Solar energy investment trust Bluefield Solar Income Fund (BSIF) will seek shareholder permission to expand its investment remit beyond solar projects.
In a circular published today, the trust’s board of directors effectively said that the accelerating decarbonisation of the UK energy market is a wider opportunity that it does not want to miss out on.
Shares looked at the opportunities to invest in the wider climate change theme this week.
The proposal would allow the trust to invest up to 25% of funds into non-solar, renewables projects, with wind power, hydro-electric and energy storage eyed to broaden the diversification of the asset base.
Bluefield Solar shareholders will be asked to vote on the changes at an extraordinary general meeting on 6 July.
That the share price reversed on Friday, falling 2.6% to 130.5p, may reflect the soaring price of renewables assets during the past few years.
ATTRACTIVE BALANCE
Analysts at broker Numis said that given the ‘evolution’ of the UK energy market, plans to broaden the mandate ‘strikes an attractive balance’ between the potential to deliver further high quality earnings growth, while retaining a low risk approach.
Numis said, ‘In our view, adding up to 25% in similar risk/return technologies does not dramatically change the risk profile of the business.’
The analysts added, ‘Since IPO, we believe that Bluefield Solar has proven itself to be disciplined in acquisition pricing and has not sought growth of assets under management for growth’s sake.
‘This has facilitated the delivery of high quality earnings and amongst the strongest NAV total return of the listed renewable peer group.’
DIVIDEND AND FEE CHANGES
In a raft of other changes, Bluefield Solar is also proposing to de-link its dividend target from RPI, in favour of a progressive policy, but plans to continue being the highest dividend payer in the sector on a pence per share basis.
It has set a target dividend of not lower than 8p for its financial year to June 2021, and will seek to maintain this level of dividend or grow it progressively where appropriate.
The trust has also set out changes to its annual base fee, detailed in the table below:
Numis described the fee changes as ‘non-controversial’, with a ‘modest’ increase in base fee in exchange for forgoing a variable fee, ;which has been paid for outperformance in four of five years and was likely to be paid out in the current financial year.’
