Foresight Solar Fund Ltd (LSE:FSFL) fund manager Ross Driver talked with Proactive about the company’s results for the six months to 30 June 2025.
Driver said the performance during the first half of the year highlighted “the quality of the operational portfolio and the expertise of the team” and reinforced a resilient cash position. He noted that the fund’s share buyback programme has been a consistent source of value for shareholders since 2023 and that the board recently allocated a further £10.00 million to extend the initiative.
Discussing the fund’s capital allocation priorities, Driver explained that cash is being balanced between shareholder returns, debt reduction, and reinvestment in development opportunities. He highlighted progress in Spain, where the fund has secured capacity for battery storage projects and expects one of its solar developments to reach ready-to-build status soon.
On dividends, Driver confirmed that Foresight Solar Fund has raised payments every year since 2013, supported by wholesale power prices and its proactive hedging approach. He reiterated the company’s 1.3x dividend cover target for 2025. Looking ahead, Driver said the fund remains focused on narrowing the discount between its share price and NAV, while also advancing divestments to free up capital for shareholders.
Proactive: Hello, you’re watching Proactive. I’m joined by Foresight Solar Fund Ltd fund manager Ross Driver. Ross, very good to speak with you. You published your results for the six months to the 30th of June 2025. What were the highlights?
Ross Driver: Good to be with you as always, Stephen. If we run through the results to 30th of June this year, our results were a validation of the positive first half of the year. There was a strong performance, which highlights the quality of the operational portfolio and the expertise of the team. It also reinforces our resilient cash position.
The share buyback by the fund has been continuing, and it’s a source of value for shareholders. Investors have asked for capital returns and we’ve continued to deliver on that. We’re also excited about our proprietary development pipeline in Spain. We were recently awarded capacity for our battery storage projects, and one of our solar sites is expected to reach ready-to-build status in the coming months.
Proactive: Ross, does the strong operational performance directly translate to an improved cash position?
Ross Driver: In short, it should do. Wholesale power prices in the UK averaged roughly around £85 per megawatt hour in the first half of the year. Combined with our proactive hedging approach, we’ve managed to sell electricity at prices that allow us to more than meet our dividend targets. That’s why the board has been able to reiterate its 1.3 times dividend cover target for the year.
From that position of strength, the directors also decided to allocate up to a further £10.00 million to the buyback programme. This extends the initiative we’ve had in place since May 2023. Our buyback programme is one of the largest in the sector relative to NAV, and we’ve been consistent with it throughout. Any additional free cash will be prioritised according to our capital allocation strategy, which balances returning capital to shareholders, paying down debt, and reinvesting in development opportunities.
Proactive: So, your income and growth strategy means the operational portfolio generates the cash for your dividends, while your development pipeline aims to deliver future growth?
Ross Driver: Exactly, Stephen. The operational portfolio will continue to deliver the cash to pay the dividend. We’ve raised our dividend every year since 2013 and never missed a payment. On the back of our portfolio performance, in combination with our hedging strategy, the development pipeline offers the opportunity for higher returns over time. It also provides optionality — either to sell assets at a profit or to invest and run them for longer-term cash generation.
If you take Muel as an example, the 55-megawatt solar project has already received its environmental approvals and is awaiting construction permits. Once those are secured, the project will effectively be ready to build. In the same way a plot of land increases in value after planning permission, Muel’s value is expected to rise at that point. The board will then have the option to sell to crystallise capital gains, or build it out and then either sell or operate it after construction is complete.
Proactive: Ross, what’s next for Foresight Solar?
Ross Driver: The share price discount to NAV continues to be too wide. We believe it is severely undervaluing a portfolio with a proven track record. We’ve committed to doing everything possible to shrink that discount. We are also driving our divestment process forward to unlock cash that can be distributed back to shareholders, used to pay down debt, or potentially reinvested to improve returns. The board is committed to delivering the best outcome for shareholders, and we will continue to analyse the opportunities available to do that.
Proactive: Well Ross, I hope you’ll continue to keep us posted on your progress. Thank you very much for speaking with us today.