- Bluefield Solar NAV per share up 10%
- NextEnergy Solar NAV per share up 7.8%
- Both trusts benefit from higher power prices
Solar-focused investment trusts Bluefield Solar Income (BSIF) and NextEnergy Solar (NESF) have both reported material increases in the value of their assets thanks to higher power prices.
With both funds also displaying their inflation-busting credentials, shares in Bluefield Solar are up 3.5% to 139.2p and NextEnergy Solar is up 2.2% to 121.4p.
Bluefield reported a 10% increase in NAV (net asset value) per share quarter-on-quarter, up to 140p as at 30 June compared with 127.04p at the end of March, thanks to an increase in both inflation and energy price expectations.
NextEnergy Solar reported an 8.2p or 7.8% increase in NAV per share to 121.7p and a slight reduction in gearing from 42% to 40% in the three-month period to the end of June and also confirmed a target dividend for the March 2023 financial year of 7.52p.
POWER MARKET EXPERIENCES SUSTAINED HIGH PRICES
The trust commented: ‘The UK power market continues to experience sustained high prices. Prevailing market conditions around the supply of gas continue to look challenging given continuing macroeconomic and geo-political events, highlighting the importance of energy security.
‘Against this backdrop, NESF offers strong diversification and protection for investors in their portfolios, in conjunction with helping accelerate net zero ambitions following COP26 through the construction of new solar power plants in the UK.’
Commenting on the NextEnergy Solar update, Numis analyst Andrew Rees said: ‘The company continues to use the rising power price forecasts to lock-in future revenues through an active PPA hedging strategy, securing fix prices ahead of forecast while mitigating future volatility in market prices. Management continues to point to a substantial £350 million pipeline to further grow the portfolio.’
And on Bluefield Solar he added: ‘Looking forward, we believe the portfolio is well placed to protect against sustained high inflation with inflation linked regulated revenues of 63% (at 31 December), which at the higher end of the peer group.
‘This high proportion of regulated cash flows combined with the fund’s active rolling PPA strategy, which allows the company to capture upside and limit downside, has enable the fund to consistently deliver a high level of cash flow visibility.’
