Foresight Solar Fund Ltd (LSE:FSFL) this week highlighted strong operational performance driven by higher-than-expected levels of solar irradiation across the UK, which is its main market.
Electricity production was 4% above budget for the first half of the year.
The company told investors that despite lower power price forecasts in the UK impacting the NAV, cash flow remained resilient.
It said the fund was on track to meet its dividend targets, and the board had reaffirmed a 1.3 times dividend cover target for the year.
Fund manager Toby Virno joined the Proactive studio to tell us more about the performance.
Proactive: Joining me is Toby Virno from Foresight Solar Fund. Toby, very good to speak with you. You've announced your net asset value for the second quarter earlier this week. What were the main takeaways?
Toby Virno: We published our NAV earlier this week of £603.8 million. That's equivalent to 108.5 pence per share for Foresight Solar.
Key highlights were strong operational performance for the start of the year, and this was driven by the high levels of solar irradiation that we've enjoyed so far in 2025.
Also, the continued share buyback program was a big positive, both of these adding value for shareholders.
In terms of headwinds, lower power price forecasts have been the primary driver of the reduction in NAV. This quarter, revised estimates for the UK markets impacted the curve both in the near term and the longer term.
However, cash flow remains resilient and Foresight Solar remains on course to meet its dividend targets for the year.
We're continuing to pay down debt, which strengthens our financial position. And of particular note in this announcement, there have been some exciting updates coming through from our Spanish development pipelines.
We announced 100MW of capacity for a number of new battery storage projects in the country.
This is a great milestone for our Spanish development strategy, with the potential for more to follow.
Proactive: That was part of another announcement you made in July, when you extended your share buyback program and update to the markets.
Has performance been strong this year?
Toby Virno: Yes, that's right. We've had plenty of sunshine in the UK, which is our main market, and this has underpinned a strong operational performance for the year so far.
That positive irradiation variance to our budget in the first half of the year has contributed to the electricity production from the global portfolio being 4% above budget.
This strong performance, together with our active power price hedging, has led to a higher than expected set of cash distributions.
The board is confident that we'll be able to deliver more than our dividend cover this year and have reiterated their 1.3 times dividend cover target for the year.
It's from this position of strength that the directors have decided to allocate a further £10 million to the share buyback program that we've had in place since May 2023.
This buyback program remains one of the largest in the sector relative to the fund size, and it's also been very consistent, which is something that we know is very important to our investors.
Proactive: Toby, looking forward to what's next for Foresight Solar?
Toby Virno: I've already mentioned the development pipeline in Spain, and this is really exciting for Foresight Solar.
In addition to the 100MW of additional battery storage project capacity that we've been awarded, we're also expecting one of our solar projects to reach a landmark milestone later this year as it becomes fully committed.
As these projects move through from development stage to being ready to build, they become increasingly de-risked and increasingly valuable as a result.
This is where we believe the future growth for Foresight Solar will come from, and we're really excited about the prospect of furthering Foresight Solar's track record in this space — adding value through these development strategies.
On the other hand, our operational portfolio continues to perform well and to generate the revenue for the dividend, which is the income part of our strategy.
We've been working really closely with the board to continue to shrink the discount and will continue to execute on these initiatives that deliver the best possible value for our shareholders.
Our share price is almost 30% higher since January.
And as we continue to balance reducing the debt, returning cash to shareholders, and also reinvesting into our development stage projects, we continue to deliver on the strategy — delivering both income and growth for our shareholders.
Proactive: Toby, I hope you'll continue to keep us updated with your progress. Thank you very much for speaking with us today.