26 October 2015
BLUEFIELD SOLAR INCOME FUND LIMITED
First Interim Dividend and Unaudited 30 September 2015 NAV Announcement
Bluefield Solar Income Fund Limited (LON: BSIF) (the "Company") is pleased to declare a first interim dividend for the financial year ending 30 June 2016 (the "First Interim Dividend") and to publish a net asset value ("NAV") as at 30 September 2015. Unless otherwise noted herein, the information provided in this announcement, and the asset valuations underlying such information, is unaudited.
The First Interim Dividend of 3.25 pence per Ordinary Share will be payable to Shareholders on the register as at 13 November 2015, with an associated ex-dividend date of 12 November 2015 and a payment date of 15 December 2015. This is comparable to the first interim dividends of 2 pence and 3.25 pence per Ordinary Share for the financial years ending 30 June 2014 and 30 June 2015, respectively.
Highlights
• The Company's NAV at 30 September 2015 was £291.7 million, or 104.79 pence per Ordinary Share, compared to the NAV at 30 June 2015 of £288.4 million, or 103.58 pence per Ordinary Share.
· The September NAV results follow the Company's announcement of performance in the financial year ending 30 June 2015, which were significantly ahead of projected returns.
· Earnings on investments during the year ending 30 June 2015, net of fund costs, of 7.72 pence per Ordinary Share, which were 10 per cent. ahead of projected investment returns, have enabled the Company to announce total dividends in relation to the financial year of at 7.25 pence per Ordinary Share, which compares to the Company's target distribution of 7 pence per Ordinary Share.
· An independent valuation as at 30 June 2015 commissioned by the Board estimated the Company's NAV to lie in a range between 104.40 and 114.30 pence per Ordinary Share, which is higher than the directors' valuation.
Current Portfolio
The Company's operating portfolio as at 30 September 2015 is shown below:
Project |
Contractor |
Region |
ROC banding/FiT |
MWp* |
North Beer |
Parabel UK |
Cornwall |
2.0 ROCs |
6.90 |
Pentylands |
Conergy |
Wiltshire |
1.6 ROCs |
19.20 |
Goosewillow |
Ikaros Solar |
Oxfordshire |
1.6 ROCs |
16.93 |
Hill Farm |
Solar Century |
Oxfordshire |
1.6 ROCs |
15.19 |
Hardingham |
Solar Century |
Norfolk |
1.6 ROCs |
14.84 |
Hall Farm |
Ikaros Solar |
Norfolk |
1.6 ROCs |
11.45 |
Betingau |
Prosolia |
Glamorgan |
1.6 ROCs |
9.99 |
Saxley |
Solar Century |
Hampshire |
1.6 ROCs |
5.90 |
West Raynham |
MAETEL/ACS |
Norfolk |
1.4 ROCs |
49.99 |
Elms |
Wirsol Energy |
Oxfordshire |
1.4 ROCs |
29.00 |
Hoback |
Solar Century |
Hertfordshire |
1.4 ROCs |
17.52 |
Roves |
Wirsol Energy |
Wiltshire |
1.4 ROCs |
12.75 |
Sheppey |
Solar Century |
Kent |
1.4 ROCs |
10.60 |
Capelands |
Juwi Renewables |
Devon |
1.4 ROCs |
8.40 |
Ashlawn |
Parabel UK |
Somerset |
1.4 ROCs |
6.70 |
Redlands |
Juwi Renewables |
Somerset |
1.4 ROCs |
6.20 |
Hardingham Extension |
Solar Century |
Norfolk |
1.4 ROCs |
5.24 |
Salhouse |
Wirsol Energy |
Norfolk |
1.3 ROCs |
4.99 |
Trethosa |
Wirsol Energy |
Cornwall |
FiT |
4.80 |
Peregrine |
Promo Energy |
Berkshire |
FiT |
0.43 |
Kite |
Enfinity |
Oxfordshire |
FiT |
0.82 |
Durrants |
REC |
Isle of Wight |
FiT |
5.00 |
Goshawk (10x Thames Water & 1x Adnams) |
British Gas |
Surrey/Oxfordshire/ Suffolk |
FiT |
1.20 |
|
|
Total |
|
264.04 |
*As defined herein.
During the quarter, the Company completed four new investments, comprising two greenfield sites (Salhouse and Trethosa) and 29 operational industrial sites, principally located on properties owned by Thames Water Utilities (Kite and Peregrine). Construction of both greenfield sites has been completed and both are now energised and operational, which means all of the assets in the Company's portfolio are currently operational.
The investment activities in the quarter bring the total portfolio of the Company to a total installed capacity of 263.9 megawatt peak ("MWp") across 20 standalone solar photovoltaic ("PV") projects and 40 industrial solar PV projects, principally on Thames Water properties. Located across the south of England and Wales, the projects are geographically diverse, have been constructed by twelve experienced solar contractors and contain a diverse range of proven solar PV technologies and infrastructure.
Future Pipeline
The Company's Investment Adviser, Bluefield Partners LLP, is currently working on a broad pipeline of both operational and greenfield solar PV investment opportunities and has signed exclusivity agreements related to a significant amount of capacity across projects on which the Investment Adviser is currently conducting due diligence and negotiating the relevant transaction documentation.
Regulatory Changes
In response to the consultations announced by the Department of Energy and Climate Change ("DECC") on 22 July 2015 regarding changes to financial support for solar PV and changes to Feed-in-Tariff ("FiT") accreditation (the "Consultations") and proposed changes to the regulatory support for solar assets, the Investment Adviser has stated that:
• the proposals under the Consultations would have no impact on the projects currently held in the Company's portfolio;
• each of the sub-5MWp construction projects in the pipeline currently being considered by the Investment Adviser on behalf of the Company would qualify for the Grace Period as proposed in the Consultations and would be eligible for the current Renewables Obligation ("RO") level of support; and
• there will be future opportunities in regard to sub-5MWp projects that would qualify for the Grace Period or that would be able to evidence the necessary significant financial commitment pursuant to the proposals, as well as further industrial and commercial projects, which together with the sub-5MWp pipeline provides a material pipeline of potential construction assets up to at least April 2017.
Financial Information:
As at 30 September 2015, the Company's NAV was 104.79 pence per Ordinary Share. This NAV is based upon the directors' valuation as at 30 June 2015 as adjusted for the movements in the period, including investments made, an increase in the amounts drawn under the Company's revolving credit facility with the Royal Bank of Scotland plc (the "RBS Facility"), earnings from investments and operational costs of the Company, as well as the results of the independent valuation. The amount drawn under the RBS Facility as at 30 September 2015 was £27.1 million out of £50 million available. There is an additional £14.4 million in project finance debt in the Durrants investment.
The September NAV reflects the addition of net investment earnings in the quarter of circa 2.75 pence per Ordinary Share, as well as the full impact of the termination of Levy Exemption Certificates announced in the United Kingdom's July 2015 budget, which due to the conservative assumptions built into the 30 June 2015 NAV had only a £0.6 million negative impact, when the concurrent announcement of corporation tax changes was taken into account.
The NAV per share and share price of the Company for 30 June 2015 and 30 September 2015 were as follows:
|
30 June 2015 |
30 September 2015 |
30 September 2015 (ex-dividend and variable fee) |
Net Asset Value per Ordinary Share (pence) |
103.58 |
104.79 |
103.22 |
|
|
|
|
Share Price (pence)* |
109.75 |
102.75 |
102.75 |
|
|
|
|
Premium/Discount |
5.96% |
-1.95% |
-0.46% |
|
|
|
|
Market Capitalisation (million £) |
305.56 |
286.07 |
286.07 |
*The last trade price on the relevant date, without any ex-dividend or variable fee adjustment.
Outlook
The Company has demonstrated robust NAV performance in the context of declining power prices and loss of revenues from Levy Exemption Certificates following the United Kingdom's July 2015 Budget. The strong NAV performance has been validated through the independent valuation, which, had the independent valuer's assumptions been adopted in full, would have implied a minimum 30 June 2015 NAV of 104.4 pence per Ordinary Share. This NAV comes from operating performance exceeding budget by 10 per cent. in the financial year to 30 June 2015, which enabled the Company to pay a dividend of 7.25p, ahead of the targeted return, and to also retain a prudent reserve. The Company's investment performance has remained strong with a total installed capacity of 263.9 MWp across 20 standalone solar PV projects and 40 industrial solar PV projects, principally on Thames Water properties.
The robust performance of the Company's NAV per share and earnings follows discipline applied by the Company and Investment Adviser in the pricing of its investments and in active supervision of the operational portfolio.
John Rennocks, the Chairman of the Company, said, "The value of our high quality and diversified portfolio can now clearly be seen. We have delivered a strong performance for our shareholders through robust earnings and further growth in our NAV to 104.79 pence per Ordinary Share, which is stated before deducting the declared fourth interim dividend for the year ending 30 June 2015 payable on 31 October 2015. This improvement is despite the backdrop of falling power prices in 2015. We continue to be excited about the potential of the UK solar market, despite the recent regulatory changes, and are exploring a range of attractive prospects which give us plenty of opportunity."
The Board remains delighted with the performance of the Investment Adviser and is pleased to declare a variable fee in respect of 2014/15 results, which is included in the ex-dividend NAV, and reflects the excellent investment and operating performance of the Company's portfolio. The variable fee is awarded based on the excess of dividend over the Company's target return for the period and even with this additional expense the Company's overall fee levels compare favourably with the levels charged by comparable infrastructure investment advisers.
The Company and its Board continue to target dividends growing by RPI from a 7 pence per Ordinary Share base level for the financial year ending 30 June 2015, which would lead to a target dividend for the Company's third financial year, ending 30 June 2016, of a minimum of 7.07 pence per Ordinary Share.
Enquiries:
James Armstrong / Mike Rand / Giovanni Terranova
Bluefield Partners LLP - Company Investment Adviser
Tel: +44 (0)20 7078 0020
Tod Davis / David Benda
Numis Securities Limited - Company Broker
Tel: +44 (0)20 7260 1000
Kevin Smith
Heritage International Fund Managers Limited - Company Secretary & Administrator
Tel: +44 (0)1481716000
Tom Karim
CNC
Tel: +44(0)20 3219 8820 / +44(0)7923 293 399
Note to editors
About Bluefield Solar Income Fund Limited (BSIF)
BSIF is a Guernsey-registered investment company focusing on large scale agricultural, commercial and industrial solar energy assets. It had an initial public offering of shares on the main market of the London Stock Exchange in July 2013. It has, currently, over 278 million shares in issue and a market cap in excess of £290 million. In June 2014 it agreed a three-year revolving credit facility with Royal Bank of Scotland, for up to £50 million.
BSIF seeks to provide shareholders with an attractive return, principally in the form of income distributions, by investing in a diversified portfolio of solar energy assets, each located within the UK, with a focus on utility scale assets and portfolios on greenfield, industrial and/or commercial sites. The Company intends to pay quarterly distributions.
About Bluefield Partners LLP (Bluefield)
Bluefield was established in 2009 and is an investment adviser to companies and funds investing in solar energy infrastructure. It has a proven record in the selection, acquisition and supervision of large scale energy and infrastructure assets in the UK and Europe. The team has been involved in over £1.4 billion of solar PV funds and/or transactions in both the UK and Europe since 2008, including over £390m in the UK since December 2011.
Bluefield has led the acquisitions, and currently advises on over 60 UK based solar assets that are agriculturally, commercially or industrially situated. Based in its London office, Bluefield's partners are supported by a dedicated and highly experienced team of investment, legal and portfolio executives.
Bluefield was appointed Investment Adviser to the Company in June 2013.
