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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Foresight Solar Fund Limited | LSE:FSFL | London | Ordinary Share | JE00BD3QJR55 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.20 | -1.37% | 86.10 | 85.00 | 85.80 | 86.10 | 86.10 | 86.10 | 140,818 | 08:24:08 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 162.99M | 154.47M | 0.2610 | 3.30 | 509.49M |
From Apr 2019 to Apr 2024
TIDMFSFL
RNS Number : 4900Y
Foresight Solar Fund Limited
22 August 2018
22 August 2018
Foresight Solar Fund Limited
('Foresight Solar', 'FSFL' or 'the Company')
Interim Results to 30 June 2018 and Dividend Announcement
Foresight Solar, a fund investing in a diversified portfolio of ground-based solar PV assets in the UK and internationally, is pleased to announce its Interim Results for the six months ended 30 June 2018.
Highlights
Hot Features
Premium
-- NAV decreased to GBP473.1 million over the period (31 December 2017: GBP481.3 million), being
105.2 pence per share (31 December 2017: 107.0 pence). This reduction was primarily driven
by a continued softening of UK power price forecasts.
-- During the period under review, the Company has declared dividends per share of 3.28 pence.
The Company remains on track to deliver its targeted full year dividend of 6.58 pence for
FY2018 (FY2017: 6.32 pence)*.
-- Electricity production at portfolio level has been above base case assumptions driven by strong
irradiation levels in the UK in the second quarter of 2018. The portfolio generated 260GWh
of clean energy, sufficient to power 84,000 homes for a year.
-- The Company acquired a 53MW portfolio of five operational assets in the UK, continuing the
value accretive expansion of the portfolio.
-- In March 2018, Longreach became the first of the Company's Australian assets to successfully
connect to the grid.
-- Post period, in July 2018, the Company completed a significantly oversubscribed placing, raising
GBP48.1 million of new capital with the net proceeds of the placing used to fund the purchase
of a 114MW portfolio of 15 operational assets located in the UK. The transaction completed
on 3 August 2018.
-- Following this acquisition, the Company is now the largest UK-listed, dedicated solar energy
investment company by installed capacity.
-- The Investment Manager continues to pursue a focused asset acquisition strategy, with the
aim of delivering NAV accretive investment opportunities and currently has exclusivity over
a 72MW UK operational portfolio.
* Target returns are not a profit forecast. There can be no assurance that target returns will be met and it should not be seen as an indication of the Company's expected or actual results or returns.
The Company is also pleased to announce that the second Quarterly dividend of 1.64 pence per share was approved by the Directors and will be paid on 23 November 2018.
Dividend Timetable Date
Ex-dividend Date 8 November 2018
-----------------
Record Date 9 November 2018
-----------------
Payment Date 23 November 2018
-----------------
Key Metrics
As at
30 June 2018
Gross Asset Value ("GAV")* GBP749.0 million
-----------------
Net Asset Value ("NAV") GBP473.1 million
-----------------
NAV per Share 105.2 pence
-----------------
Profit after Tax for the Year GBP6.0 million
-----------------
Total Dividend per Share for 3.28 pence
the period
-----------------
Market Capitalisation GBP489.5 million
-----------------
Share Price 108.8 pence
-----------------
Annual Total NAV Return since
IPO** 6.89%
-----------------
Annual Total Shareholder Return
since IPO** 7.03%
-----------------
* UK investments valued using an unlevered discount rate of 7.00% or a levered discount rate of 7.75%. Australian operational assets use a levered discount rate of 8.5%. Assets under construction are valued at cost.
** Annualised from IPO on 29 October 2013.
Commenting on the Company's Interim results, Alex Ohlsson, Chairman of Foresight Solar Fund Limited said:
"The first half of 2018 has been a period of progress, marked by significant expansion in our UK portfolio, the first of our Australian assets connecting to the grid on schedule and the launch of an equity placing to support further UK asset acquisitions. We are pleased that we remain on track to deliver our targeted full year dividend of 6.58p.
"Following the period, the equity placing closed and was significantly oversubscribed. Proceeds from the placing funded our acquisition of 15 UK solar assets, which saw us become the largest UK-listed dedicated solar energy investment company by installed capacity. We remain confident that, with the positive operational performance of our assets, our continued ability to deliver NAV-accretive investment opportunities and the global trend towards a higher penetration of renewable generation, we are well-positioned to deliver further growth."
Results presentation
Foresight Solar Fund Ltd is holding a presentation to analysts at 09:00 today at Foresight Solar Fund Limited, The Shard, 32 London Bridge Street, London, SE1 9SG. Analysts wishing to attend should contact foresightsolar@citigatedewerogerson.com to register.
Analysts unable to attend in person may listen to the presentation live by using the details below:
Conference Call Dial-In Details: 0808 109 0700
Standard International Access: +44 (0) 20 3003 2666
Password: Foresight Solar
For further information, please contact:
Foresight Group
+44 (0)20 3763 6951
Joanna Andrews
InstitutionalIR@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
Louise Mason-Rutherford
Nick Hayns
Eleni Menikou
Elizabeth Kittle
Notes to Editors
About Foresight Solar Fund Limited
Foresight Solar is a Jersey registered, closed-end investment company investing in a diversified portfolio of ground-based solar PV assets in the UK and Australia.
Since its IPO in October 2013, FSFL has more than tripled in size and raised more than GBP510 million through share placings. The Company targets an index-linked annualised dividend inflated by RPI and has paid all target dividends to date. The target dividend for 2018 is 6.58 pence per share.
FSFL is managed by Foresight Group, a leading independent Global Infrastructure & Private Equity manager, which provides FSFL with depth of experience in fund management, deal origination and execution. The Company has a fully independent Board of Directors and is chaired by Alex Ohlsson. The lead Investment Manager for the Company is Ricardo Piñeiro, Head of UK Solar at Foresight Group.
LEI: 213800VO4O83JVSSOX33
Chairman's Statement
On behalf of the Board, I am pleased to present the Unaudited Interim Report and Financial Statements for Foresight Solar Fund Limited (the "Company") for the six months ended 30 June 2018.
This was a period of real progress for the Company, marked by further expansion of our UK portfolio, the connection to the grid of the Company's first Australian asset, Longreach, and the successful launch and post period completion of an equity placing to support further UK acquisitions.
In what has undeniably become a more competitive and price sensitive market, the Company has managed to source and acquire a number of attractive investment opportunities in the UK. During the period, we acquired a portfolio of five operational solar parks with a total installed capacity of 53.3MW. Post-period end, we also secured a portfolio of 15 assets totalling 114MW. Following this acquisition, the Company is now the largest dedicated solar PV listed investment company in the UK by installed capacity.
I am pleased with the pace of deployment and the Investment Manager's ability to diversify the portfolio and develop efficiencies of scale through a disciplined asset acquisition strategy.
The Board remains confident in the operational performance of our assets, the Investment Manager's ability to deliver NAV accretive investment opportunities and the global movement towards a higher penetration of renewable generation, all of which should support the Company's continued growth.
KEY FINANCIALS
During the period, the NAV per Ordinary Share decreased by 1.8 pence to 105.2 pence (31 December 2017: 107.0 pence). The reduction was primarily driven by a decrease in UK power price forecasts during the period.
DIVID AND DIVID GROWTH
The Company has continued to achieve its dividend objectives and has paid all target dividends since its IPO in October 2013. Dividends over that period totalled 24.6 pence per share.
During the period we approved the first two quarterly dividends of 1.64 pence each and the Company remains on track to deliver its targeted full year dividend of 6.58 pence per share. The Company is due to pay the first quarterly dividend for the current year of 1.64 pence on 24 August 2018.
The Board expects to maintain its stable and RPI inflation-linked dividend based on the financial performance of the current portfolio and existing market conditions. We continue to actively review the dividend policy to reflect the expected evolution of the Investment Portfolio and the ongoing relationship between power prices and inflation levels.
OVERSUBSCRIBED POST-PERIOD SHARE PLACING
On 4 July 2018, the Company closed a significantly oversubscribed share placing raising GBP48.1 million through the issuance of 44,995,209 new Shares. The issuance was undertaken under the Company's existing general authority to dis-apply pre-emption rights as approved by shareholders at the Annual General Meeting on 11 June 2018. The proceeds of the placing were used to fund the purchase of 15 solar assets in the UK, totalling 114MW, as noted above. In our opinion the over-subscription is indicative of the continued support and interest from existing and new shareholders in the Company's offering and track record in delivering targeted returns.
FINANCING
At 30 June 2018, the total outstanding debt for the Company and its subsidiaries amounted to GBP306.0 million (31 December 2017: GBP200.3 million), with long term gearing representing GBP201.0 million (December 2017: GBP152.4 million). The total gearing level increased to 41% of GAV (December 2017: 29%) as a result of the acquisitions completed in the period and the use of the Australian assets debt facilities. Long term gearing represented 27% (2017: 22%), remaining within the debt target level set by the Board.
The Investment Manager will continue to identify opportunities to optimise the Company's capital structure to enhance returns for investors.
OPERATIONAL PERFORMANCE
The second half of the period saw strong irradiation levels in the UK and production levels above base case assumptions. Portfolio performance continued to improve during the first half of the year with only two relevant isolated events causing production variance to fall behind irradiation variance. Those incidents will be compensated for through insurance or contractual liquidated damages and are explained in more detail in the Asset Management section.
PORTFOLIO DEVELOPMENT
During the period the Company reviewed more than 1.4GW of potential investments in the UK and internationally. The Company maintained its pricing discipline and acquired a 53.3MW operational portfolio of five ROC or FiT accredited assets for GBP36.6 million. The purchase of these assets is testament to the Investment Manager's continued ability to source value accretive opportunities which are in line with our objective of creating a diversified, sustainable portfolio through a focused approach to new acquisitions.
During the period, we secured exclusivity over a 134MW operational portfolio of ROC accredited assets located in the UK. We completed the acquisition of 15 of the 18 assets on 3 August 2018 for an equity consideration of GBP47 million. The remaining three assets remain under exclusivity and will be subject to further acquisition due diligence.
SOLAR MARKET DEVELOPMENTS
Global support for renewable energy generation continues to gain significant traction and the industry has matured to cater for this demand. In the UK, renewable generation represented approximately 9.3% of total energy generation in 2016, below the 2020 renewable energy target of 15%. The UK government has recently agreed to increase the 2030 renewable energy target from 27% to 32%, creating a clear opportunity for additional growth of the UK solar market in the medium to long-term.
In April 2017, the closure of the ROC Scheme prompted a shift in the UK market to an increased focus on secondary market acquisitions, subsidy-free solar and the integration of energy storage. The latter both remain in their infancy and the economic viability of these opportunities is yet to be proven. The Investment Manager continues to monitor the progress of these market developments but remains confident that these trends will provide future growth opportunities for the Company given industry support for these initiatives.
In July 2018 Ofgem issued a consultation which proposes a Significant Code Review ("SCR") to address inefficiencies in network access and forward-looking network charging arrangements. If launched, this would run in parallel with the current SCR in progress and the Targeted Charging Review ("TCR") launched in August 2017, which encompasses a review of residual network charging arrangements. The impact of these review processes on charging arrangements for embedded generation has the potential to materially affect the embedded benefits received by the portfolio. Embedded benefits revenue represents less than 2% of lifetime revenues for the portfolio.
In line with global trends, the Australian market has seen a significant increase in both actual and forecasted renewable energy generation. The country is expected to meet its 2030 target for a 26% reduction in carbon emissions ahead of schedule considering the increasing levels of new renewable generation capacity. In contrast to the developed renewables industry in the UK, the Australian renewables sector is in its early stages of development with a number of regulatory initiatives that are expected to support the deployment of renewables under discussion, most notably the Federal Government's National Energy Guarantee ("NEG") framework. The NEG framework focuses on reducing consumers' electricity prices and bringing reliability and emissions reductions to the country's National Electricity Market. The Investment Manager is actively monitoring this development as the NEG policy details and implementation timetable are yet to be confirmed.
PIPELINE AND OUTLOOK
The Investment Manager continues to source a number of value accretive opportunities as evidenced by the recent addition of 114MW of operational assets to the Fund's portfolio. The Company is currently actively reviewing a short-term pipeline of more than 300MW of potential investments in the UK and Western Europe, including a 72MW portfolio of 10 operational, ROC accredited assets located in the UK. The Company has secured exclusivity over this portfolio, which is currently owned by funds managed by Foresight Group LLP.
The Investment Manager will continue to focus on identifying operational assets available in the UK secondary market, as well as continuing to explore investment opportunities in international markets. Investment opportunities outside the UK are expected to deliver attractive returns on a risk-adjusted basis while further diversifying our portfolio, in line with its investment policy.
Alexander Ohlsson
Chairman
22 August 2018
Corporate Summary and Investment Objective
CORPORATE SUMMARY
The Company is a closed-ended company with an indefinite life and was incorporated in Jersey under the Companies (Jersey) Law 1991, as amended, on 13 August 2013, with registration number 113721.
As at 30 June 2018, the Company has 449,952,091 ordinary shares in issue which are listed on the premium segment of the Official List and traded on the London Stock Exchange's Main Market.
The Company makes its investments through intermediate holding companies and underlying Project Vehicles/Special Purpose Vehicles ("SPVs").
INVESTMENT OBJECTIVE
The Company's objective is to provide investors with a sustainable, inflation-linked quarterly dividend and enhanced capital value, through investment in ground-based solar assets predominately located in the UK.
THE COMPANY
The Company's Initial Public Offering on 24 October 2013 raised GBP150 million, creating the largest dedicated solar investment company listed in the UK at the time. To date, the Company has raised a total of GBP511 million through equity issuance.
During the period, the Company announced a placing of 44,995,209 new shares to raise up to GBP48.1 million. The placing was significantly oversubscribed with the Company issuing the maximum number of shares. Following the issuance of the new shares on 6 July 2018, the Company has 494,947,300 shares in issuance representing a market capitalisation of GBP537.0 million.
As at 30 June 2018, the Company's portfolio consisted of 28 assets with a net installed capacity of 674MW, including four Australian assets (representing 146MW), three of which are currently under construction. During the period, Longreach became the first of the Australian assets to begin exporting electricity to the grid.
INVESTMENT POLICY
The Company will pursue its investment objective by acquiring ground-based, operational solar power plants predominantly located in the UK. Investments outside the UK and assets which are still, when acquired, under construction will be limited to 25 percent of the GAV of the Company and subsidiaries, calculated at the time of investment.
The Company will seek to acquire majority or minority stakes in individual ground-based solar assets. When investing in a stake of less than 100 per cent in a solar power plant SPV, the Company will secure its shareholder rights through shareholders' agreements and other legal transaction documents.
Power purchase agreements ("PPAs") will be entered into between each of the individual solar power plant SPVs in the portfolio and creditworthy offtakers. Under the PPAs, the SPVs will sell solar generated electricity and green benefits to the designated offtaker. The Company may retain exposure to power prices through PPAs that do not include mechanisms such as fixed prices or price floors.
Investment may be made in equity or debt or intermediate instruments but not in any instruments traded on any investment exchange.
The Company is permitted to invest cash held for working capital purposes and awaiting investment in cash deposits, gilts and money market funds.
In order to spread risk and diversify its portfolio, at the time of investment no single asset shall exceed in value (or, if it is an additional stake in an existing investment, the combined value of both the existing stake and the additional stake acquired) 30 per cent of the Company's GAV post-acquisition. The GAV of the Company will be calculated based on the last published gross investment valuation of the Company's portfolio, including cash, plus acquisitions made since the date of such valuation at their cost of acquisition. The Company's portfolio will provide diversified exposure through the inclusion of not less than five individual solar power plants and the Company will also seek to diversify risk by ensuring that a significant proportion of its expected income stream is derived from regulatory support (which will consist of, for example, without limitation, ROCs and FiTs for UK assets). Diversification will also be achieved by the Company using a number of different third-party providers such as developers, EPC contractors, O&M contractors, panel manufacturers, landlords and distribution network operators.
The Articles provide that gearing, calculated as Group Borrowing (including any asset level gearing) as a percentage of the Company's GAV, will not exceed 50 percent at the time of drawdown. It is the Board's current intention that long-term gearing (including long-term, asset level gearing), calculated as Group borrowings (excluding intra-group borrowings (i.e. borrowings between members of the Group) and revolving credit facilities) as a percentage of the Company's GAV will not exceed 40 per cent at the time of drawdown.
Any material change to the investment policy will require the prior approval of shareholders by way of an ordinary resolution (for so long as the Ordinary Shares are listed on the Official List) in accordance with the Listing Rules.
SIGNIFICANT SHAREHOLDERS
The Company's shareholders include a substantial number of blue-chip institutional investors.
Shareholders in the Company with more than a 5% holding as at 30 June 2018 are as follows:
% Shareholding
in Fund
Blackrock Investment
Management Ltd 14.4%
---------------
Newton Investment Management
Ltd 9.0%
---------------
Legal & General Investment
Management Ltd 7.3%
---------------
Schroders Plc 7.0%
---------------
Standard Life Aberdeen 5.8%
---------------
Rathbones 5.5%
---------------
Baillie Gifford & Co
Ltd (SC) 5.4%
---------------
Total 54.4%
---------------
ALTERNATIVE INVESTMENT FUND MANAGEMENT DIRECTIVE ("AIFMD")
The AIFMD, which was implemented across the EU on 22 July 2013 with the transition period ending on 22 July 2014, aims to harmonise the regulation of Alternative Investment Fund Managers ("AIFMs") and imposes obligations on managers who manage or distribute Alternative Investment Funds ("AIFs") in the EU or who market shares in such funds to EU investors. Under the AIFMD, the Company is self-managed and acts as its own Alternative Investment Fund Manager.
Both the Company and the Investment Manager are located outside the European Economic Area ("EEA") but the Company's marketing activities in the UK are subject to regulation under the AIFMD.
PACKAGED RETAIL AND INSURANCE-BASED INVESTMENT PRODUCTS REGULATION
A new EU regulation, the Packaged Retail and Insurance-based Investment Products Regulation ("PRIIPS"), came into effect on 1 January 2018. Its aim is to ensure retail investors are provided with transparent and consistent information across different types of financial products. This new regulation requires the Company to publish a Key Information Document ("KID"). The KID is available on the Company's website under Publications and can be found at the following website address: http://fsfl.foresightgroup.eu/investor-relations/publications/kid/.
Board of Directors
The Directors, who are Non-Executive and independent of the Investment Manager, are responsible for the determination of the investment policy of the Company, have overall responsibility for the Company including its investment activities and for reviewing the performance of the Company's portfolio. The Directors are as follows:
Alex Ohlsson (Chairman)
Mr Ohlsson is Managing Partner of the law firm Carey Olsen in Jersey. He is recognised as a leading expert in corporate and finance law in Jersey and is regularly instructed by leading global law firms and financial institutions. He sits on the boards of a number of companies and is also chairman of the listed company GCP Asset Backed Income Fund Limited. He is an Advisory Board member of Jersey Finance, Jersey's promotional body and Treasurer of the Jersey Law Society. He has recently retired as the independent chairman of the States of Jersey's Audit Committee. He was educated at Victoria College, Jersey and at Queens' College, Cambridge, where he obtained an MA (Hons) in Law. He has also been an Advocate of the Royal Court of Jersey since 1995.
Mr Ohlsson was appointed as a Non-Executive Director and Chairman on 16 August 2013 and was reappointed on 11 June 2018.
Chris Ambler
Mr Ambler has been the Chief Executive of Jersey Electricity Plc since 1 October 2008. He has experience in a number of senior positions in the global industrial, energy and materials sectors working for major corporations including ICI/Zeneca, The BOC Group and Centrica/British Gas, as well as in strategic consulting roles. He is a Director on other boards including a Non-Executive Director of Apax Global Alpha Limited, a listed fund which launched on the London Stock Exchange on 15 June 2015. Mr Ambler is a Chartered Director, a Chartered Engineer and a Member of the Institution of Mechanical Engineers. He holds a First Class Honours Degree from Queens' College, Cambridge and an MBA from INSEAD.
Mr Ambler was appointed as a Non-Executive Director on 16 August 2013 and was reappointed on 11 June 2018.
Peter Dicks
Mr Dicks is currently a Director of a number of quoted and unquoted companies. In addition, he was the Chairman of Foresight VCT plc and Foresight 2 VCT plc from their launch in 1997 and 2004 respectively until 2010 and served on the Board of Foresight VCT plc until May 2018. He is also on the Board of Mercia Fund 1 General Partnership Limited and Miton UK Microcap Trust plc and Chairman of Unicorn AIM VCT plc and SVM Emerging Fund.
Mr Dicks was appointed as a Non-Executive Director on 16 August 2013 and was reappointed on 11 June 2018.
Investment Manager
The Company's Investment Manager, Foresight Group CI Limited ("Foresight Group"), is responsible for the development and management of the Company's assets, including the sourcing and structuring of new acquisitions and advising on the Company's borrowing strategy. The Investment Manager is a Guernsey registered company, incorporated under the Guernsey Law with registered number 51471. The Investment Manager is licensed and regulated by the Guernsey Financial Services Commission.
Founded in 1984, Foresight Group is a leading independent infrastructure and private equity investment manager that currently manages over GBP2.5 billion of assets on behalf of institutions and retail clients. Foresight Group's infrastructure team manages GBP2.2 billion of the GBP2.5 billion under management, invested in energy infrastructure assets representing 1.6GW of capacity. The solar investment team was established in 2007 and today it manages assets representing GBP1.3 billion, invested in 80 solar power plants across the UK, Europe and Australia with a total generating capacity of 1.1GW (788MW of which is managed by the Company). In Australia, following the recent acquisitions made on behalf of the Company, Foresight Group is now a significant investor in the Australian market with 252MW under management. Other solar assets include an 21MW portfolio of unsubsidised solar assets in Portugal and Spain, including one of the first corporate PPAs in that market.
The solar investment team, which includes 25 investment professionals, forms part of Foresight Group's 39 strong dedicated multinational energy infrastructure investment team. In the UK, the wider infrastructure team also manages 463MW of investments in bioenergy projects, onshore wind, lithium ion battery storage facilities and reserve power generation assets.
The Company's Investment Management team is led by three experienced UK-based managers and supported by a further team of solar investment managers located in the UK and internationally. The Investment Management team based in Australia has grown to six people comprising three investment professionals, one technical professional and two support staff. This team has been instrumental in the management of the Company's four Australian assets.
Foresight Group is overseen by an Executive Committee of which Gary Fraser is a member. Foresight Group's Executive Committee provides strategic investment advice to the management team and the Board.
During the period, Jamie Richards retired from Foresight Group, the Investment Manager. The Board and Foresight Group would like to thank Jamie, who was heavily involved in the original launch of the Fund and for his contribution during that period. Matt Hammond replaced Jamie on the Company's Investment Management team. Matt is a Director at Foresight Group and has over 20 years' experience in the infrastructure and renewable energy sector.
RICARDO PINEIRO, PARTNER, HEAD OF UK SOLAR
Ricardo has led Foresight Group's UK solar investments since 2011 and has been part of the Fund's management team since IPO. He has overseen more than 60 acquisitions representing over 800 MW and remains primarily focused on leading new renewable energy transactions across UK and international markets. Prior to joining Foresight, Ricardo worked at Espirito Santo Investment where he focused on lending and advisory for the energy infrastructure and transportation sectors.
GARY FRASER, PARTNER, CHIEF FINANCIAL OFFICER
Gary is a Chartered Accountant and Chartered Fellow of the Securities Institute. He worked with Ernst & Young between 1993 and 1999, predominantly in the audit and risk assurance and corporate finance areas and joined ISIS Asset Management plc in 1999 where he was responsible for the provision of similar services to several investment companies. He joined Foresight Group in 2004 and is an Executive Committee member.
MATT HAMMOND, DIRECTOR
Matt has worked as a Director at Foresight since 2015. Prior to joining Foresight Matt was a Director at Macquarie where he focused on infrastructure and renewable energy advisory, investing and lending. He has also worked at Henderson, BT Alex Brown and the WHEB Group where he raised and invested two renewable energy funds investing across Europe.
Asset Manager
The Company's underlying investment vehicles have appointed Foresight Group LLP, a subsidiary of Foresight Group CI, to act as Asset Manager. The Asset Manager is responsible for all operations, including the commercial, financial and technical management of assets under construction acquired by the Company. Foresight Group LLP is authorised and regulated by the Financial Conduct Authority.
Since 2011, Foresight Group has developed a leading Asset Management capability with expertise across electrical and civil engineering, finance and legal disciplines. The team manages over 140 energy infrastructure projects including solar, battery storage, reserve power, bio-energy and onshore wind investments, with 1.6GW of renewable energy capacity.
TOM MOORE, DIRECTOR
Tom has responsibility for the financial and operational performance of Foresight Group's energy infrastructure assets. Tom joined Foresight Group in 2013, having previously worked as Financial Controller at a hedge fund with oversight of internal finance, operations and compliance. He also performed advisory work for M&A transactions and corporate restructurings. Before this he spent four years in practice with Saffery Champness. Tom is a Chartered Accountant and holds a BSc in
Economics from The University of York.
ARNOUD KLAREN, TECHNICAL DIRECTOR
Arnoud joined Foresight Group in 2011 and is responsible for the technical aspects of Foresight Group's solar portfolio. Arnoud previously worked at SolFocus as a Project Manager where he focused on the deployment of concentrated photovoltaic plants in Southern Europe and the Middle-East. Prior to this, Arnoud founded ThinkSpectrally, a spin-off company of The University of Valencia in Spain, dedicated to quality assurance in the PV manufacturing process. Arnoud holds a MSc degree in Electrical Engineering from the Twente University of Technology in The Netherlands.
JULIAN ELSWORTH, SENIOR PORTFOLIO MANAGER
Julian joined Foresight Group in 2013 and has over 14 years of experience in the renewable energy industry. Julian is responsible for the management of the technical and commercial aspects of the UK solar portfolio. Prior to joining Foresight Group, Julian worked as a Senior Consultant for a large engineering consultancy where he focused on a variety of renewable energy projects globally. Julian is a Chartered Engineer and holds an MSc in Renewable Energy and the Environment from Reading University.
TULLY ROBERTSON, TECHNICAL PORTFOLIO MANAGER
Tully joined Foresight Group in 2018 and is based in Sydney. He is an electrical engineer with 13 years' experience in project/contract management, design and commissioning of various high voltage infrastructure projects throughout Australia. Tully has also performed design reviews and written EPC specifications for utility scale wind and solar farm projects in Australia. Tully is a Chartered Professional Engineer (CPEng), Registered Professional Engineer of Queensland (RPEQ) and Member of the Institution of Engineers Australia (MIEAust).
Portfolio Assets
Current Portfolio
Asset Country Status Installed Ownership Net Connection Acquisition Current(2)
Peak MW Date Cost(1) Fair
Capacity Value
(MW)
----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Wymeswold(3) UK and accredited 34 100% 34 March 2013 45 48.0
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Castle Eaton UK and accredited 18 100% 18 March 2014 22.6 20.5
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Highfields UK and accredited 12 100% 12 March 2014 15.4 13.3
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
High Penn UK and accredited 10 100% 10 March 2014 12.7 10.2
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Pitworthy UK and accredited 16 100% 16 March 2014 19.3 16.3
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Hunters Operational
Race UK and accredited 10 100% 10 July 2014 13.3 13.5
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Spriggs Operational
Farm UK and accredited 12 100% 12 March 2014 14.6 13.7
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational September
Bournemouth UK and accredited 37 100% 37 2014 47.9 49.8
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational December
Landmead UK and accredited 46 100% 46 2014 52.4 47.7
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational September
Kencot UK and accredited 37 100% 37 2014 49.5 44.5
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational December
Copley UK and accredited 30 100% 30 2015 32.7 36.6
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Atherstone UK and accredited 15 100% 15 March 2015 16.2 15.3
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Paddock Operational
Wood UK and accredited 9 100% 9 March 2015 10.7 10.9
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Southam UK and accredited 10 100% 10 March 2015 11.1 11.0
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Port Farm UK and accredited 35 100% 35 March 2015 44.5 43.6
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Membury UK and accredited 16 100% 16 March 2015 22.2 20.4
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Shotwick UK and accredited 72 100% 72 March 2016 75.5 84.2
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Sandridge UK and accredited 50 100% 50 March 2016 57.3 57.6
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Wally Corner UK and accredited 5 100% 5 March 2016 5.7 5.7
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational February
Coombeshead UK and accredited 10 100% 10 2015 7.2 7.1
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Park Farm UK and accredited 13 100% 13 March 2015 8.2 8.1
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Sawmill UK and accredited 7 100% 7 March 2015 4.5 4.5
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational February
Verwood UK and accredited 21 100% 21 2015 14.1 14.0
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Operational
Yardwell UK and accredited 3 100% 3 June 2015 2.5 2.6
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
UK Subtotal 528 528 605.1 599.2
---------------------------------------------- ---------- ---------- ---- ----------- ------------ -----------
August
Bannerton Australia Construction 110 48.5% 53 2018(4) 22.9 22.9(5)
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Longreach Australia Operational 17 49% 8 March 2018 2.7 3.0
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
September
Oakey 1 Australia Construction 30 49% 15 2018(4) 4.4 4.4(5)
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
October
Oakey 2 Australia Construction 70 100% 70 2018(4) 25.6 25.6(5)
-------------- ----------- ----------------- ---------- ---------- ---- ----------- ------------ -----------
Australia
Subtotal 227 146 55.5 55.9
---------------------------------------------- ---------- ---------- ---- ----------- ------------ -----------
Total 755 674 660.6 655.1
---------------------------------------------- ---------- ---------- ---- ----------- ------------ -----------
1 Original cost at time of acquisition, including transaction
costs.
2 UK investments valued using an unlevered discount rate of
7.00% or a levered discount rate of 7.75%. Australian operational
assets use a levered discount rate of 8.5%.
3 Includes the 2MW extension acquired in March 2015.
4 Expected connection dates.
5 Held at cost incurred to date. This does not represent expected
final cost and assumes AUD/GBP exchange rate of 0.56 as at
30 June 2018.
Portfolio ACQUIRED POST PERIOD
Asset Country Status Installed Ownership Net MW Connection Acquisition
Peak Capacity Date Cost1
(MW)
--------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Abergelli UK and accredited 8 100% 8 2015 3.7
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational February
Crow Trees UK and accredited 5 100% 5 2016 1.8
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Cuckoo Grove UK and accredited 6 100% 6 2015 2.5
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Field House UK and accredited 6 100% 6 2015 3.1
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Fields Farm UK and accredited 5 100% 5 2016 1.7
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Gedling UK and accredited 6 100% 6 2015 1.9
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Homeland UK and accredited 13 100% 13 2014 5.2
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Marsh Farm UK and accredited 9 100% 9 2015 4.0
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational December
Sheepbridge UK and accredited 5 100% 5 2015 1.9
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational
Steventon UK and accredited 10 100% 10 June 2014 4.2
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Tengore Operational February
Lane UK and accredited 4 100% 4 2015 1.3
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational March
Trehawke UK and accredited 11 100% 11 2014 4.7
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational October
Upper Huntingford UK and accredited 8 100% 8 2015 3.1
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational
Welbeck UK and accredited 11 100% 11 July 2014 4.3
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Operational November
Yarburgh UK and accredited 8 100% 8 2015 3.4
------------------- --------- ----------------- --------------- ---------- ------- ----------- -------------
Total 114 114 46.8
------------------------------------------------- --------------- ---------- ------- ----------- -------------
Total including
post period
end assets 869 788 707.4
------------------------------------------------- --------------- ---------- ------- ----------- -------------
1 Original cost at time of acquisition, including transaction costs
Investment Manager's Report
For the period ended 30 June 2018
KEY INVESTMENT METRICS
As at As at As at
30 June 2018 31 December 30 June 2017
2017
Market Capitalisation GBP489.5 million GBP486.0 million GBP465.0 million
----------------- ----------------- -----------------
Share Price 108.8 pence 108.0 pence 112.38 pence
----------------- ----------------- -----------------
Dividend Declared per 3.28 pence 6.32 pence 1.58pence
Share for the period
----------------- ----------------- -----------------
GAV GBP749.0 million GBP680.8 million GBP625.3 million
----------------- ----------------- -----------------
Net Asset Value GBP473.1 million GBP481.3 million GBP432.8 million
----------------- ----------------- -----------------
NAV per Share 105.2 pence 107.0 pence 104.6 pence
----------------- ----------------- -----------------
Annual Total Return
(NAV) since IPO 6.89% 7.48% 6.97%
----------------- ----------------- -----------------
Annual Total Shareholder
Return since IPO 7.03% 7.02% 8.35%
----------------- ----------------- -----------------
Profit after Tax for GBP6.0 million GBP35.1 million GBP11.5 million
the Year
----------------- ----------------- -----------------
PORTFOLIO SUMMARY
At the period end, the Company's portfolio consisted of 28 assets with total net peak capacity of 674MW. The UK portfolio represents a total installed capacity of 528MW across 24 operational assets accredited under the Renewables Obligation ("RO") scheme, with the exception of Yardwall which is Feed-in-Tariff ("FiT") accredited asset. The international portfolio consists of four assets located in Australia, representing 146MW of net installed capacity. The first Australian asset, Longreach, connected to the grid in March 2018, with the remaining three Australian assets under construction and expected to connect to the grid during the second half of 2018. The Australian assets benefit from subsidies in the form of Large-Scale Generation Certificates ("LGC").
During the period approximately, 53% of total revenues resulted from the sale of green certificates and FiT payments, with the remaining 47% representing the sale of the electricity generated by the assets in the Company's portfolio. The ROC buy-out price for the annual compliance period commencing in April 2018 increased to GBP47.22 (2017-18 compliance period: GBP45.58), reflecting the average monthly percentage change in RPI during 2017.
The Investment Manager has selected assets that deliver portfolio diversification by geographical location, panel manufacturers and O&M counterparties. The Australian assets, which at period end represented c.13% of the total equity invested, provide further diversification in a high irradiation environment and are expected to generate attractive returns on a risk-adjusted basis.
UK ACQUISITIONS
In April 2018, the Company acquired a portfolio of five operational solar parks with a total installed capacity of 53.3MW. The portfolio was acquired for GBP36.6 million, including transaction costs and approximately GBP4.2 million of cash balances. As part of the transaction, the Company acquired the economic benefit of all project cash flows from 1 January 2018.
At the date of acquisition, the portfolio had in place long-term debt facilities with an outstanding balance of GBP31.8 million provided by Macquarie Infrastructure Debt Investment Solutions, an existing lender to the Company investment portfolio.
The five assets acquired are detailed below:
Asset Location Installed Connection Subsidy
Peak Date
Capacity
(MW)
--------------- ---------- ----------- --------
Coombeshead Devon 9.8 Aug-15 1.4
ROCs
------------ --------------- ---------- ----------- --------
Park Farm Leicestershire 13.2 Jul-15 1.4
ROCs
------------ --------------- ---------- ----------- --------
Sawmill Devon 6.6 Sep-15 1.4
ROCs
------------ --------------- ---------- ----------- --------
Verwood Dorset 20.7 May-15 1.4
ROCs
------------ --------------- ---------- ----------- --------
Yardwell Somerset 3.0 Sep-15 FiT
------------ --------------- ---------- ----------- --------
The portfolio also includes a 0.5MW onshore wind asset. The Company plans to hold this asset on a temporary basis. The asset was commissioned in December 2014 and accredited under the FiT scheme. The asset represents an insignificant part of the investment portfolio, representing less than 1% of the Company's NAV.
POST PERIOD
In August 2018, the Company acquired a 114MW operational portfolio for an equity consideration of GBP47 million, including the economic benefit of all cashflows from 1 April 2018. The portfolio consists of 15 assets located in the UK, all accredited under the RO scheme, receiving a weighted average of 1.41 ROCs/MWh.
The transaction offered a unique opportunity to the Company as the portfolio was acquired from funds managed by Foresight Group LLP. All assets in the portfolio have been in operation for a minimum period of two years and have been managed by Foresight's in-house Asset Management team, thereby ensuring the quality of assets.
The portfolio offers a wide range of module manufacturers and O&M contractors servicing the individual assets, thereby increasing the diversification of the Company's UK portfolio.
The portfolio currently has debt facilities in place totalling GBP107.2 million provided by the Royal Bank of Scotland, which have been arranged on an asset by asset basis. It is the Company's intention to refinance these facilities and other UK assets in the Company's portfolio currently funded by Revolving Credit Facilities ("RCFs") as a whole within the next 12 months.
The 15 assets acquired are detailed below:
Asset Location Installed Connection ROCs
Peak Date
Capacity
(MW)
----------------- ----------- ----------- -----
Trehawke Cornwall 10.6 Mar-14 1.6
-------------- ----------------- ----------- ----------- -----
Homeland Dorset 13.2 Mar-14 1.6
-------------- ----------------- ----------- ----------- -----
Steventon Oxfordshire 10.0 Jun-14 1.4
-------------- ----------------- ----------- ----------- -----
Welbeck Nottinghamshire 11.3 Jul-14 1.4
-------------- ----------------- ----------- ----------- -----
Tengore
Lane Somerset 3.6 Feb-15 1.4
-------------- ----------------- ----------- ----------- -----
Gedling Nottinghamshire 5.7 Mar-15 1.4
-------------- ----------------- ----------- ----------- -----
Marsh
Farm Wiltshire 9.1 Mar-15 1.4
-------------- ----------------- ----------- ----------- -----
Abergelli South Wales 7.7 Mar-15 1.4
-------------- ----------------- ----------- ----------- -----
Field
House Hampshire 6.4 Mar-15 1.4
-------------- ----------------- ----------- ----------- -----
Cuckoo
Grove Pembrokeshire 6.1 Mar-15 1.4
-------------- ----------------- ----------- ----------- -----
Upper
Huntingford Gloucestershire 7.7 Oct-15 1.3
-------------- ----------------- ----------- ----------- -----
Yarburgh Lincolnshire 8.1 Nov-15 1.3
-------------- ----------------- ----------- ----------- -----
Sheepbridge Reading 5.0 Dec-15 1.3
-------------- ----------------- ----------- ----------- -----
Crow Trees Nottinghamshire 4.7 Feb-16 1.3
-------------- ----------------- ----------- ----------- -----
Fields
Farm Warwickshire 5.0 Mar-16 1.3
-------------- ----------------- ----------- ----------- -----
POWER PRICES
UK
Power prices averaged approximately GBP50/MWh for most of Q1 2018 but increased significantly in March due initially to the very low temperatures and adverse weather that resulted in higher gas prices in Europe, with the daily average price temporarily increasing to GBP98/MWh at the beginning of March. The European Emission Allowances ("EUA") carbon price also rose significantly during Q1 2018 which further supported the increase in power prices.
In Q2 2018 power prices remained relatively stable, largely supported by gas prices and the continued rise in EUA carbon prices.
The Company's PPA strategy seeks to optimise revenues from power generated, while keeping the flexibility to manage the portfolio appropriately.
The Company continues to take advantage of current attractive forward electricity prices and has increased the proportion of fixed price arrangements from 29% (31 December 2017) to 54% of the electricity sales of the UK portfolio as at 30 June 2018. This increase is driven by new fixed price arrangements across six assets until 30 September 2018, at a weighted-average price of GBP48.07/MWh. Additionally, the 53.3MW portfolio acquired in April had, at the time of acquisition fixed price arrangements in place until 30 September 2018, at a weighted-average price of GBP44.83/MWh. This provides greater visibility over future cash flows and limits potential price volatilities in the short term.
The average power price for the UK portfolio during the period, including fixed price arrangements was GBP46.54, versus GBP40.61 in the first half of 2017, an increase of 14.6%.
The Investment Manager regularly reassesses conditions in the electricity market and updating its view on likely future movements. The Company retains the option to fix the PPAs of its portfolio assets at any time, but the Investment Manager is satisfied that the current proportion of fixed price arrangements offers an appropriate level of price certainty.
australia
In 2017, energy prices increased across the majority of regions as a result of the closure of base load plants (Hazelwood, Wallerawang, Northern and Swanbank E) and reduced availabilities of the coal fleet, as well as higher periods of electricity consumption and peak demand. South Australia and Tasmania exhibited the sharpest increases in pricing due to an extended period of outage of the interconnector with Victoria (in the case of Tasmania) and as a result of gas supply constraints over winter combined with interconnector outages (in the case of South Australia).
Wholesale prices during the first half of 2018 have fallen versus 2017 due to an increase in renewables penetration and reduced demand from large energy consumers.
The Investment Manager is currently reviewing the PPA options for Oakey 2 and expects to enter an agreement in advance of the target commissioning date in October 2018.
POWER PRICE FORECASTS
The Investment Manager uses forward looking power price assumptions to assess the likely future income of the portfolio assets for valuation purposes. The Company's assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis for each relevant market.
UK
During the period, there was a downward movement of c.2.9% in the medium to long-term power price forecast driven by an expected higher penetration of installed renewable generation capacity and fall in commodity prices.
The Company's forecasts assume an increase in power prices in real terms over the medium to long-term of 1.1% per annum (31 December 2017: 1.3%).
Where the assumed asset life extends beyond 2040, the Investment Manager has assumed no real growth in forecast power prices.
AUSTRALIA
Prices are expected to fall between now and 2020 as a result of increasing levels of new renewable generation capacity entering the market under the large scale renewable energy target (LRET), in combination with stable levels of projected demand, as anticipated at the time of the Company's initial investment in the Australian market.
The federal government has announced its intention to introduce a National Energy Guarantee ("NEG") which is expected to reduce electricity prices, while continuing to provide a higher revenue stream for renewables in the form of higher contract prices linked to emission intensity. Further changes to the energy efficiency policy or the Renewable Energy Target are also feasible, as well as policy changes to encourage greater than 26% emissions reductions in the energy sector as reductions in other sectors are less feasible. On 20 August 2018 the federal government announced the NEG framework would no longer legislate on the country's commitment to reduce emissions by 26% by 2030, focusing instead on ministerial regulation driven by consumer electricity prices. The policy details and implementation of the NEG are yet to be finalised by the federal government.
THIRD PARTY DEBT ARRANGEMENTS AND Gearing Position
As at 30 June 2018, the total outstanding long-term debt was GBP201.0 million, representing 27% of GAV of the Company and Subsidiaries (31 December 2017: GBP152.4 million or 22% of GAV).
As at 30 June 2018, the total outstanding debt including RCFs was GBP306.0 million, representing 41% of GAV (31 December 2017: GBP200.3 million or 29% of GAV.)
Long Term Facilities
As at 30 June 2018, GBP186.6 million of long-term debt facilities was outstanding*. This figure includes the GBP31.8 million debt facilities in place at the date of acquisition of the 53.3MW portfolio acquired in April 2018. The new debt facilities have a remaining tenure of 16 years and includes an inflation-linked and a fixed-rate tranche, representing 85% and 15%, respectively, of the total facility amount. Inflation linked debt facilities represent GBP90.9 million of the total long-term debt outstanding as of 30 June 2018.
* Includes GBP5.8m of nominal revaluation of the inflation-linked facilities.
At 30 June 2018, the average cost of long-term debt, including the new facility was 2.47% per annum (2017: 2.5%), including the cost of the inflation linked facilities of 1.35% per annum. The cost of the inflation linked facility is expected to increase over time assuming the Company's long-term annual RPI forecast of 2.75%, to an equivalent average annual cost of c.2.99% over the term of the facilities.
Revolving Credit Facilities
As part of the acquisition of five new assets in April 2018, the Company agreed a GBP10 million facility extension of the RCF entered in February 2017 at the prevailing rate of LIBOR + 2%. As at 30 June 2018, RCFs of GBP105m were fully drawn.
At 30 June 2018 the all-in annualised cost of the revolving credit facilities was 1.71%. The Investment Manager expects to refinance the remaining balance either through future equity raisings or other long-term refinancing arrangement.
TERM FACILITIES FOR AUSTRALIAN ASSETS
As at 30 June 2018, the following project companies had drawn down on their debt facilities:
Project Facility Amount drawn
size
---------- -------------
Bannerton (CEFC) c.A$98m A$11.2m*
----------------- ---------- -------------
Oakey 1 (CEFC) c.A$19m A$14m
----------------- ---------- -------------
Oakey 1 (MUFG) c.A$19m A$14m
----------------- ---------- -------------
Longreach (CEFC) c.A$13.5m A$12.2m
----------------- ---------- -------------
Longreach (MUFG) c.A$13.5m A$12.2m
----------------- ---------- -------------
Oakey2 (CEFC) c.A$55m undrawn
----------------- ---------- -------------
*The balance of the loan as at the end of June, including capitalised interest and commitment fees was A$11.5m
When assets are not owned in their entirety by the Company only the pro-rata debt amounts drawn are considered for gearing ratio calculation purposes.
DIVIDS
Since the IPO, the Company has met all target dividends. The Company is targeting a full year dividend for the year ending 31 December 2018 of 6.58 pence.
DIVID TIMETABLE FOR FY2018
Dividend Amount Status Payment
Date
----------- --------- ------------
Interim 1.64 pence Approved 24 August
1 2018
--------- ----------- --------- ------------
Interim 1.64 pence Approved 23 November
2 2018
--------- ----------- --------- ------------
Interim 1.65 pence Targeted Q1 2019
3
--------- ----------- --------- ------------
Interim 1.65 pence Targeted Q2 2019
4
--------- ----------- --------- ------------
TOTAL 6.58 pence
--------- ----------- --------- ------------
The first interim quarterly dividend of 1.64 pence for the year ending 31 December 2018 will be paid on 24 August 2018.
On 21 August 2018 the Board approved the second interim dividend relating to FY2018 of 1.64 pence per share.
Dividend Timetable -
Interim 2
------------
Ex-dividend Date 8 November
2018
--------------------- ------------
Record Date 9 November
2018
--------------------- ------------
Payment Date 23 November
2018
--------------------- ------------
DIVID COVER
Total dividends of GBP27.9 million were paid during the year to 30 June 2018. Compared with the relevant net cash flows of the Company and underlying investments, these dividends were covered 1.14 times when dividends paid to new equity are excluded.
FOREIGN EXCHANGE
As a result of its Australian acquisitions, the Company will be exposed to foreign exchange movements in respect of these investments. To reduce the impact of potential currency fluctuations and to minimise the volatility of equity returns and cash flow distributions, the Company will implement a hedging strategy by entering into forward contracts for up to two years in an amount equivalent to c.75% of its distributable foreign currency cash flows at project level. Due to the predictable nature of solar irradiation in Australia, and the known dividend payment dates, the Investment Manager believes this hedging solution will protect the cash yields from the Australian projects.
The cost of the equity investments will not benefit from foreign exchange hedging, considering the long-term investment strategy of the Company.
The Company will review this foreign exchange strategy on a semi-annual basis with the objective of limiting the short-term volatility in sterling distributable cash flows caused by foreign exchange fluctuations and of optimising the costs of the hedging instruments.
ONGOING CHARGES
The ongoing charges ratio for the year to 30 June 2018 was 1.19% (31 December 2017: 1.18%). This has been calculated using methodology as recommended by the Association of Investment Companies ("AIC"). Foresight Group LLP charges asset management fees directly to the assets and these are not included within the ongoing charge ratio.
INVESTMENT PERFORMANCE
The NAV per share for the Company as at 30 June 2018 decreased to 105.2 pence compared to 107.0 pence as at 31 December 2017.
GROSS ASSET VALUE ("GAV")
The GAV of the Company is GBP749.0 million as at 30 June 2018. The reconciliation below shows the GAV as it would be on a consolidated basis when all third party debt at the intermediate holding level is included. There is no external debt at asset level for the UK assets.
GAV of Company GBP474.5m
------------
Less: Valuation of Investment GBP(403.0)m
--------------------------------------------- ------------
Add: Valuation of underlying solar portfolio GBP677.4m
--------------------------------------------- ------------
Add: Other net assets of subsidiaries GBP0.1m
--------------------------------------------- ------------
GAV of Company and subsidiaries GBP749.0m
--------------------------------------------- ------------
MOVEMENTS IN NAV
A breakdown in the movement of the Group NAV during the reporting period is shown in the table below.
NAV NAV per share
------------ --------------
NAV as at December 2017 GBP481.3m 107.0p
------------------------- ------------ --------------
Dividend paid GBP(14.2)m (3.2)p
------------------------- ------------ --------------
Interest earned GBP17.4m 3.9p
------------------------- ------------ --------------
Management fee GBP(2.3)m (0.5)p
------------------------- ------------ --------------
RCF Finance costs GBP(1.0)m (0.2)p
------------------------- ------------ --------------
Other cost (incl. CT) GBP(1.6)m (0.4)p
------------------------- ------------ --------------
Inflation* GBP8.5m 1.9p
------------------------- ------------ --------------
Acquisitions* GBP0.9m 0.2p
------------------------- ------------ --------------
Valuation Date* GBP(4.6)m (1.0)p
------------------------- ------------ --------------
PR* GBP(0.8)m (0.2)p
------------------------- ------------ --------------
Power Curve* GBP(9.7)m (2.1)p
------------------------- ------------ --------------
Other* GBP(0.8)m (0.2)p
------------------------- ------------ --------------
NAV as at June 2018 GBP473.1m 105.2p
------------------------- ------------ --------------
* Movement in the valuation of underlying solar assets
VALUATION OF THE PORTFOLIO
The Investment Manager is responsible for providing fair market valuations of the Company's underlying assets to the Board of Directors. The Directors review and approve these valuations following appropriate challenge and examination. Valuations are undertaken quarterly. A broad range of assumptions is used in the valuation models. These assumptions are based on long-term forecasts and are not affected by short-term fluctuations, be it economic or technical.
It is the policy of the Investment Manager to value with reference to Discounted Cash Flows ("DCF") at the later of commissioning or transaction completion. This is partly due to the long periods between agreeing an acquisition price and financial completion of the acquisition. Quite often this delay reflects construction. Revenues accrued do not form part of the DCF calculation when making a fair and proper valuation.
The current portfolio consists of non-market traded investments and valuations are based on a DCF methodology or held at cost where the assets have not yet reached commissioning. This methodology adheres to both IAS 39 and IFRS 13 accounting standards as well as the International Private Equity and Venture Capital ("IPEV") Valuation Guidelines.
The Company's Directors review the operating and financial assumptions, including the discount rates, used in the valuation of the Company's portfolio and approve them based on the recommendation of the Investment Manager.
As reported in the 2017 Annual Accounts, as of 31 December 2017 the Company adapted its valuation methodology to apply a levered equity discount rate of 7.75% for UK assets which utilise long term debt facilities whilst maintaining an unlevered equity discount rate of 7.0% for those assets that are funded by equity or RCF proceeds. As of 30 June 2018, the discount rates remained unchanged, with Shotwick, Sandridge and Wally Corner, being valued at a 7.0% unlevered discount rate and the remaining assets in the UK portfolio valued at a levered equity discount rate of 7.75%.
The discount rate used for those assets which have received lease extensions is 9% after 25 years.
Longreach, the first Australian asset to become operational, is being valued applying a levered discount rate of 8.5%.
DIVID PAID
The Company paid dividends of GBP14.2 million during the period 1 January 2018 to 30 June 2018.
INTEREST EARNED
The Company and its subsidiaries accrued GBP17.4 million of investment income during the reporting period. This income represents distributions from the underlying assets.
COSTS
Total costs of GBP4.9 million, which include corporation tax, management fees, finance and other costs, were incurred by the Company and its subsidiaries on a consolidated basis during the year.
INFLATION
The Investment Manager continues to use 2.75% as its medium/long-term inflation assumption. As at 30 June 2018, the models reflect OBR forecasts for the period between 2018 and 2020 are: 3.46%, 2.71% and 2.89% respectively.
ACQUISITIONS
During the period the Company completed the acquisition of a 53.3MW portfolio of five assets located in the UK, resulting in a NAV uplift of GBP0.5 million which represents the difference between the acquisition prices paid and the current valuations.
Longreach connected in March and as such has been revalued this quarter using the discounted cash flow methodology, in line with the rest of the portfolio. This resulted in a NAV uplift of GBP0.4 million.
The remaining Australian acquisitions are valued at cost and will continue to be held at cost until the assets become connected to the grid. These asset valuations are updated quarterly to reflect movements related to exchange rate.
EQUITY RAISED
No Share Placings took place during the reported period. The 30 June 2018 valuation does not include the GBP48.1 million proceeds from the July fundraise.
DISCOUNT RATE
The Company's discount rates reported above remain unchanged and as reported in the 31 December 2017 Annual Accounts.
The Investment Manager regularly reviews the discount rate to ensure it remains in line with any changes to the risk profile of the Company.
VALUATION DATE
This movement represents the impact of moving from one valuation date to another. Over the life of an asset this movement will reduce the valuation to nil. Short term increases arise from moving towards higher cash yields (and therefore discounting them less).
PERFORMANCE RATIO ("PR")
The performance ratio assumptions in the valuation models are initially linked to contractually guaranteed performance and the initial technical due diligence findings at the time of acquisition. The long-term assumptions are adjusted on an ongoing basis as more data becomes available, recognising the actual performance ratios experienced across the portfolio on an asset by asset basis. This approach is applied on a quarterly basis to ensure valuation assumptions better reflect the actual performance of the sites. The movements in assumed performance ratios are implemented conservatively at a rate that ensures short term fluctuations do not inflate performance potential.
POWER CURVE
The Investment Manager uses forward looking power price assumptions to assess the likely future income of the portfolio assets for valuation purposes. The Company's assumptions are formed from a blended average of the forecasts provided by third party consultants and are updated on a quarterly basis.
During the period there was a downward movement of 2.9% in the medium to long term power price forecast. The Company's forecasts continue to assume an increase in power prices in real terms over the medium to long-term of 1.1% per annum (31 December 2017: 1.3%).
OTHER MOVEMENTS
This includes other factors behind the valuation movement for example revisions in underlying assumptions regarding operational efficiencies, such as insurance.
lease extensions
Prior to the period, the Asset Manager secured lease and planning rights to extend the useful economic life of eight assets in the portfolio by up to an extra ten years beyond the standard 25-year period. These extensions are included in the DCF model.
The cash flows from operations that fall after the initial 25-year period have been discounted at 9.0%, reflecting the merchant risk of the expected cash flows beyond the initial 25-year period.
The average extension to useful economic life across the eight assets is 8.2 years with additional costs incorporated into the extended lives. The weighted life of the UK portfolio as at 30 June 2018 is 28.3 years (31 December 2017: 28.7 years).
There have been no lease extensions during the reported period.
VALUATION SENSITIVITIES
Where possible, assumptions are based on observable market and technical data. In many cases, such as forward power prices, independent advisors are used to provide reliable and evidenced information enabling the Investment Manager to adopt a prudent approach. The Investment Manager has set out the inputs which it has ascertained would have a material effect upon the NAV in note 16 of the financial statements. All sensitivities are calculated independently of each other.
Asset Manager's Report
Portfolio Performance
UK PORTFOLIO PERFORMANCE
The Asset Manager is pleased with production levels during the period, which were driven by higher than expected levels of irradiation. For the period production levels were 0.9% above expectations versus irradiation levels, which were 3.2% above forecasts.
The portfolio performance continued to improve during the first half of the year with only two isolated events causing production variance to fall behind irradiation variance. Those incidents, which will be compensated for through insurance and contractual liquidated damages are explained in more detail below. The incidents are isolated events and will not affect the long-term performance of the assets.
Further EPC remedial works were performed on three of the SunEdison-built sites which experienced underperformance in 2017 (Pitworthy, High Penn, Highfields). These sites combined represent 7% of UK installed capacity, with works resulting in lower availability than our long-term assumptions provide for. There is no concern around the long-term performance capability of these sites but the works needed are taking longer than initially envisaged.
PRODUCTION
The production figures below have been adjusted for events where compensation has been, or will be, received.
Site MW Production Production Irradiation
(MW hours) Variance Variance
------ ------------ ----------- ------------
Atherstone 14.8 7,807,744 7.3% 8.1%
---------------- ------ ------------ ----------- ------------
Bournemouth 37.3 21,621,975 2.7% 0.1%
---------------- ------ ------------ ----------- ------------
Castle Eaton 17.8 9,050,875 4.2% 4.9%
---------------- ------ ------------ ----------- ------------
Coombeshead 9.8 3,972,193 1.6% 0.9%
---------------- ------ ------------ ----------- ------------
Copley 30.0 15,854,259 5.6% 2.2%
---------------- ------ ------------ ----------- ------------
High Penn 9.6 4,727,977 -3.9% 0.5%
---------------- ------ ------------ ----------- ------------
Highfields 12.2 5,695,798 -5.2% 0.9%
---------------- ------ ------------ ----------- ------------
Hunters Race 10.3 5,849,319 2.3% -0.2%
---------------- ------ ------------ ----------- ------------
Kencot 37.2 19,877,033 4.2% 2.9%
---------------- ------ ------------ ----------- ------------
Landmead 45.9 23,445,713 2.7% 5.4%
---------------- ------ ------------ ----------- ------------
Membury 16.5 8,445,573 -0.6% -1.7%
---------------- ------ ------------ ----------- ------------
Paddock Wood 9.2 5,149,779 5.2% 2.9%
---------------- ------ ------------ ----------- ------------
Park Farm 13.2 4,958,108 9.4% 4.8%
---------------- ------ ------------ ----------- ------------
Pitworthy 15.6 6,629,973 -15.0% 6.6%
---------------- ------ ------------ ----------- ------------
Port Farms 34.7 17,883,078 0.2% 1.9%
---------------- ------ ------------ ----------- ------------
Sandridge 49.6 25,913,246 0.1% 0.7%
---------------- ------ ------------ ----------- ------------
Sawmills 6.6 2,511,730 -2.6% -1.1%
---------------- ------ ------------ ----------- ------------
Shotwick 72.2 34,835,960 -3.6% 7.6%
---------------- ------ ------------ ----------- ------------
Southam 10.3 5,469,607 5.5% 3.0%
---------------- ------ ------------ ----------- ------------
Spriggs 12.0 6,405,888 3.1% -1.1%
---------------- ------ ------------ ----------- ------------
Verwood 20.7 8,068,795 2.2% 3.6%
---------------- ------ ------------ ----------- ------------
Wally Corner 5.0 2,793,598 5.5% 2.7%
---------------- ------ ------------ ----------- ------------
Wymeswold 34.5 16,986,165 0.9% 5.1%
---------------- ------ ------------ ----------- ------------
Yardwall 3.0 1,203,412 -2.2% -0.2%
---------------- ------ ------------ ----------- ------------
Total 527.9 265,157,796 0.9%
---------------- ------ ------------ ----------- ------------
Weighted Total 3.2%
---------------- ------ ------------ ----------- ------------
SHOTWICK (72MW)
On 25 April 2018, there was a break-in at Shotwick and cable was stolen from the site. The EPC reacted quickly, the damage was rectified and the site was fully operational by the end of May. The Asset Manager considers this an insurable event. This Incident accounted for 0.8% of Shotwick's expected production for the period.
On 25 June 2018, the cable connecting the solar power plant and the substation failed, forcing the site offline. The Asset Manager and Independent Connection Provider ("ICP") worked continuously to ensure re-energisation of the site as quickly and safely as possible. The cable route in question ran over and along a railway bridge, main road and gas main pipeline. The site was re-energised on 27 July 2018. The Investment Manager expects compensation to be received through a combination of insurance and ICP damages representing a high proportion of the revenues losses. Production losses not covered by insurance or contractual protection are expected to be around GBP0.32m.
CASTLE EATON (18MW), HIGH PENN (10MW), HIGHFIELDS (12MW) AND PITWORTHY(16MW)
In the six month period, the four sites have seen a marked improvement in performance. During the period, minor incidents occurred at High Penn, Highfields and Pitworthy, which reduced site availability. The incidents at High Penn and Highfields were dealt with in a timely manner and are of no ongoing concern to the Asset Manager. Pitworthy continues to be impacted by a lack of availability of inverters. The Asset Manager is working with the O&M Contractor and the inverter manufacturer to improve the situation. Despite this, during the period Pitworthy has seen continued improvement in performance due to the ongoing works. Castle Eaton performed in line with expectation.
KENCOT (37MW)
Under performance at Kencot was due to the failure of separate voltage transformers twice within the period, affecting approximately 50% of the site's capacity. The first instance occurred from 23 February to 10 March. The second from 9 April to 15 May. Liquidation damages are being sought from the O&M Contractor to cover periods of unavailability.
AUSTRALIAN CONSTRUCTION ASSETS
The Australian assets in construction have shown positive progress, with Longreach becoming the first operational asset and the remaining assets expected to connect to the grid in the second half of 2018.
Bannerton
Construction works on site remain broadly on time however the project is experiencing delays with the grid connection works that in turn are expected to cause delays in achieving full export capacity. The project is expected to be partially exporting at the end of August with full export targeted during early November 2018. The Company is protected financially from losses resulting from the grid connection delay under the existing project contracts.
Longreach
Construction of Longreach is complete and the site is now operational. The project connected to the grid in March 2018 and has started exporting electricity.
Oakey 1 and Oakey 2
Construction is progressing well with both sites currently on track to connect to the grid in September and October 2018 respectively.
The Investment Manager is currently reviewing the PPA options for Oakey 2 and expects to enter an agreement in advance of the target commissioning date in October 2018.
Environmental, Social and Governance Considerations
Environmental, Social and Governance ('ESG") considerations inform and shape all stages of the Company's investment process and the day-to-day operations of the portfolio to ensure sustainable, long-term growth.
Foresight Group is a signatory to the United Nations Principles for Responsible Investment ("UNPRI"). As a signatory to this voluntary framework, Foresight Group submits an annual report to the UNPRI on its responsible investment activities. For the 2017 full year period, both Foresight Group as an organisation, and Foresight Group's Infrastructure division, were awarded A ratings.
ENVIRONMENTAL STEWARDSHIP
In addition to the environmental advantages of large scale renewable energy, each investment is closely monitored for its localised environmental impact. The Company works with residents, landowners and local authorities to help minimise the visual and auditory impact of sites. Solar power plants are managed in a manner that maximizes the agricultural, landscaping, biodiversity and wildlife potential, which can also contribute to lowering maintenance costs and enhancing security.
During the six-month period, the Company continued its efforts to ensure the solar power plants are being effectively managed for biodiversity. Enhancement measures are installed and effectively maintained by conducting biodiversity audits. These audits ensure the following:
-- Sites and perimeter hedgerows and trees promote wildflower meadows, nesting and other habitats;
-- Defective planting is replaced and hedgerows and trees
maintained in a healthy condition in accordance with best
practice management;
-- Landscape and Ecological Management plans are adhered
to;
-- Land is kept in good condition and not damaged during
operations;
The Asset Manager is actively promoting beekeeping on the solar power plants to assist in restoring the native bee population and provide local opportunities for artisanal honey production. The Asset Manager is also looking to seed sites with nectar rich wildflower species to attract bees, birds and insects. On those sites where the land was previously used for sheep grazing, the Asset Manager has ensured that the solar plants do not displace tenant sheep graziers. Some sites have also been designed to allow for sheep grazing through the installation of protective barriers around electrical equipment.
At Paddock Wood solar power plant a new apple orchard and 440 metres of new hedgerow have been planted. In addition to this, wildflowers were planted, log piles built, bird and bat boxes installed and a local bee keeper invited to keep hives at the site. Funds have also been raised to set up signs for the Hop Pickers Line Heritage Trail as the solar power plant is located on the historic hop pickers railway route where London families used to take 'Hopper Specials' from London Bridge Station to the hop fields for harvesting to earn extra income and enjoy the countryside.
During the period, the Company's 528MW operational UK portfolio produced 260GWh of clean energy. This is the equivalent of:
Social and Community Engagement
The Asset Manager actively seeks to engage with the local communities around the Company's solar assets and has organised a number of educational site visits. For example, at the Company's Australian site, Bannerton, located in Victoria, students from Robinvale College visited the site and learnt about solar power, electricity and the solar panel process. In March 2018, the Company also launched the Bannerton solar park grant scheme, providing grants of up to $5,000 to local community groups. The groups which were awarded the grant were: Rotary Club of Robinvale- Euston, St Vincent de Paul Society Robinvale, Murray Valley Aboriginal Co-operative, Robinvale College, Mallee Almond Blossom Festival, Englefield V8 Car Trek team, Robinvale Storm Rugby Club, Robinvale - Euston Netball Club and Robinvale Rowing Club and Youth Association.
In the UK, for the second year running, in April 2018, the Company invited the Institution of Engineering and Technology to visit Wymeswold solar power plant in Leicestershire. The group toured the 78-hectare site to witness first-hand the operational aspects of a solar power plant. The site's Operations and Maintenance (O&M) contractor, Brighter Green Engineering, explained details of the day-to-day management of the solar power plant and steps taken to maximise operational efficiency and environmental stewardship.
The Asset Manager also regularly attends parish council meetings to encourage community engagement and promote the benefits of the solar assets. The Company also supports community benefit schemes to develop and maintain community assets. Projects funded include upgrading recreational facilities and playgrounds and the provision of bus shelters in rural communities.
Governance
The Asset Manager regularly reviews all solar assets to ensure they are compliant with planning consents and the conditions attached to them and actively engages with local councils. In addition to ensuring the Company is protected from prosecution, this also promotes trust with local communities.
Principal Risks
The Directors consider the following as relevant risks and uncertainties and mitigants to the Company at this time:
-- Risks relating to regulatory changes in the UK and Australian
electricity market
-- Risks relating to the sale of electricity
-- Risks relating to gearing
-- Risks relating to inflation as measured by RPI
-- Risks relating to assets under construction
-- Risks relating to operation and maintenance contracts
-- Risks relating to the taxation of the Company
More detailed information on the risks and uncertainties affecting the Company can be found on pages 19-37 of the Company's most recent Prospectus issued on 3 March 2017 and the Risk Management section in the Company's latest Full Year Results Report for the year ended 31 December 2017.
Statement of Directors' Responsibilities
For the period 1 January 2018 to 30 June 2018
The Disclosure Guidance and Transparency Rules ("DTR") of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Unaudited Half-Yearly Financial Report for the six months ended 30 June 201.
The Directors confirm to the best of their knowledge that:
(a) the summarised set of financial statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board;
(b) the Unaudited Half-Yearly Financial Report for the six months ended 30 June 2018 includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year and a description of principal risks and uncertainties that the Company faces for the remaining six months of the year);
(c) the summarised set of financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R; and
(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
For and behalf of the Board
Alexander Ohlsson
Chairman
22 August 2018
Statement of Comprehensive Income
For the period 1 January 2018 to 30 June 2018
Notes Unaudited Unaudited Audited year
Period 1 Period 1 1 January
January 2018 January 2017 2017 to 31
to 30 June to 30 June December
2018 2017 2017
GBP'000 GBP'000 GBP'000
------ -------------- -------------- -------------
Revenue
-------------------------------- ------ -------------- -------------- -------------
Interest income 4 18,322 17,366 35,421
-------------------------------- ------ -------------- -------------- -------------
(Loss) / Gain on investments
at fair value through
profit or loss 14 (9,542) (4,222) 4,650
-------------------------------- ------ -------------- -------------- -------------
8,780 13,144 40,071
-------------------------------- ------ -------------- -------------- -------------
Expenditure
-------------------------------- ------ -------------- -------------- -------------
Management fees 5 (2,299) (1,306) (4,277)
-------------------------------- ------ -------------- -------------- -------------
Administration and accountancy
expenses 6 (84) (134) (212)
-------------------------------- ------ -------------- -------------- -------------
Directors' fees 7 (85) (73) (155)
-------------------------------- ------ -------------- -------------- -------------
Other expenses 8 (267) (162) (340)
-------------------------------- ------ -------------- -------------- -------------
Total expenditure (2,735) (1,675) (4,984)
-------------------------------- ------ -------------- -------------- -------------
Profit before tax for
the period/year 6,045 11,469 35,087
-------------------------------- ------ -------------- -------------- -------------
Taxation - - -
-------------------------------- ------ -------------- -------------- -------------
Profit for the period/year 6,045 11,469 35,087
-------------------------------- ------ -------------- -------------- -------------
Other comprehensive income - - -
-------------------------------- ------ -------------- -------------- -------------
Profit and total comprehensive
income
for the period/year 6,045 11,469 35,087
-------------------------------- ------ -------------- -------------- ------------- Earnings per Ordinary Share (pence per Share) 9 1.34 3.04 8.80 -------------------------------- ------ -------------- -------------- -------------
All items above arise from continuing operations, there have been no discontinued operations during the period.
The accompanying notes on pages 48 to 73 form an integral part of these Financial Statements.
Statement of Financial Position
As at 30 June 2018
Unaudited Unaudited Audited 31
Notes 30 June 30 June December
2018 2017 2017
GBP'000 GBP'000 GBP'000
-------- ---------- ---------- -----------
Assets
--------------------------- -------- ---------- ---------- -----------
Non-current assets
--------------------------- -------- ---------- ---------- -----------
Investments held
at fair value through
profit or loss 14 403,422 372,092 408,464
--------------------------- -------- ---------- ---------- -----------
Total non-current
assets 403,422 372,092 408,464
--------------------------- -------- ---------- ---------- -----------
Current assets
--------------------------- -------- ---------- ---------- -----------
Interest receivable 10 68,948 50,391 57,626
--------------------------- -------- ---------- ---------- -----------
Trade and other
receivables 11 1,926 5,513 1,933
--------------------------- -------- ---------- ---------- -----------
Cash and cash equivalents 12 180 5,401 14,669
--------------------------- -------- ---------- ---------- -----------
Total current assets 71,054 61,305 74,228
--------------------------- -------- ---------- ---------- -----------
Total assets 474,476 433,397 482,692
--------------------------- -------- ---------- ---------- -----------
Equity
--------------------------- -------- ---------- ---------- -----------
Retained earnings 18,619 16,822 26,793
--------------------------- -------- ---------- ---------- -----------
Stated capital 18 454,515 415,977 454,515
--------------------------- -------- ---------- ---------- -----------
Total equity 473,134 432,799 481,308
--------------------------- -------- ---------- ---------- -----------
Liabilities
--------------------------- -------- ---------- ---------- -----------
Current liabilities
--------------------------- -------- ---------- ---------- -----------
Trade and other
payables 13 1,342 598 1,384
--------------------------- -------- ---------- ---------- -----------
Total current liabilities 1,342 598 1,384
--------------------------- -------- ---------- ---------- -----------
Total liabilities 1,342 598 1,384
--------------------------- -------- ---------- ---------- -----------
Total equity and
liabilities 474,476 433,397 482,692
--------------------------- -------- ---------- ---------- -----------
Net Asset Value
per Ordinary Share 19 105.2 104.6 107.0
--------------------------- -------- ---------- ---------- -----------
The Financial Statements on pages 44 to 73 were approved by the Board of Directors and signed on its behalf on 21 August 2018 by:
Alexander Ohlsson
Chairman
The accompanying notes on pages 48 to 73 form an integral part of these Financial Statements.
Statement of Changes in Equity
For the period 1 January to 30 June 2018
Notes Stated Capital Retained Total
GBP'000 Earnings GBP'000
GBP'000
------ --------------- ---------- ---------
Balance as at 1 January
2018 (unaudited) 454,515 26,793 481,308
------------------------- ------ --------------- ---------- ---------
Total comprehensive
income for the period:
------------------------- ------ --------------- ---------- ---------
Profit for the period - 6,045 6,045
------------------------- ------ --------------- ---------- ---------
Transactions with
owners, recognised
directly in equity:
------------------------- ------ --------------- ---------- ---------
Dividends paid in
the period 22 - (14,219) (14,219)
------------------------- ------ --------------- ---------- ---------
Balance as at 30 June
2018 454,515 18,619 473,134
------------------------- ------ --------------- ---------- ---------
For the period 1 January 2017 to 30 June 2017 (unaudited)
Notes Stated Capital Retained Total
GBP'000 Earnings GBP'000
GBP'000
------ --------------- ---------- ---------
Balance as at 1 January 2017: 339,003 11,767 350,770
-------------------------------------- ------ --------------- ---------- ---------
Total comprehensive income for
the period:
-------------------------------------- ------ --------------- ---------- ---------
Profit for the period - 11,469 11,469
-------------------------------------- ------ --------------- ---------- ---------
Transactions with owners, recognised
directly in equity:
-------------------------------------- ------ --------------- ---------- ---------
Dividends paid in the period 22 - (6,414) (6,414)
-------------------------------------- ------ --------------- ---------- ---------
Issue of Ordinary Shares 18 78,497 - 78,497
-------------------------------------- ------ --------------- ---------- ---------
Issue costs 18 (1,523) - (1,523)
-------------------------------------- ------ --------------- ---------- ---------
Balance as at 30 June 2017 415,977 16,822 432,799
-------------------------------------- ------ --------------- ---------- ---------
For the period 1 January 2017 to 31 December 2017 (unaudited)
Notes Stated Capital Retained Total
GBP'000 Earnings GBP'000
GBP'000
------ --------------- ---------- ---------
Balance as at 1 January 2017: 339,003 11,767 350,770
-------------------------------------- ------ --------------- ---------- ---------
Total comprehensive income for
the year:
-------------------------------------- ------ --------------- ---------- ---------
Profit for the year - 35,087 35,087
-------------------------------------- ------ --------------- ---------- ---------
Transactions with owners, recognised
directly in equity:
-------------------------------------- ------ --------------- ---------- ---------
Dividends paid in the year 22 - (20,061) (20,061)
-------------------------------------- ------ --------------- ---------- ---------
Issue of Ordinary Shares 18 117,539 - 117,539
-------------------------------------- ------ --------------- ---------- ---------
Issue costs 18 (2,027) - (2,027)
-------------------------------------- ------ --------------- ---------- ---------
Balance as at 31 December 2017 454,515 26,793 481,308
-------------------------------------- ------ --------------- ---------- ---------
The accompanying notes on pages 48 to 73 form an integral part of these Financial Statements.
Statement of Cash Flows
For the period 1 January to 30 June 2018
Unaudited Unaudited Audited year
Period 1 Period 1 1 January
January 2018 January 2017 2017
to 30 June to 30 June to 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
-------------- -------------- ----------------
Profit for the period after tax from
continuing operations 6,045 11,469 35,087
-------------------------------------------- -------------- -------------- ----------------
Adjustments for:
-------------------------------------------- -------------- -------------- ---------------- Unrealised loss/(gain) on investments 9,542 4,222 (4,650) -------------------------------------------- -------------- -------------- ---------------- Investment income (18,322) (17,366) (35,421) -------------------------------------------- -------------- -------------- ---------------- Operating cash flows (2,735) (1,675) (4,984) -------------------------------------------- -------------- -------------- ---------------- Decrease/(increase) in trade and other receivables 7 (666) 2,914 -------------------------------------------- -------------- -------------- ---------------- (Decrease)/increase in trade and other payables (42) 482 1,268 -------------------------------------------- -------------- -------------- ---------------- Net cash (outflow)/inflow from operating activities (2,770) (1,859) (802) -------------------------------------------- -------------- -------------- ---------------- Investing activities -------------------------------------------- -------------- -------------- ---------------- Increase in shareholder loan to/from subsidiary (4,500) (102,700) (130,200) -------------------------------------------- -------------- -------------- ---------------- Investment income received 7,000 19 10,839 -------------------------------------------- -------------- -------------- ---------------- Net cash outflow from investing activities 2,500 (102,681) (119,361) -------------------------------------------- -------------- -------------- ---------------- Financing activities -------------------------------------------- -------------- -------------- ---------------- Dividends paid (14,219) (6,414) (20,061) -------------------------------------------- -------------- -------------- ---------------- Issue costs paid - (1,523) (2,027) -------------------------------------------- -------------- -------------- ---------------- Proceeds from issue of shares - 78,497 117,539 -------------------------------------------- -------------- -------------- ---------------- Net cash (outflow)/inflow from financing activities (14,219) 70,560 95,451 -------------------------------------------- -------------- -------------- ---------------- Net decrease in cash and cash equivalents (14,489) (33,980) (24,712) -------------------------------------------- -------------- -------------- ---------------- Cash and cash equivalents at the beginning of the period 14,669 39,381 39,381 -------------------------------------------- -------------- -------------- ---------------- Cash and cash equivalents at the end of the period 180 5,401 14,669 -------------------------------------------- -------------- -------------- ----------------
The accompanying notes on pages 48 to 73 form an integral part of these Financial Statements.
Notes to the Financial Statements
For the period 1 January to 30 June 2018
1. Company information
Foresight Solar Fund Limited (the "Company") is a closed-ended company with an indefinite life and was incorporated in Jersey under the Companies Law (Jersey) 1991, as amended, on 13 August 2013, with registered number 113721. The address of the registered office is: 28 Esplanade, St Helier, Jersey, JE4 2QP.
The Company has one investment, Foresight Solar (UK Hold Co) Limited ("UK Hold Co"). Up to 31 March 2016, UK Hold Co invested in further holding companies (the "SPVs") which then invested in the underlying solar investments. On 11 January 2016, UK Hold Co incorporated a subsidiary, FS Holdco Limited ("FS Holdco"). On 31 March 2016, UK Hold Co transferred all equity investments and related shareholder loans in the SPVs to FS Holdco in return for 16 ordinary shares issued by FS Holdco Limited and a loan receivable on a pari passu basis.
On 1 December 2016, UK Hold Co incorporated a further subsidiary, FS Holdco 2 Limited ("FS Holdco 2"), which in turn incorporated a subsidiary, FS Debtco Limited ("FS Debtco"), on 2 December 2016. FS Debtco invested in SPVs which then invested in the underlying solar investments.
During the year ended 31 December 2017, UK Hold Co incorporated two additional subsidiaries, FS Holdco 3 Limited ("FS Holdco 3"), on 31 August 2017 and FS Holdco 4 Limited ("FS Holdco 4"), on 1 September 2017. FS Holdco 3 and FS Holdco 4 invested in SPVs which then invested in the underlying solar investments.
The principal activity of the Company, UK Hold Co, FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and the SPVs (together "the Group") is investing in operational UK and Australian ground based solar power plants.
2. Summary of significant accounting policies 2.1 Basis of presentation
The Unaudited Interim Financial Statements (the "Interim Financial Statements") for the period 1 January 2018 to 30 June 2018 have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ("IAS 34").
The Interim Financial Statements do not include all the information and disclosures required in the annual Financial Statements, and should be read in conjunction with the annual Financial Statements as at 31 December 2017.
These are not statutory accounts in accordance with Article 105 of the Companies Law (Jersey) 1991, as amended and the financial information for the period ended 30 June 2018 and 30 June 2017 has been neither audited nor formally reviewed. Statutory accounts in respect of the period to 31 December 2017 have been audited and reported on by the Company's auditors and delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Article 113B (3) or 113B (6) of the Companies Law (Jersey) 1991. No statutory accounts in respect of any period after 31 December 2017 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
2.2 Going concern
The Directors have considered the Company's cash flow projections for a period of no less than twelve months from the date of approval of these Interim Financial Statements together with the Company's borrowing facilities. These projections show that the Company will be able to meet its liabilities as they fall due.
The Directors have therefore prepared the Interim Financial Statements on a going concern basis.
2.3 Changes in accounting policies and disclosures
New and revised IFRSs adopted by the Company
The accounting policies used in the preparation of the interim financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2017 and are expected to be consistently applied during the year ended 31 December 2018.
In addition, the following new standards and amendments to standards and interpretations are effective for annual periods after 1 January 2018 and will be applicable for the year ended 31 December 2018 and therefore for the current six month period ended 30 June 2018:
-- IFRS 15 'Revenue from Contracts with Customers'.
-- IFRS 9 'Financial Instruments - Classification and
Measurement'.
The impact of the adoption of these standards and the new accounting policies are disclosed in note 25. The other new or amended standards did not have any impact on the Company's accounting policies and did not require retrospective adjustments.
New and revised IFRSs in issue but not yet effective
There are no standards, amendments or interpretations in issue at the reporting date which have been issued but are not yet effective that are deemed to be material to the Fund.
2.4 Consolidation
Associates
Associates are entities over which the Company has significant influence, being the power to participate in the financial and operating policy decisions of the investee (but not control or joint control).
Subsidiaries
All subsidiaries are entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Investment Entity
Qualifying entities that meet the definition of an investment entity are not required to produce a consolidated set of Financial Statements and instead account for subsidiaries at fair value through profit or loss.
The defined criteria of an 'investment entity' are as follows:
-- It holds more than one investment;
-- It has more than one investor;
-- It has investors that are not related parties to the
entity; and
-- It has ownership interests in the form of equity or
similar interests.
However, the absence of one or more of these characteristics does not prevent the entity from qualifying as an 'investment entity', provided all other characteristics are met and the entity otherwise meets the definition of an 'investment entity':
-- It obtains funds from one or more investors for the
purpose of providing those investor(s) with professional
investment management services;
-- It commits to its investor(s) that its business purpose
is to invest funds solely for returns from capital
appreciation, investment income or both; and
-- It measures and evaluates the performance of substantially
all of its investments on a fair value basis.
As discussed in note 1, the Company has one direct subsidiary, a 100% controlling interest in UK Hold Co and a number of indirect subsidiaries.
Under IFRS 10 "Consolidated Financial Statements", the directors deem that the Company is an investment entity and therefore the Company does not consolidate its subsidiary but carries it at fair value through profit or loss. The Company does not meet all the defined criteria of an 'investment entity' as the Company only has one investment. However, the Directors deem that the Company is nevertheless an 'investment entity' as the remaining requirements have been met and, through the Group, there is a diverse investment portfolio which will fill the criteria of having more than one investment. Therefore, the Company qualifies as an 'investment entity'.
As UK Hold Co is not consolidated, its subsidiaries (plus their underlying investments) are not separately presented at fair value through profit or loss in the Company's accounts. However accounting standards require that if an investment entity is the parent of another investment entity, the parent shall also provide the additional disclosures required by IFRS 12 Interest in unconsolidated subsidiaries. These disclosures are set out in notes 16 and 17.
3. Critical accounting estimates and judgements
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.
The Board considers that the only areas where management make critical estimates and judgements that may have a significant effect on the financial statements are in relation to the valuation of financial assets at fair value through profit and loss, new significant judgements and key sources of estimation uncertainty related to the application of IFRS 15 and IFRS 9, which are described in Note 25 and the determination that the Company meets the definition of an investment entity, which is discussed in detail in note 2.4.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and underlying assumptions are reviewed on an ongoing basis.
The Board considers that the determination that the Company meets the definition of an investment entity involves significant judgement because the entity does not possess all the typical characteristics of an investment entity. While the absence of one or more of the typical characteristics of an investment entity described in IFRS 10 Consolidated Financial Statements does not immediately disqualify an entity from being classified as an investment entity. The entity is required to disclose its reasons for concluding that it is nevertheless an investment entity if one or more of these characteristics are not met. In order to reach that conclusion of whether the Company meets the definition of an investment entity the Board had to make significant judgements.
The Board considers that the fair value of Investments not quoted in an active market involves critical accounting estimates and judgements because it is determined by the Directors using their own models, which are usually based on valuation methods and techniques generally recognised as standard within the industry. Models use observable data, to the extent practicable. However, they also rely on significant unobservable inputs about the output of the asset (including assumptions such as solar irradiation and technological performance of the asset), power prices, operating costs, discount and inflation rates applied to the cash flows, and the duration of the useful economic life of the asset. Furthermore, changes in these inputs and assumptions could affect the reported fair value of financial instruments. The determination of what constitutes 'observable' requires significant judgement by the Fund. The Fund considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
4. Interest income
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Bank interest income - 19 25
------------------------------ --------- --------- ------------
Interest on loan notes 16,751 15,549 32,246
------------------------------ --------- --------- ------------
Interest on shareholder loan 1,571 1,798 3,150
------------------------------ --------- --------- ------------
18,322 17,366 35,421
------------------------------ --------- --------- ------------
Loan notes were issued by the Company to UK Hold Co for the purchase of investments. Interest is payable at 9% per annum in arrears on each Interest Payment Date (28 / 29 February and 31 August each year). Where interest is not paid on the payment date, it will compound and future interest shall accrue at 11% per annum from the due date up to the date of actual payment, compounding on each Interest Payment Date. The loan notes balance at period end on which interest is charged is GBP250,000,000 (30 June 2017: GBP250,000,000, 31 December 2017: GBP250,000,000). These loans form part of the fair value of the investments as per note 14.
A shareholder loan is created when the total amount paid by the Company on behalf of UK Hold Co to acquire the underlying investments is more than the total loan notes issued by the Company to UK Hold Co. Interest was previously accrued at 9% per annum, decreasing to 2% per annum with effect from 1 April 2017, and is repayable in full on demand. The shareholder loan balance at period end is GBP158,609,725 (30 June 2017: GBP126,609,725, 31 December 2017: GBP154,109,725). These loans form part of the fair value of the investments as per note 14.
5. Management fees
The Investment Manager of the Company, Foresight Group CI Limited, receives an annual fee of 1% of the Net Asset Value ("NAV") of the Company. This is payable quarterly in arrears and is calculated based on the published quarterly NAV. For the period ended 30 June 2018, the Investment Manager was entitled to a management fee of GBP2,299,044 (1 January 2017 to 30 June 2017: GBP1,306,418, 1 January 2017 to 31 December 2017: GBP4,276,808) of which GBP1,341,858 was outstanding as at 30 June 2018 (30 June 2017: GBP498,574, 31 December 2017: GBP1,257,741).
6. Administration and Accountancy fees
Under an Administration Agreement, the Administrator of the Company, JTC (Jersey) Limited, is entitled to receive minimum annual administration and accountancy fees of GBP156,000 (2017: GBP156,000) payable quarterly in arrears. For the period ended 30 June 2018, total administration and accountancy fees were GBP84,105 (1 January 2017 to 30 June 2017: GBP133,534, 1 January 2017 to 31 December 2017: GBP211,534) of which GBP39,000 was outstanding as at 30 June 2018 (1 January 2017 to 30 June 2017: GBP39,000, 1 January 2017 to 31 December 2017: GBP39,000).
7. Directors' fees
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Peter Dicks 22 18 40
-------------------- --------- --------- ------------
Alexander Ohlsson 35 31 65
-------------------- --------- --------- ------------
Christopher Ambler 28 24 50
-------------------- --------- --------- ------------
85 73 155
-------------------- --------- --------- ------------
8. Other Expenses
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Legal and professional fees 120 145 271
----------------------------- --------- --------- ------------
Other expenses 147 17 69
----------------------------- --------- --------- ------------
267 162 340
----------------------------- --------- --------- ------------
Included within legal and professional fees is GBP19,750 (1 January 2017 to 30 June 2017: GBP6,400, 1 January 2017 to 31 December 2017: GBP20,500) relating to the accrual of the 2018 audit fees. There were no other fees paid to the auditors for non-audit services (1 January 2017 to 30 June 2017: GBPnil, 1 January 2017 to 31 December 2017: GBPnil).
9. Earnings per Ordinary share - basic and diluted
The basic and diluted profits per Ordinary Share for the Company are based on the profit for the period of GBP6,044,557 (1 January 2017 to 30 June 2017: GBP11,469,047, 1 January 2017 to 31 December 2017: GBP35,086,596) and on 449,952,091 (1 January 2017 to 30 June 2017: 377,780,949, 1 January 2017 to 31 December 2017: 398,908,689) Ordinary Shares, being the weighted average number of shares in issue during the period.
10. Interest receivable
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Interest receivable on loan notes 65,497 42,863 48,746
------------------------------------ --------- --------- ------------
Interest receivable on shareholder
loan 3,451 7,528 8,880
------------------------------------ --------- --------- ------------
68,948 50,391 57,626
------------------------------------ --------- --------- ------------
11. Trade and other receivables
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Prepaid expenses 4 14 16
-------------------------------- --------- --------- ------------
Amounts due from subsidiaries* 1,146 4,694 1,146
-------------------------------- --------- --------- ------------
Other receivables 776 805 771
-------------------------------- --------- --------- ------------
1,926 5,513 1,933
-------------------------------- --------- --------- ------------
*Amounts due from subsidiaries are unsecured, interest free and repayable on demand.
12. Cash and cash equivalents
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Cash at bank 180 5,401 14,669
-------------- --------- --------- ------------
180 5,401 14,669
-------------- --------- --------- ------------
13. Trade and other payables
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Accrued expenses 1,342 598 1,384
------------------ --------- --------- ------------
1,342 598 1,384
------------------ --------- --------- ------------
14. Investments at fair value through profit or loss
The following table presents the Company's investments at fair value through profit or loss:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
-------- --------- --------- ------------
Investment in UK Hold Co Equity - - -
----------------------------------- -------- --------- --------- ------------
Loans 403,422 372,092 408,464
-------------------------------------------- --------- --------- ------------
403,422 372,092 408,464
-------------------------------------------- --------- --------- ------------
Book cost as at 1 January 404,109 273,909 273,909
--------------------------------------------- --------- --------- ------------
Opening investment holding
(losses)/ gains 4,355 (295) (295)
--------------------------------------------- --------- --------- ------------
Valuation as at 1 January 408,464 273,614 273,614
--------------------------------------------- --------- --------- ------------
Movements during the period
----------------------------------- -------- --------- --------- ------------
Purchase at cost 4,500 102,700 130,200
--------------------------------------------- --------- --------- ------------
Disposal proceeds - - -
----------------------------------- -------- --------- --------- ------------
Investment holding gains/(losses) (9,542) (4,222) 4,650
--------------------------------------------- --------- --------- ------------
Valuation as at 30 June/
31 December 403,422 372,092 408,464
--------------------------------------------- --------- --------- ------------
Book cost as at 30 June/
31 December 408,609 376,609 404,109
--------------------------------------------- --------- --------- ------------
Closing investment holding
gains (5,187) (4,517) 4,355
--------------------------------------------- --------- --------- ------------
403,422 372,092 408,464
-------------------------------------------- --------- --------- ------------
The Company has one investment in Foresight Solar (UK Hold Co) Limited ("UK Hold Co"). This investment consists of both debt and equity and is not quoted in an active market. Accordingly, the investment in UK Hold Co has been valued using its net assets.
In turn, UK Hold Co has four investments in FS Holdco Limited ("FS Holdco"), FS Holdco 2 Limited ("FS Holdco 2"), FS Holdco 3 Limited ("FS Holdco 3") and FS Holdco 4 Limited ("FS Holdco 4"), and FS Holdco 2 has one investment in FS Debtco Limited ("FS Debtco"). These investments also consist of both debt and equity and are not quoted in an active market. FS Holdco is fair valued using its net asset value as reported at period end, with adjustments to its long term external debt to reflect the fact that the carrying value at amortised cost is not considered to be the best approximation of its fair value. FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4 are fair valued using their net asset value as reported at period end.
In turn, FS Holdco, FS Debtco, FS Holdco 3 and FS Holdco 4's investment portfolios consist of unquoted investments in solar projects, the valuations of which are based on a discounted cash flow methodology (as set out in note 16).
Fair value hierarchy
IFRS 13 "Fair Value Measurement" requires disclosures relating to fair value measurements using a three-level fair value hierarchy. The level within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. Assessing the significance of a particular input requires judgement, considering factors specific to the asset or liability. The following table shows investments recognised at fair value, categorised between those whose fair value is based on:
(a) Level 1 - Quoted (unadjusted) market prices in active
markets for identical assets or liabilities;
(b) Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is directly or indirectly observable; and
(c) Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable.
All investments held at fair value through profit or loss are classified as level 3 within the fair value hierarchy.
As UK Hold Co's net asset value is not considered observable market data the investment in UK Hold Co has been classified as level 3. There were no movements between levels during the period.
As at 30 June 2018:
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ---------
Unquoted investment - - 403,422 403,422
--------------------- ---------- ---------- --------- ---------
- - 403,422 403,422
---------- -------------------------------- --------- ---------
As at 30 June 2017:
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ---------
Unquoted investment - - 372,092 372,092
--------------------- ---------- ---------- --------- ---------
- - 372,092 372,092
---------- -------------------------------- --------- ---------
As at 31 December 2017:
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ---------
Unquoted investment - - 408,464 408,464
--------------------- ---------- ---------- --------- ---------
- - 408,464 408,464
---------- -------------------------------- --------- ---------
Sensitivity Analysis
Due to the nature of the Group structure and the underlying valuation basis of UK Hold Co, FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3, FS Holdco 4 and the underlying solar project investments, the valuation of the Company's investment at fair value through profit or loss is directly linked to the valuation of the underlying solar investments. Therefore, the unobservable inputs driving the valuation of the Company's investments in UK Hold Co are directly attributable to the valuation of the unquoted investments in FS Holdco, FS Debtco, FS Holdco 3 and FS Holdco 4 which is discussed further in note 16.
15. Subsidiaries and associates
Details of the undertakings which the unconsolidated subsidiaries held as at 30 June 2018 are listed below:
Name Direct or indirect Country of Principal activity Proportion
holding incorporation of shares and voting
rights held
----------------------- ----------------------- --------------------- ---------------------
Foresight Solar (UK
Hold Co) Limited
("UK Hold Co") Direct UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Holdco Limited
("FS Holdco") Indirect UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Holdco 2 Limited
("FS Holdco 2") Indirect UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Debtco Limited
("FS Debtco") Indirect UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Holdco 3 Limited
("FS Holdco 3") Indirect UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Holdco 4 Limited
("FS Holdco 4") Indirect UK Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Wymeswold Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Castle Eaton
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Pitworthy Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Highfields Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS High Penn Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Hunter's Race
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Spriggs Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Bournemouth
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Landmead Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Kencot Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Copley Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Port Farms Solar
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Membury Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Southam Solar
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Atherstone Solar
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Paddock Wood Solar
Farm Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Atherstone Hold Co
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Southam Hold Co
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Paddock Wood Hold Co
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Shotwick Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Sandridge Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
FS Wally Corner
Limited Indirect UK SPV Holding Company 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Foresight Bannerton
Pty Limited Indirect UK SPV Holding Company 48.50%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Wymeswold Solar Farm
Limited
("Wymeswold") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Castle Eaton Solar
Farm Limited
("Castle Eaton") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Pitworthy Solar Farm
Limited ("Pitworthy
") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Highfields Solar Farm
Limited
("Highfields") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
High Penn Solar Farm
Limited ("High Penn
") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Hunter's Race Solar
Farm Limited
("Hunter's Race") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Spriggs Solar Farm
Limited ("Spriggs ") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Bournemouth Solar
Farm Limited
("Bournemouth") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Landmead Solar Farm
Limited ("Landmead") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Kencot Hill Solar
Farm Limited
("Kencot") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Copley Solar Limited
("Copley") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Port Farms Solar
Limited (Port Farm") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Membury Solar Limited
("Membury") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Atherstone Solar Farm
Ltd ("Atherstone") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Southam Solar Farm
Ltd ("Southam") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Paddock Wood Solar
Farm Ltd ("Paddock
Wood") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Shotwick Solar
Limited ("Shotwick
Solar") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Sandridge Solar Power
Limited
("Sandridge") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
SSR Wally Corner
Limited ("SSR
Wally") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Foresight Solar
Australia Pty
Limited Indirect Australia Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Longreach Asset
Company Pty Limited Indirect Australia Investment 49%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Oakey 1 Asset Company
Pty Limited Indirect Australia Investment 49%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
RE Oakey Pty Limited Indirect Australia Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Yardwall Limited
("Yardwall") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Verwood Limited
("Verwood") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Park Farm Limited
("Park Farm") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Coombeshead Limited
("Coombeshead") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Sawmills Limited
("Sawmills") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
Second Generation
Bottonnett Limited
("Bottonnett") Indirect UK Investment 100%
---------------------- ----------------------- ----------------------- --------------------- ---------------------
16. Interests in unconsolidated structured entities
Period ended 30 June 2018
The following table represents the fair values of the investments held by FS Holdco Limited as required by IFRS12.
Unrealised
gain/(loss) Unrealised
as at Movement on gain/(loss) Fair value
Cost at 1 Additions/ Cost as at 1 January unrealised as at as at 30
January 2018 (Disposals) 30 June 2018 2018 gain/(loss) 30 June 2018 June 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------- ------------- ------------ ------------- -------------
Wymeswold 48,590 - 48,590 (272) 433 161 48,751
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Castle Eaton 21,630 - 21,630 (835) 28 (807) 20,823
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Pitworthy 18,210 - 18,210 (1,582) (117) (1,699) 16,511
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Highfields 14,300 - 14,300 (726) (91) (817) 13,483
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
High Penn 11,310 - 11,310 (804) (145) (949) 10,361
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Hunter's Race 13,160 - 13,160 389 135 524 13,684
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Spriggs 14,580 - 14,580 (699) 52 (647) 13,933
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Bournemouth 50,060 - 50,060 364 112 476 50,536
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Landmead 51,580 - 51,580 (3,096) (77) (3,173) 48,407
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Kencot 47,210 - 47,210 (2,151) 74 (2,077) 45,133
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Copley 35,670 - 35,670 1,390 92 1,482 37,152
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Paddock Wood 10,621 - 10,621 553 (71) 482 11,103
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Atherstone 16,004 - 16,004 (321) (113) (434) 15,570
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Southam 11,145 - 11,145 115 (63) 52 11,197
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Port Farms 44,215 - 44,215 92 (14) 78 44,293
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Membury 21,160 - 21,160 (460) (9) (469) 20,691
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
429,445 - 429,445 (8,043) 226 (7,817) 421,628
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
The above individual project valuations do not include a (GBP6,200,517) adjustment (30 June 2017: GBPNil, 31 December 2017: (GBP5,010,200)) relating to future tax payments which will be settled at the Fund level.
Comparatives for the periods ended 30 June 2017 and 31 December 2017 are shown on pages 57 and 58.
Period ended 30 June 2018
The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS12.
Cost Additions Cost Unrealised Movement Unrealised Fair
at 1 / (Disposals) as at gain/(loss) on unrealised gain/(loss) value
January GBP'000 30 June as at gain/(loss) as at as at
2018 2018 1 January GBP'000 30 June 30 June
GBP'000 GBP'000 2018 2018 2018
GBP'000 GBP'000 GBP'000
--------- --------------- --------- ------------- --------------- ------------- ---------
Shotwick Solar 74,894 - 74,894 9,696 (429) 9,267 84,161
------------------ --------- --------------- --------- ------------- --------------- ------------- ---------
Sandridge Solar
Power 57,046 - 57,046 959 (415) 544 57,590
------------------ --------- --------------- --------- ------------- --------------- ------------- ---------
SSR Wally Corner 5,718 - 5,718 41 (26) 15 5,733
------------------ --------- --------------- --------- ------------- --------------- ------------- ---------
137,658 - 137,658 10,696 (870) 9,826 147,484
------------------ --------- --------------- --------- ------------- --------------- ------------- ---------
Period ended 30 June 2018
The following table represents the fair values of the investments held by FS Holdco 3 Limited as required by IFRS12.
Cost Additions Cost Unrealised Movement Unrealised Fair
at / (Disposals) as at gain/(loss) on unrealised gain/(loss) value
1 January GBP'000 30 June as at gain/(loss) as at as at
2018 2018 1 January GBP'000 30 June 30 June
GBP'000 GBP'000 2018 2018 2018
GBP'000 GBP'000 GBP'000
------------ --------------- --------- ------------- --------------- ------------- ---------
Yardwall - 2,530 2,530 - 35 35 2,565
------------- ------------ --------------- --------- ------------- --------------- ------------- ---------
Verwood - 14,110 14,110 - (122) (122) 13,988
------------- ------------ --------------- --------- ------------- --------------- ------------- ---------
Park Farm - 8,180 8,180 - (111) (111) 8,069
------------- ------------ --------------- --------- ------------- --------------- ------------- ---------
Coombeshead - 7,240 7,240 - (98) (98) 7,142
------------- ------------ --------------- --------- ------------- --------------- ------------- ---------
Sawmills - 4,530 4,530 - (61) (61) 4,469
------------- ------------ --------------- --------- ------------- --------------- ------------- ---------
- 36,590 36,590 - (357) (357) 36,233
-------------------------- --------------- --------- ------------- --------------- ------------- ---------
Period ended 30 June 2018
The following table represents the fair values of the investments held by FS Holdco 4 Limited as required by IFRS12.
Cost Adjusted Additions Cost Unrealised Movement Unrealised Fair
at Cost / as at gain/(loss) on gain/(loss) value
1 January at (Disposals) 30 June as at unrealised as at as at
2018 1 January GBP'000 2018 1 January gain/(loss) 30 June 30 June
GBP'000 2018 GBP'000 2018 GBP'000 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000
----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
Bannerton
Solar
Farm 12,482 12,482 10,400 22,882 - - - 22,882
----------- ----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
Longreach 5,218 2,613 37 2,650 - 370 370 3,020
----------- ----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
Oakey
1 7,842 4,306 61 4,367 80* (80) - 4,367
----------- ----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
Oakey
2 15,910 22,051 3,552 25,603 120* (120) - 25,603
----------- ----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
41,452 41,452 14,050 55,502 200 170 370 55,872
----------- ----------- ----------- ------------ --------- ------------- ------------- ------------- ---------
Period ended 30 June 2017
The following table represents the fair values of the investments held by FS Holdco Limited as required by IFRS12.
Unrealised
gain/(loss) Unrealised
Cost at as at Movement on gain/(loss) Fair value
1 January Additions / Cost as at 1 January unrealised as at as at
2017 (Disposals) 30 June 2017 2017 gain/(loss) 30 June 2017 30 June 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------- ------------- ------------ ------------- -------------
Wymeswold 48,590 - 48,590 1,510 (100) 1,410 50,000
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Castle Eaton 21,630 - 21,630 270 (600) (330) 21,300
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Pitworthy 18,210 - 18,210 90 (500) (410) 17,800
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Highfields 14,300 - 14,300 700 (400) 300 14,600
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
High Penn 11,310 - 11,310 690 (300) 390 11,700
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Hunter's Race 13,160 - 13,160 340 (100) 240 13,400
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Spriggs 14,580 - 14,580 220 (200) 20 14,600
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Bournemouth 50,060 - 50,060 1,240 (1,200) 40 50,100
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Landmead 51,580 - 51,580 2,520 (1,500) 1,020 52,600
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Kencot 47,210 - 47,210 1,790 (600) 1,190 48,400
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Copley 35,670 - 35,670 2,330 (500) 1,830 37,500
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Paddock Wood 10,621 - 10,621 879 (100) 779 11,400
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Atherstone 16,004 - 16,004 596 (300) 296 16,300
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Southam 11,145 - 11,145 655 (100) 555 11,700
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Port Farms 44,215 - 44,215 1,785 (1,200) 585 44,800
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Membury 21,160 - 21,160 740 (300) 440 21,600
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
429,445 - 429,445 16,355 (8,000) 8,355 437,800
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Period ended 30 June 2017
The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS12.
Cost at 1 Additions / Cost as at Unrealised Movement on Unrealised Fair value
January 2017 (Disposals) 30 June 2017 gain/(loss) unrealised gain/(loss) as at 30
GBP'000 GBP'000 GBP'000 as at gain/(loss) as at June 2017
1 January GBP'000 30 June 2017 GBP'000
2017 GBP'000
GBP'000
-------------- ------------- ------------- ------------- ------------ ------------- ------------
Shotwick
Solar - 75,517 75,517 - 11,083 11,083 86,600
-------------- -------------- ------------- ------------- ------------- ------------ ------------- ------------
Sandridge
Solar Power - 57,748 57,748 - 552 552 58,300
-------------- -------------- ------------- ------------- ------------- ------------ ------------- ------------
- 133,265 133,265 - 11,635 11,635 144,900
----------------------------- ------------- ------------- ------------- ------------ ------------- ------------
As at 30 June 2017, there had been no activities in FS Holdco 3 and FS Holdco 4.
Year ended 31 December 2017
The following table represents the fair values of the investments held by FS Holdco Limited as required by IFRS12.
Cost at Additions / Cost as at Unrealised Movement on Unrealised Fair value
1 January (Disposals) 31 December gain/(loss) unrealised gain/(loss) as at
2017 GBP'000 2017 as at gain/(loss) as at 31 December
GBP'000 GBP'000 1 January GBP'000 31 December 2017
2017 2017 GBP'000
GBP'000 GBP'000
------------- ------------- ------------- ------------- ------------ ------------- -------------
Wymeswold 48,590 - 48,590 1,510 (1,782) (272) 48,318
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Castle Eaton 21,630 - 21,630 270 (1,105) (835) 20,795
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Pitworthy 18,210 - 18,210 90 (1,672) (1,582) 16,628
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Highfields 14,300 - 14,300 700 (1,426) (726) 13,574
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
High Penn 11,310 - 11,310 690 (1,494) (804) 10,506
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Hunter's Race 13,160 - 13,160 340 49 389 13,549
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Spriggs 14,580 - 14,580 220 (919) (699) 13,881
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Bournemouth 50,060 - 50,060 1,240 (876) 364 50,424
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Landmead 51,580 - 51,580 2,520 (5,616) (3,096) 48,484
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Kencot 47,210 - 47,210 1,790 (3,941) (2,151) 45,059
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Copley 35,670 - 35,670 2,330 (940) 1,390 37,060
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Paddock Wood 10,621 - 10,621 879 (326) 553 11,174
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Atherstone 16,004 - 16,004 596 (917) (321) 15,683
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Southam 11,145 - 11,145 655 (540) 115 11,260
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Port Farms 44,215 - 44,215 1,785 (1,693) 92 44,307
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
Membury 21,160 - 21,160 740 (1,200) (460) 20,700
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
429,445 - 429,445 16,355 (24,398) (8,043) 421,402
-------------- ------------- ------------- ------------- ------------- ------------ ------------- -------------
The above individual project valuations do not include a (GBP5,010,200) adjustment relating to future tax payments which will be settled at the Fund level.
Year ended 31 December 2017
The following table represents the fair values of the investments held by FS Debtco Limited as required by IFRS12.
Cost Additions Cost Unrealised Movement Unrealised Fair value
at / as at gain/(loss) on gain/(loss) as at
1 January (Disposals) 31 December as at unrealised as at 31 December
2017 GBP'000 2017 1 January gain/(loss) 31 December 2017
GBP'000 GBP'000 2017 GBP'000 2017 GBP'000
GBP'000 GBP'000
------------ ------------- ------------- ------------- ------------- ------------- -------------
Shotwick
Solar - 74,894 74,894 - 9,696 9,696 84,590
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
Sandridge
Solar
Power - 57,046 57,046 - 959 959 58,005
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
SSR Wally
Corner - 5,718 5,718 - 41 41 5,759
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
- 137,658 137,658 - 10,696 10,696 148,354
--------------------------- ------------- ------------- ------------- ------------- ------------- -------------
As at 31 December 2017, there had been no activities in FS Holdco 3.
Year ended 31 December 2017
The following table represents the fair values of the investments held by FS Holdco 4 Limited as required by IFRS12.
Cost Additions Cost Unrealised Movement Unrealised Fair value
at / as at gain/(loss) on gain/(loss) as at
1 January (Disposals) 31 December as at unrealised as at 31 December
2017 GBP'000 2017 1 January gain/(loss) 31 December 2017
GBP'000 GBP'000 2017 GBP'000 2017 GBP'000
GBP'000 GBP'000
------------ ------------- ------------- ------------- ------------- ------------- -------------
Bannerton
Solar
Farm - 12,482 12,482 - - - 12,482
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
Longreach - 5,218 5,218 - - - 5,218
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
Oakey 1 - 7,842 7,842 - 80* 80* 7,922
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
Oakey 2 - 15,910 15,910 - 120* 120* 16,030
-------------- ------------ ------------- ------------- ------------- ------------- ------------- -------------
- 41,452 41,452 - 200 200 41,652
--------------------------- ------------- ------------- ------------- ------------- ------------- -------------
*This relates to FX gain on translation from AUD to GBP at 31 December 2017.
17. Fair value of the investments in unconsolidated entities
Valuation process
Valuations are the responsibility of the Board of Directors. The Investment Manager is responsible for submitting fair market valuations of Group assets to the Directors. The Directors review and approve these valuations following appropriate challenge and examination. Valuations are carried out quarterly. The current portfolio consists of non-market traded investments and valuations are based on a discounted cash flow methodology. The Investment Manager's assessment of fair value of investments is determined in accordance with the International Private Equity and Venture Capital Valuation Guidelines ("IPEVC"), using levered and unlevered Discounted Cash Flow principles. The Investment Manager and Directors consider that the discounted cash flow methodology used in deriving a fair value is in accordance with the fair value requirements of IFRS 13. The investments held by FS Holdco 4 were valued at cost as at 30 June 2018 as these projects were not yet operational, and are therefore not included in the sensitivity analysis on the following pages.
Sensitivity analysis of significant changes in unobservable inputs within Level hierarchy of underlying Investments
The Company's investments (indirectly held through its unconsolidated subsidiaries FS Holdco, FS Holdco 2 and FS Holdco 3) are valued with reference to the discounted value of future cash flows. The Directors consider the valuation methodology used, including the key assumptions and discount rate applied, to be appropriate. The Board review, at least annually, the valuation inputs and where possible, make use of observable market data to ensure valuations reflect the fair value of the investments. A broad range of assumptions are used in the valuation models. These assumptions are based on long-term forecasts and are not affected by short term fluctuations in inputs, be it economic or technical.
The Directors consider the following assumptions to be significant inputs to the DCF calculation. The valuation of the Company's investments is determined based on the discounted value of future cash flows of those investments over their useful economic lives ("UELs").
The UEL of individual assets is determined by reference to a fixed contractual lease term, and therefore, the Board and Manager do not consider that the UEL is an unobservable input or assumption that can have a significant impact on the valuation of the investments.
However, the Board notes that if extended contractual lease terms were negotiated for individual assets, this would increase the value of those assets. Similarly, if the assets did not operate for the duration of the fixed contractual period, this would reduce the value of those assets.
Discount rate
The weighted average discount rate used is 7.60%. The Directors do not expect to see a significant change in the discount rates applied within the Solar Infrastructure sector. Therefore a variance of +/- 0.5% is considered reasonable.
-0.50% -0.25% Base +0.25% +0.50%
---------------------- ------- ------- ------ ------- -------
Directors' valuation
(GBPm) 662.3 648.8 635.7 623.1 610.8
---------------------- ------- ------- ------ ------- -------
NAV per share
(pence) 111.1 108.1 105.2 102.3 99.6
---------------------- ------- ------- ------ ------- -------
Change vs Base
Case (%) 4.18 2.06 0.00 (1.99) (3.92)
Production
Base case production is a function of a number of separate assumptions including irradiation levels, availability of the sites and technical performance of the equipment. A sensitivity of +/- 10% is considered reasonable given stable levels of irradiation, contractual availability guarantees and understanding of future performance levels of the equipment.
-10% Base +10%
----------------------------- -------- ------ ------
Directors' valuation (GBPm) 558.6 635.7 711.9
----------------------------- -------- ------ ------
NAV per share (pence) 88.0 105.2 122.1
----------------------------- -------- ------ ------
Change vs Base Case (%) (12.13) 0.00 11.98
Power Price
DCF models assume power prices that are consistent with the Power Purchase Agreements ("PPA") currently in place. At the PPA end date, the model reverts to the power price forecast.
During the period c. 47% of revenue derived from electricity sales which are subject to power price movements. The remaining c. 53% of the Company's operational performance came from subsidies.
The power price forecasts are updated quarterly and based on power price forecasts from leading independent sources. The Investment Manager applies expected PPA sales discounts to the applicable forecast. The forecast assumes an average annual increase in power prices in real terms of approximately 1.1%.
-20.0% -10.0% Base +10.0% +20.0%
---------------------- -------- ------- ------ ------- -------
Directors' valuation
(GBPm) 562.4 599.3 635.7 672.0 708.2
---------------------- -------- ------- ------ ------- -------
NAV per share
(pence) 88.9 97.1 105.2 113.2 121.3
---------------------- -------- ------- ------ ------- -------
Change vs Base
Case (%) (11.53) (5.73) 0.00 5.70 11.40
Inflation
A variable of 1.5% is considered reasonable given historic fluctuations. A long term inflation rate of 2.75% has been used.
-1.50% -0.75% Base +0.75% +1.50%
---------------------- -------- ------- ------ ------- -------
Directors' valuation
(GBPm) 565.5 599.3 635.7 675.3 718.6
---------------------- -------- ------- ------ ------- -------
NAV per share
(pence) 89.5 97.1 105.2 114.0 123.6
---------------------- -------- ------- ------ ------- -------
Change vs Base
Case (%) (11.04) (5.72) 0.00 6.23 13.04
Operating costs (investment level)
Operating costs include operating and maintenance ("O&M"), insurance and lease costs. Other costs are fixed and are therefore not considered to be sensitive to changes in unobservable inputs. Base case costs are based on current commercial agreements. We would not expect these costs to fluctuate widely over the life of the assets and are comfortable that the base case is prudent. A variance of +/- 5.0% is considered reasonable, a variable of 10.0% is shown for information purposes.
-10.0% -5.0% Base +5.0% +10.0%
---------------------- ------- ------ ------ ------- -------
Directors' valuation
(GBPm) 646.2 641.0 635.7 630.5 625.2
---------------------- ------- ------ ------ ------- -------
NAV per share
(pence) 107.5 106.3 105.2 104.0 102.8
---------------------- ------- ------ ------ ------- -------
Change vs Base
Case (%) 1.65 0.82 0.00 (0.82) (1.65)
AUD/GBP Exchange Rate
Due to level of investment in Australia and exposure to AUD, the NAV may be sensitive to changes in the sterling exchange rate. A variance of +/- 20% is considered reasonable and illustrates potential impact below:
-20.0% -10.0% Base +10.0% +20.0%
----------------------------- ------- ------- ------- ------- -------
Directors' valuation (GBPm) 626.4 630.6 635.7 641.3 646.9
----------------------------- ------- ------- ------- ------- -------
NAV per share (pence) 103.1 104.0 105.2 106.4 107.6
----------------------------- ------- ------- ------- ------- -------
Change vs Base Case (%) (1.46) (0.80) 0.00 0.88 1.76
18. Stated Capital
The stated capital of the Company consists solely of Ordinary Shares of nil par value and therefore the value of the stated capital relates only to share premium. At any General Meeting of the Company each shareholder will have, on a show of hands, one vote and on a poll one vote in respect of each Ordinary Share held. Stated capital is the net proceeds received from the issue of Ordinary Shares (net of issue costs capitalised).
Ordinary Shares
30 June 30 June 31 December
2018 2017 2017
Shares Shares Shares
------------ ------------ ------------
Opening balance 449,952,091 340,950,912 340,950,912
---------------------------------- ------------ ------------ ------------
Issued during the period - 72,850,624 109,001,179
---------------------------------- ------------ ------------ ------------
Repurchased and held in Treasury - - -
---------------------------------- ------------ ------------ ------------
Closing balance 449,952,091 413,801,536 449,952,091
---------------------------------- ------------ ------------ ------------
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
Opening balance 454,515 339,003 339,003
--------------------------- --------- --------- ------------
Proceeds from share issue - 78,497 117,539
--------------------------- --------- --------- ------------
Less: issue costs - (1,523) (2,027)
--------------------------- --------- --------- ------------
Closing balance 454,515 415,977 454,515
--------------------------- --------- --------- ------------
19. NAV per Ordinary Share
The Net Asset Value ("NAV") per redeemable Ordinary Share for the Company is based on the Net Asset Value at the reporting date of GBP473,133,573 (30 June 2017: GBP432,798,841, 31 December 2017: GBP481,307,486) and on 449,952,091 (30 June 2017: 413,801,536, 31 December 2017: 449,952,091) redeemable Ordinary Shares, being the number of Ordinary Shares in issue at the end of the period.
20. Financial instruments and risk profile
The Company holds cash and liquid resources as well as having receivables and payables that arise directly from its operations. The underlying investments of the Company's investment activities indirectly expose it to various types of risk associated with solar power. The main risks arising from the Company's financial instruments are market risk, liquidity risk, credit risk and interest rate risk. The Directors regulatory review and agree policies for managing each of these risks and these are summarised below:
20.1 Market risk
(a) Foreign exchange risk
Foreign currency risk, as defined in IFRS 7, arises as the values of recognised monetary assets and monetary liabilities denominated in other currencies fluctuate due to changes in foreign exchange rates. Transactions in foreign currency are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to pounds sterling at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in income.
The Company has no direct exposure to foreign currency risk, however through its underlying investment in Australian assets via FS Holdco 4 it has indirect exposure. FS Holdco 4 is directly exposed to fluctuations in foreign currency due to its investments in Australian dollar denominated assets. The Group mitigates its exposure to fluctuations in foreign currency through the use of forward exchange contracts.
The carrying amount of FS Holdco 4's foreign currency exposure at the reporting date is as follows:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
--------- --------- ------------
AUD 55,872 N/A 41,652
----- --------- --------- ------------
The FX rate applied at 30 June 2018 0.56 (30 June 2017: n/a, 31 December 2017: 0.58). A 10% weakening or strengthening of the FX rate would have a GBP5,587,200 impact on the valuation of assets denominated in AUD.
(b) Price risk
The Company's investments are susceptible to market price risk arising from uncertainties about future values of the instruments. The Board's Investment Manager provides the Company with investment recommendations. The Board's Investment Manager's recommendations are reviewed and approved by the Investment Manager before the investment decisions are implemented. To manage the market price risk, the Board's Investment Manager reviews the performance of the investments on a regular basis and is in regular contact with the management of the non current investments for business and operational matters.
Price risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. At 30 June 2018, the Company's only investment was valued at net assets excluding the outstanding loans issued by the Company. Were this value to increase by 10%, the increase in net assets attributable to shareholders for the period would have been GBP40,342,170 (30 June 2017: GBP37,209,200, 31 December 2017: GBP40,846,400). The impact of changes in unobservable inputs to the underlying investments is considered in note 16.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term borrowing to its subsidiary. At period end the Company had no long term borrowings with third parties (1 January 2017 to 30 June 2017: GBPNil, 1 January 2017 to 31 December 2017: GBPNil).
Weighted
average
time for
which rate
Weighted
average
interest
Total portfolio rate is fixed
30 June 30 June 30 June
2018 2018 2018
GBP'000 % Days
---------------- ---------- ------------
Loan notes 250,000 11.00% 234
------------------- ---------------- ---------- ------------
Shareholder loans 158,610 2.00% 741
------------------- ---------------- ---------- ------------
Cash 180 - -
------------------- ---------------- ---------- ------------
408,790
------------------- ---------------- ---------- ------------
Weighted
average
time for
which rate
Weighted
average
interest
Total portfolio rate is fixed
30 June 30 June 30 June
2017 2017 2017
GBP'000 % Days
---------------- ---------- ------------
Loan notes 250,000 11.00% 599
------------------- ---------------- ---------- ------------
Shareholder loans 126,610 5.50% 1,106
------------------- ---------------- ---------- ------------
Cash 5,401 - -
------------------- ---------------- ---------- ------------
382,011
------------------- ---------------- ---------- ------------
Total portfolio Weighted average interest rate Weighted average time for which rate is fixed
31 December 2017 31 December 2017 31 December 2017
GBP'000 % Days
------------------ ------------------------------- ----------------------------------------------
Loan notes 250,000 11.00% 415
----------------- ------------------ ------------------------------- ----------------------------------------------
Shareholder
loans 154,110 4.30% 922
----------------- ------------------ ------------------------------- ----------------------------------------------
Cash 14,669 - -
----------------- ------------------ ------------------------------- ----------------------------------------------
418,779
----------------- ------------------ ------------------------------- ----------------------------------------------
20.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due as a result of the maturity of assets and liabilities not matching. An unmatched position potentially enhances profitability, but can also increase the risk of losses. Liquidity could be impaired by an inability to access secured and/or unsecured sources of financing to meet financial commitments. The Board monitors the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.
30 June 2018
Carrying Less than 6 to 12 Greater than
amount Contractual Total 6 months Months 12 months
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ------------------ ---------- --------- -------------
Financial Assets
----------------------------- --------- ------------------ ---------- --------- -------------
Investments 403,422 403,422 - - 403,422
----------------------------- --------- ------------------ ---------- --------- -------------
Trade and other Receivables 1,926 1,926 1,926 - -
----------------------------- --------- ------------------ ---------- --------- -------------
Interest receivable 68,948 68,948 68,948 - -
----------------------------- --------- ------------------ ---------- --------- -------------
Cash and cash equivalents 180 180 180 - -
----------------------------- --------- ------------------ ---------- --------- -------------
Total Financial assets 474,476 474,476 71,054 - 403,422
----------------------------- --------- ------------------ ---------- --------- -------------
Trade and other payables (1,342) (1,342) (1,342) - -
----------------------------- --------- ------------------ ---------- --------- -------------
Total financial liabilities (1,342) (1,342) (1,342) - -
----------------------------- --------- ------------------ ---------- --------- -------------
Net position 473,134 473,134 69,712 - 403,422
----------------------------- --------- ------------------ ---------- --------- -------------
30 June 2017
Greater
Carrying Contractual Less than 6 to 12 than
amount Total 6 months Months 12 months
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ------------ ---------- --------- -----------
Financial Assets
--------------------- --------- ------------ ---------- --------- -----------
Investments 372,092 372,092 - - 372,092
--------------------- --------- ------------ ---------- --------- -----------
Trade and other
Receivables 5,513 5,513 5,513 - -
--------------------- --------- ------------ ---------- --------- -----------
Interest receivable 50,391 50,391 50,391 - -
--------------------- --------- ------------ ---------- --------- -----------
Cash and cash
equivalents 5,401 5,401 5,401 - -
--------------------- --------- ------------ ---------- --------- -----------
Total Financial
assets 433,397 433,397 61,305 - 372,092
--------------------- --------- ------------ ---------- --------- -----------
Trade and other
payables (598) (598) (598) - -
--------------------- --------- ------------ ---------- --------- -----------
Total financial
liabilities (598) (598) (598) - -
--------------------- --------- ------------ ---------- --------- -----------
Net position 432,799 432,799 60,707 - 372,092
--------------------- --------- ------------ ---------- --------- -----------
31 December 2017
Greater
Carrying Contractual Less than 6 to 12 than
amount Total 6 months Months 12 months
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ------------ ---------- --------- -----------
Financial Assets
--------------------- --------- ------------ ---------- --------- -----------
Investments 408,464 408,464 - - 408,464
--------------------- --------- ------------ ---------- --------- -----------
Trade and other
Receivables 1,933 1,933 1,933 - -
--------------------- --------- ------------ ---------- --------- -----------
Interest receivable 57,626 57,626 57,626 - -
--------------------- --------- ------------ ---------- --------- -----------
Cash and cash
equivalents 14,669 14,669 14,669 - - --------------------- --------- ------------ ---------- --------- ----------- Total Financial assets 482,692 482,692 74,228 - 408,464 --------------------- --------- ------------ ---------- --------- ----------- Trade and other payables (1,384) (1,384) (1,384) - - --------------------- --------- ------------ ---------- --------- ----------- Total financial liabilities (1,384) (1,384) (1,384) - - --------------------- --------- ------------ ---------- --------- ----------- Net position 481,308 481,308 72,844 - 408,464 --------------------- --------- ------------ ---------- --------- ----------- 20.3 Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
The Company places cash with authorised deposit takers and is therefore potentially at risk from the failure of such institutions.
In respect of credit risk arising from other financial assets and liabilities, which mainly comprise of cash and cash equivalents, exposure to credit risk arises from default of the counterparty with a maximum exposure equal to the carrying amounts of these instruments. In order to mitigate such risks, cash is maintained with major international financial institutions. During the period and at the reporting date, the Company maintained relationships with the following financial institutions:
30 June 2018
Moody's Credit Rating GBP'000
----------------------- -------------
Cash in hand:
---------------------------------------------- ----------------------- -------------
Royal Bank of Scotland International Limited P2 10
---------------------------------------------- ----------------------- -------------
Lloyds Bank International Limited P1 170
---------------------------------------------- ----------------------- -------------
Total Company cash balances held by banks 180
----------------------------------------------------------------------- -------------
30 June
Moody's 2017
Credit Rating GBP'000
---------------- ---------
Cash in hand:
---------------------------------------------- ---------------- ---------
Royal Bank of Scotland International Limited P2 24
---------------------------------------------- ---------------- ---------
Lloyds Bank International Limited P1 5,377
---------------------------------------------- ---------------- ---------
Total Company cash balances held by banks 5,401
---------------------------------------------------------------- ---------
31 December
Moody's 2017
Credit Rating GBP'000
---------------- ------------
Cash in hand:
---------------------------------------------- ---------------- ------------
Royal Bank of Scotland International Limited P2 14,659
---------------------------------------------- ---------------- ------------
Lloyds Bank International Limited P1 10
---------------------------------------------- ---------------- ------------
Total Company cash balances held by banks 14,669
---------------------------------------------------------------- ------------
20.4 Other risks
Political and economic risk
The value of Ordinary Shares may be affected by uncertainties such as political or diplomatic developments, social and religious instability, changes in government policies, taxation or interest rates, currency repatriation and other political and economic developments in law or regulations and, in particular, the risk of expropriation, nationalisation, and confiscation of assets and changes in legislation relating to the level of foreign ownership.
Governmental authorities at all levels are actively involved in the promulgation and enforcement of regulations relating to taxation, land use and zoning and planning restrictions, environmental protection, safety and other matters. The introduction and enforcement of such regulations could have the effect of increasing the expense and lowering the income or rate of return from, as well as adversely affecting the value of, the Company's assets.
21. Capital Management
The Company's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares (up to its authorised number of shares) or sell assets to reduce debt.
22. Dividends
Dividends paid during the period comprise an interim dividend in respect of quarter 1 (1 January 2018 to 31 March 2018) of GBP7,109,243 (1.58 pence per Ordinary Share) (2017: GBP6,413,924, 1.58 pence per Ordinary Share) and quarter 2 (1 April 2018 to 30 June 2018) of GBP7,109,243 (1.58 pence per Ordinary Share) (2017: GBP6,538,064, 1.58 pence per Ordinary Share).
23. Related party disclosures
For the purposes of these Financial Statements, a related party is an entity or entities who are able to exercise significant influence directly or indirectly on the Company's operations.
As noted in Note 2, the Company does not consolidate its subsidiary. However, the Company and its subsidiaries (direct and indirect) are a Group and therefore, are considered to be related parties.
Transactions with UK Hold Co
During the period the Company issued no additional Loan Notes to UK Hold Co (1 January 2017 to 30 June 2017: GBPNil, 1 January 2017 to 31 December 2017: GBPNil), thus the total issued to UK Hold Co remained at GBP250,000,000 (30 June 2017: GBP250,000,000, 31 December 2017: GBP250,000,000), on which interest of GBP16,750,732 accrued during the period (1 January 2017 to 30 June 2017: GBP15,549,068, 1 January 2017 to 31 December 2017: GBP32,245,925). As at the reporting date interest of GBP65,496,400 was receivable (30 June 2017: GBP42,863,304, 31 December 2017: GBP48,745,653).
On 30 June 2018 the Company issued an additional GBP4,500,000 shareholder loan to UK Hold Co. As at the reporting date, the Company had increased its shareholders loan receivable from UK Hold Co to GBP158,609,725 (30 June 2017: GBP126,609,725, 31 December 2017: GBP154,109,725). Total interest of GBP1,571,111 accrued for the period (30 June 2017: GBP1,797,936, 31 December 2017: GBP3,150,225). As at reporting date interest of GBP3,451,175 was receivable (30 June 2017: GBP7,527,776, 31 December 2017: GBP8,880,064).
Transactions between UK Hold Co and FS Holdco
As at the reporting date, FS Holdco had a non-interest bearing loan receivable from UK Holdco totalling GBP143,503,500 (30 June 2017: GBP143,503,500, 31 December 2017: GBP143,503,500) and an interest bearing loan payable to UK Hold Co of GBP343,730,873 (30 June 2017: GBP343,730,873, 31 December 2017: GBP343,730,873). Total interest of GBP13,636,198 (1 January 2017 to 30 June 2017: GBP13,560,859, 1 January 2017 to 31 December 2017: GBP27,121,719) accrued to UK Hold Co during the period of which GBP51,347,559 (30 June 2017: GBP34,072,582, 31 December 2017: GBP37,711,361) remained payable by FS Holdco at period end.
On 19 June 2018, a GBP40,000,000 loan was issued to FS Holdco by UK Hold Co at an interest rate of 5% per annum. Total interest of GBP394,520 accrued for the period, all of which was outstanding at period end.
Transactions between UK Hold Co and FS Holdco 2
As at the reporting date, UK Hold Co had an interest bearing loan receivable from FS Holdco 2 totalling GBP74,893,885 (30 June 2017: GBP74,893,885, 31 December 2017: GBP74,893,885), on which interest of GBP1,856,958 accrued during the period (1 January 2017 to 30 June 2017: GBP1,333,727, 1 January 2017 to 31 December 2017: GBP3,221,463). As at the reporting date total interest of GBP1,856,958 (30 June 2017: GBP1,333,727, 31 December 2017: GBP3,221,463) was receivable.
As at the reporting date UK Hold Co had an interest bearing loan payable to FS Holdco 2 totalling GBP28,970,000 (30 June 2017: GBPnil, 31 December 2017: GBP28,970,000), on which interest of GBP718,297 (1 January 2017 to 30 June 2017: GBPnil, 1 January 2017 to 31 December 2017: GBPnil) accrued during the period.
As at the reporting date UK Hold Co also had an interest bearing loan payable to FS Holdco 2 totalling GBP13,000,000 (30 June 2017: GBPnil, 31 December 2017: GBP13,000,000), on which interest of GBP322,329 (1 January 2017 to 30 June 2017: GBPnil, 1 January 2017 to 31 December 2017: GBP169,178) was accrued during the period.
Transactions between UK Hold Co and FS Holdco 3
As at the reporting date UK Hold Co had an interest bearing loan receivable from FS Holdco 3 totalling GBP10,380,000 (30 June 2017: GBPnil, 31 December 2017: GBPnil), on which interest of GBP123,707 (30 June 2017: GBPnil, 31 December 2017: GBPnil) was accrued during the period.
On 19 June 2018, a GBP36,123,745 loan was issued to FS Holdco 3 by UK Hold Co at an interest rate of 5% per annum. Total interest of GBP356,288 accrued for the period, all of which was outstanding at period end.
Transactions between UK Hold Co and FS Holdco 4
As at the reporting date UK Hold Co had an interest bearing loan receivable from FS Holdco 4 totalling GBP28,970,000 (30 June 2017: GBPnil, 31 December 2017: GBP28,970,000), on which interest of GBP718,297 (30 June 2017: GBPnil, 31 December 2017: GBPnil) was accrued during the period.
As at the reporting date UK Hold Co also had non interest bearing loans receivable from FS Holdco 4 totalling GBP12,481,519 (30 June 2017: GBPnil, 31 December 2017: GBP12,481,519), on which interest of GBP309,473 (1 January 2017 to 30 June 2017: GBPnil, 1 January 2017 to 31 December 2017: GBP162,430) was accrued during the period.
Transactions between UK Hold Co and FS Debtco
As at the reporting date UK Hold Co had an interest bearing loan receivable from FS Debtco totalling GBP55,000,000 (30 June 2017: GBPnil, 31 December 2017: GBP55,000,000 ) on which interest of GBP1,363,699 (1 January 2017 to 30 June 2017: GBPnil, 1 January 2017 to 31 December 2017: GBP2,019,178) accrued during the period.
Transactions between FS Holdco, FS Debtco 2, FS Holdco 4 and their SPVs
All of the SPVs are cash generating solar farms. On occasion revenues are received and expenses are paid on their behalf by FS Holdco, FS Debtco and FS Holdco 4. All of these transactions are related party transactions. FS Holdco made the following net transactions on behalf of SPVs during the period and had the following net amounts payable or receivable at period end (none payable and receivable to FS Debtco or FS Holdco 4):
All of the SPVs are cash generating solar farms. On occasion revenues received and expenses are paid on their behalf by FS Holdco. All of these transactions are related parties. At period end, the following SPVs had amounts payable and receivable to FS Holdco:
Amounts paid Amounts received Net amount
Opening Balance receivable/ (payable) on behalf of from (payable)/ receivable
1 January SPV SPV as at 30 June
2018 2018 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- ----------------- -----------------------
Atherstone - 185 (185) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Bournemouth - 1,120 (1,120) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Castle Eaton (2,200) 3,006 (806) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Copley - 686 (686) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
High Penn (1,186) 1,683 (497) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Highfields (1,551) 2,017 (456) 10
-------------- -------------------------------------- -------------- ----------------- -----------------------
Hunters Race - 275 (275) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Kencot (1,567) 1,967 (1,240) (840)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Landmead (142) 465 (323) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Membury (610) 1,041 (1,782) (1,351)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Paddock Wood - 194 (194) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Pitworthy (1,874) 2,784 (513) 397
-------------- -------------------------------------- -------------- ----------------- -----------------------
Port Farms - 2,635 (3,225) (590)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Southam - 209 (209) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Spriggs (818) 1,104 (286) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Wymeswold (1,489) 2,039 (1,670) (1,120)
-------------- -------------------------------------- -------------- ----------------- -----------------------
(11,437) 21,410 (13,467) (3,494)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Net amount
Amounts paid Amounts received (payable)/ receivable
Opening Balance receivable/ (payable) on behalf of from as at
1 January SPV SPV 31 December
2017 2017 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------------- ----------------- -----------------------
Atherstone - 1,323 (1,323) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Bournemouth - 3,699 (3,699) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Castle Eaton - 1,572 (3,772) (2,200)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Copley 116 3,214 (3,330) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
High Penn - 741 (1,927) (1,186)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Highfields - 1,031 (2,582) (1,551)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Hunters Race - 931 (931) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Kencot (293) 2,412 (3,686) (1,567)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Landmead - 4,032 (4,174) (142)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Membury (758) 1,564 (1,416) (610)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Paddock Wood - 854 (854) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Pitworthy - 989 (2,863) (1,874)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Port Farms - 2,843 (2,843) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Southam - 890 (890) -
-------------- -------------------------------------- -------------- ----------------- -----------------------
Spriggs - 1,052 (1,870) (818)
-------------- -------------------------------------- -------------- ----------------- -----------------------
Wymeswold - 3,736 (5,225) (1,489)
-------------- -------------------------------------- -------------- ----------------- -----------------------
(935) 30,883 (41,385) (11,437)
-------------- -------------------------------------- -------------- ----------------- -----------------------
24. Transactions with the manager
Foresight Group CI Limited, acting as investment manager to the Group in respect of its investments, earned fees of GBP2,299,044 during the period (1 January 2017 to 30 June 2017: GBP1,306,418, 1 January 2017 to 31 December 2017: GBP4,276,808), of which GBP1,341,858 was outstanding as at 30 June 2018 (1 January 2017 to 30 June 2017: GBP498,574, 1 January 2017 to 31 December 2017: GBP1,257,741).
Foresight Group CI Limited charged fees to FS Holdco, FS Holdco 2, FS Debtco, FS Holdco 3 and FS Holdco 4 of GBPNil (1 January 2017 to 30 June 2017: GBPNil, 1 January 2017 to 31 December 2017: GBPNil) during the period in relation to the arrangement and transaction advice of the long term refinancing of the Group, of which GBPNil (1 January 2017 to 30 June 2017: GBPNil, 1 January 2017 to 31 December 2017: GBPNil) was outstanding as at period end.
Foresight Group LLP, a related party of Foresight Group CI, charged asset management fees to the underlying projects of GBP304,000 during the period (1 January 2017 to 30 June 2017: GBP256,000, 1 January 2017 to 31 December 2017: GBP587,333).
Brighter Green Engineering, a related party of Foresight Group LLP, charged fees to the underlying projects under both the O&M contracts and EPC defect remedial work of GBP2,471,568 during the period (1 January 2017 to 30 June 2017: GBP1,260,543, 1 January 2017 to 31 December 2017: GBP4,015,368).
Pursuant to the terms of the Prospectus, the total launch costs to be borne by the Shareholders of the Company were capped at 2% of the launch proceeds of GBP150,000,000 (i.e. GBP3,000,000) with any excess launch costs being reimbursed to the Company from Foresight Group CI Limited. Launch costs for the period to be reimbursed from Foresight Group CI Limited amounted to GBPnil (1 January 2017 to 30 June 2017: GBP652,202, 1 January 2017 to 31 December 2017: GBP771,254).
25. Change in accounting policies
This note explains the impact of the adoption of IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers' on the Company's financial statements and also discloses the new accounting policies that have been applied from 1 January 2018, where they are different to those applied in prior periods.
As a result of the changes in the Company's accounting policies, prior year financial statements did not have to be restated as there were no material reclassifications or adjustments arising from the new impairment rules.
a) Impact on the financial statements
IFRS 15 was endorsed on 22 September 2016 and is effective for accounting periods beginning on or after 1 January 2018. The objective of IFRS 15 is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. A five-step model framework is adopted to recognise revenue based on the amount of consideration to which the entity expects to be entitled to in exchange for goods or services promised to customers.
Scope:
IFRS 15 applies to all contracts with customers except those within the scope of IAS 17 Leases, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IAS 27 Separate Financial Statements, IAS 28 Investments in Associates and Joint Ventures, IFRS 4 Insurance Contracts and non-monetary exchanges between entities in the same line of business to facilitate sales to customers.
Application to the Company:
The adoption of IFRS 15 does not have a material impact on the Company's two revenue streams:
- Interest revenue earned from loans that have been issued
to underlying Companies within the Group; and
- Gains on its investments at fair value through profit
and loss.
IAS 18 specifies that interest revenue is recognised using the effective interest method. The measurement principles for interest revenue have been included in IFRS 9 which similarly will require that interest revenue be recognised using the effective interest method.
Revenue arising from changes in the fair value of financial assets and financial liabilities or their disposal is specifically excluded from the scope of IAS 18. Revenue from financial instruments and other contractual rights or obligations within the scope of IFRS 9 is specifically excluded from the scope of IFRS 15. Both revenue streams fall within the scope of IFRS 9 and thus specifically excluded from the scope of IFRS 15, the adoption of IFRS 15 did not have a material impact on the Company's interim report and did not result in any changes to accounting policies.
-- IFRS 9, 'Financial Instruments Classification and Measurement'.
IFRS 9 was issued in July 2014 and is effective for annual periods beginning on or after 1 January 2018. IFRS 9 was issued to replace IAS 39 Financial Instruments: Recognition and Measurement. It includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.
Initial measurement of financial instruments:
IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics. IFRS 9 contains three principal classification categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income. The standard replaces the existing IAS 39 categories of held to maturity, loans and receivables, fair value through profit or loss, amortised cost and available for sale.
Application to the Company: Investments held at fair value through profit or loss
The Company's investment in UK Hold Co (which comprises both debt and equity) was previously held at fair value through profit or loss under IAS 39. In terms of IFRS 9, the investment in its entirety continues to be held at fair value through profit or loss as the equity portion of the investment is not held for trading nor will the fair value through other comprehensive income option be elected and the debt portion of the investment meets the following conditions;
- the fair value through profit or loss classification
eliminates an accounting mismatch; and
- the debt investment forms part of a group of assets that
are managed and performance evaluated on a fair value
basis.
Therefore there is no change in the recognition or measurement of investments held at fair value through profit or loss.
Interest receivable, trade and other receivables, cash and cash equivalents
Interest receivable, trade and other receivables and cash and cash equivalents were previously measured at amortised cost under IAS 39. Under IFRS 9 assets can be classified under amortised cost under the following conditions;
- The assets must be held in a business model whose objective
is to collect the contractual cash flows i.e. "held to
collect"; and
- the contractual cash flows must represent repayment of
the principal and interest on the principal amount outstanding
These assets by their nature meet the above conditions and will therefore continue to be held at amortised cost under IFRS 9.
Trade and other payables
Under IAS 39, trade and other payables are measured at amortised cost. This does not change with the application of IFRS 9.
-- IFRS 9, 'Financial Instruments - Impairment'.
The Company was required to revise its impairment methodology under IFRS 9 for each class of financial asset.
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial. Investments held at fair value through profit or loss are not subject to IFRS 9 impairment requirements.
Interest receivable
The Company applies the simplified approach to measuring expected credit losses, as permitted by IFRS 9, which uses a lifetime expected loss allowance for all interest receivable. The Company has completed some high-level analysis and forward looking qualitative and quantitative information, to determine if the interest receivable is low credit risk. Based on this analysis the expected credit loss on interest receivable is not material and therefore no impairment adjustments were accounted for.
Trade and other receivables
The Company applies the simplified approach to measuring expected credit losses, as permitted by IFRS 9, which uses a lifetime expected loss allowance for all trade receivables. The expected credit loss on trade receivables is not material and therefore no impairment adjustments were accounted for.
b) Accounting policies applied from 1 January 2018 - IFRS
9
Classification
From 1 January 2018, the Company classifies its financial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either
through Other Comprehensive Income, or through profit
or loss), and
- Those to be measured at amortised cost.
The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business model for managing those assets changes.
Initial measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are two measurement categories into which the Company classifies its debt instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at amortised cost.
Interest income from these financial assets is included in finance income using the effective
interest rate method. Any gain or loss arising on derecognition is recognised directly in
profit or loss and presented in other gains/(losses). Impairment losses are presented as separate
line item in the statement of profit or loss; and
- Fair value through profit or loss: Assets that do not meet the criteria for amortised cost
are measured at fair value through profit or loss. A gain or loss on a debt investment that
is subsequently measured at fair value through profit or loss is recognised in profit or loss
and presented net within other gains/(losses) in the period in which it arises.
Impairment
From 1 January 2018, the Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables and interest receivable, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
26. Commitments and contingent liabilities
There are no commitments nor contingent liabilities.
27. Controlling party
In the opinion of the Directors, there is no controlling party as no one party has the ability to direct the financial and operating policies of the Company with a view to gaining economic benefits from its direction.
28. Post balance sheet events
The Company completed a significantly oversubscribed placing, raising GBP48.1 million of new capital in July 2018. The net proceeds of the placing have been used to fund the purchase of a portfolio of 15 operational assets in the UK. The transaction completed on 10 August 2018.
AIFMD Disclosures (unaudited)
Alternative Investments Fund Manager Directive Report
In accordance with the Alternative Investments Fund Manager Directive Report (the "Directive"), the Company is required in its capacity as the Alternative Investment Fund Manager ("AIFM") and the Alternative Investment Fund ("AIF") to disclose specific information in relation to the following aspects of the Company's management:
OVERVIEW OF INVESTMENT ACTIVITIES
The Company's investment activities during the year is disclosed in full in the Investment Manager's Report on page 20 of the Annual Report.
The Company's portfolio's performance during the year is disclosed in full in the Asset Manager's Report on page 36 of the Annual Report.
A list of the Company's portfolio holdings is included on page 16 of the Annual Report.
LEVERAGE AND BORROWING
Leverage is defined as any method by which the Company increases its exposure through debt, borrowed capital or the use of derivatives.
The Company and its subsidiaries' leverage position and third party debt arrangements are disclosed in full in the Investment Manager's Report on page 20 of the Annual Report.
'Exposure' is defined in two ways - 'Gross method' and 'Commitment method' - and the Company must not exceed maximum exposures under both methods.
The Directors are required to calculate and monitor the level of leverage of the Company, expressed as a ratio between the exposure of the Company and its Net Asset Value (Exposure/NAV), under both the Gross method and the Commitment method.
'Gross method' exposure is calculated as the sum of all positions of the Company (both positive and negative), that is, all eligible assets, liabilities and derivatives, including derivatives held for risk reduction purposes.
'Commitment method' exposure is also calculated as the sum of all positions of the Company (both positive and negative), but after netting off derivative and security positions as specified by the Directive.
For the "Gross method", the following has been excluded:
- the value of any cash and cash equivalents which are highly
liquid investments held in the local currency of the Company
that are readily convertible to a known amount of cash,
subject to an insignificant risk of changes in value and
which provide a return no greater than the rate of the 3-month
high quality government bond;
- cash borrowings that remain in cash or cash equivalents
as defined above and where the amounts of that payable are
known.
The total amount of leverage calculated as at 31 December 2017 is as follows:
Gross method: 22%
Commitment method: 32%
LIQUIDITY
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due as a result of the maturity of assets and liabilities not matching. An unmatched position potentially enhances profitability, but can also increase the risk of losses. Liquidity could be impaired by an inability to access secured and/or unsecured sources of financing to meet financial commitments. The Board monitors the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs.
The financial position of the Company, its cash flows, liquidity position and borrowing facilities are referred to in the Chairman's Statement, Strategic Report and Notes to the Accounts. In addition, the financial statements include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.
The Company has sufficient financial resources together with investments and income generated. As a consequence, the Directors believe that the Company is able to manage its business risks.
RISK MANAGEMENT POLICY NOTE
Please refer to Principal Risks report on page 43 of the Annual Report.
REMUNERATION
As AIFM, the Company is subject to a remuneration code which is consistent with the requirements of the FCA which apply to the AIFM. The remuneration policy is designed to ensure that any relevant conflicts of interest can be managed appropriately at all times and that the remuneration of the Directors and senior management is in line with the risk policies and objectives of the funds managed by the AIFM.
The Company does not directly employ any staff members. The services in this regard are provided by staff members of Foresight Group LLP.
In accordance with the AIFMD, information in relation to the remuneration of the Company's AIFM is required to be made available to investors. In accordance with the Directive, the AIFM's remuneration policy and the numerical remuneration disclosures in respect of the AIFM's relevant reporting period (year ending December 2017) are available from the AIFM on request.
Advisors
ADMINISTRATOR & COMPANY SECRETARY
JTC (Jersey) Limited
JTC House
28 Esplanade
St. Helier Jersey
JE4 2QP
REGISTRAR
Computershare Investor Services (Jersey)
Queensway House
Hilgrove Street
St. Helier Jersey
JE1 1ES
CORPORATE BROKER
Stifel Nicolaus Europe Limited (formerly Oriel Securities)
150 Cheapside
London
EC2V 6ET
INVESTMENT MANAGER
Foresight Group CI Limited
PO Box 156
Dorey Court
St. Peter Port
Guernsey
GY1 4EU
LEGAL ADVISORS TO THE COMPANY AS TO ENGLISH LAW
Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London
EC2A 2EW
LEGAL ADVISORS TO THE COMPANY AS TO JERSEY LAW
Ogier
Ogier House
The Esplanade
St. Helier
Jersey
JE4 9WG
LEGAL ADVISORS TO THE COMPANY AS TO THE ACQUISITION OF SOLAR ASSETS
Osborne Clarke
One London Wall
London
EC2Y 5EB
INDEPENT AUDITOR
KPMG LLP
15 Canada Square
London
E14 5GL
Glossary of Terms
AIC The Association of Investment Companies
-------------------------------------------------------------------------------------------------
AIC Code The Association of Investment Companies Code of Corporate Governance
------------------- -------------------------------------------------------------------------------------------------
AIC Guide The Association of Investment Companies Corporate Governance Guide for Investment Companies
------------------- -------------------------------------------------------------------------------------------------
AIFMD The Alternative Investment Fund Management Directive
------------------- -------------------------------------------------------------------------------------------------
Asset Manager The Company's underlying investments have appointed Foresight Group LLP, a subsidiary of
Foresight
Group CI, to act as Asset Manager
------------------- -------------------------------------------------------------------------------------------------
Company Foresight Solar Fund Limited
------------------- -------------------------------------------------------------------------------------------------
CEFC The Clean Energy Finance Corporation
------------------- -------------------------------------------------------------------------------------------------
DCF Discounted Cash Flow
------------------- -------------------------------------------------------------------------------------------------
DECC The Department of Energy and Climate Change
------------------- -------------------------------------------------------------------------------------------------
DNO Distribution Network Operator
------------------- -------------------------------------------------------------------------------------------------
EPC Engineering, Procurement & Construction
------------------- -------------------------------------------------------------------------------------------------
EU The European Union
------------------- -------------------------------------------------------------------------------------------------
EUA European Emission Allowances
------------------- -------------------------------------------------------------------------------------------------
FAC Final Acceptance Certificate
------------------- -------------------------------------------------------------------------------------------------
FiT Feed-in Tariff. The Feed-in-Tariff scheme is the financial mechanism introduced on 1 April
2010 by which the UK Government incentivises the deployment of renewable and low-carbon
electricity
generation of up to 5MW of installed capacity.
------------------- -------------------------------------------------------------------------------------------------
GAV Gross Asset Value on Investment Basis including debt held at SPV level
------------------- -------------------------------------------------------------------------------------------------
Group Borrowing Group Borrowing refers to all third-party debt by the Company and its subsidiaries.
------------------- -------------------------------------------------------------------------------------------------
GWh Gigawatt hour
------------------- -------------------------------------------------------------------------------------------------
IAS International Accounting Standard
------------------- -------------------------------------------------------------------------------------------------
IFRS International Financial Reporting Standards as adopted by the EU
------------------- -------------------------------------------------------------------------------------------------
Investment Manager Foresight Group CI Limited
------------------- -------------------------------------------------------------------------------------------------
IPO Initial Public Offering
------------------- -------------------------------------------------------------------------------------------------
KID Key Information Document
------------------- -------------------------------------------------------------------------------------------------
KPMG LLP KPMG is the Company's Auditor
------------------- -------------------------------------------------------------------------------------------------
LGC Large-Scale Generation Certificate
------------------- -------------------------------------------------------------------------------------------------
LIBOR London Interbank Offered Rate
------------------- -------------------------------------------------------------------------------------------------
Listing Rules The set of FCA rules which must be followed by all companies listed in the UK
------------------- -------------------------------------------------------------------------------------------------
LRET Large-Scale Renewable Energy Target. The LRET creates a financial incentive in Australia for
the establishment and growth of renewable energy power stations, such as wind and solar farms,
or hydro electric power stations
------------------- -------------------------------------------------------------------------------------------------
Main Market The main securities market of the London Stock Exchange
------------------- -------------------------------------------------------------------------------------------------
MIDIS Macquarie Infrastructure Debt Investment Solutions
------------------- -------------------------------------------------------------------------------------------------
MUFG Bank of Tokyo-Mitsubishi UFJ
------------------- -------------------------------------------------------------------------------------------------
MWh Megawatt hour
------------------- -------------------------------------------------------------------------------------------------
MWp Megawatt peak
------------------- -------------------------------------------------------------------------------------------------
NAV Net Asset Value
------------------- -------------------------------------------------------------------------------------------------
NEG National Energy Guarantee
------------------- -------------------------------------------------------------------------------------------------
Official List The Premium Segment of the UK Listing Authority's Official List
------------------- -------------------------------------------------------------------------------------------------
O&M Operation and Maintenance contractors
------------------- -------------------------------------------------------------------------------------------------
PPA Power Purchase Agreements
------------------- -------------------------------------------------------------------------------------------------
PR Performance Ratio
------------------- -------------------------------------------------------------------------------------------------
PRIIPS Packaged Retail and Insurance-Based Investment Products
------------------- -------------------------------------------------------------------------------------------------
PV Photovoltaic
------------------- -------------------------------------------------------------------------------------------------
RET Renewable Energy Target
------------------- -------------------------------------------------------------------------------------------------
RO Scheme The financial mechanism by which the UK Government incentivises the deployment of large-scale
renewable electricity generation by placing a mandatory requirement on licensed UK electricity
suppliers to source a specified and annually increasing proportion of electricity they supply
to customers from eligible renewable sources or pay a penalty.
------------------- -------------------------------------------------------------------------------------------------
ROC Renewable Obligation Certificates
------------------- -------------------------------------------------------------------------------------------------
RPI The Retail Price Index
------------------- -------------------------------------------------------------------------------------------------
SCR Significant Code Review
------------------- -------------------------------------------------------------------------------------------------
SPV The Special Purpose Vehicles which hold the Company's investment portfolio of underlying
operating
assets
------------------- ------------------------------------------------------------------------------------------------- TCR Targeted Charging Review ------------------- ------------------------------------------------------------------------------------------------- UK The United Kingdom of Great Britain and Northern Ireland ------------------- -------------------------------------------------------------------------------------------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR UAVNRWSAWUAR
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August 22, 2018 02:00 ET (06:00 GMT)
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