy Solar Fund Limited

Our conclusion

We have reviewed the accompanying condensed interim financial statements of NextEnergy Solar Fund Limited (the "Company") as of 30 September 2018. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial statements is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The accompanying condensed interim financial statements comprise:

·      the condensed interim statement of financial position as of 30 September 2018;

·      the condensed statement of comprehensive income for the six-month period then ended;

·      the condensed statement of changes in equity for the six-month period then ended;

·      the condensed statement of cash flows for the six-month period then ended; and

·      the notes, comprising a summary of significant accounting policies and other explanatory information.

The condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibilities and those of the directors

The Directors are responsible for the preparation and presentation of these condensed interim financial statements in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on these condensed interim financial statements based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of interim financial information performed by the independent auditor of the entity' issued by the International Auditing and Assurance Standards Board. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim report and condensed interim financial statements and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers CI LLP

Chartered Accountants

Guernsey, Channel Islands

19 November 2018

Company Information

Directors:

Kevin Lyon, Chairman


Patrick Firth


Vic Holmes


Sharon Parr



Registered Office:

1 Royal Plaza


Royal Avenue


St Peter Port


Guernsey


GY1 2HL



Investment Manager:

NextEnergy Capital IM Limited


1 Royal Plaza


Royal Avenue


St Peter Port


Guernsey


GY1 2HL



Investment Adviser:

NextEnergy Capital Limited


20 Savile Row


London


UK


W1S 3PR



Secretary and Administrator:

Ipes (Guernsey) Limited


1 Royal Plaza


Royal Avenue


St Peter Port


Guernsey


GY1 2HL



Independent Auditor:

PricewaterhouseCoopers CI LLP


Royal Bank Place


1 Glategny Esplanade


St Peter Port


Guernsey


GY1 4ND



Registered Number:

57739



Registrar:

Link Market Services (Guernsey) Ltd



Legal Adviser to the Group as to UK law:

Simmons & Simmons LLP



Legal Adviser to the Group as to Guernsey law:

Mourant Ozannes and Carey Olsen (Guernsey) LLP



Legal Adviser to the Group as to Debt Financing:

Stephenson Harwood LLP



Brokers to the Company:

Cantor Fitzgerald Europe


Shore Capital and Corporate Ltd


Fidante Partners (Europe) Ltd


Macquarie Capital (Europe) Ltd



Media and Public Relations

MHP Communications Ltd



Adviser:


 

Glossary of Defined Terms

AGM

Annual General Meeting



AIC

Association of Investment Companies



AIC Code

AIC Code of Corporate Governance



AIC Guide

AIC Corporate Governance Guide for Guernsey Domiciled Investment Companies



AIF

Alternative Investment Fund



AIFM

Alternative Investment Fund Manager



AIFMD

Alternative Investment Fund Management Directive



Asset Management Alpha

The difference between the delta of energy generation vs. budget and the delta of solar irradiation vs. budget



Apollo portfolio

21 plants held within NESH



Base Fee

The fee that the Investment Manager is entitled to under the Investment Management Agreement



BEIS

The Department for Business, Energy & Industrial Strategy



Brexit

The UK voting to leave the European Union





Cash Dividend Cover

The ratio of the Company's Income over dividends paid during the financial year



CBA

Commonwealth Bank of Australia



Company/NESF

NextEnergy Solar Fund Limited



Consultants

Two of the leading energy market consultants



CfD

Contract for Difference



CRS

Common Reporting Standard for automatic exchange of tax information



CSR

Corporate Social Responsibility



DCF

Discounted Cash Flow



Developer

NextPower Development Limited



Premium/discount to NAV

The amount by which the Companies shares trade above or below the NAV



DNO

Distribution Network Operators



EPC

Engineering, Procurement and Construction



ESG

Environmental, Social and Governance



EU

European Union



FATCA

Foreign Account Tax Compliance Act



FiT

Feed-in Tariff



GAV

Gross Asset Value



GFSC

Guernsey Financial Services Commission



GFSC Code

Guernsey Financial Services Commission Finance Sector Code of Corporate Governance



Gross Dividend Cover

The ratio of the Company's Gross Income over dividends paid during the financial year



Group

The Company, HoldCos and SPVs



GWh

Gigawatt hour - a measure of electricity generated per hour



HoldCos

Intermediate holding companies - NESH, NESH II, NESH III, NESH IV, NESH V and NESH VI



IAS

International Accounting Standards



IFRS

International Financial Reporting Standards



Investment Adviser

NextEnergy Capital Limited



Investment Manager

NextEnergy Capital IM Limited



IPEV

International Private Equity and Venture Capital



IPO

Initial Public Offering



IRR

Internal Rate of Return



ISA

International Standards on Auditing



KPI

Key Performance Indicator



KWh

Kilowatt hour - a measure of electricity generated per hour



LOI

Letter of Intent



MIDIS

Macquarie Infrastructure Debt Investment Solutions



MWh

Megawatt hour - a measure of electricity generated per hour



NAB

National Australia Bank



NAV

Net Asset Value



NAV per share

Net Asset Value per ordinary share



NAV Total Return

The actual rate of return from dividends paid and capital gains on NAV per share over a given period of time



NESH

NextEnergy Solar Holding Limited



NESH II

NextEnergy Solar Holding II Limited



NESH III

NextEnergy Solar Holding III Limited



NESH IV

NextEnergy Solar Holding IV Limited



NESH V

NextEnergy Solar Holding V Limited



NESH VI

NextEnergy Solar Holding VI Limited



Net Dividend Cover

The ratio of the Company's Net Income over dividends paid during the financial year



NPPR

National Private Placement Regime



OCR

Ongoing Charges Ratio - the ratio of annualised on-going charges to average NAV



OECD

Organisation for Economic Co-operation and Development



Official List

The Premium Segment of the UK Listing Authority's Official List



Ordinary Shares

The issued ordinary share capital of the Company



POI Law

Protection of Investors (Bailiwick of Guernsey) Law, 1987



PPA

Power Purchase Agreement



Performance Ratio

The measure of the PV plant energy output compared to the theoretical output on acquisition



PV

Photovoltaic



PwC CI

PricewaterhouseCoopers CI LLP



Radius portfolio

Five plants held with NESH IV



RCF

Revolving Credit Facilities



RO Scheme

Renewable Obligation Scheme



ROC

Renewable Obligation Certificates



RPI

Retail Price Index



Solis portfolio

Eight plants held with NESH V



SPA

Share Purchase Agreement



SPVs

Special purpose vehicles which hold the Company's investment portfolio of underlying operating assets



Total Shareholder Return

The actual rate of return from dividends paid and capital gains on share price movements over a given period of time



Three Kings portfolio

Three plants held with NESH III



UK

United Kingdom of Great Britain and Northern Ireland



UK Code

UK Corporate Governance Code dated April 2016



UKLA

UK Listing Authority



WACC

Weighted Average Cost of Capital



WiseEnergy

WiseEnergy (Great Britain) Limited and WiseEnergy Italia Srl

 

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NextEnergy Solar Fund Limited

Registered Address


1 Royal Plaza, Royal Avenue

Email:

St Peter Port

[email protected]

Guernsey GY1 2HL

Website:

T: +44 (0) 1481 713 843

nextenergysolarfund.com

 


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