Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • NESF's Net Asset Value per Ordinary Share stood at 91.7p in Q1, with Ordinary Shareholders’ NAV at £527.2 million.

  • Dividends declared for Q1 totalled 2.10p per Ordinary Share, in line with full-year target guidance of 8.43p.

  • Portfolio electricity generation was 7.6% above budget due to favourable UK irradiation levels, contributing positively to NAV.

NextEnergy Solar Fund (LSE:NESF), a specialist investor in solar energy and energy storage, has released its Q1 Net Asset Value (NAV) and Operational Update for the period ended 30 June 2025.

At the end of the quarter, NAV per Ordinary Share was 91.7p compared with 95.1p on 31 March 2025. Ordinary Shareholders’ NAV stood at £527.2 million, while Gross Asset Value was £1,050 million.

Financial debt gearing, excluding Preference Shares, was reported at 29.1% (31 March 2025: 28.1%), with total gearing including Preference Shares at 48.5% (31 March 2025: 47.3%). The weighted average cost of debt, inclusive of Preference Shares, remained stable at 4.9%, while the weighted average discount rate across the portfolio was maintained at 8.0%.

As previously announced on 19 June 2025, a reduction in investment management fees has taken effect from 1 April 2025, the start of the current financial year.

Dividend Declaration

For the period ended 30 June 2025, NESF declared total dividends of 2.10p per Ordinary Share, consistent with the 2.10p dividend declared in Q1 2024. The Company reaffirmed its full-year dividend target guidance of 8.43p per Ordinary Share for the year ending 31 March 2026, expected to be covered 1.1x to 1.3x by earnings after debt amortisation.

Since inception, the Company has declared total Ordinary Share dividends of £407 million. As of 20 August 2025, NESF offered a dividend yield of approximately 11%.

Portfolio Performance

The Company’s portfolio consisted of 101 operating assets with a total installed capacity of 937MW, unchanged from 31 March 2025. The remaining weighted average asset life was reported at 24.5 years.

During the quarter, UK irradiation levels were 18.9% above budget, resulting in electricity generation 7.6% ahead of expectations, including distribution network operator (DNO) outages. This performance contributed a 0.5p per share uplift to NAV.

Share Buyback and Capital Recycling

As part of its up to £20 million Share Buyback Programme, the Company had purchased 15,621,142 Ordinary Shares for £11.5 million as of 30 June 2025. All purchased shares are currently held in treasury.

The Capital Recycling Programme also advanced, with the remaining 100MW undergoing a competitive sales process. As of 20 August 2025, NESF had sold three assets totalling approximately 145MW of capacity, raising £72.5 million and adding an estimated NAV uplift of 2.76p per share.

Capital Structure

At 30 June 2025, total debt stood at £497 million, comprising £298.5 million of financial debt and £198.5 million of Preference Shares. Long-term amortising debt reduced to £145.6 million, in line with portfolio subsidy lives. Of the Company’s total debt, 69% was fixed, while 31% was at floating rates via the short-term revolving credit facility.