Member Info for blackfriars1

Reply from FSFL to my earlier email……..

Let me just say that the downside impact you saw in today's announcement isn't a charge. There has been no fine or enforcement action. What the number shows is a change in expected future tax payments following an agreement with HMRC and a review of our tax structure with a leading advisor.

Whilst the downside is disappointing, it is the current best estimate and tax liabilities are now materially de-risked for past and future payments. Despite today's movements, the £/MW valuation of our UK assets is very much in line with the rest of the market.

On Australia, the sale is still on the agenda. However, a pure play solar portfolio hasn't traded hands there in more than 12 months, which highlights the challenge. We're going to work to refinance the portfolio and then reassess when to bring it back to market to protect shareholder value.

M&A is one of the initiatives the directors are looking at, and we've talked about how we've made an offer for another investment trust. Rest assured the board is analysing options to deliver the best possible outcome for investors.

From Quoted Data this afternoon…….

The company said following engagement with HMRC in respect of its group tax structure, a position on historic tax submissions and “clarity” for future tax obligations had been reached. It said “the current best estimate of tax forecasts indicates that future tax payments will need to be increased”, leading to the 3.6p adjustment as post-tax income falls.

Stifel analyst Iain Scouller said it was a complex matter but it appeared Foresight Solar had assumed a higher level of deductions from taxable income than HMRC thought appropriate.

“At this early stage, we hope this is a Foresight-specific issue. However, the market will now be wary of other funds potentially having tax issues. No doubt all the managers will be reviewing their assumptions,” he said.

WillJa, here is the FSFL contact email…….

fsflir@foresightgroup.eu

Email sent to Tony Roper, Chairman at FSFL this morning……

Further to your trading update this morning which has been poorly received by the market and current shareholders.

The paragraph re your engagement with HMRC is scant at best and does nothing to clarify your position going forward. Albeit you have taken a hit to NAV but this is rear view mirror stuff and will do nothing to placate shareholders, only increasing uncertainty. Shareholders to my mind need to know when this situation came to light and the potential downside going forward, ie, increased tax provision and potential fines.

Also on the Australian divestment, this has gone round the houses and asks the question of judgement from those involved. Previous updates had been mildly positive as to a potential sale. To now update the market that a sale is not on the agenda is really poor. Would it not have been better to manage shareholder expectations in the first place?

And finally, yourself and the board must recognise that the time has now come for FSFL to be part of any upcoming M&A. The fund is far too small to attract institutional investors or raise capital to invest in the future. Sadly a regretful end for a company which at one time looked likely to play a part in the future of the UKs energy needs.

Is Rachel from accounts moonlighting at FSFL?

Honestly, is this for real and the CFO is still in place?

And very little shared by the Chair as to when this situation came to light and repercussions going forward.

Now wondering if Ross Driver’s departure has got anything to do with this?

“ Foresight Solar, with the support of a leading tax advisor, has engaged with HM Revenue & Customs in respect of its group tax structure. This process has been productive in respect of achieving an agreed position for historic tax submissions and providing clarity for tax obligations going forward”

I’ve owned LGEN for over 10 years and the share price has gone nowhere.

Albeit half yearly dividends have kept the wolf from the door.

However, with £1.2 trillion in aum, a £1 billion buyback about to commence and a market cap of only £14 billion, I’m now thinking that LGEN could move higher. Already writing good BPA business in the US and apparently looking closely at the Canadian and Dutch markets. Personally I think the market hates their capital intensive business model, you just need to look at how Aviva has re-rated given their 2028 target asset allocation of 75/25 in favour of asset light businesses.

I guess you pay your money and take your chances but there have been several US takeovers of insurers by the likes of Brookfield, Blackstone and Apollo so not out of the question that LGEN could be a target.

From Quote Date site…….

“No understanding” of investors

Stifel analyst Iain Scouller criticised the Department of Energy Security and Net Zero’s release of price sensitive information through the posting of two press releases on its website last Friday afternoon. He said there should have been a 7am announcement via the regulatory news service (RNS) to ensure the market knew of the proposals before trading started.

“It is clear the Department has no understanding of the concept of stability for investors, risk premiums and cost of capital. We think this announcement has probably added 100 basis points [1%] of risk premium to UK renewable investments,” he said.

Scouller added: “We suspect the Department either forgot these listed companies with renewable projects existed or thought that the change wouldn’t have any impact on the valuations. Either way, we think they are about to be reminded of the importance of the listed sector over the next few weeks when they will receive a barrage of hostile responses to the consultation.”

All conditions to financial close have now been satisfied, marking the start of revenue commencement. Under the RAB model, INPP will benefit from regulated, inflation-linked returns from day one of its investment, as returns are not exposed to fluctuations in power generation or the market price. Through the construction and early operations phase to the late 2030s, the investment offers a fixed, regulated equity return of 10.8% in real terms, including an annual cash yield of c.6%, resulting in a forecast internal rate of return ('IRR') in the low-teens, well above the returns achievable through share buybacks. These returns are subject to Ofgem's licence and underpinned by a Government Support Package that provides protections in the event of construction cost overruns or delays and ring-fences nuclear-specific risks, consistent with INPP's prior disclosures[2].

Damofarl, Looks like a fait accompli to me too.

Amazing how positive James Armstrong has been waxing lyrical about BSIS’s prospects for the last year or two then all of a sudden it’s an integrated model or god help us all. As you say, it’s how they dress it up now to appease existing shareholders.

krustysmegma, you could well be right here, difficult call for me but I wish you well, that’s the thing about the future, it’s hard to predict……..

Krustysmegma, with all due respect I don’t think the company/board will get 15 months from today……..

Short 6 minute interview with James Armstrong who again is highlighting the extensive BSIF development pipeline for which they have planning permission. Given the 30%+ discount to nav they are unable to raise capital to build-out the pipeline.

Maybe shareholders need to show some patience here……..

https://www.proactiveinvestors.co.uk/companies/news/1080781/bluefield-solar-income-fund-eyes-shift-to-ipp-structure-as-it-details-strong-fy25-performance-1080781.html#

If 116p nav is correct, why don’t they sell off the business piecemeal and redistribute the funds to existing shareholders? Big uplift from 80p being quoted as we speak.

Just noticed no buyback since 9th October, any idea why this might be the case?

Fatprofits, the PHP board hands are tied until the CMA Phase 1 findings are announced which should be on or before the 29th October. So in effect both businesses are still being run separately. In the meantime, I’m sure the PHP board are working behind the scenes on disposals to reduce the LTV and assuage the CMA.

GS, you’re spot on.

One observation I would also add is that these ongoing buy backs are actually making the trusts smaller which is in effect making the trust size and liquidity problem worse.

As you alluded to, why not just repay debt and see where that leads too. Even on 25/30% discounts the buy backs are having zero effect in this higher for longer interest rate environment. As of today 10 year and 30 year gilts are 4.61% and 5.42% respectively. The UK has an inflation problem and a government credibility problem and buying gilts at the above levels looks

a brave call. As I mentioned earlier this situation can’t continue indefinitely, they board either merge and gain scale or they put the fund up for sale piecemeal. The market cap here and at the other renewables is unsustainable.

Https://www.ii.co.uk/analysis-commentary/ian-cowie-new-investment-trust-holding-my-isa-ii536551

Posted this on ADVFN too………

Yep Nav down again with these interim results.

Simple truth there are NO institutional buyers for FSFL and others like them pure and simply because they are too small. Market cap here is approx £430 million which is far too small to entice institutional buyers. Regardless of how many shares the company buys back, it’s only retail punters who are buying. For the life of me I can’t understand why management here and the other solar/renewable funds are not proposing mergers to their shareholders. The board know that size and liquidity are the main problems so why don’t they just get on with it and stop wasting time and shareholder funds on buy backs that are clearly not working across the whole sector.

Discount to NAV back out 19%……….

GS, thanks for the info.

I’m overweight these but given the recent 4p nav uplift to 148.7p and the discount to nav at c. 18%, I’m pondering buying more.

The evidence to date is compelling. The board have sold £345million of assets in the last 18 months at or above nav with the recent small divestment in Angel Trains at a 30% premium to last December’s book price according to analysts at Panmure Liberum. To have sold such a chunk of the portfolio at above nav means the current share price is silly. With the shares on a 7% yield for year end 2025 and 7.2% for year end 2026 investors are being paid to be patient. The other thing is the positive news flow re infrastructure which the Chairman alluded to in the recent interims. Much to ponder.

A Phase 2 CMA investigation is a in-depth review by the Competition and Markets Authority (CMA) into whether a merger will likely result in a substantial lessening of competition (SLC) in the UK market. Following an initial Phase 1 review, if the CMA finds a realistic prospect of an SLC, it proceeds to a more detailed Phase 2 investigation led by an independent Inquiry Group. This phase involves gathering more evidence to determine the severity of any potential anti-competitive effects, after which the CMA will make a decision on the merger and may impose remedies if necessary.