Nextenergy Solar Share Discussion Threads

[tag57] 16/5/2025 08:40:00

Mahy has stepped down from the SSE Board too although more due to the 9year tenure.
Maybe she is just prepping for retirement / maybe poor health, who knows but it is concerning that it is with immediate effect.

[18sprice] 16/5/2025 08:32:09

CC2014, liquidity is a major problem for the majority of these renewable/infra ITs. With a market cap just shy of £400million NESF isn’t even on the radar of large institutions, the trust is simply too small. As many of the renewable trusts have alluded to recently, there needs to be strategic M&A to enable the trusts to get bigger, without corporate activity the smallest players will be bought out in piecemeal fashion leaving only the likes of INPP, HICL and a few others.

[cc2014] 16/5/2025 07:55:22

The Chair leaving immediately and not making it through to the AGM or providing 3 months for succession planning is not a good message. There's something uncomfortable there.

The discount to NAV has always been too high as well and the shares have been shunned by some of the large institutions. When the third largest investor is HL and the eight Interactive Investor that's sending a message as you don't see that elsewhere in the same way.


I am off now to unravel the puzzle as to whether the dividend is really covered or not. I suspect it is but I am puzzled by the statement that the dividend is covered 1.1-1.3x now up from 1.1x from as recently as y/e 31/03/25. I'm not sure given 95% of their revenues are fixed how the range can be so wide (or rather I can construct a way it is but it implies NESF's production might vary far more than I thought or seems likely)

[chucko1] 15/5/2025 22:35:30

There is some especially weak/lazy thought going into some of these posts.

The evidence that "NESF is eating itself", using the idea that dividends = NAV atrophy the past two years is in contrast to this: the sum of dividends and NAV atrophy over a much longer period annualises at circa +7.5%. You will find that a rapid ratcheting up of discount rate those past two years is a more appropriate place to look. Still, 7.5% is less than the average dividend yield, so further detailed analysis to reconcile this is required (you are certainly not going to find it in the past 100 posts).

Furthermore, the certitude expressed by some relative to the guesswork is absurd: NESF is extremely volatile owing to the inherent leverage incurred by the long time frames involved in valuations. A key driver is the spread between discount rate and inflation, very much the same as drives the valuation of long linker Gilts. Take a look at the movement in price of those the past two years and you will find that NESF is an oasis of calm by comparison!

That said, let's see how the commented upon irradiance of April/May feeds through to future NAVs as at least that variable has a short duration and effectively accrues. And as for Mahy, who knows? Could mean anything, but worth keeping an eye on any clear reasons emerging.

[marktime1231] 15/5/2025 19:34:03

I see BSIF also reported today, similarly eroding NAV it seems because net earnings don't cover the dividend. But they confirmed that record sunshine in March more than made up for below budget performance in Jan-Feb. So NESF has had problems other than low irradiance to compound its woes, like outages and ...?

Unexpected abrupt departure of Helen Mahy the NESF Chairman this afternoon, something which couldn't wait and follow an orderly process eg publishing the FY result in mid June and the AGM to follow which presumably will include a continuation vote. Whoever drafted the rns was struggling to find resignation words which reflect positively on her tenure. Having a crisis of conscience, or suddenly keen to distance herself?

[robertspc1] 15/5/2025 15:34:08

Gonna happen in my view. BSIF leading the charge

[marktime1231] 15/5/2025 11:36:27

Another trading update without any operational or financial performance data, except to say that irradiance was below budget. And yet the headlines were for record March sunshine. And perpetuating the myth that the dividend is covered by using a gross income measure eg before accounting for all deductions. It is not covered net when you account for all the group costs eg buyback, management fees, perp share payments and interest on the rcf. Not covered by miles. NESF is accruing interest and in effect is borrowing to pay the high dividend and to buy back shares.

This is a scandal, a con which some punters are falling for, blinded by the 12% dividend and the board presenting NESF to be in continuing good financial health when it is hugely loss making. As a couple of posters have pointed out NESF is eating itself to sustain the distribution.

[stemis] 15/5/2025 10:24:13

That's exactly what is happening. Over the last 2 years NAV has fallen by 19.2p and dividends have been...19.6p.

[cousinit] 15/5/2025 10:09:40

CC - I think that underlines why this is finely balanced at this point. Especially when share buybacks and BESS could be accretive in terms of capital allocation, even if the market may really dislike the latter.

[cc2014] 15/5/2025 09:48:18

a) the NAV keeps falling, one can argue the Trust is handing back it's income stream as dividends to it's shareholders
b)the gearing is at 48.4% (and going up not down)

[cousinit] 15/5/2025 09:09:30

Agreed Specto.

Just a thought, as the dividend is a Board policy, could the hold be to turn up the pressure on the manager? The manager will clearly understand the expectation on divi increases and "marketing" the strategy they are trying to promote/grow.

[woodhawk] 15/5/2025 09:05:32

So a 12% yield at 70p! Going to look ever more attractive as bank rates drop below 4%.

[spectoacc] 15/5/2025 08:38:28

FSFL said they were looking for consolidation - they, NESF, BSIF: you'd think all 3 would roll up into the go-to, super-sized solar IT.

If two go together and one is left out, that wouldn't be good for the one remaining.

Something's got to give on the fees on all of them, and rolling them up seems the obvious thing. Too many snouts in the troughs.

[garbetklb] 15/5/2025 08:38:23

As they project divi cover to be 1.1-1.3 (mainly dependent on sunlight & outages?), I'd have thought a small increase in dividend would have appeared possible and not wildly imprudent.
As SpectoAcc says, not a v good look to simply hold. I'm a bit surprised the share price is effectively flat.

[cousinit] 15/5/2025 08:34:14

I get the sentiment when these trusts are not meant to be annuities but have divi growth as well.

I think they got a bit over confident in 2021/2 when they hedged at good levels and interest rates were lower. Clearly both of those have unwound and it seems that the forward power curves reflect more solar saturation, depressing the revenues that aren't subsidies. A partial answer would be co-located BESS, but there isn't the capital (on a standalone basis) to develop it.

Obviously M&A seems to make sense for shareholders here, at least to consolidate the sector. Any kind of JV (similar to SUPR) to develop BESS may stymie that.

[spectoacc] 15/5/2025 08:16:25

Guess it comes down to whether you believe the divi cover (in an accounting sense), but failing to put a few fractions of a penny onto the divi isn't a good look IMO. What will they do going forward?

Agree re management fees.

[cousinit] 15/5/2025 08:14:05

Specto - I'd much rather have some capacity for share buybacks than a divi increase, especially a token one.

Hopefully the Board delivers on reducing the management fees, but the time that is taking suggests more of a fudge than anything meaningful.

[bluemango] 15/5/2025 07:52:39

Yep, forgot that Q1 was 0.0210, thanks

[grahamg8] 15/5/2025 07:42:41

0.0843 this year, therefore target is to maintain. If it is actually 4x0.0211 (which I think it will be) then board will claim to have exceeded their target. Sneaky.

[bluemango] 15/5/2025 07:33:29

Minor point, but why is the dividend target 0.0843 and not 4 x 0.211 = 0.0844?

Typo on their part?

[sleveen] 15/5/2025 07:30:44

Specto

Running on vapours.


When will the NAV stop falling?

[risk1] 15/5/2025 07:26:33

Greedy boy

[spectoacc] 15/5/2025 07:25:47

Why is no one mentioning the holding of the divi - where's the inflationary rises gone?

"The Board believes that this maintained dividend target appropriately balances the interests of the Company's shareholders and other stakeholders with the Company's available uses of capital."

[return_of_the_apeman] 15/5/2025 07:20:25

The dividend target is forecast to be covered in a range of 1.1x - 1.3x by earnings post-debt amortisation, supported by a high degree of visibility of the Company's revenues.  As of 15 May 2025, the Company's forecasted total revenues for the year ending 31 March 2026 are 94% fixed through its RPI-linked government-backed subsidies and the Company's active power hedging strategy.

[masurenguy] 15/5/2025 07:12:10

*NAV per Ordinary Share of 95.1p (31 December 2024: 97.4p). Current discount to NAV is 27%.

*Total dividends declared of 8.43p per Ordinary Share for the twelve months ended 31 March 2025 (31 March 2024: 8.35p). As at 14 May 2025, the Company offers an attractive dividend yield of c.12%.

*As at 31 March 2025, the Company had purchased 15,125,342 Ordinary Shares for a total consideration of £11.0m through its up to £20m Share Buyback Programme.