Foresight Environmental Infrastructure (LSE:FGEN) has pledged to focus on core environmental assets, following a broad strategic review prompted by market volatility and 'higher return expectations'.
The London-listed investor, which focuses on renewable energy and sustainable infrastructure projects across the UK and mainland Europe, said on Tuesday that it would not pursue any major asset sales in the near term.
Instead, it is opting to hold its existing portfolio of income-generating assets while planning a gradual exit from higher-growth projects.
"The board concluded that the long-term prospects of the company and shareholder interests are best served through the proactive management of the existing portfolio," said CEO Ed Warner.
"The company will follow a re-focused investment strategy, prioritising a core portfolio of environmental infrastructure assets with long-term stable cash flows delivering predictable income alongside opportunities for growth."
The strategy rethink followed an extensive review of options for the business, including a possible managed wind-down or merger.
Instead, the board has opted for what it described as a “re-focused” approach, prioritising steady, inflation-linked returns from established infrastructure projects in areas such as solar, wind, biomass, and water.
While some capital will still go into later-stage development opportunities, FGEN said it would pursue disposals of riskier growth assets only in the medium term, once they are fully operational.
These include the Rjukan vertical farming project in Norway, which is nearing its first harvest, and a cleaner transport venture supplying compressed natural gas (CNG), which has undergone a recent restructuring.
Meanwhile, the fee structure paid to Foresight Group, the company’s investment manager, will be revised again from October.
From that date, fees will be calculated half based on net asset value and half on market capitalisation, with the latter element capped at the NAV level.
FGEN said this would reduce annual costs by more than £800,000, a 13% cut from the current arrangement, and bring the total reduction in investment management fees since last autumn to around 34%.
Turning to the company's financial performance, it reported a net asset value of £678.7 million at the end of March, down slightly from £695.4 million at the end of December.
Net asset value per share slipped to 106.5p from 107.4p. The total return on NAV over the quarter was 1%, bringing the return for the full year to 0.6%.
Cash generation reached a record level, with income from the portfolio covering dividends by a factor of 1.32.
FGEN declared a final quarterly dividend of 1.95p, in line with its previous target. For the current financial year ending March 2026, the company is aiming for a full-year dividend of 7.96p per share, a 2% increase.
As part of efforts to support the share price, FGEN said it had repurchased nearly 10 million shares during the latest quarter, bringing the total buyback programme since August to £19.2 million.
That scheme was extended in March to allow for repurchases of up to £30 million.
The company plans to publish its full-year results and strategic update in June.