Bluefield Solar Income Fund (LSE:BSIF) is exploring a shift to an integrated model with its investment manager, the Bluefield Group, enabling self-funded growth as a UK-focused independent green power producer.
The solar-focused investment trust is in the midst of a fundamental strategic review in light of continued share price discount to net asset value and constrained access to capital, which led to a previous process exploring the sale of its portfolio, which did not lead to a binding offer.
"The directors recognise that the historically low interest rate environment that supported the early years of the company and its peers is unlikely to return," said chair John Scott in a statement as part of the company's annual report on Tuesday, noting that financial markets have changed and the board is "working to determine a more appropriate structure in which to place an integrated green power entity, suitable for the next decade and beyond".
He said the portfolio sale process, made it clear to the board that investors were most interested in the company's operating assets in combination with its development pipeline and managed by its experienced investment adviser, the Bluefield Group.
"Put simply, we discovered that the whole Bluefield enterprise is worth more than the sum of its parts. This insight helps define the board's current thinking in terms of the future direction of BSIF."
He said the board believes that while BSIF could continue under its current model and maintain a strong dividend, limited access to equity and low-cost debt would require ongoing asset sales, restricting growth and eroding NAV over time.
Market feedback supports the value of a more integrated model, combining BSIF’s operating assets, development pipeline, and Bluefield's group capabilities.
The board is therefore exploring a transition to a largely self-funded, UK-focused independent power producer model.
Scott said this would support long-term growth and potentially higher total returns, but would require a reassessment of BSIF’s capital structure and dividend policy to fund development through retained earnings and borrowing.
Results and board changes
For the year to June 2025, BSIF declared its fourth interim dividend of 2.3p per share to take the full-year total to 8.9p for the twelve months ended 30 June 2025, in line with its target and up 1% on the prior year.
While it remains in the current structure, a dividend target of no less than 9p has been set for the new financial year.
Net asset value declined to £690.1 million from £781.6 million a year earlier, while NAV per share dropped to 116.56p from 129.75p.
Underlying earnings before amortisation rose marginally to £95.3 million, or 16.0p per share.
Operationally, BSIF recorded strong solar generation in the second half of the year, helping offset weaker performance in the latter half of 2024. Solar output was 1.9% above forecast, and irradiation came in 6.8% ahead of expectations.
During the year, the company completed Phase Two of its partnership with GLIL, selling a 50% stake in a 112MW portfolio for approximately £70 million. Phase Three followed post year-end, involving a further asset sale valued at £38 million.
As a result, BSIF reduced its revolving credit facility and invested across development and equipment upgrades.
Post year-end, BSIF acquired full ownership of the Galaxy Portfolio, adding 249MW of photovoltaic capacity and 130MW of battery energy storage systems, and representing around 40% of the company’s ready-to-build PV pipeline and 20% of its ready-to-build storage pipeline by capacity.
On the governance front, Michael Gibbons CBE has been appointed chair, succeeding Scott. Other committee changes include Glen Suarez becoming senior independent director, with adjustments to the nomination and remuneration committee leadership.