Bluefield Solar Income Fund (LSE:BSIF) has decided to explore strategic initiatives to address the share price discount to net asset value and “seek to maximise value for our shareholders”, following a review with investors.
This decision was announced alongside the solar farm investment company’s interim results, for a first-half performance that it described as “respectable” and which saw the dividend target raised again.
At the end of December, NAV per share stood at 126.03p, down from 129.75p at the end of June.
Meanwhile, the shares ended December at a price of 94.2p, representing a discount of 25% to NAV, and since then weakened to a low point of 81.3p in early February.
Chair John Scott noted that the NAV reflected a “rigid evaluation” of the operating business, including power prices, prices being paid for solar assets in the secondary market, interest rates and operating costs.
Therefore he said the disconnect across the whole quoted renewables sector between share prices and NAVs, which has been going on since central banks hiked interest rates sharply in 2022 and has not dissipated as rates have begun to be cut last year, “is not a temporary phenomenon which patience alone will cure” and that “action is needed”.
Following a number of meetings with larger shareholders in recent weeks, the board has found a spectrum of views, he said, with some shareholders content to back the current business model and others deeply dissatisfied with the sector and advocating various initiatives to enable the return of money to shareholders.
“As a result of the consultation, the board has concluded that it is the right time to explore strategic initiatives to address the share price discount and to continue to seek to maximise value for our shareholders,” he said. “The board is committed to reviewing all options available to the company and we will look to update shareholders on progress as appropriate.”
For the current year, the board also set a dividend target at not less than 8.9p per share, up from the 8.8p dividends paid in respect of the previous year, with a first interim dividend of 2.2p declared on 28 January.