Foresight Group Holdings Ltd. · LSE:FSG
Foresight — Foresight Solar Fund — FY2018 Earnings Presentation
21 slides from Foresight's earnings presentation, Mar 6, 2019
Slide 1: Foresight Solar Fund Limited Annual Results 2018
Foresight Solar Fund Limited ANNUAL RESULTS FOR THE YEAR ENDING 31 DECEMBER 2018 Analyst Presentation 6 March 2019
Slide 2: 2018 Highlights
2018 Highlights NAV growth: 111.2 pence per share (31 Dec 2017: 107.0 pence). Portfolio expansion: 31 assets totalling 248MW acquired. Strong operational performance: 4.9% above UK budget. Dividend delivery: 6.58 pence per share FY2018, as per target. Fundraising: £106 million raised through two ove
Slide 3: Key Financial Metrics
Key Financial Metrics Strong year-on-year NAV growth 31 December 2018 31 December 2017 GAV £1,114.7 million £680.8 million NAV £610.3 million £481.3 million NAV per Share 111.2 pence 107.0 pence Profit after Tax for the period £56.0 million £35.1 million Total Dividend per Share for the period 6.58
Slide 4: Net Asset Value Movements
Net Asset Value Movements Growth supported by a lower discount rate, power curve and short term inflation changes Movements in NAV (£m and pence per share) Key drivers 4
Slide 5: Financial Performance
Financial Performance Solid underlying earnings and underpinned by stable operating margins • Portfolio income shows revenue generated at £’m project level, including liquidated damages Portfolio income 84.50 and insurance proceeds. Portfolio operational costs (19.31) • Principal repayments on debt
Slide 6: Dividends
Dividends Delivered on all target dividends since IPO • Dividend cover for the period, on a cash basis, was 1.38x (excluding dividends paid to new shares issued in the period and including cash balances acquired as part of the acquisitions completed in 2018). • Excluding cash acquired alongside new
Slide 7: UK Portfolio Performance
UK Portfolio Performance Significant improvement in UK portfolio performance • FY2018 adjusted* generation was 4.9% above expectations. • UK irradiation levels up 6.4% above base case assumptions. • Performance enhancing initiatives implemented by the asset manager addressed historical issues on spe
Slide 8: UK Portfolio Power Prices 2018
UK Portfolio Power Prices 2018 Strong wholesale power prices throughout the year • 12.1% increase in average power price to £49.54 (FY2017: £44.19)*. • Continued to take advantage of attractive forward electricity prices through fixed price arrangements: • 31 Dec 18: 53% of UK portfolio fixed at wei
Slide 9: Australia Portfolio Performance
Australia Portfolio Performance Two assets representing 61MW reached first export in 2018 • Longreach: Fully operational after reaching first export in March 2018. Experiencing limited levels of grid curtailment. • Bannerton: First electricity export in July 2018 and due to reach full export capacit
Slide 10: Portfolio Optimisation
Portfolio Optimisation Medium and long term value enhancing initiatives O&M Tender • 23 contracts representing 350MW re-tendered in 2018. • 17% decrease in ongoing annual fees achieved while optimising scope. PPA Tender • 5 contracts representing 53MW tendered Q4 2018 resulting in a further increase
Slide 11: Case Study: Spriggs Solar
Case Study: Spriggs Solar Investment to enable long term performance • Systemic module (PID) and transformer defects identified during warranty period resulting in a decline in performance • EPC negotiations in relation to defects and bond extensions ultimately led to bond call to recover losses and
Slide 12: FSFL made value-accretive investments in 2018
FSFL made value-accretive investments in 2018 31 assets (248MW) acquired in 2018 supporting further sustainable growth MW ownership NAV accretive 1000 900 800 700 Operational and RO accredited 600 500 400 300 No cash drag as funded through share 200 100 placings 0 Dec 2014 Dec 2015 Dec 2016 Dec 2017
Slide 13: Portfolio Geographical Analysis
Portfolio Geographical Analysis Diversified portfolio of 54 assets across the UK and Australia Installed Capacity Electricity Generation* Equity Invested** 9% 17% 30% 869 981 £664m MW GWh 70% 83% 91% UK Australia UK Australia UK Australia * UK is FY2018 figures. Australia’s figures are based on the
Slide 14: Portfolio Revenue Analysis
Portfolio Revenue Analysis High predictability of cash flows in the short term Projected 2019 Revenue Split* Revenue from Subsidies - 52% 4% UK Subsidy - Fixed Revenue from Electricity Sales - 48% 21% AUS Subsidy - Merchant AUS Subsidy - Fixed 869MW 46% of installed capacity UK Electricity Sales - M
Slide 15: Power Price Forecasts
Power Price Forecasts Conservative forecast based on independent power price analysis UK Wholesale Power Prices (£/MWh) • FY2018 forecast: 0.4% increase • Company forecast: Medium to long term increase of 0.6% per annum (31 Dec 17: 1.3%) Australian Wholesale Power Prices ($/MWh) • Short-term (2019-
Slide 16: Outlook
Outlook Continue to focus on the operating performance of the assets in the UK and Australia Deliver further portfolio optimisation - including refinancing Adopt opportunistic approach to UK secondary market opportunities Continue to monitor developments in unsubsidised solar Explore solar opportuni
Slide 17: Appendices
Appendices
Slide 18: Capital Structure
Capital Structure Ongoing optimisation of the capital structure • Two oversubscribed placings in 2018 raising £106 million: July £48 million EQUITY and October £58 million. GAV increased to £1,114.7 million. RAISED £569m • Total outstanding debt of £504.4 million (45% of GAV), including: since IPO •
Slide 19: Sustainability
Sustainability ESG Best Practice Environmental Stewardship • Partner of the Solar Trade Association’s Large-Scale Asset Management Working Group & Signatory to the Solar Farm Land Management Charter • Biodiversity management via hedgerow planting, beehive installation, sheep grazing Social Engagemen
Slide 20: Contact Details
Contact Details Foresight Group +44 (0)20 3763 6951 Joanna Andrews jandrews@ForesightGroup.eu Stifel Nicolaus Europe Limited +44 (0)20 7710 7600 Mark Bloomfield Neil Winward Gaudi Le Roux Citigate Dewe Rogerson +44 (0)20 7638 9571 Nick Hayns Elizabeth Kittle Lucy Eyles
Slide 21: Important Notice
Important Notice General This document and the presentation have been prepared by Foresight Group LLP for information purposes only. By being in receipt of this document, you will be deemed to have (a) agreed to all of the following restrictions and made the following undertakings and (b) acknowledg