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The USS preference shares are exactly that, they rank above all other share holders in a sale or change of ownership. As USS can only redeem on their choice post 2036 if they decide to and at NAV it seems an unlikely event. Whilst USS may decide to forgo the higher ranking preference shares and convert to another share type they would then be on an equal footing with all other share holders, so the preference shares are effectively a bond in perpetuity delivering 4.75%. The dividend realised would increase the return, but the redemption at nav would potentially force a bid for the whole company due to the number of shares.

The main question would be do USS want to own a solar company or do they want to retain a 4.75% income bond?

Will USS's governance actually allow them to take the company into their ownership?

The USS problem is a 10 year away bump in the road, unless someone makes a bid for the company

Hi TF,

UKW is worth a look and I understand the appeal — better dividend cover, longer growth track record, and stronger net cash generation. Your raising it has prompted me to look more closely and it may well deserve a place in the mix, especially if the continuation vote fails and shareholders vote for a restructuring or wind down of TRIG.

However I'd note that both TRIG and UKW now have discount-triggered continuation votes built into their articles — so that governance mechanism exists in both. More significantly, TRIG's continuation vote is due at the June 2026 AGM, just weeks after the 11 May Capital Markets Seminar. The seminar isn't just a strategy update — it's the board's pitch for survival. That context makes the questions I've been raising considerably more urgent than a routine capital allocation debate.

From your response it appears share price appreciation may be a significant objective alongside income — though I appreciate I may be reading that incorrectly. If so that's a completely legitimate position but it may explain where our approaches diverge.

A buyback strategy optimises for share price by retiring shares at a discount — but generates no new cashflow and shrinks the asset base over time. Incremental improvement of existing assets at input costs materially below NAV grows cashflow, improves dividend cover, and raises enterprise value through real earnings growth rather than financial engineering on a contested number. A rising enterprise value from genuine cashflow growth lifts NAV at whatever level it is calculated, closes the discount organically, and grows the dividend simultaneously — which serves both income and capital appreciation objectives structurally rather than trading one off against the other.

The June continuation vote means shareholders will have a direct say on whether the current strategy deserves to continue. The 11 May seminar is the board's opportunity to make the case. The questions I've raised are exactly what I feel that case needs to answer.

Hi TopFCA

Thank you for the detailed response — genuinely appreciated, and it gave me a few interesting points to think about.

However I'd push back on four points.

First, your entire argument rests on the NAV being accurate. It may well be — but the market has applied a persistent approx 30% discount for three years and shown no sign of changing its view. Whether the NAV is correct is almost irrelevant; what matters is that the market doesn't believe it and has consistently declined to place capital on that basis. Building a capital allocation strategy on a number the market persistently discounts is a fragile foundation regardless of whether the number itself is right.

Second, your line "why invest in new assets when the market only values them at 70% of cost" misreads my argument entirely. I'm not suggesting acquiring new assets. The NAV of any existing asset already includes land, grid connection, planning, installation, and operational history — all paid for and on the balance sheet. The incremental cost of improving that asset is therefore a fraction of its NAV by definition. A £1 spend on a panel efficiency improvement has a calculable ROI timeline, an immediate cashflow uplift, and compounds for the remaining asset life. Multiplied across 2.3GW the cumulative return dwarfs anything a buyback delivers — and every penny is grounded in real spend against real cashflow, not a number the market has repeatedly declined to endorse.

Third, the capital allocation question is simple: spend £1, gain more efficient cashflow from assets you already own and control. A buyback retires a yield obligation but generates no new cashflow. The business shrinks rather than compounds.

Fourth, the disposal and buyback model is extractive — the company is eating itself. A shrinking asset base cannot grow dividends, and fixed overhead costs become a progressively larger percentage of a declining revenue base. Incremental improvement of existing assets does the opposite — it grows revenue, improves cashflow, increases dividend cover, and raises enterprise value organically through actual performance rather than modelling assumptions.

We share common ground in one important respect — holding and collecting the dividend is a rational strategy for long term income investors and something we both agree on. Where I differ is that incremental improvement of the existing asset base gives a far better chance of genuine growth in that dividend, in enterprise value, and ultimately in share price than a strategy of managed extraction. One compounds, the other declines.

The Q1 2026 NAV update confirmed the buyback programme delivered +0.3p NAV accretion at a cost of £13.2m. Annualised that's 1.2% NAV accretion. The £200m private placement is a refinancing of existing RCF drawings, not new money — but the board is still committing £150m to a buyback generating 1.2% annual NAV accretion. That capital could be working significantly harder.

The disposal and reinvestment trap

If a buyer acquires TRIG assets at or near carrying value they must believe those assets will generate profitable returns. TRIG is handing future profits, plus transaction costs and adviser commissions, to someone else — on assets it already owns at a 34% market discount. Recycling proceeds into acquisitions at full market cost makes it worse — the market immediately applies its 34% discount to whatever is acquired. Value is destroyed at both ends of every transaction. The only consistent beneficiaries are advisers collecting transaction fees and InfraRed, whose management fees are based on gross assets and are unaffected by how much value the recycling destroys.

Where capital should actually go

Projects like Ryton and Spennymoor represent a fundamentally different proposition. Where land, planning, and grid connection are already on the balance sheet as sunk costs, incremental build cost could be materially below 69p — yet the completed asset sits at a NAV of 104p. That is £1.04 of provable, construction-cost-grounded balance sheet value for every 69p or less spent. Genuine NAV accretion, not model-derived, not dependent on power price assumptions.

Exhaust that internal pipeline first. Then retain disposal proceeds as auditable cash rather than recycling into acquisitions the market immediately discounts. As free cashflow grows from new income streams, special dividends become the natural distribution mechanism — and income investors will position ahead of that event in a way they never will for a buyback.

The worst possible use of capital is acquiring operational assets at or above NAV. Every pound spent is immediately worth 66p to shareholders. That is destruction dressed as growth.

The question for 11 May is whether the board has the conviction to change course, or whether the current strategy continues to serve the fee base rather than the shareholder.

The Q1 2026 NAV update confirmed the buyback programme delivered +0.3p NAV accretion at a cost of £13.2m. Annualised that's 1.2% NAV accretion. The £200m private placement is a refinancing of existing RCF drawings, not new money — but the board is still committing £150m to a buyback generating 1.2% annual NAV accretion. That capital could be working significantly harder.

The disposal and reinvestment trap

If a buyer acquires TRIG assets at or near carrying value they must believe those assets will generate profitable returns. TRIG is handing future profits, plus transaction costs and adviser commissions, to someone else — on assets it already owns at a 34% market discount. Recycling proceeds into acquisitions at full market cost makes it worse — the market immediately applies its 34% discount to whatever is acquired. Value is destroyed at both ends of every transaction. The only consistent beneficiaries are advisers collecting transaction fees and InfraRed, whose management fees are based on gross assets and are unaffected by how much value the recycling destroys.

Where capital should actually go

Projects like Ryton and Spennymoor represent a fundamentally different proposition. Where land, planning, and grid connection are already on the balance sheet as sunk costs, incremental build cost could be materially below 69p — yet the completed asset sits at a NAV of 104p. That is £1.04 of provable, construction-cost-grounded balance sheet value for every 69p or less spent. Genuine NAV accretion, not model-derived, not dependent on power price assumptions.

Exhaust that internal pipeline first. Then retain disposal proceeds as auditable cash rather than recycling into acquisitions the market immediately discounts. As free cashflow grows from new income streams, special dividends become the natural distribution mechanism — and income investors will position ahead of that event in a way they never will for a buyback.

The worst possible use of capital is acquiring operational assets at or above NAV. Every pound spent is immediately worth 66p to shareholders. That is destruction dressed as growth.

The question for 11 May is whether the board has the conviction to change course, or whether the current strategy continues to serve the fee base rather than the shareholder.

I hope so too, I was just wanting to get the alternatives out there.

There is another viable alternative to generate share holder value and narrow NAV to SP discount.

1) Maintain dividend at pre review levels

2) Re-negotiate maintenance and AM fees

3) Tender any actual maintenance work on a fixed price basis for 3 years

The cost of tendering the maintenance would almost certainly have attracted savings which may be as much as the dividend cut would save. How much maintenance does a PV panel and an inverter actually need? Even with a list of things to do, ask what actually gets done.

Maintain the dividend for 3 +years and watch the share price catch up when it is proven as stable and achievable.

The board do not seem to be protecting share holders in this instance.

Hopefully the last few days will have got rid of the forced sellers and the dividend hunters, but will the reset actually improve the situation for shareholders?

Definitely needs to be validated

I would suggest you do your own research and make your own decisions. I do not need to provide the maths to back up my statement, experience shows the flaws in battery storage. One thing I would advise (by all means ignore it, that's your choice) is that AI relies on the input and the questions asked so if you do not factor in all the costs, timelines and other issues in connecting batteries you will get a skewed response. As always do your own research, if you want to use AI to do it make sure you validate what it tells you rather than just taking it all at face value.

Oh and there is no need to thank me, I wasn't doing it specifically for you, I was just sharing my opinion based on my experience, research and knowledge.

Have a great weekend.

If we look at battery storage. A 2 hour battery storage arrangement may cost the same capital outlay as the PV itself. 2 hours will mean that the battery will only charge when their is a surplus or when the array is set to charge the battery rather than export to the grid. Once the battery is full any generation will go to the grid. If an array has a nominal peak rating of 100 kW (as an example) then the export limits should be set to a maximum of 100 kW so without a battery the energy generated over a day will be exported as its generated and sold at a contracted (or hedged) price. If the panels cannot generate more than 100 KW then all energy can be exported and there isn't a surplus to charge the batteries. If the batteries do decide to be charged and they get a full 2 hours of charge this can be released at a different time to maximise the price received. In the summer it will mean that the batteries need to charge and discharge during a 24 hour cycle. In the winter there may not be enough generation to charge the batteries.

unless the cost difference during the day and the early evening is significant the only people who benefit from battery storage are the ones selling and maintaining the batteries. the capital cost is prohibitive for commercial operations.

batteries work brilliantly in a domestic setting as most people are out during the day and so can store the energy generated when the load used is small to use in the evenings when the load usage is higher. Commercial uses are not as binary.

Batteries need to be sized based on the load and the demand and a full cost benefit analysis carried out. If NESF have done this then they should be able to provide a business case for it and prove that there is a return on capital.

The reality of battery storage in the uk is that the costs quite often outweigh the benefits and storing 2 hours of energy isn't a huge uplift in revenue, but is a big cost from a capital and operational perspective. At least the management company gets to claim OHP on the batteries and the solar array, so a win win for them.

So the dividend cut is bad news, but even with this in place the shares generate a cash covered dividend which still equates to 1p per quarter (possibly more) per share. I for one will still be reinvesting dividends in NESF as there is potentially now a glimmer of hope that the dividend cut will enable the share price to increase towards the NAV. The NAV is however for all intents and purposes irrelevant in the short term as it is a figure which is based on an opinion and may or may not be correct. The key driver is the dividend rate and in the UK as a general rule of thumb each KWp of solar will generate 850-1000 kWhr per year of energy, which if sold at the rates published will generate a cash flow, once the debt (RCF and Pref shares) have been serviced it will free up free cash flow which will be passed on to shareholder as a dividend.

My view is that someone (USS or management co are favourites) will realise that they can buy the whole company at a significant discount to NAV and then have a cash generating vehicle which will hedge against inflation. I for one would love to see the dividends be cash covered for perpetuity and just collect those, as the income is more valuable than the uplift in share price which will attract CGT.

The forward looking energy costs may or may not be correct, if they are proven to be incorrect and they rise the NAV may be severely under rated. At this share price selling would seem to be a fools errand as the upside (8-10% annual dividend with the potential for share price uplift) seems to be huge. There are very few places which can provide such a dividend with what appears to be little risk of the sun stopping shinning.

Battery storage whilst having some benefit will not generate huge returns when compared to the capital cost, so for me paying the RCF debt would be a much better use of surplus cash than renewing panels or inverters. panel efficiency drops off over time, but the drop off is maybe 1-2% efficiency per year which when annualised and amortised makes renewal much less cost effective, as the capital cost reducing debt would save interest payments at 4-7% per year thereby offsetting any benefit in efficiency. But someone smarter than me needs to crunch the numbers and do a cost benefit analysis.

To me keeping a higher cash covered dividend is much more useful than selling as once the debt is amortised this will be free cash flow with USS only claiming 4.75% which seems to be very cheap. USS can only stop special dividends not ordinary dividends so all looks good. A depressed share price means I can buy more shares and get more dividends and so the gravy train continues.

A bit long winded but my view is buy and let the dividends recoup the outlay so that a net zero cost is achieved.

This looks like there may be a bid soon. The Asset value has been demonstrated as being realistic, the company generates enough to cover costs and dividends leaving a surplus to pay any future borrowing. USS could theoretically buy up the whole thing at less than NAV, recoup their costs and have a nice little cash cow. As could the management company. 8% dividends are still worthwhile hang on in there

This share currently has a cash covered dividend which is covered from operating costs. Any sale would see USS paid out at Par with the remainder (after debt) being allocated to ordinary shareholders. This will potentially realise a gain from recent SP, but it is potentially minimal. USS shares do not have voting rights but they could veto if not sufficiently high enough for them.

Dividend is currently paying over 2p per share per quarter which is an attractive annual dividend. Dividend investors could sit and ride out any losses to recoup through dividends.

Other than the USS debt (which isn't redeemable) other debt is tapered to reduce as feed in tariffs etc reduce, thereby providing NESF with an unencumbered cash generating asset. Distributable cash will increase as debt decreases, and the future revenues are locked in.

Personally as a dividend investor selling the company would be a short term gain, whereas as long as the sun keeps shining the cash keeps flowing.

The takeaway is a cash generating, low cost, low maintenance vehicle.

looking at traded volumes there are still plenty of buyers who presumably are aligned with the dividend generation cannot be ignored.

Any takeover may take months to get approval at which point recent buyers would get the dividends to sale and also any capital appreciation

I for one am reinvesting all dividends moving forward.