Interim Results

FSFL, a UK centric solar electricity generator, delivered a solid H1’23 total return (-2.4%) in a difficult environment. During the period, the fund continued with its forward sales (locking in cashflows for the next 2.5 years), increased its discount rate by c50bps to 7.5% (UK), maintained its medium term inflation (2024-2030) assumption of 3.0% and announced plans to recycle 200MW of assets into higher returning projects. During 2023 the sector has de-rated as investors, grappling with valuati

Hardman & Co Insight: UK interest rates and “risk-free” gilts at their peak? Infrastructure stocks struggle

The share price performances of the nine Infrastructure Investment Companies (IICs) and of the 22 Renewable Energy Infrastructure Funds (REIFs) have been dire over the past year. Undoubtedly, the sharp rise in interest rates has presented the sector with serious challenges, especially since the yield on “risk-free” 10-year gilts has risen appreciably. Furthermore, the ongoing war in Ukraine and high inflation rates, from which many IICs and REIFs are partially ‒ if not wholly ‒ protected, contin

Foresight Solar Fund - Q2 NAV, trading and capital recycling update

Foresight Solar Fund (FSFL) released a strong operational trading update, with production 2.8% ahead of budget, cash receipts of £52.3m, 42% higher year on year, and forward power sales supporting a 1.5x dividend cover forecast by the company for the next three years. FSFL’s Q2 NAV/share was down 4.3p (-3.4%) from Q1 at 119.9p, with 74% of this move due to 50bp rise in discount rate assumptions for UK assets to 7.5%. FSFL trades at an attractive 19% discount to NAV and 8% dividend yield, in our

The Hardman & Co Monthly: August 2023

Feature article: UK interest rates and “risk-free” gilts at their peak? Infrastructure stocks struggle Executive summary Infrastructure/Renewable Energy Funds ► The share price performances of the nine Infrastructure Investment Companies (IICs) and of the 22 Renewable Energy Infrastructure Funds (REIFs) have been dire over the past year. Undoubtedly, the sharp rise in interest rates has presented the sector with serious challenges, especially since the yield on “risk-free” 10-year gilts has r

Hardman & Co Insight: Higher interest rates overshadow IIC/REIF prospects

Hardman & Co Research’s focus is on the nine quoted infrastructure investment companies (IICs) and on the 22 renewable energy infrastructure funds (REIFs), most of which saw their share prices fall during 2022, while the FTSE 100 rose by just 0.9%. In our Quoted UK Infrastructure and Renewable Energy – Prospects for 2023 publication, we have addressed the three key issues of recent months: higher inflation, extremely volatile power prices and rising interest rates.

Foresight Solar Fund - Growth ambitions

Foresight Solar Fund (FSFL) is the largest solar investor listed in the UK by total net peak capacity of c 1.07GW (when operational). We believe that the global and UK climate change policies will remain renewable energy friendly, creating further solar and battery storage growth opportunities for FSFL. FSFL provides investors with a covered, sustainable and growing dividend (even in 2020 amid depressed power prices). It is focused on further strengthening its dividend cover (1.21x in FY21, targ

Foresight Solar Fund - Powered by merchant exposure

Foresight Solar Fund (FSFL) is the largest solar investor listed in the UK by installed capacity. With power prices more than tripling in 2021, FSFL’s c 25% merchant share of revenues allows the fund to benefit from this increase. While a lower discount rate was the largest contributor to the NAV per share increase to 104.1p in Q321 (98.0p at end-June 2021), power prices were the key external factor affecting the NAV. FSFL provides investors with a covered, sustainable and growing dividend (incl

REIFs revisited – a compendium

In this publication, Hardman & Co’s focus is on the 17 quoted Renewable Energy Infrastructure Funds (REIFs), as we update our publication of February 2020 – the stocks analysed are members of the Association of Investment Companies (AIC). As a group, their combined market capitalisation is now ca.£10.6bn. The most valuable quoted funds are Greencoat UK Wind (£2.5bn) and TRIG (£2.4bn). Comparisons with the seven Infrastructure Investment Companies – a sector worth ca.£12.8bn – are also undertaken

Foresight Solar Fund - Solar energy - the future is here

Foresight Solar Fund (FSFL) has consistently delivered on its investment objective from its launch in October 2013. It is the largest UK solar player and provides investors with a covered, sustainable and growing dividend, underpinned by subsidised assets in the UK and high-return growth opportunities globally. This continued during the fund’s arguably most challenging few years, amid declining power prices and the COVID-19-triggered economic shock. The solar industry’s growth potential remains

UK Renewable Energy Infrastructure Funds – For all the fans

Over the past two decades, onshore wind power has prospered and now exceeds 12 GW in the UK. The termination of subsidies for new plants from 2017 onwards has cut investment. Instead, offshore wind power is the new ‘goto’ investment sector, as there has been a sea-change in costs. The key event was the 2017 auction for the development of the Hornsea Project Two and the Moray East fields, when 15-year contract for differences (CfDs) were awarded, at just £57.50p per MWh; this compares with the 20

Fidante Daily Digest

Augmentum Fintech – Notice of general meeting | John Laing Environmental Assets – Investment adviser change | Foresight Solar – Group acquisition | Gore Street Energy Storage – Finals and proposed fundraising

Fidante Daily Digest

JZCP – JZ Capital – Finals to 28 February 2019 and strategic initiatives | RECI – Real Estate Credit Investments – Proposed fundraising | FSFL – Foresight Solar – Q1 2019 NAV | APAX – Apax Global Alpha – Q1 2019 NAV

Fidante Daily Digest

TRIG – Renewables Infrastructure Group – February 2019 NAV and asset | BBOX – Tritax Big Box – Finals to 31 December 2018 | SIR – Secure Income REIT – Finals to 31 December 2018 | FSFL – Foresight Solar – Finals to 31 December 2018

Strong H1'23 results; forecasts upgraded

LIBERUM: Housebuilders: Darkest before dawn

Strategic progress drives robust growth

H1 interims are in line. Argentex has delivered strong growth (+28% yoy revenue) by driving growth initiatives. New technology-enabled products have been launched, including Alternative Transaction Banking, which are already delivering compelling growth ahead of expectations. Pressing into Europe via the Netherlands is also delivering strong growth. At the core, client KPIs remain strong. We leave our forecasts unchanged, with revenue momentum continuing into Q3. We believe the current 12.4x Dec

LIBERUM: Housebuilders: Rate peak nears & Gove less BANANAs

Equals Group (EQLS LN) - Interims justify rise in forecasts

What’s new: Equals Group has delivered outstanding interims, which have exceeded even the positive commentary at the Capital Markets Day in May and the trading update on 5 July. With trading “ahead of expectations”, we raise our 2023E revenue forecast by 7% to £95m and adj EBITDA forecast by 11% to £20m, as well as nudging up our forecasts for 2024E and 2025E.

H1 23: focusing on capital generation

Promising results for M&G in H1 23. The new CEO, Andrea Rossi, continues to execute the company’s new strategy, and we have confidence that he is positioning M&G to surpass its financial targets for the 2022-24 plan. The H1 23 operating capital generation results significantly outperformed expectations, exceeding the consensus by more than 50%. This substantial capital accumulation is poised to deliver strong returns to shareholders, rewarding them for their patience during this transitional per

LIBERUM: Alpha Group International: Underlying strength

Gore Street Energy Storage + (GSF, House Stock, 84p) - Steady NAV growth

LIBERUM: Real Estate Investors: Further profitable sales reduce leverage

Robust interims; small reductions to FY24 forecasts

LIBERUM: Harworth: Valuation gains reflect management actions and operational progress

LIBERUM: Pollen Street : Fundraising momentum continues

Taking the Upper Brand: Brands Sector Overview

The earliest dated brand has long been contested; the majority point to Kongō Gumi, a family run construction company that specialised in Buddhist temples in Japan; its documented record of ownership goes back to 578 AD. Like Kongō Gumi, several different brands have withstood the test of time, albeit without then same degree of longevity. The term brand originates from the 1500s and means "to burn" in Ancient Norse and was initially used to mark cattle for ownership. This practice can be consid

Morning Note – 6 September 2023

Debt reduction plan in face of higher interest rates

FY23 results were well flagged but the focus is likely to be on the outlook, where high interest rates continue to impact buyer confidence and therefore private sales rates, as well as increasing Springfield’s own cost of debt. This leads us to reduce our adj. EBIT forecast for FY24 by 24%, with a greater 48% reduction in our adj. EPS forecast. We expect net debt exc. leases of £55.1m in FY24. Management’s focus is on cash generation, with the dividend paused and a plan to sell c.£50m of land ov