NextEnergy Solar Fund - Earnings visibility underpins dividend target

It has been a busy few months for NextEnergy Solar Fund (NESF) and the listed renewable energy sector. The share price may have come under pressure from the threat of rising discount rates and windfall taxes, but the picture on this is clearer, and – as the latest results show – NESF’s NAV is still making positive progress. Strong earnings cover and NESF’s forward sales of power give the board confidence to maintain its policy of at least matching dividend hikes with inflation. If shareholders

NextEnergy Solar Fund - Earnings visibility underpins dividend target

It has been a busy few months for NextEnergy Solar Fund (NESF) and the listed renewable energy sector. NESF’s share price may have come under pressure from the threat of rising discount rates (as interest rates rise, its NAV falls) and windfall taxes, but the picture on both fronts is clearer, and – as the latest results show – NESF’s NAV is still making positive progress. The board says that strong earnings cover and NESF’s forward sales of power give it confidence to maintain its policy of

NextEnergy Solar Fund - Strong NAV Growth Despite New Tax

NESF’s interim NAV has grown by 8.3% despite being calculated to take account of the potential impact of the windfall tax on UK renewables. This reflects stronger pricing, and it is important to remember that the fund still benefits from this even though some of the upside is now taken by the tax. Strong operational outperformance also contributed, and the fund continues to make progress on asset growth both in solar and in battery storage.

Cenkos: NextEnergy Solar Fund - Shining via pricing and inflation

NextEnergy Solar Fund's (NESF) interim results demonstrate a period of substantial expansion and NAV progression assisted by elevated pricing, inflation, asset growth and higher operating performance. As further support for the fund, we see the recently announced Electricity Generator Levy as having minimal impact. We also believe NESF's continued expansion into battery storage to be NAV accretive with revenue diversification benefits.

NextEnergy Solar Fund - Known Unknown Now A Known

The UK windfall tax on older renewable generation assets has been set at 45% of profit above a power price of £75/MWh. While slightly higher than some market expectations, we do not see the impact on the NESF dividend as critical and the removal of uncertainty over the extent of the taxation is beneficial in our view.

NextEnergy Solar Fund - Sustainability Report Published

NextEnergy’s first standalone sustainability report highlights that this is a fund which delivers across the ESG spectrum, going beyond the obvious standout performance on climate change mitigation.

NextEnergy Solar Fund - Major Battery Portfolio Acquired

NESF has made a leap forward in investment in standalone battery storage to complement its existing solar portfolio, taking its JV battery capacity with Eelpower to 300MW in a new deal. With growing renewable energy penetration, the GB power market is becoming more volatile, growing opportunities to take advantage of arbitrage opportunities. The acquired portfolio of two-hour battery projects will allow this opportunity to be fully exploited.

NextEnergy Solar Fund - Increase in Facilities Well-Timed

An increased in revolving credit facilities at NESF brings the total available to £205m with £115.5m currently drawn. We see this as well-timed as there is a lot of activity in the market for both PV and storage projects and the facility gives the fund the firepower to pursue the best opportunities in a timely fashion.

NextEnergy Solar Fund - New Storage JV

NESF has entered into a second energy storage JV this time with a 75% share of a £200m partnership. With demand for energy storage likely to grow as intermittent renewable energy penetration rises increasing exposure here makes sense in our view.

UK Energy Package - Energy Package Impacts on Clean Energy

UK Prime Minster Liz Truss has outlined a package to offset the impact of high gas prices on the UK electorate. While a lot of the initiatives focus on household bills, a number have a direct impact on clean energy companies. We see the amendment of the Renewables Obligation with a CfD mechanism as potentially de-risking for clean energy companies. Commitment to energy export is positive for hydrogen and e-fuel producers and the confirmation of no windfall tax is a relief for larger clean energy

NextEnergy Solar Fund - NAV Up With Power and Inflation

NESF’s quarterly NAV shows another upward revision with the impact of higher power prices and inflation the key drivers although the fund has also benefited from improved operating performance. In a volatile market the fund is benefiting from locking in power prices through the in-house power sales team at its management company with hedges out to 2025/26.

NextEnergy Solar Fund - Fund Secures CfD Wins

NESF has boosted its effective electricity price hedging with the winning of 86W under the UK’s CfD renewable support scheme. This provides an index-linked 15-year income stream providing a strong underpinning to the fund’s earnings.

Review of Electricity Market Arrangements - REMA Could Bring Benefits

Last week, the UK government published the consultation paper on its Review of Electricity Market Arrangements (REMA). Any change potentially represents uncertainty in a market that has been wary of changes with a number of shares falling after early details of possible reforms were flagged in the press. We review the possible changes and conclude that while there is some risk, from what we can see at present the likely outcomes could be either minimal or beneficial for investors in clean energy

Next Energy Solar Fund - Article 9 Status Confirmed

NESF has confirmed that it is classified as an Article 9 Fund. We see this as helping to emphasise the fund’s contribution to enabling a net zero world and its suitability for investors seeking sustainable outcomes.

NextEnergy Solar Fund - Facility Extension Delivers Firepower

NESF has extended one of its revolving credit facilities giving it £48m of additional lending. The fund has created several new areas for potential asset growth including co-investment alongside NPIII in international projects, stand alone battery projects with Eelpower and co-located battery projects at its existing solar sites. The new facility gives the fund the firepower to capture these opportunities.

Stable 4Q22

LIBERUM: Trident Royalties* - Record quarterly receipts

LIBERUM: Trident Royalties* - General Motors invests in Thacker Pass

Top Picks for 2023 - 2022 review and outlook for 2023

On 10 January last year, we set out our ten top stock picks for 2022, in what turned out to be a very poor twelve months for global equities, due to war, accelerating inflation, political instability and recession fears. Between 7 January 2022 and 31 December 2022, the AIM All-Share Index declined 30.0%, whilst the average performance of our ten top picks was -24.7%, a modest relative outperformance. In this note we discuss the performance of our 2022 top picks, equities trends in 2022, and our

QuotedData’s Real Estate Monthly Roundup – January 2023

Performance - 2022 ended with another difficult month for property companies as the sector continues to get to grips with the impact of higher interest rates. There were several funds that performed well during December, however, with secondary shopping centre landlord Capital & Regional top of the pile. For a second month on the trot Home REIT saw its share price tank after it came under attack from a short seller in November. Valuation moves - It was a mixed bag for valuations, with six-month

FY22 TU – Strong Upgrades on Better Performance

Argentex has issued a trading update for the 9M22 period this morning, with revenue and earnings performance ahead of expectations. FY22 revenues are up 54% yoy to £50.4m (+7.5% vs. SCM estimates) and operating margins are ahead of management expectations. This was driven by growth in the number of corporate clients as well as good progress across its growth strategy, with robust trading across all products and geographies. Another strong update from Argentex, as the Group continues to deliver o

Strong H1 update and contract wins

Made Tech has announced a very strong update: H1 sales +76% y/y and alongside this, also several wins/expansions worth £27m. As a result, Made Tech has now delivered 48%/FY23e sales and as well, has a very strong backlog: £48m (+53% y/y) so is very well positioned to drive continued growth, both this year and next. Margins meanwhile leave room for improvement, as having generated £0.5m EBITDA in H1, this leaves work to do, but with contractors now materially lower (at c.10% vs. c.20% in the PY)

Cenkos; Marlowe Plc -- Building the software offering

Marlowe hosted a well-attended CMD last week in which it provided a deep dive into its burgeoning software business, which from a standing start in 2018, has grown to represent c25% of group Adj EBITDA today, driven by a combination of targeted acquisitions and strong organic growth (mid-high teens in FY22A). Multiple macro drivers underpin growth in the global GRC market, which is expanding at a c8% CAGR. With the share price having nearly halved over the past 12-months, Marlowe now trades mate

FLASH: FY22 pre-close indicates profit beat

Hybridan Small Cap Feast - 17 Jan 23

17 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Q4 Activities Update

Trident Royalties Plc (AIM: TRR) has, this morning, provided an update on its activities undertaken during the quarter ended 31 December 2022. In terms of royalty receipts it has been the best quarter since inception. QoQ revenues increased 46% to US$3.5m (9x YoY). Each royalty either met or exceeded our forecasts with Koolyanobbing 52% ahead. The gold offtake portfolio was slightly above our forecast.

Thacker Pass Update

The lithium industry, perhaps the hottest sub-sector of mining right now, was set even more abuzz by the announcement yesterday that Lithium Americas Corp has secured a $650m financing package from General Motors for the development and construction of the Thacker Pass mine in Nevada. There has been some talk for a while on when an automaker was going to make a serious investment in a battery metal mine. This is the largest ever and it is suitable that it is in Thacker Pass which is the largest

Morning Note – 31 January 2023

Hybridan Small Cap Feast - 23 Jan 23

23 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Hybridan Small Cap Feast - 19 Jan 23

19 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object