TIDMBSIF
RNS Number : 7771Q
Bluefield Solar Income Fund Limited
02 March 2021
2 March 2021
Bluefield Solar Income Fund Limited
('Bluefield Solar' or the 'Company')
Interim Report and Financial Statements for the Period Ended 31
December 2020
Bluefield Solar (LON:BSIF), a sterling income fund that invests
in UK-based solar assets, is pleased to announce its Interim
Results for the Period Ended 31 December 2020.
Highlights
As at 31 December 2020/ 30 June 2020
Net Asset Value (NAV) Dividend Target per Share
GBP476.7m GBP433.5m FY21 8.00pps 7.90pps
NAV per share Total return to Shareholders
117.12p 117.01p since IPO
79.39% 79.89%
Six month period to 31 December 2020 / 31 December 2019
Underlying Earnings(1) Total return to Shareholders(2)
(pre amortisation of debt) -0.37% 6.97%
GBP18.7m GBP20.7m
Underlying Earnings per share(1)
(pre amortisation of debt)
4.59p 5.59p
Total Underlying Earnings per MWh Generated per MWp(3)
share available for distribution(1)
(post amortisation of debt) 432 459
4.66p 4.02p
Environmental, Social and Governance (ESG)
Delivered Carbon Savings of over 850,000 tonnes of CO2 (since
IPO)
Forward Focus
An important solar acquisition has continued our policy of asset
growth, while modestly increasing our gearing level within the
Board's target range.
We continue to look at ways of growing the Company through accretive
secondary acquisitions, new build capacity and complementary
renewable technologies.
1. Underlying earnings is an alternative performance measure
employed by the Company to provide insight to the Shareholders by
linking the underlying financial performance of the operational
projects to the dividends declared and paid by the Company. Further
detail is provided below.
2. Total return to Shareholders is based on share price movement
and dividends paid in the period .
3. Excludes assets invested during the period.
Results Summary:
Six months ended
31 December 2020
-------------------------------------------------------------------- -------------------------
Total operating income GBP14,189,525
Total comprehensive income before tax GBP13,485,183
Total underlying earnings(1) GBP18,678,067
Earnings per share (below) 3.57p
Underlying EPS available for distribution(2) 2.63p
Underlying EPS brought forward(3) 2.03p
Total underlying EPS available for distribution 4.66p
1(st) interim dividend for the year ending 30 June 2021 2.00p
NAV per share 117.12p
Share Price as at 31 December 2020 130.0p
Total Return(4) 3.52%
Total Return to Shareholders(5) -0.37%
Total Return to Shareholders since inception(6) 79.39%
Dividends per share paid since inception 49.39p
-------------------------------------------------------------------- -------------------------
1. Underlying earnings is an alternative performance measure
employed by the Company to provide insight to the Shareholders by
linking the underlying financial performance of the operational
projects to the dividends declared and paid by the Company. Further
detail is provided below.
2. Underlying EPS is calculated using underlying earnings
available for distribution divided by the weighted average number
of shares in issue through the period.
3. Underlying EPS brought forward is calculated using the number
of shares in issue.
4. Total Return is based on NAV per share movement and dividends
paid in the period.
5. Total Return to Shareholders is based on share price movement
and dividends paid in the period .
6. Total Return to Shareholders since inception is based on
share price movement and dividends paid since the IPO.
Chairman John Rennocks said:
" The performance of the Company over the first six months of
this financial year has once again been highly pleasing. The Board
has been delighted with the services provided in relation to
technical management of the Company's portfolio by Bluefield
Services and Bluefield Operations during the extended period of the
Covid-19 pandemic and I would also like to express our thanks to
the Investment Adviser and all its staff for their exceptional
effort supporting the Company during this unprecedented period"
A copy of the Interim report and Financial Statements has been
submitted to the National Storage Mechanism and will shortly be
available for inspection at www.morningstar.co.uk/uk/NSM . The
Interim Report and Financial Statements will also shortly be
available on the Company's website at www.bluefieldsif.com where
further information on the Company can also be found.
Analyst presentation
A meeting for analysts will be held at 09:30am today via a
conference call facility and an audio webcast will be available on
the Company's website later that day.
To register for the analyst briefing please contact Buchanan on
BSIF@buchanan.uk.com .
For further information:
Bluefield LLP (Company Investment Adviser) Tel: +44 (0) 20 7078 0020
James Armstrong / Neil Wood / Giovanni www.bluefieldllp.com
Terranova
Numis Securities Limited (Company Broker) Tel: +44 (0) 20 7260 1000
Tod Davis / David Benda www.numis.com
Ocorian Administration (Guernsey) Limited Tel: +44 (0) 1481 742 742
(Company Secretary & Administrator) www.o corian .com
Kevin Smith
Media enquiries: Tel: +44 (0) 20 7466 5000
Buchanan (PR Adviser) www.buchanan.uk.com
Henry Harrison-Topham / Henry Wilson BSIF@buchanan.uk.com
/ Charlotte Slater
Notes to Editors
About Bluefield Solar
Bluefield Solar is a UK income fund focused, primarily, on
acquiring and managing UK-based solar projects to generate
renewable energy for periods of typically 25 years or longer. Not
less than 75% of the Company's gross assets will be invested into
UK solar assets. The Company can also invest up to 25% of its gross
assets into onshore wind, hydro and storage technologies. Its
primary objective is to deliver to its shareholders stable, long
term sterling income via quarterly dividends. The majority of the
Group's revenue streams are regulated and non-correlated to the UK
energy market. Bluefield Solar owns and operates one of the UK's
largest, diversified portfolios of solar assets with a combined
installed power capacity in excess of 612 MWp.
Further information can be viewed at www.bluefieldsif.com
About Bluefield Partners LLP ('Bluefield')
Bluefield Partners was established in 2009 and is an investment
adviser to companies and funds investing in renewable energy
infrastructure. It has a proven record in the selection,
acquisition and supervision of large-scale energy assets in the UK
and Europe. The team has been involved in over GBP2.0 billion
renewable funds and/or transactions in both the UK and Europe since
2008, including GBP1.3 billion in the UK since December 2011.
Bluefield Partners has led the acquisitions of, and currently
advises on, over 100 UK based solar PV assets that are
agriculturally, commercially or industrially situated. Based in its
London office, it is supported by a dedicated and highly
experienced team of investment, legal and portfolio executives.
Bluefield Partners was appointed Investment Adviser to Bluefield
Solar in June 2013.
Corporate Summary
Investment objective
The investment objective of the Company is to provide
Shareholders with an attractive return, principally in the form of
regular income distributions, by being invested in solar energy
assets located in the UK. The Company also has the ability to
invest a minority of its capital into wind, hydro and energy
storage assets.
Structure
The Company is a non-cellular company limited by shares
incorporated in Guernsey under the Law on 29 May 2013. The
Company's registration number is 56708, and it is regulated by the
GFSC as a registered closed-ended collective investment scheme and
it is accredited as a Green Fund after successful application to
the GFSC under the Guernsey Green Fund Rules. The Company's
Ordinary Shares were admitted to the Premium Segment of the
Official List and to trading on the Main Market of the LSE
following its IPO on 12 July 2013. The issued capital during the
year comprises the Company's Ordinary Shares denominated in
Sterling.
The Company has the ability to use long term and short term debt
at the holding company level as well as having long term,
non-recourse debt at the SPV level.
Investment Adviser
The Investment Adviser to the Company during the period was
Bluefield Partners LLP which is authorised and regulated by the UK
FCA under the number 507508. In May 2015 BSL, a company with the
same ownership as the Investment Adviser, commenced providing asset
management services to the investment SPVs held by BSIFIL. In
August 2017 BOL, a company with the same ownership as the
Investment Adviser, commenced providing operation and maintenance
services to the Company and provides services to 40 of the
investment SPVs held by BSIFIL as at period end.
Chairman's Statement
Introduction
As I wrote in my Chairman's statement in the Company's June 2020
annual report, due to the Covid-19 pandemic the period since March
2020 has been a remarkable one which had thrown up many new
challenges, which the Company has met successfully. That said, with
several vaccines now approved and an immunisation rollout programme
underway across the globe, it is with cautious optimism that we are
now able to look forward to a point where life and activity return
to pre-pandemic norms.
The principal features of the period under review have been:
-- Shareholders provided approval of ability to invest outside
of solar infrastructure assets, notably wind and energy
storage.
-- Shareholders approved an update to the Company's dividend policy.
-- Bluefield completed, for a combined value of up to GBP106.6
million (including working capital), the acquisition of a portfolio
of fifteen UK ground mounted operating PV assets.
-- The Company, through an over-subscribed share issue,
successfully raised GBP45m in November 2020.
-- The Company, working with its development partner Lightrock
Power, achieved planning consent in November 2020 for a 50MWp PV
plant, the first in its pipeline of subsidy free solar
developments.
-- Easing of UK lockdown restrictions during the summer and
autumn months was followed by a further tightening in November 2020
and implementation of a third national lockdown in January
2021.
-- Power prices continued to rise from a low of GBP24.18MWh in
April 2020, during the first wave of the pandemic, as rising gas
and carbon prices pushed electricity prices to a twelve month high
in December 2020 GBP54.98MWh.
-- Despite varying degrees of lockdown restrictions, the
Company's principal O&M provider Bluefield Operations has
continued to provide full contractual services and is a key element
behind the highly pleasing technical performance of the
portfolio.
-- Finally, the UK completed its departure from the European Union on 31 December 2020.
Each of these themes is dealt with in more detail below.
At the period end the Net Asset Value per share in the Company
was 117.12 pps (30 June 2020 - 117.01pps), with dividends paid in
the period totalling 4.00pps, as well as a first interim dividend
of 2.00pps being declared in January 2021. The share price declined
slightly from 134.5p at 30 June 2020 to 130.0p at 31 December 2020,
which equates to a total return for Shareholders for the period of
-0.37%. The performance of the assets of the Company and how this
is reflected in returns to Shareholders is set out in detail in the
Investment Adviser's report below.
Key Events
In August 2020, the Company completed the acquisition of 15
solar plants totalling 64.2 MWp (a mixture of FiT and ROC assets
with an average ROC of 1.8) and then, shortly after the period end,
in January 2021, announced the acquisition of Bradenstoke Solar
Farm, a 1.4 ROC, 70 MWp ground mounted solar farm located in
Wiltshire.
With both acquisitions benefitting from high proportions of
regulated revenue, they not only underpin our objective to sustain
market leading earnings and dividend payments in the years ahead
but also enable us to build on the excellent asset performance
which has contributed to our ability to convert high levels of
irradiation into generation and revenues.
Beyond growing the earnings potential of the Company, the Board
is particularly pleased that these investments, totalling c.GBP200
million, were accompanied by an oversubscribed equity raise in
November 2020 of GBP45m, and were supported by a carefully
structured mix of the Company's GBP50m RCF and a bespoke 3 year
GBP110m term loan from NatWest.
At the time of writing, the Group's total outstanding debt has
increased to c.GBP370.1 million and its leverage level stands at
c.44% of GAV; in line with the range the Directors have previously
outlined as desirable for the Company.
Finally, the Board and the Investment Adviser were delighted to
achieve planning consent in November 2020 with respect to
Yelvertoft Solar Farm, a 50 MWp plant located in Northamptonshire.
We have exercised our option to construct the project and we are
looking forward to updating our Shareholders on construction
timings in the coming months.
With a well progressed proprietary pipeline of over 450 MWp,
consent for the Company's first fully developed project marks an
important milestone for the Company and its ambition to support the
de-carbonisation of the UK's electricity network, and the UK
Government's net-zero ambitions.
The Investment Adviser has also been evaluating onshore wind and
battery storage investment opportunities. The regulated wind market
offers a technology that has a complementary energy generation and
comparable risk profile to solar and the opportunity for high
levels of regulated revenue. Battery storage is developing into an
attractive market, which has the potential to deliver accretive
returns to the Company. Both are expected to play an important part
in Bluefield Solar's evolution in the coming years.
As ever, the Board will continue to ensure that these potential
new projects are capable of enhancing dividends by a judicious use
of debt and equity financing.
Underlying Earnings and Dividend Income
The Underlying Earnings for the period, pre amortisation of
long-term finance, were GBP18.7m or 4.59pps (31 December 2019:
GBP20.7m and 5.59pps, respectively). After amortising our long-term
debt, the available profits, including brought forward reserves,
were GBP19.1m or 4.66pps (31 December 2019: GBP15.0m or
4.02pps).
The on-target financial performance by the Company over the six
months to December 2020, combined with the benefit of brought
forward reserves of 2.03pps, as well as earnings from the
subsequent acquisition of Bradenstoke, which the Company is
entitled to from April 2020, mean the Board remains confident of
meeting its dividend target of 8.00pps for the year to 30 June 2021
and that the Company can continue to retain its position as the
sector's highest dividend distributor (on a pence per share basis)
for the foreseeable future.
Further details of Underlying Earnings are set out in the
Investment Adviser's Report below.
Valuation and Discount Rate
Valuation methodology remains consistent with previous reporting
periods, with the Board receiving a valuation recommendation from
the Investment Adviser which is derived from a comprehensive DCF
model. This valuation is then benchmarked, on a capacity basis,
against comparable transactional activity for UK based solar
assets.
As a result of successful asset extension activity by the
Investment Adviser over the past 12 months, the Directors'
Valuation as at 31 December 2020 now includes 306 MWp (c.56% of the
portfolio by capacity) being valued on the basis of an additional 5
- 15 years of operational life, resulting in a weighted average
life of the portfolio of 27.1 years (vs. 27.4 years in June 2020),
reflecting both new acquisitions and asset life extensions.
The Company's valuation policy balances recommendations from the
Investment Adviser (as a product of a comprehensive DCF model) with
benchmarking against comparable transactional activity for UK based
solar assets. As a result of the continued demand for subsidised
solar assets, the range of values witnessed by the Investment
Adviser and Board for assets equivalent to those in the Company's
portfolio remains between GBP1.20m/MWp and GBP1.40m/MWp.
By valuing the Company's portfolio at an Enterprise Value of
GBP698.3m (GBP1.28m/MWp), the Directors' Valuation as at 31
December 2020 is comparable to precedent market transactions, in
keeping with the Company's valuation methodology of 'willing
buyer/willing seller'. Ensuring the Directors' Valuation remains
comparable with transactional valuations, whilst accommodating the
latest power price forecasts, has resulted in the Directors
continuing to apply an equity discount rate of 6.00% (cf. 6.00% in
June 2020 and 6.50% in December 2019).
Power Prices and BREXIT Impact
From the historic lows seen in Q2 2020, as the UK Government
placed the country into a nationwide lockdown in response to the
Covid-19 pandemic, power prices rose steadily during the second
half of 2020 (increasing from GBP24.18/MWh in April 2020 to
GBP54.98MWh in December 2020).
This increase in baseload pricing was driven by a combination of
factors; initial easing of national restrictions during the summer
and autumn, as well as rising carbon pricing (which returned to pre
pandemic levels) and increasing gas prices. The last is a result of
tightening of gas supplies, as extended outages on both nuclear and
thermal generating stations, combined with below average winter
temperatures, drove demand to levels comparable to Q4 2019 despite
a second national lockdown.
The Company's flexible PPA strategy has meant it was able to
manage the timing of power price fixes to avoid the lows in April
2020, before carefully fixing selected asset tranches to take
advantage of rising power prices during the second half of 2020 and
early 2021.
As such, the average contracted price for the portfolio achieved
per MWh for the 12 month period to 31 December 2020, of
GBP48.37/MWh, was considerably higher than the average day ahead
base load price of GBP36.85/MWh for the same period.
On the 24 December 2020 the UK and EU finally reached a
post-Brexit trade deal, one week before the end of the transition
period. Whilst the deal provides a framework for future energy
market relations between the UK and EU, Great Britain will no
longer be part of the Internal Energy Market ("IEM"), and
uncertainty remains over the future of GB carbon pricing and cross
border electricity trading across interconnectors.
Whilst plans are in place to develop models to address both
these issues, the lack of certainty in the short term could lead to
increased volatility in day ahead and intraday power prices.
Looking beyond the near term, medium to long term power price
predictions have once again been lowered as forecasters continue to
predict prices will be suppressed by falling commodity prices and
increased renewable generation post-2030.
Covid-19 Contingency Planning
As I have outlined previously, the Board has been delighted with
the services provided in relation to technical management of the
Company's portfolio by Bluefield Services and Bluefield Operations
during the extended period of the Covid-19 pandemic. Despite
numerous lockdowns, both companies have continued to provide full
and uninterrupted services - a credit to the management of the
businesses and the dedication of their staff.
My Board colleagues and I would also like to express our thanks
to the Investment Adviser and all its staff for their exceptional
effort supporting the Company during this unprecedented period.
Environmental, Social and Governance
ESG considerations have become increasingly important to
Shareholders over the past few years and the pandemic has served to
accelerate this view.
One consequence of this for Shareholders is that it can be
difficult to understand the basis upon which companies are making
ESG disclosures and whether companies' ESG policies are correctly
identifying both the risks and opportunities that ESG
considerations are creating.
In response to this, the Board and the Investment Adviser are
working on providing a clear and transparent ESG 'audit' of the
Company which we expect to publish in the annual report for the
year ending 30 June 2021.
With respect to the period to 31 December 2020, contained within
this report is a detailed update on the ESG position for the
Company, the Investment Adviser and its key service providers.
Conclusion
The performance of the Company over the first six months of this
financial year has once again been highly pleasing. After a period
of portfolio consolidation, the Company is delighted to have
acquired over 134 MWp of solar projects with a high proportion of
regulated revenues, as well as to have achieved planning consent on
its first subsidy free development.
Furthermore, the widening of the Investment Policy agreed in our
July 2020 EGM, has enabled the Investment Adviser to build an
exciting pipeline of potential acquisitions within the onshore wind
and energy storage space, which we believe will in due course
provide opportunity for Shareholders to benefit from continuing
growth in renewables through their investment in the Company.
John Rennocks
Chairman
1 March 2021
The Company's Investment Portfolio
[chart]
Analysis of the Company's Investment Portfolio
[chart]
Report of the Investment Adviser
1. About Bluefield Partners LLP
Bluefield Partners was established in 2009 and is an investment
adviser to companies and funds investing in renewable energy
infrastructure. It has a proven record in the selection,
acquisition and supervision of large-scale energy assets in the UK
and Europe. The team has been involved in over GBP2.0 billion
renewable funds and/or transactions in both the UK and Europe since
2008, including GBP1.3 billion in the UK since December 2011.
Bluefield Partners LLP was appointed Investment Adviser to the
Company in June 2013. Based in its London office, Bluefield's
partners are supported by a dedicated and highly experienced team
of investment, legal and portfolio executives. As Investment
Adviser, Bluefield Partners LLP takes responsibility, fully
inclusive within its advisory fees, for selection, origination and
execution of investment opportunities for the Company, having
executed just under 70 individual SPV acquisitions on behalf of
BSIF since flotation in July 2013.
Bluefield Partner LLP's Investment Committee has collective
experience of over GBP20 billion of energy and infrastructure
transactions.
2. Structure
The Company's corporate structure is summarised below:
[chart]
3. Portfolio: Acquisitions, Performance and Value
Enhancement
Portfolio
As at 31 December 2020, the Company held an operational
portfolio of 105 PV plants (consisting of 64 large scale sites, 39
micro sites and 2 roof top sites) with a total capacity of 543 MWp,
following the acquisition of a further 15 plants (64.2 MWp) in
August 2020 (with data provided since 1 July). The portfolio
continues to display strong diversity through geographical spread
(as shown by the map above), a range of proven PV technologies and
infrastructure, and a blend of asset sizes with capacities ranging
from microsites to utility-scale solar farms (including two plants
at 50 MWp).
Acquisitions
In August 2020, the Company successfully completed a material
acquisition of a UK-based portfolio of 15 plants with a total
installed capacity of 64.2 MWp for an initial cash consideration of
GBP106.6 million (including working capital) with deferred
consideration of up to GBP2.1 million, contingent on securing asset
life extensions. Notwithstanding the timing of the acquisition, the
Company receives the economic benefit of the portfolio from 1
January 2020.
The portfolio consists of 15 ground-mounted operational solar PV
plants, with 8 sites clustered in the south west of England, 2 in
west Wales and a further 5 across central and eastern England. It
also benefits from attractive subsidies; 13 of the projects are
accredited under the Renewable Obligation Certificate ('ROC')
regime with tariffs ranging from 1.4 - 2.0 ROCs, while 2 of the
projects are accredited under the feed-in-tariff ('FiT')
scheme.
The acquisition was financed by a bespoke GBP110m three-year,
interest only, re-drawable term loan at an effective all-in cost of
c.1.40% (being margin and swap rate) with National Westminster Bank
plc ("NatWest"), with the Company electing to hedge 75% of the loan
repayments and interest over a notional 18-year period, at a swap
rate of approximately 0.31% until 2038, to provide underlying rate
certainty in anticipation of a refinancing scenario in or before
August 2023.
In addition to this acquisition, during the 6-month period to 31
December 2020, the Investment Adviser reviewed over 700 MWp of
opportunities across onshore wind, solar and storage.
In keeping with the objective to deliver value and return
accretive acquisition opportunities to the Company, the Investment
Adviser is currently assessing a range of transactions as it looks
to continue its policy of securing high quality, return accretive
acquisitions.
Post Period End Acquisition
On 8 January 2021, the Company completed the acquisition of
Bradenstoke Solar Farm, a 70 MWp ground mounted plant, for a total
cash consideration of GBP89.0 million with the Company receiving
the economic benefit of all cash flows from 1 April 2020.
The plant, located in Wiltshire, has been operational since
March 2015 and is accredited under the ROC regime with a tariff of
1.4 ROCs.
The acquisition has been financed using the Company's revolving
credit facility which, as well as being extended to September 2022
(with an option to extend to September 2023), has also been
increased, through a further GBP50m uncommitted tranche, to GBP100
million.
Following the transaction, the Company's total outstanding debt
has increased to GBP370.4 million which is equivalent to 44% of
Gross Asset Value (June 2020: 34% GAV) and the total installed
capacity of its portfolio has grown to 613 MWp (June 2020: 479
MWp).
Performance
The performance of the portfolio for the first six months of the
financial period is detailed below, but it is important to outline
that due to seasonal differences in irradiation the minimum period
for assessing a plant's long-term level of performance is twelve
months.
Table 1. Summary of BSIF Portfolio Performance for H1
2020/21:
Delta H1 Actual
H1 Actual H1 Forecast Forecast 2019/20 Delta Actuals
2020/21 2020/21 (% change) (% change)
--------------------------
Portfolio Total
Installed Capacity
(MWp) 543.0 465.3
-------------------------- ---------- ------------ ------------ ---------- --------------
Weighted Average
Irradiation (Hrs)(1,2) 541.1 549.9 -1.6% 575.7 -6.0%
---------- ------------ ------------ ---------- --------------
Net Performance
Ratio (%)(1,2) 79.8% 79.7% 0.1% 79.5% 0.4%
---------- ------------ ------------ ---------- --------------
Generation Yield
(MWh/MWp)(1,2) 432.0 438.4 -1.5% 459.4 -6.0%
---------- ------------ ------------ ---------- --------------
Total unit Price:
Power + ROCs +LDs(3)
(GBP 000's/MWh) GBP127.24 GBP123.42 3.1% GBP129.08 -1.4%
---------- ------------ ------------ ---------- --------------
Total Revenue:
inc LDs (GBP 000's/MWp) GBP54.94 GBP54.11 1.5% GBP59.30 -7.4%
---------- ------------ ------------ ---------- --------------
Notes to Table 1:
1. Excluding grid outages and significant periods of constraint
or curtailment that were outside the Company's control (for
example, DNO-led outages and curtailments).
2. H1 Actual 2019/20 excludes the 18 assets acquired between 1
January and 31 December 2020
3. Actual and expected revenue figures exclude ROC recycle
estimates. H1 Actual 2020/21 includes Mutualisation rebate for CP16
at GBP149.7k & CP17 GBP70.1k & H1 Actual 2019/20 includes
Mutualisation rebate for CP16 of GBP42.7k.
4. Total Revenue excludes any successful Business Rate rebate
amounts.
Irradiation levels during the reporting period were 1.6% lower
than expectation as four of the six months (July, August, October
and December) experienced levels below those seen in a typical
year.
The lower than expected irradiation levels were translated to a
generation yield of 432.0 GWh, 1.5% below the forecast level of
438.4 GWh.
Several new PPAs with favourable prices, compared to forecast
assumptions, came into effect during the period, resulting in the
Total Unit Price being ahead of expectations by 3.1%, at
GBP127.24/MWh, but lower than that recorded in H1 2019/20
(GBP129.08, -1.4%) where the overall weighted power price of the
portfolio was higher due to the full benefit of high power price
fixes in September 2018.
During the latter part of the first half of the reporting year,
when irradiation levels are close to their lowest seasonal levels,
the Company took the opportunity to complete the replacement of
several items of high voltage equipment (including transformers and
inverters) on several sites. This was in addition to routine
maintenance of these units, which requires partial plant
curtailment to be completed. As a result of this proactive approach
to technical maintenance, the portfolio's 'availability' (the total
time the plant was operating, as a percentage of the maximum
possible) for H1 2020/21 was lower than expected, being 97.53% vs.
99.0%.
The portfolio's Net PR (the ratio at which a PV plant converts
the available irradiation to electrical generation output,
excluding periods of outage which were outside the control of the
plant) during the six months was 79.8%, marginally above the
expected 79.7% (H1 2019/20: 79.5%).
Figure 1. H1 2020/21 vs H1 2019/20 - Actual Generation and
Revenue
[chart]
Generally, a solar PV plant's performance is expected to fall
with time as the effects of degradation impact the modules'
performance; an industry standard rate of degradation is -0.4% per
annum. In addition, the design of many plants to maximise
generation in the higher-irradiation months means that the low
winter sun trajectories will result in some inter-row shading.
Figure 2 - H1 2020/21 vs H1 2019/20 actual Net PR and
irradiation
[chart]
The geographical and equipment diversity within the Company's
portfolio mitigates the effects of both 'Outage Risk' (whereby a
higher proportion of large capacity assets would hold increased
exposure to material losses due to curtailments and periods of
outage, as directed by a specific regional DNO) and 'Defect Risk'
(where over-reliance on limited equipment manufacturers could lead
to large proportions of the portfolio suffering similar defects).
The geographical diversification also helps to mitigate the impact
of localised irradiation shortfalls or contamination of solar
panels, such as by snow.
The portfolio's 'availability' (the total time the plant was
operating, as a percentage of the maximum possible) was 97.9%, as
against the forecasted level of 99%. The main reason for marginally
lower availability is incidents of 'non-excluded' outage or
curtailment which were within the control of the Company (for
example, periods when a plant, or part of a plant, was shut to
conduct essential maintenance or repairs). Outages and curtailments
which arise from events outside of the Company's control (for
example, where these events are initiated by a DNO to undertake
upgrade works in the local area, termed 'excluded outages') are
'excluded'.
During the period, non-excluded outages accounted for a loss of
7,213.41 MWh, equivalent to 2.82% of the Portfolio's total
generation (H1 2019/20: 1.9%) and excluded outages accounting for
1,156.9 MWh, equivalent to 0.49% (H1 2019/20: 0.92%). The table
below summarises the main outage events during the reporting
period.
Table 2. Major Outage Events during H1, 2020/21:
Lost Generation Lost Revenue Asset Installed
(MWh) (GBP, GBP000s) Capacity (MWp) Brief Description of
Event
A systemic failure of
the inverter AC circuit
boards across the plant,
1,400 replacements fitted
by Dec 20. Warranty
613.5 97.02 Southwick 47.9 claim in progress.
--------------- ------------ --------------- -----------------------------
2-day DNO outage in
July 20, HV & inverter
maintenance in Nov 20
and various inverter
corrective maintenance
548.89 75.22 West Raynham 50.0 in Aug 20.
--------------- ------------ --------------- -----------------------------
2 Power Unit failures.
Delays in manufacturer's
ability to attend site
and remedy. HV maintenance
in
391.07 53.59 Hardingham 20.1 Nov 20.
--------------- ------------ --------------- -----------------------------
Replacement of 122 DC
connectors due to corrosion
303.09 33.14 Elms 28.9 during Jul and Aug 20.
--------------- ------------ --------------- -----------------------------
During the six months to 31 December 2020, the Company received
GBP114.3k for EPC and O&M performance LDs (for
underperformance, revenue losses and the rectification of minor
equipment defects) and GBP452k resulting from successful insurance
claims. A further GBP97.5k of claims, for events during the period,
are under review by the Company's insurer and several O&M LDs
are under negotiation with the relevant service-providers.
Reflecting the maturity of the current assets within the
portfolio, as at 31 December 2020, 90% of the portfolio has passed
final acceptance.
As assets have passed their final acceptance dates, the plants
entered new availability and/or performance guarantees with their
respective O&M providers, also benefitting from comprehensive
insurance coverage with respect to damage, theft, equipment failure
and business interruption.
During the reporting period, the O&M contracts for a further
4 assets, totalling 65 MWp (including West Raynham plant, at 50
MWp) were transferred to BOL. As of 31 December 2020, BOL provides
operation and maintenance services on a total of 40 plants with a
combined capacity of 430.7 MWp, equivalent to 79.29% of the
portfolio.
The transfer of these 4 assets has provided operational cost
savings in the period of approximately GBP107k per year, as well as
increased contractual service levels and faster response times
through a close operational working relationship with the asset
manager, BSL. The total savings through the transfer of plants to
BOL is GBP389.8k per year, compared with the previous
arrangements.
The Company's operating portfolio as at 31 December 2020 and the
electricity generated during H1 of the 2020/21 financial year is
shown below, in Table 3.
Table 3. BSIF Portfolio Generation for the H1 2020/21 reporting
period
Solar Farm Total Investment Installed Generation to
Asset Commitment (GBP) Capacity (MWp) 31 Dec 2020 (Actual,
MWh)
West Raynham 55.9 50.0 20,879,466
------------------------------------ ---------------------- ------------
Southwick 61 47.9 19,917,646
------------------------------------ ---------------------- ------------
Elms 32.8 28.9 12,690,521
------------------------------------ ---------------------- ------------
Hardingham 22.7 20.1 8,098,353
------------------------------------ ---------------------- ------------
Pentylands 21.4 19.2 7,948,379
------------------------------------ ---------------------- ------------
Molehill 23.1 18.0 8,371,099
------------------------------------ ---------------------- ------------
Hoback 19 17.5 7,517,337
------------------------------------ ---------------------- ------------
Littlebourne 22 17.0 7,567,152
------------------------------------ ---------------------- ------------
Goosewillow 19 16.9 7,486,213
------------------------------------ ---------------------- ------------
Hill Farm 17.3 15.2 6,788,317
------------------------------------ ---------------------- ------------
Roves 14 12.7 5,408,190
------------------------------------ ---------------------- ------------
Pashley 15.4 11.5 5,460,660
------------------------------------ ---------------------- ------------
Hall Farm 13.4 11.4 4,792,570
------------------------------------ ---------------------- ------------
Sheppey 12 10.6 4,763,293
------------------------------------ ---------------------- ------------
Betingau 11.2 10.0 3,888,352
------------------------------------ ---------------------- ------------
Capelands 8.6 8.4 3,284,302
------------------------------------ ---------------------- ------------
North Beer 9.3 6.9 2,776,781
------------------------------------ ---------------------- ------------
Ashlawn 7.6 6.6 2,950,154
------------------------------------ ---------------------- ------------
Redlands 6.4 6.2 2,745,880
------------------------------------ ---------------------- ------------
Saxley 7.0 5.9 2,637,072
------------------------------------ ---------------------- ------------
Holly Farm 7.2 5.0 2,468,851
------------------------------------ ---------------------- ------------
East Farm 7.2 5.0 2,432,930
------------------------------------ ---------------------- ------------
Durrants 6.4 5.0 2,566,834
------------------------------------ ---------------------- ------------
Clapton 6.3 5.0 2,195,946
------------------------------------ ---------------------- ------------
Romsey 5.8 5.0 2,308,869
------------------------------------ ---------------------- ------------
Old Stone 5.7 5.0 2,187,574
------------------------------------ ---------------------- ------------
Salhouse 5.6 5.0 2,162,932
------------------------------------ ---------------------- ------------
Frogs Loke 5.6 5.0 2,102,612
------------------------------------ ---------------------- ------------
Place Barton 5.5 5.0 2,256,844
------------------------------------ ---------------------- ------------
Court Farm 5.5 5.0 2,333,363
------------------------------------ ---------------------- ------------
The Grange 5.4 5.0 2,174,209
------------------------------------ ---------------------- ------------
Bunns Hill 5.3 5.0 2,086,839
------------------------------------ ---------------------- ------------
Oulton 5.3 5.0 2,055,113
------------------------------------ ---------------------- ------------
Rookery 5.2 5.0 2,153,850
------------------------------------ ---------------------- ------------
Kellingley 5.0 5.0 2,070,016
------------------------------------ ---------------------- ------------
Kislingbury 5.0 5.0 2,140,058
------------------------------------ ---------------------- ------------
Willows 4.6 5.0 1,951,407
------------------------------------ ---------------------- ------------
Great Houndbeare 6.8 5.0 2,254,220
------------------------------------ ---------------------- ------------
Wormit 5.1 5.0 1,943,106
------------------------------------ ---------------------- ------------
Gretton 5.1 4.9 2,062,876
------------------------------------ ---------------------- ------------
Trethosa 5.8 4.8 2,145,083
------------------------------------ ---------------------- ------------
Folly Lane 5.3 4.8 2,031,178
------------------------------------ ---------------------- ------------
Gypsum 4.4 4.5 1,907,578
------------------------------------ ---------------------- ------------
Tollgate Farm 4.6 4.3 1,823,936
------------------------------------ ---------------------- ------------
Burnaston 14.4 4.1 1,596,053
------------------------------------ ---------------------- ------------
Galton Manor 5.5 3.8 1,796,293
------------------------------------ ---------------------- ------------
Thornton 3.7 3.6 1,382,155
------------------------------------ ---------------------- ------------
Barvills 3.3 3.2 1,496,836
------------------------------------ ---------------------- ------------
Langlands 3.1 2.1 934,928
------------------------------------ ---------------------- ------------
Goshawk (10
micro sites) 2 1.1 481,706
------------------------------------ ---------------------- ------------
Butteriss
(20 micro
sites) 2.3 0.8 288,762
------------------------------------ ---------------------- ------------
Corby 2.3 0.5 82,620
------------------------------------ ---------------------- ------------
Promothames
(9 micro sites) 1.3 0.4 158,792
------------------------------------ ---------------------- ------------
SUB -TOTAL 570.7 478.8 206,006,106
------------------------------------ ---------------------- ------------
Assets acquired during the
reporting period
---------------------------- ------------------------------------ ---------------------- ------------
Bidwell 8.2 6.1 2,748,674
------------------------------------ ---------------------- ------------
Nottington 11.8 6.0 3,273,938
------------------------------------ ---------------------- ------------
Lower Marsh 8.6 5.9 2,519,507
------------------------------------ ---------------------- ------------
Cobbs Cross 9.1 5.7 2,591,312
------------------------------------ ---------------------- ------------
Stow Longa 8.8 5.3 2,400,839
------------------------------------ ---------------------- ------------
Foxcombe 7.5 5.3 2,041,537
------------------------------------ ---------------------- ------------
Beaford 8.3 5.2 2,251,159
------------------------------------ ---------------------- ------------
Hamptworth 8.8 5.0 2,250,975
------------------------------------ ---------------------- ------------
Eastcott 10.1 5.0 2,205,527
------------------------------------ ---------------------- ------------
Blackbush 6.6 3.4 1,344,523
------------------------------------ ---------------------- ------------
Hazel 4.3 2.8 1,261,387
------------------------------------ ---------------------- ------------
Norton Hall 4.1 2.8 1,178,203
------------------------------------ ---------------------- ------------
Lount Farm 3.3 2.5 1,001,082
------------------------------------ ---------------------- ------------
Stantway 2.7 1.8 838,174
------------------------------------ ---------------------- ------------
Aberporth 2.0 1.4 579,918
------------------------------------ ---------------------- ------------
SUB -TOTAL 104.2 64.2 28,486,755
------------------------------------ ---------------------- ------------
GRAND TOTAL 674.9 543.0 234,492,861
------------------------------------ ---------------------- ------------
Value Enhancement Initiatives
As previously reported, the Investment Adviser continues to
focus on initiatives that seek to enhance and create additional
value for the portfolio through the optimisation of both operations
and revenues.
The wide-ranging asset life extension programme, which seeks to
allow the SPVs to extend the available tenor of the PV plants above
2 MWp capacity up to 40 years continues to be a focus. Each project
requires the negotiation of lease extension agreements prior to
seeking planning permission.
Over the last 6 months the project has progressed well and, as
at 31 December 2020, 42 leases have suitable extension rights of
between 30 to 40 years, representing a combined total of 306 MWp,
equivalent to 56.4% of the portfolio's capacity. At the time of
writing, 195 MWp has achieved planning extension consent, 15.5 MWp
is currently undergoing reviews by the respective local planning
authority, with a further 58.8 MWp expected to be submitted by the
end of Q3 2020/21. To date, the Company has enjoyed a 100% success
rate regarding planning permissions for site extensions.
Reflecting the progress in the period, the Directors' Valuation
as at 31 December 2020 now includes 306 MWp (245 MWp in June 2020)
valued on an extended life basis. Furthermore, the Investment
Adviser is hopeful of progressing negotiations on assets with a
combined installed capacity of c.240MWp (inclusive of 15.6MWp of
the in period acquisition of 64.2MWp portfolio and the post period
acquisition of 70MWp Bradenstoke).
By way of illustration, if the Company were to assume a 30-year
asset life for those projects that currently do not have leases
with suitable extension rights beyond their current terms of 25
years (being c.232 MWp out of the Company's portfolio of 543 MWp as
at 31 December 2020), the prospective additional valuation impact
would be c.GBP12.0m, or c.2.9pps.
Beyond life extensions, the Investment Adviser is continuing to
discuss power sales opportunities within the UK's burgeoning long
term corporate and direct wire PPA market, as both routes have the
potential to provide predictable and reliable income streams over
the long term, in some cases up to 25 years, as well as progressing
a review of previous business rates levied on each asset holding
SPV.
To ensure that the Company is in the best position to be active
in the next phase of solar deployment in the UK, the Investment
Adviser has entered into discussions with a select group of
developers and contractors and is actively reviewing a pipeline of
c.700 MWp, covering development, ready to build and storage
opportunities.
The Company's strategy remains the same, however, and it will
continue to apply stringent capital discipline to ensure that only
assets that are accretive to Shareholders' returns are acquired. It
is confident that this can be achieved through a mix of carefully
selected development investment, private wire or corporate PPA
backed new build installations and return adjusted additions from
co-located storage and solar.
PPA Strategy
Over the year the Company maintained its strategy of fixing
power price contracts for periods between 12 and 36 months with the
majority of contracts continuing to be struck for a minimum of 18
months. Flexibility to strike PPA tenors of this length is due to
the decision by the Company to secure long term amortising debt at
portfolio level as opposed to project level.
The Company has continued to implement its approach of fixing
power prices evenly throughout the year, in order to mitigate the
Company's exposure to seasonal fluctuations and short term events
which have the potential to increase volatility in the price of
electricity in the UK.
Prices can be agreed up to 3 months in advance of the
commencement of the fixing period and PPA counterparties are
selected on a competitive basis, but with a focus on achieving
value and diversification of counterparty risk.
The graph below shows that as at 31 December 2020 the Company
has a price confidence level of c.92% to June 2021 and c.88% to
December 2021 over its power and subsidy revenue streams.
Figure 3. % of BSIF revenues fixed as at 31 December 2020
[chart]
Note: There is c.95 MWp of capacity (c.18% of the portfolio)
which benefits from long term offtake agreements, with 9 years
remaining. These agreements have built in floor prices, which are
automatically applied in the absence of direct short-term power
price fixes.
The Company's strategy of fixing prices over periods of 12-36
months means the portfolio has the flexibility to capitalise on
periods of above-forecasted power prices, as it successfully did
during September 2018, but also to avoid fixing at points of
significant market deterioration (e.g. in April 2020 and May 2020).
This is made possible by the Board and Investment Adviser's
strategy of securing leverage at the portfolio, rather than asset,
level.
Furthermore, this also gives the Company the opportunity to
explore value-enhancing options, such as negotiating corporate PPA
offtakes, as well as maximising potential economies of scale by
taking advantage of opportunities available only to owners who can
commit significant volumes of generating capacity.
Revenues and Power Price
The portfolio's revenue streams in the reporting period
(including any ROC recycle estimates for CP 19; the period April
2020 to December 2020) show that the sale of electricity accounted
for 34.2% (June 2020: 39%) of the Company's income. Regulated
revenues from the sale of FiTs and ROCs accounted for 65.9% (June
2020: 61%).
Reviewing the performance of the wholesale power market
throughout 2020, whilst prices fell dramatically in late March when
the UK Government initiated the first Covid-19 national lockdown,
as the lockdown measures were eased during the Summer, power demand
rose along with the cost of gas and carbon pricing. Whilst
persistent gas price increases continued to support rising power
prices, they remained below August 2019 levels. In October 2020, a
decrease in carbon prices and an increase in low marginal cost
generation led to a dip in the average power price.
Average monthly power prices reached a year high in December
2020, as gas reserves tightened due to below-average seasonal
temperatures, combined with depressed wind output and thermal plant
outages.
Despite a recovery in power prices over the second half of 2020,
the year-on-year comparison shows a decrease of 10.9% between the
UK day ahead market base load power price for the 12 months to 31
December 2019 of GBP41.35 per MWh to GBP36.85 per MWh for the 12
months to 31 December 2020.
As a further illustration of the points mentioned above, the
charts below compare the wholesale electricity prices versus gas
and carbon over the last 24 months.
Figure 4. UK wholesale gas, power and carbon prices: Dec 2018 -
Dec 2020:
[chart]
Source data from Bloomberg. Carbon price EU ETS from Bloomberg,
effective GB price based on Investment Adviser calculations
This year-on-year downward movement of the wholesale power
market has been reflected in the Company's average seasonal
weighted power price. For 12 months period ending 31 December 2020,
it was at GBP48.3 per MWh (vs. UK day ahead of GBP36.85 per MWh), a
decrease from GBP56.12 per MWh for the 12 months ending 31 December
2019.
The impact of power prices on NAV is set out in the valuations
section.
4. Analysis of underlying earnings
The total generation and revenue earned (including ROC recycle
estimate) in the 6 months to 31 December 2020 by the Company's
portfolio, split by subsidy regime, is outlined below.
Subsidy Regime Generation PPA Revenue Regulated
(MWh) (GBPm) Revenue (GBPm)
FiT 10,872 0.4 2.3
----------- ------------ ----------------
2.0 ROC 12,693 0.6 1.5
----------- ------------ ----------------
1.6 ROC 51,103 2.4 4.7
----------- ------------ ----------------
1.4 ROC 106,981 4.8 8.7
----------- ------------ ----------------
1.3 ROC 25,326 1.3 1.9
----------- ------------ ----------------
1.2 ROC 27,518 1.4 1.9
----------- ------------ ----------------
Total 234,493 10.9 21.0
----------- ------------ ----------------
The Company includes ROC recycle assumptions within its long
term forecasts and applies a market based approach on recognition
within any current financial period, including prudent estimates
within its accounts where there is clear evidence that participants
are attaching value to ROC recycle for the current accounting
period.
In October 2020, Ofgem announced that value for ROC recycle for
the period April 2019 to March 2020 (CP18) was GBP5.02/ROC
(equivalent to 10.29% of CP18 ROC buyout prices). This was in line
with the ROC Recycle estimate the Company had recognised in its 30
June 2020 Financial Statements, however a further 'late payment'
amount of GBP0.63/ROC was also announced in December 2020, equating
to a further GBP459k. This amount has been included within the
'Other revenue' line within the table below.
The key drivers behind the changes in Underlying Earnings
between H1 2020/21 and H1 2019/20 are the combined effects of lower
generation and PPA pricing (-6.0% and -8.0% respectively) as well
as limited receipt of business rates rebates being offset by an
increase in earnings from the 64.2MWp acquisition completed in
August 2020.
Underlying Portfolio Earnings
Half year Half year Full year Full year
period to period to to to
31 Dec 2020 31 Dec 2019 30 June 30 June
20 19
(GBPm) (GBPm) (GBPm) (GBPm)
Portfolio Revenue 31.9 30.0 65.9 63.6
------------- ------------- ---------- ----------
Liquidated damages
and Other Revenue* 1.2 2.9 3.8 0.8
------------- ------------- ---------- ----------
Portfolio Income 33.1 32.9 69.7 64.4
------------- ------------- ---------- ----------
Portfolio Costs -7.8 -6.9 -14.1 -13.1
------------- ------------- ---------- ----------
Project Finance Interest
Costs -0.8 -0.3 -0.6 -0.6
------------- ------------- ---------- ----------
Total Portfolio Income
Earned 24.5 25.7 55.0 50.7
------------- ------------- ---------- ----------
Group Operating Costs(#)
** -3.7 -2.7 -5.8 -5.4
------------- ------------- ---------- ----------
Group Debt Costs -2.1 -2.3 -4.6 -4.6
------------- ------------- ---------- ----------
Underlying Earnings 18.7 20.7 44.6 40.7
------------- ------------- ---------- ----------
Group Debt Repayments -8.0 -8.0 -9.2 -8.8
------------- ------------- ---------- ----------
Underlying Earnings
available for distribution 10.7 12.7 35.5 31.9
------------- ------------- ---------- ----------
Half year Half year Full year Full year
to to to to
31 Dec 2020 31 Dec 2019 30 June 30 June
20 19
(GBPm) (GBPm) (GBPm) (GBPm)
Brought forward reserves 8.4 2.3 2.3 1.1
------------- ------------- ---------- ----------
Total funds available
for distribution -1 19.1 15.0 37.6 33.0
-------------------------- ------------- ------------- ---------- ----------
Target distribution*** N/A N/A 29.3 28.4
-------------------------- ------------- ------------- ---------- ----------
Actual Distribution
-2 8.1 7.2 29.3 30.7
------------- ------------- ---------- ----------
Underlying Earnings
carried forward
(1-2) N/A N/A 8.4 2.3
------------- ------------- ---------- ----------
Excess Distribution
Paid N/A N/A 0.0 2.3
------------- ------------- ---------- ----------
*Other Revenue includes insurance proceeds, O&M settlement
agreements and rebates received
#Includes the Company and BSIFIL (within BSIFIL is a group tax
charge of c. GBP1.1m vs GBP0.4m in Dec 19)
**Excludes one-off transaction costs and the release of up-front
fees related to the Company's debt facilities
***Target distribution is based on funds required for total
target dividend for each financial period.
The table below presents the underlying earnings on a per share
basis.
Half year Half year Full year Full year
period to period to to to
31 Dec 2020 31 Dec 2019 30 June 30 June
20 19
Target Distribution
(RPI dividend) -
GBPm N/A N/A 29.3 28.4
------------- ------------- ------------ ------------
Total funds available
for distribution
(inc. reserves)
- GBPm 19.1 15.0 37.6 33.0
------------- ------------- ------------ ------------
Number of shares
at period end 406,999,622 370,499,622 370,499,622 369,883,530
------------- ------------- ------------ ------------
Target Dividend
(pps) N/A N/A 7.9 7.68
------------- ------------- ------------ ------------
Total funds available
for distribution
(pps) - 1 4.66 4.02 10.13 8.91
------------- ------------- ------------ ------------
Total Dividend Declared
& Paid (pps) - 2 2.0 1.95 7.90 8.31
------------- ------------- ------------ ------------
Reserves carried
forward
(pps) * - 1-2 N/A N/A 2.23 0.60
------------- ------------- ------------ ------------
* Reserves carried forward are based on the shares in issue at
the corresponding year end.
5. NAV and Valuation of the Portfolio
The Investment Adviser is responsible for advising the Board in
determining the Directors' Valuation and, when required, for
carrying out the fair market valuation of the Company's
investments.
Valuations are carried out on a six-monthly basis as at 31
December and 30 June each year, with the Company committed to
conducting independent reviews as and when the Board believes it
benefits the Shareholders.
As the portfolio comprises only non-market traded investments,
the Investment Adviser has adopted a valuation process based upon
the IPEV Valuation Guidelines published by the BVCA (the British
Venture Capital Association). The application of these guidelines
is considered consistent with the requirements of compliance with
IFRS 9 and IFRS 13.
Following consultation with the Investment Adviser, the
Directors' Valuation adopted for the portfolio as at 31 December
2020 was GBP608.4m (31 December 2019, GBP621.7m).
The table below shows a breakdown of the Directors' Valuations
over the last four reporting periods:
Valuation Component (GBPm) Dec 2020 June 2020 Dec 2019 June 2019
Enterprise Portfolio DCF value (EV) 698.3 602.7 611.6 605.2
--------- ---------- --------- ----------
Deduction of Project Co debt & NatWest 3 year Term loan -120.3 -10.8 -11.2 -11.7
--------- ---------- --------- ----------
Projects valued at cost (amount invested) 0.0 0.0 0.0 0.0
--------- ---------- --------- ----------
Project Net Current Assets 30.4 32.4 21.3 28.6
--------- ---------- --------- ----------
Directors' Valuation 608.4 624.3 621.7 622.1
--------- ---------- --------- ----------
Portfolio Size (MWp) 543.0 478.8 465.3 465.3
--------- ---------- --------- ----------
Detail of the main drivers behind these valuations are outlined
in the portfolio valuation movement section below.
During the reporting period there have been a number of key
factors that have been considered in the Investment Adviser's
recommendation to the Directors' Valuation:
(i) Competition for operational assets has remained high, as the
range of pricing on subsidised solar assets equivalent to the ROC
weighting of the Company's portfolio (average c.1.4ROC) continues
to be between c.GBP1.20m/MWp and c.GBP1.40m/MWp. The Company's post
period end acquisition of Bradenstoke for c.GBP1.27m/MWp sits
within the lower band of this range. Accordingly, to ensure the
Company's portfolio sensibly reflects market pricing as at 31
December 2020, the Directors have applied a discount rate of 6.00%
(vs 6.00% in June 2020 and 6.50% in December 2019);
(ii) Inclusion, on a discounted cash flow basis, of the 64.2 MWp
acquisition completed in August 2020 and associated financing (the
GBP110m 3 year term NatWest loan with 75% of the underlying gilt
curve interest rate exposure hedged over 18 years at a swap rate of
0.31%);
(iii) Elimination of the Company's drawn RCF balance which stood
at GBP44m as at 30 June 2020, following the Company's GBP45m equity
raise in November 2020;
(iv) Progress continued regarding the Company's asset life
extension programme (as outlined in the Portfolio section), with
306 MWp (245 MWp as at 30 June 2020) of the Company's portfolio now
valued on the basis of 30-40 years of operational life. The Board
continues to believe the most suitable method to value the
additional cash flows from these assets is to apply a combination
of prudent assumptions on performance and maintenance reserve as
well as an increased discount rate of 7.5% (7.5% in June 2020) for
periods over 30 years. As at 31 December 2020, the weighted average
life of the portfolio was 27.1 years (June 2020: 27.4 years);
(v) As reported in the Company's 30 June 2020 annual accounts,
the Directors' Valuation now uses an equal blend of three leading
forecasters' power curves (see power curve graph below).
Discounting Methodology and Discount Rate
The Directors' Valuation is based on the discounting of
post-tax, projected cash flows of each investment, based on the
Company's current capital structure, with the result then
benchmarked against comparable market multiples. The discount rate
applied on the post-tax levered project cash flows is the weighted
average discount rate.
In addition, the Board continues to adopt the approach under the
'willing buyer/willing seller' methodology, that the valuation of
the Company's portfolio be appropriately benchmarked on GBP/MWp
basis against comparable portfolio transactions.
Strong competition for large scale portfolios of equivalent or
lower ROC banding to the Company's, mean pricing continues to be
within a pricing range of GBP1.20m/MWp - GBP1.40m/MWp and so by
valuing the portfolio at an EV of GBP698.3m (June 2020: GBP602.7m),
and an effective price of GBP1.28m/MWp (June 2020: GBP1.26m/MWp),
using a discount rate of 6.00%, the Board remains conservatively
within the pricing range of precedent market transactions.
Debt Assumptions
The debt assumptions within the Directors' Valuation reflect all
third-party loans within the Company's capital structure as at the
valuation date. Interest rates and repayment profiles are matched
to the terms of each loan. In the case of any short-term financing,
conservative assumptions are applied with respect to interest rates
and repayment profiles post maturity. As at 31 December 2020, the
Company's short term debt consisted of a GBP110m term loan from
NatWest, maturing in September 2023, and the conversion assumption
within the Directors' Valuation is aligned to the percentage of the
loan that has been hedged (being 75% with 18-year swaps at a rate
of 0.31% until 2038).
The interest rate applied to the converted balance (being
GBP82.5m) is 3.0%.
Power Price
The blended forecast of three leading consultants used within
the latest Directors' Valuation, as shown graphically below, is
based on forecasts released in October 2020 and December 2020 and
implies a compound annual growth rate, in real terms from 2021,
over the 30 year forecast of -0.02% per annum.
Whilst wholesale electricity price projections from the
forecasters are generally comparable to June 2020, all forecasters
used by the Company are now removing a c.GBP2.50/MWh BSUoS charge
on generation from April 2023 in their projections. The impact of
this change to network charging means it is less expensive for
transmission connected assets to operate, which effectively
translates to a broadly comparable drop in wholesale power
prices.
Beyond the amendment to BSUoS costs, the latest curves also
reflect the following key updates:
1. Short-term gas prices have risen slightly, bringing wholesale
power prices upwards compared to previous forecasts,
2. Latest analysis on the impact of Covid-19 and the impact on
electricity demand. Demand is expected to recover faster than
envisaged in previous forecasts, resulting in a small increase in
near-term prices.
3. Increased renewable deployment in the UK* (notably by 2030 c.
30 GWp of Offshore wind, c.20 GWp of Onshore Wind and c.17 GWp of
solar) and Europe, which reflect governments' energy budgets,
long-term plans* and announcements by project developers. Compared
to June 2020 forecasts, this results in lower price forecasts in
the medium-long term.
*Please note the reference to long term Government plans
reflects those known by the forecasters at the time their curves
were released and so do not cover the Energy White Paper or the 10
point plan.
For illustration purposes, the graph also includes the blended
curves used in the past two Directors' Valuations.
[chart]
The DCF for each project applies the contractually fixed power
price applicable to each solar PV asset until the end of the fixed
period and, thereafter, the blended independent forecast price.
Plant Performance
The capacity of the Company's portfolio now being valued with
reference to PR from operational or final acceptance (this covers a
minimum of 2 years of operational data) is 467 MWp (out of 543 MWp)
compared to 425 MWp (out of 465 MWp) in June 2020. The weighted
average PR for these plants, including the effects of degradation,
is 82.1% (June 2020: 82.4%).
Consistent with the valuation approach taken in previous
periods, the Directors' Valuation does not amend long term plant
performance forecasts based upon short term performance, especially
while the plants remain within the warranty period and subject to
outstanding contractual testing obligations.
Inflation
The Directors have continued to apply an inflation assumption
between 2020 and 2024 of 3.00% and from 2025 onwards of 2.75%.
Other Cash flow Assumptions
No material changes have been made regarding regulatory revenue
or cost assumptions.
NAV movement
In the period, the Company paid total dividends of GBP14.8m,
being 4.0pps in total for the third and fourth interim dividends in
respect of the year ended 30 June 2020.
Over the period the Company's NAV has increased by GBP43.2m,
from GBP433.5m as at 30 June 2020, to GBP476.7m as at 31 December
2020. Adjusting the 30 June 2020 NAV of GBP433.5m for the dividends
paid in the period (GBP14.8m) and net equity raised of GBP44.5m
results in an uplift in the NAV of the Company during the period of
GBP13.5m.
A breakdown in the movement of the NAV of the Company over the
period and how this interacts with the movement in the valuation of
the portfolio is illustrated in the charts below. Post period end,
in March 2021, the Company will pay the first interim dividend for
the 2020/21 financial year of 2.0pps.
[chart]
Directors' Valuation movement
(GBPmillion) As % of
30 June
2020 valuation
---------------------------------- ---- ------- -------------- ----------------
30 June 2020 Valuation 624.3
----------------------------------------- ----------------------- ----------------
Cash receipts from portfolio (35.6) (5.7%)
New investment (64.2 MW
portfolio) 104.2 16.7%
New NatWest term loan -110.0 (17.6%)
New investment valuation
uplift (64.2 MW portfolio) 3.8 0.6%
Power curve updates (incl. PPAs) (6.2) (1.0%)
Balance of portfolio return 27.9 4.5%
31 December 2020 Valuation 608.4 (2.5%)
---------------------------------------- -------- -------------- ----------------
Each movement since the 30 June 2020 valuation is considered in
turn below:
Cash receipts from the Portfolio
This movement reflects the cash payments made from the
underlying project companies up to BSIFIL and the Company to enable
the companies to settle operating costs and distribution
commitments as they fall due within the period.
New investment (64.2MW portfolio) & New NatWest term
loan
These movements reflect the base investment cost of GBP104.2m of
the 64MWp portfolio the Company acquired in August 2020 and the
three year term loan of GBP110m the Company arranged with NatWest
to finance the transaction. The difference in value between base
cost of the portfolio and quantum of the term loan is a working
capital and transaction fees.
New investment valuation uplift (64.2MW portfolio)
Following the 64MWp acquisition, the Company has benefitted from
a small value uplift of GBP3.8m compared to the base cost invested
(being GBP104.2m excluding working capital). This value accretion
is a result of the positive contribution the highly regulated
revenue streams make to the overall revenue mix within the
Directors' Valuation, as well as benefitting from limited life
extension assumptions (between 5 - 15 years) on some of the assets
within the portfolio.
Power curve updates (incl. PPAs)
The Company's three independent forecasters released updated
forecasts in October and December 2020 and these have been applied
to the Directors' Valuation. The impact of adopting an even blend
of three independent forecasters as well as the latest power price
fixes, against power price expectations applied in the 30 June 2020
valuation, results in a valuation decrease of GBP6.2m.
The discounted cash flow for each project applies the
contractually fixed power price applicable to each solar PV asset
until the end of the fixed period, and thereafter an even blend of
three independent forecasters' prices.
Balance of Portfolio Return
The balance of portfolio return is predominantly the result of
the unwinding of the discount rate over the period, but it also
includes the effects of the Company's slight change in capital
structure following the equity issuance of GBP45m and the full
repayment of the RCF in November 2020, as well as minor operational
and financial assumption changes.
Other assumptions
Consistent with previous Directors' Valuations, the valuation
assumes a terminal value of zero for all projects within the
portfolio c.25 years after their commencement of operation, or 30
to 40 years for those with asset life extensions.
There have been no material changes to assumptions regarding the
future performance or cost optimisation of the portfolio when
compared to the Directors' Valuation of 30 June 2020.
On the basis of these key assumptions, the Board believes there
remains further potential for NAV enhancement from the potential
extensions of asset life for further projects in the portfolio, as
well as cost optimisation on long term O&M fees.
The assumptions set out in this section will remain subject to
continuous review by the Investment Adviser and the Board.
Reconciliation of Directors' Valuation to Balance sheet
Balance at Period End
Category 31 30 June 31 30 June
December 2020 December 2019
2020 (GBPm) 2019 (GBPm)
(GBPm) (GBPm)
--------------------- ---------------------- ---------------------- ----------------------
Directors'
Valuation 608.4 624.3 621.7 622.1
--------------------- ---------------------- ---------------------- ----------------------
BSIFIL
Working
Capital 27.1 20.9 24.7 19.5
--------------------- ---------------------- ---------------------- ----------------------
BSIFIL
Debt* (160.1) (212.8) (199.0) (205.9)
--------------------- ---------------------- ---------------------- ----------------------
Financial
Assets at
Fair Value
per
Balance
sheet 475.4 432.4 447.4 435.7
--------------------- ---------------------- ---------------------- ----------------------
Gross Asset
Value 755.8 653.3 656.7 653.3
--------------------- ---------------------- ---------------------- ----------------------
Gearing (%
GAV**) 37% 33% 32% 33%
--------------------- ---------------------- ---------------------- ----------------------
*30 June 2020, 31 December 2019, and 30 June 2019 include
c.GBP1m of upstream intercompany loans.
** GAV is the Financial Assets at Fair Value of GBP475.4m plus
Aviva long term debt of GBP160.1m, Durrants' project debt of
GBP10.3m and NatWest of GBP110m term loan, (giving total debt of
GBP280.4m) As at 31 December 2020 the Company's GAV is
GBP755.8m.
Directors' Valuation sensitivities
Valuation sensitivities are set out in tabular form in Note 7 of
the financial statements. The following diagram reviews the
sensitivity of the EV of the portfolio to the key underlying
assumptions within the discounted cash flow valuation.
[chart]
6. Financing
Aviva Investors Long Term Facility
The LTF is provided by Aviva Investors in two tranches.
Loan Original Amount Current Amount Tenor Cost Average Loan Life
(Sept 16) (Dec 20) at drawdown
Fully amortising
over 18 years to
2034, sculpted to All in cost of
Fixed GBP121.5m GBP99.9m cash flows 287.5bps 10.6
------------------- ------------------- ------------------- ------------------- ------------------
Fully amortising
over 18 years to
2034, sculpted to
Index-Linked GBP65.5m GBP60.1m cash flows RPI plus 70bps 11.3
------------------- ------------------- ------------------- ------------------- ------------------
Both tranches are fully amortising over 18 years, providing
natural alignment with the average remaining life of the Company's
regulated revenues, eliminating refinancing risk as well as
insulating the Company's equity cash flows from significant
principal repayments in the final years of the facility when the
contribution of revenue from power is increased.
During the period principal repayments of GBP7.5m, combined with
indexation increases of GBP0.4m, resulted in a total outstanding
balance to Aviva Investors as at 31 December 2020 of GBP160.0m
(Fixed GBP99.9m, Index linked GBP60.1m).
The LTF is held by the Company's wholly-owned subsidiary,
BSIFIL, and is the result of a deliberate structuring approach to
maximise both transparency and portfolio management flexibility,
whilst also delivering one of the lowest costs of capital in our
sector (as at 31 December 2020, the blended all in debt cost of the
facilities was 2.5%).
Thanks to the prudent leverage (37% of GAV as at 31 December
2020), on the Company's base case projections the average DSCR
remains close to 3 times.
RBSI Revolving Credit Facility
On 6 November 2020 the Company agreed with RBSI to extend the
tenor of its GBP50m RCF to September 2022. This includes
flexibility for a further one year extension to 30 September 2023
as well as an uncommitted facility of a further GBP50m. The terms
of the revised facility remained unchanged, with a constant margin
of 2.0% over LIBOR.
As at 31 December 2020 the RCF balance was nil as BSIFIL had
fully repaid its drawn RCF balance of GBP44.1m on 27 November 2020,
using proceeds from its GBP45m equity raise earlier in the
month.
Post period end, on 7 January 2021, the Company drew GBP90m of
its revised RCF (out of GBP100m available) to complete the
acquisition of Bradenstoke solar farm. Both the RCF and the LTF are
secured upon a selection of the Company's investment portfolio and
offer the ability to substitute reference assets.
Project level debt
In addition to the LTF and the three year RCF, the Company has a
three year term loan with NatWest of GBP110m, maturing in September
2023 (secured against a portfolio of 141.7 MWp within the Company's
structure) and a small project finance loan of GBP10.3m, provided
by BayernLB and fully amortising until maturity in 2029, secured
against Durrants, a 5 MWp FiT plant located on the Isle of
Wight.
7. Market Developments
UK solar photovoltaic capacity and deployment
According to BEIS, the UK's total installed solar photovoltaic
capacity as at the end of November 2020 (the latest statistics
available) was 13.45 GWp, across just over one million
installations. This compares to 13.39 GWp in June 2020. Expansion
over the period, of 66 MWp, has been driven exclusively by the
deployment of c. 20,000 small unaccredited installations with
capacities below 50 kWp. The chart below illustrates how the
deployment of new generating capacity has diminished significantly
since the closure of the RO scheme in 2017.
[chart]
*Source; BEIS, Solar photovoltaics deployment November 2020
Capacity accredited nationally under the RO Scheme is 7.3GWp,
represents 50% of the total solar capacity in the UK, but
constitutes only 2.2% of the number of installations. Capacity
accredited under the FiT scheme was 5.1 GWp according to the latest
data from BEIS released in November 2020. This equates to about 38%
of total solar capacity and 82% of all installations. Subsidy-free
capacity stands at 1.1 GWp and 16% of installations, although many
of these are micro installations.
Secondary market transactions and subsidy-free activity
Transactional activity in the UK secondary solar PV market saw a
slight resurgence in 2020 after a quiet period in 2019 as investor
appetite for subsidised assets continued to increase. According to
the most recent figures from Bloomberg New Energy Finance (BNEF)
and the Investment Adviser's market knowledge, 552 MWp changed
hands between July and December 2020. For reference, some 300 MWp
of solar PV project deals were reported in 2019.
Development activity in the UK subsidy-free market has also
gained momentum, despite potential disruptions during the Covid-19
pandemic. Significant development activity is now underway within
the UK, which is being driven by factors such as ambitious
decarbonisation targets, falling installation costs and
anticipation over the inclusion of solar PV into the upcoming CfD
auction round. Estimates from Solar Power Media indicate that there
is now a 13 GWp pipeline of large-scale solar projects in the
development phase (as at the end of December 2020), a 44% increase
on the 9 GWp reported in June 2020.
There have also been indications that the construction of
larger-scale unsubsidised projects is beginning to gain momentum as
projects progress through the development phase. A significant
number of these projects are extensions to existing assets,
community schemes or local council funded.
Various companies have continued to launch tenders for PPA
agreements over the period, signalling their continued desire to
procure electricity from renewable sources. This source of demand
provides a potential route to market for subsidy free projects, if
mutually beneficial offtake agreements can be reached.
Another theme is the co-location of unsubsidised solar assets
with battery storage facilities, which have the potential to bring
efficiencies to construction costs and opportunities to optimise
use of the grid connection.
With 613 MWp under management (including 70 MWp purchased after
the period end), the Company continues to maintain a strong
position within the UK solar market, as it owns and operates about
6.5% of the country's utility-scale solar PV capacity. As an
established and experienced market participant, this regulated
revenue base provides a strong foundation for growth of the Company
through its subsidy-free solar strategy.
8. Regulatory Environment
Update on Contracts for Differences (CfD)
The CfD scheme is now the Government's main mechanism for
supporting low-carbon electricity generation and operates via an
auction process. During the period BEIS announced that solar PV
will be allowed to participate in the next CfD allocation round
(AR4) for the first time since 2015.
The UK Government is aiming to support up to 12 GW of renewable
energy projects in AR4, which is set to open in late 2021. The
tender will split technologies across three 'pots'. Pot 1 includes
established technologies such as onshore wind and solar PV; pot 2
includes less-established renewable technologies such as advanced
conversion technologies and tidal stream, while a new pot 3 has
been set up for offshore wind.
Further details on the design parameters for AR4 are expected to
be published during the period. Subsequent rounds are then expected
to be held approximately every two years.
UK net zero target
Since the UK introduced legislation requiring net greenhouse gas
emissions to reduce to zero by 2050, the Government has published
its Ten Point Plan for a Green Industrial Revolution and the Energy
White Paper. These documents address how the Government envisages
development of our energy system to accelerate the delivery of
net-zero emissions and how it will promote a greener future for the
country.
In December 2020 the UK Government also announced its new
Nationally Determined Contribution (NDC) under the Paris Agreement,
which commits the UK to reducing nationwide greenhouse gas
emissions by at least 68% by 2030, compared to 1990 levels. The
Climate Change Committee ("CCC") also published its 6(th) carbon
budget (covering the period 2033 - 2038), which targets a 78%
reduction in emissions relative to 1990 levels.
The Ten Point Plan
This document, published on 18 November 2020, outlined the
government's vision to become a global leader in green technologies
and details targets for different sectors including offshore wind,
hydrogen, transport, carbon capture and buildings. The plan also
outlines ambitious funding plans, including GBP12 billion of
Government investment to help create and support up to 250,000
green jobs. Solar is not specifically referenced within the
document, besides the plan to include it in the next CfD auction
round.
Energy White Paper
The Government published its highly anticipated Energy White
Paper on 14 December 2020, which provides further clarity on how
the UK aims to achieve its net zero target. The three objectives
stated in the paper are to: i) transform the energy system; ii)
support a green recovery and promote green jobs; and iii) to create
a fair deal for consumers. The paper provides further detail on how
to achieve the targets set out in the Ten Point Plan, as well as
announcements such as the establishment of a UK emissions trading
system.
9. Environmental, Social and Governance
ESG Report from Bluefield Solar's Investment Adviser & Key
Service Providers
Introduction
ESG activities relating to the portfolio are undertaken by the
Investment Adviser and Bluefield subsidiaries ("the Bluefield
Group") on behalf of the Company. In addition to creating an ESG
strategy for the Company, the Bluefield Group has been evaluating
its own sustainability position. For the first time, a dedicated
ESG function has been created, working to enhance ESG commitments
within each of the Bluefield companies. Furthermore, an ESG policy
for the group is currently being developed, detailing the approach
to sustainability across portfolio-related activities.
The following report constitutes a high-level summary of key ESG
activities, including new developments over the past six
months.
Covid-19 Update
The Bluefield Group has adjusted efficiently to the
circumstances imposed by the Covid-19 pandemic and has continued to
run as normal, with only slight adjustments to service. In
accordance with Government instructions on the 23 March 2020, all
employees who were able to work from home were asked to do so with
immediate effect. Key workers were identified and have been able to
operate at normal levels, with additional measures in place to
mitigate Health & Safety risk.
The majority of staff have been able to work effectively from
home locations. As the homeworking requirement continues to be
extended, staff needs are being carefully monitored and efforts
made to ensure staff have a comfortable working environment. Health
& Safety remains paramount and employees have been asked to
undertake Display Screen Equipment (DSE) assessments at home and
discuss concerns with line managers.
The mental health of employees continues to be a priority and
efforts have been made to support staff wellbeing through flexible
working, E-learning courses and promotion of an Employee Assistance
Programme (EAP). During January, Bluefield ran a 'Wellness and
Charity Initiative' to encourage employees to improve their
wellbeing through exercise, including the opportunity to take time
out during the day to take advantage of limited day-time hours.
Environmental Considerations
Renewable Energy Generation
The Bluefield Group is committed to having a positive
environmental impact, most notably through the production of clean,
renewable energy. The Investment Adviser was founded to attract
capital into renewable energy assets and, through the funds to
which it acts as investment adviser, produces thousands of
megawatts of clean energy each year. As a result, hundreds of
thousands of tonnes of CO2 are saved from being released into the
atmosphere annually, supporting climate initiatives and the UK's
commitment to achieve net zero greenhouse gas emissions by
2050.
Land Management
O&M provider Bluefield Operations Ltd is responsible for
ensuring each asset under management is fully compliant with its
Landscape and Ecological Management Plan (LEMP). This ensures the
asset has no net negative impact on the surrounding environment,
and in some cases can enhance the diversity of the fauna and flora
present. Under correct management, a solar farm can return
intensively farmed land back into natural meadows, increasing
diversity and returning nitrates to soils.
Biodiversity
The Bluefield Group is focused on supporting biodiversity and
intends to take a considered and informed approach to increasing
biodiversity across the portfolio. The priority this financial year
is to benchmark biodiversity through ecological surveys,
potentially in collaboration with a University.
The placement of beehives has been trialled on various sites,
supporting local bee farmers as well as surrounding ecosystems.
Efforts are underway to increase the number of beehives across the
portfolio, with the addition of at least three beehives confirmed
for Spring 2021.
Social Considerations
Winter Learning & Development Programme
A Learning & Development Programme was launched across the
Bluefield group of companies over the winter months, to provide
staff with the opportunity to advance and learn new skills despite
the restrictions of home working. Following the launch of a new
E-learning platform in November 2020, staff were encouraged to
develop skills in areas of business, compliance, well-being and
leadership. In November and December, some 100 hours of learning
were completed.
To support the learning culture and growth mindset advocated by
Bluefield, a 360 Feedback and Insights Programme was also launched
at the end of 2020, focused on senior leaders. The objective was to
increase the self-awareness of senior individuals through feedback,
assisting their development and enhancing team performance.
Quote from Baiju Devani, UK Investment Director: "I found the
360 Feedback and Insights Programme invaluable. Not only did it
enhance my own self-awareness, but the expert coaching and advice I
received will improve my performance, and subsequently my team's
performance, at work."
Governance
Third Party Due Diligence
A comprehensive vetting process has been developed to ensure
subcontractors are suitably qualified, carry appropriate levels of
insurance and have planned works in a safe manner. This is achieved
primarily through use of a sub-contractor questionnaire and
analysis of contractor certification. Training in these matters is
undertaken by appropriate staff. Searches and checks are tools that
are applied during initial tenders and negotiations, as well as
during formal audits. The Bluefield Group focuses on ensuring that
none of its counterparties has ever been sanctioned by any
regulatory body.
Anti-Bribery, Money Laundering and Slavery
Internal policy requires that the companies, and all those who
work for them and with them, uphold principles embodied in the
anti-bribery, anti-money laundering and anti-slavery/trafficking
legislation. These requirements are reflected in contractual
obligations and may be followed up with annual audit requirements
of contractors. Policies are subject to periodic reviews and
renewed as appropriate, with staff trained on a yearly basis.
Compliance
Regulation and compliance, including with respect to GDPR and
cybersecurity, direct Bluefield's decision making and underpin all
work undertaken. Widespread awareness of legal obligations
throughout the senior teams ensures a vigilant company approach.
The Investment Adviser uses third party compliance advisers to
ensure regulatory obligations, relating to both the Company and the
Bluefield Group, are met through annual audit on business
activities. Annual training on regulation and internal policies is
given to relevant staff.
The asset management team at Bluefield Services Ltd ensure
compliance with the specific conditions associated with each asset,
throughout the asset's lifetime. Internal processes and procedures
are used alongside an asset management platform to ensure all
regulations are adhered to, with regular site visits confirming
that environmental conditions are being met.
Principles of Responsible Investment
In 2019 the Investment Adviser became a signatory to the
Principles of Responsible Investment (PRI) and will continue to
review its commitments in line with the investment principles.
Health and Safety
The Bluefield Group has a rigorous approach to Health &
Safety management, with Health & Safety awareness embedded at
every level of the organisation. The on-site activities of
Bluefield Operations Ltd pose the highest risk and are therefore a
key area of focus.
Comprehensive Health & Safety policies and processes,
created alongside specialist consultants, are frequently reviewed
to ensure compliance with the latest Health & Safety guidance.
Every task, whether corrective maintenance or just a site visit, is
preceded by a Health & Safety analysis.
During the interim period there was one major Health &
Safety incident to declare, which resulted in no injuries to
personnel and no significant downtime.
Corporate Responsibility
FareShare South West & The Felix Project
Due to the ongoing social impact of Covid-19, the Bluefield
Group wanted to give back to organisations that have supported
local communities during the pandemic. The Felix Project and
FareShare South West are charities focused on alleviating food
poverty through the redistribution of surplus food. During the
pandemic, demand for the services of these charities increased at
least three-fold, as individuals were unable to access food
supplies and experienced financial hardship.
Bluefield donated to each charity in December to support demand
over winter, a period when food poverty levels naturally peak. In
total, Bluefield funded the distribution of over 50,000 meals. In
January 2021, employees were encouraged to take part in a Bluefield
'Wellness and Charity Initiative', with resulting funds donated to
both organisations.
Bluefield Partners LLP
1 March 2021
Environmental, Social and Governance Report
Introduction
Bluefield Solar Income Fund was listed on the London Stock
Exchange in July 2013. Since IPO, the Company has been part of a
major investment theme that has seen numerous renewable energy
funds list and create a multi-billion-pound investment sector.
Environmental considerations and concerns about climate change have
grown in the intervening period and so too have Shareholders'
interest in the social impact of their investments and associated
governance. As a result, ESG is now one of the most important
considerations in investment today.
In the Annual Report for the year ending 30 June 2020, the Board
and the Bluefield Group presented the first detailed ESG Report
relating to the Company. A full update on progress in this area
will be provided in the Annual Report for the year ending 30 June
2021.
Environmental Impact
The Company plays an important role in the decarbonisation of
the power sector in the UK. The annual CO2 savings generated by the
portfolio are listed in the table below. Since inception, the
portfolio has saved over 850,000 tonnes of CO2 from being released
into the atmosphere. Despite the portfolio steadily increasing in
size, annual CO2 savings decrease after 2017. This is caused by the
reducing contribution of fossil fuels to the UK's electricity mix
and within that mix coal has largely been replaced by gas, which
produces significantly less CO2 than other fossil fuels. As
renewable energy generation increases, the proportion of the grid
supplied by fossil fuels will continue to decrease. This means CO2
savings derived from the displacement of fossil fuel generated
energy will also decline over time. However, as the absolute
generation of energy increases, it provides renewable energy for
higher numbers of households, as detailed below:
Reporting Year (01 July - 30 June) Total CO(2) Savings (tonnes) (1) Houses Powered for a Year (2)
13/14 12,516 8,841
--------------------------------- ------------------------------
14/15 67,325 42,917
--------------------------------- ------------------------------
15/16 141,704 99,697
--------------------------------- ------------------------------
16/17 167,753 132,124
--------------------------------- ------------------------------
17/18 153,723 142,147
--------------------------------- ------------------------------
18/19 134,881 154,906
--------------------------------- ------------------------------
19/20 125,534 170,705
--------------------------------- ------------------------------
(1) CO(2) savings have been calculated using generation data
aligned with the appropriate Government CO(2) conversion factor.
Generation data has not been pro-rated in accordance with
conversion factor expiry dates, but instead the conversion factor
encompassing the largest proportion of the reporting year has been
used.
(2) The number of houses powered has been calculated using
generation data divided by the appropriate Ofgem Typical Domestic
Consumption Value for a medium sized household.
Following the 64.2MW portfolio acquisition, the installed
capacity of the portfolio increased to 543 MWp. As a result, during
the 6 months to 31 December 2020 period the portfolio delivered CO2
savings of over 54,000 tonnes. Based on Ofgem's Typical Domestic
Consumption Values, a medium household uses 2,900 kWh electricity
per year. If the six month generation data is extrapolated across a
year, the portfolio has the capacity to power approximately 170,000
homes - equating to a city similar in population size to
Nottingham.
Community Benefits
The Company is committed to building strong relationships with
communities in close proximity to the solar assets. Community
benefit schemes are supported across the portfolio, with
significant donations made each year.
Environmental Accreditations & Frameworks
In 2019, the Company was awarded the LSE Green Economy Mark and
achieved Guernsey Green Fund status. The Company is currently
reviewing its disclosure commitments in line with the requirements
of the EU Taxonomy.
Contribution to UN Sustainable Development Goals (SDGs)
The Company understands the importance of the SDGs and their
role in society. The Company's contribution to the SDGs will be
considered during the development of an ESG strategy and reflected
in subsequent ESG reporting.
Statement of Principal Risks and Uncertainties for the Remaining
Six Months of the year to 30 June 2021
As described in the Company's annual financial statements as at
30 June 2020, the Company's principal risks and uncertainties
include the following:
-- Portfolio acquisition risk;
-- Portfolio operational risk;
-- Valuation error;
-- Depreciation of NAV;
-- Unfavourable weather and climate conditions;
-- Unfavourable electricity market conditions;
-- Changes in tax regime;
-- Cyber risk;
-- Adverse publicity;
-- Covid-19 pandemic;
-- Changes to government plans, and
-- Political risk.
The Board believes that these risks are unchanged in respect of
the remaining six months of the year to 30 June 2021.
Further information in relation to these principal risks and
uncertainties may be found above of the Company's annual financial
statements as at 30 June 2020.
These inherent risks associated with investments in the solar
energy sector could result in a material adverse effect on the
Company's performance and value of Ordinary Shares.
Risks including emerging risks are mitigated and managed by the
Board through continual review, policy setting and regular reviews
of the Company's risk matrix by the Audit Committee to ensure that
procedures are in place with the intention of minimising the impact
of the above mentioned risks. The Board carried out a formal review
of the risk matrix at the Audit Committee meeting held on 18
November 2020. The Board relies on periodic reports provided by the
Investment Adviser and Administrator regarding risks that the
Company faces. When required, experts will be employed to gather
information, including tax advisers, legal advisers, and
environmental advisers.
Directors' Statement of Responsibilities
The Directors are responsible for preparing the Interim Report
and Unaudited Condensed Interim Financial Statements in accordance
with applicable regulations. The Directors confirm that to the best
of their knowledge:
-- the Unaudited Condensed Interim Financial Statements have
been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the European Union; and
-- the interim management report which includes the Chairman's
Statement, Report of the Investment Adviser and Statement of
Principal Risks and Uncertainties for the remaining six months of
the year to 30 June 2021 includes a fair review of the information
required by:
a. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
Unaudited Condensed Interim Financial Statements; and a description
of the principal risks and uncertainties for the remaining six
months of the financial year; and
b. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place during the
first six months of the financial year and that have materially
affected the financial position or performance of the Company
during that period; and any changes in the related party
transactions described in the last annual report that could do
so.
The Board is responsible for the maintenance and integrity of
the corporate and financial information included on the Company's
website, and for the preparation and dissemination of financial
statements. Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
On behalf of the Board
Paul Le Page Laurence McNairn
Director Director
1 March 2021 1 March 2021
Independent Review Report to Bluefield Solar Income Fund
Limited
Conclusion
We have been engaged by Bluefield Solar Income Fund (the
"Company") to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 31
December 2020 of the Company which comprises the unaudited
condensed statements of financial position, comprehensive income,
changes in equity, cash flows and the related explanatory
notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2020 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with the
terms of our engagement letter to assist the Company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company for our
review work, for this report, or for the conclusions we have
reached.
Rachid Frihmat
for and on behalf of KPMG Channel Islands Limited
Chartered Accountants, Guernsey
1 March 2021
Unaudited Condensed Statement of Financial Position
As at 31 December 2020
31 December 2020 30 June 2020
Unaudited Audited
Note GBP'000 GBP'000
------------------------------------------------------------ ----- --------------------- ---------------------
ASSETS
Non-current assets
Financial assets held at fair value through profit or loss 7 475,408 432,426
Total non-current assets 475,408 432,426
------------------------------------------------------------ ----- --------------------- ---------------------
Current assets
Trade and other receivables 8 1,132 768
Cash and cash equivalents 9 504 747
Total current assets 1,636 1,515
------------------------------------------------------------ ----- --------------------- ---------------------
TOTAL ASSETS 477,044 433,941
------------------------------------------------------------ ----- --------------------- ---------------------
LIABILITIES
Current liabilities
Other payables and accrued expenses 10 372 436
------------------------------------------------------------ ----- --------------------- ---------------------
Total current liabilities 372 436
------------------------------------------------------------ ----- --------------------- ---------------------
TOTAL LIABILITIES 372 436
------------------------------------------------------------ ----- --------------------- ---------------------
NET ASSETS 476,672 433,505
------------------------------------------------------------ ----- --------------------- ---------------------
EQUITY
Share capital 413,214 368,712
Retained earnings 63,458 64,793
TOTAL EQUITY 12 476,672 433,505
------------------------------------------------------------ ----- --------------------- ---------------------
Number of Ordinary Shares in issue
at period/year end 12 406,999,622 370,499,622
------------------------------------------------------------ ----- --------------------- ---------------------
Net Asset Value per Ordinary Share (pence) 6 117.12 117.01
------------------------------------------------------------ ----- --------------------- ---------------------
These unaudited condensed interim financial statements were
approved and authorised for issue by the Board of Directors on 1
March 2021 and signed on their behalf by:
Paul Le Page Laurence McNairn
Director Director
1 March 2021 1 March 2021
The accompanying notes form an integral part of these unaudited
condensed interim financial statements.
Unaudited Condensed Statement of Comprehensive Income
For the six months ended 31 December 2020
Six months ended Six months ended
31 December 2020 31 December 2019
Unaudited Unaudited
Note GBP'000 GBP'000
------------------------------------------------------------------------- ----- ----------------- -----------------
Income
Income from investments 4 362 362
Interest income from cash and cash equivalents - 2
------------------------------------------------------------------------- ----- ----------------- -----------------
362 364
Net gains on financial assets held at fair value through profit or loss 7 13,827 27,987
------------------------------------------------------------------------- ----- ----------------- -----------------
Operating income 14,189 28,351
------------------------------------------------------------------------- ----- ----------------- -----------------
Expenses
Administrative expenses 5 704 673
Operating expenses 704 673
------------------------------------------------------------------------- ----- ----------------- -----------------
Operating profit 13,485 27,678
------------------------------------------------------------------------- ----- ----------------- -----------------
Total comprehensive income
for the period 13,485 27,678
------------------------------------------------------------------------- ----- ----------------- -----------------
Attributable to:
Owners of the Company 13,485 27,678
Earnings per share:
Basic and diluted (pence) 11 3.57 7.48
------------------------------------------------------------------------- ----- ----------------- -----------------
All items within the above statement have been derived from
continuing activities.
The accompanying notes form an integral part of these unaudited
condensed interim financial statements.
Unaudited Condensed Statement of Changes in Equity
For the six months ended 31 December 2020
Number of Retained
Note Ordinary Shares Share capital earnings Total equity
GBP'000 GBP'000 GBP'000
------------------------------------------- ------- ----------------- -------------- ---------- -------------
Shareholders' equity at 1 July 2020 370,499,622 368,712 64,793 433,505
------------------------------------------- ------- ----------------- -------------- ---------- -------------
Shares issued during the period 12 36,500,000 45,260 - 45,260
Share issue costs 12 - (758) - (758)
Dividends paid 12,13 - - (14,820) (14,820)
Total comprehensive income for the period - - 13,485 13,485
Shareholders' equity at 31 December 2020 406,999,622 413,214 63,458 476,672
------------------------------------------- ------- ----------------- -------------- ---------- -------------
For the six months ended 31 December 2019
Number of
Ordinary Share Other Retained
Note Shares capital Reserves earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------- ------------ --------- ---------- ---------- -------------
Shareholders'
equity at 1 July
2019 369,883,530 368,013 699 67,684 436,396
----------------------- ------- ------------ --------- ---------- ---------- -------------
Dividends paid 12,13 - - - (16,681) (16,681)
Ordinary Shares
issued in settlement
of variable fee 14 616,092 699 (699) - -
Total comprehensive
income for the
period - - - 27,678 27,678
Shareholders'
equity at 31
December 2019 370,499,622 368,712 - 78,681 447,393
----------------------- ------- ------------ --------- ---------- ---------- -------------
The accompanying notes form an integral part of these unaudited
condensed interim financial statements.
Unaudited Condensed Statement of Cash Flows
For the six months ended 31 December 2020
Six months ended Six months ended
31 December 2020 31 December 2019
Unaudited Unaudited
Note GBP'000 GBP'000
------------------------------------------------------------------------ ------ ----------------- -----------------
Cash flows from operating activities
Total comprehensive income for the period 13,485 27,678
Adjustments:
(Increase)/decrease in trade and other receivables (364) 361
Decrease in other payables and accrued expenses (64) (27)
Net gains on financial assets held at fair value through profit or loss 7 (13,827) (27,987)
Net cash (used in)/generated from operating activities (770) 25
------------------------------------------------------------------------ ------ ----------------- -----------------
Cash flow from investing activities
Purchase of financial assets held at fair value through profit or loss (44,625) -
Receipts from unconsolidated subsidiary 7 15,470 17,332
Net cash (used in)/generated from investing activities (29,155) 17,332
------------------------------------------------------------------------ ------ ----------------- -----------------
Cash flow from financing activities
Proceeds from issue of Ordinary Shares 12 44,625 -
Issue costs paid 12 (123) -
Dividends paid 12,13 (14,820) (16,681)
Net cash generated from/(used in) financing activities 29,682 (16,681)
------------------------------------------------------------------------ ------ ----------------- -----------------
Net (decrease)/increase in cash and cash equivalents (243) 676
Cash and cash equivalents at the start of the period 747 278
Cash and cash equivalents at the end of the period 9 504 954
------------------------------------------------------------------------ ------ ----------------- -----------------
The accompanying notes form an integral part of these unaudited
condensed interim financial statements.
Notes to the Unaudited Condensed Interim Financial
Statements
For the six months ended 31 December 2020
1. General information
The Company is a non-cellular company limited by shares,
incorporated in Guernsey under the Law on 29 May 2013. The
Company's registration number is 56708, and it is regulated by the
GFSC as a registered closed-ended collective investment scheme.
The investment objective of the Company is to provide
Shareholders with an attractive return, principally in the form of
regular income distributions, by being invested in solar energy
assets located in the UK. It also has the ability to invest a
minority of its capital into wind, hydro and energy storage
assets.
The Company has appointed Bluefield Partners LLP as its
Investment Adviser.
2. Accounting policies
a) Basis of preparation
The financial statements, included in this interim report, have
been prepared in accordance with IAS 34 'Interim Financial
Reporting', as adopted by the EU and the DTR. These financial
statements comprise only the results of the Company as all of its
subsidiaries are measured at fair value as explained in Note 2.c.
The accounts have been prepared on a basis that is consistent with
accounting policies applied in the preparation of the Company's
annual financial statements for the year ended 30 June 2020.
These financial statements have been prepared under the
historical cost convention with the exception of financial assets
held at fair value through profit or loss and in accordance with
the provisions of the DTR.
These financial statements do not include all information and
disclosures required in the annual financial statements and should
be read in conjunction with the Company's audited financial
statements for the year ended 30 June 2020, which were prepared
under full IFRS requirements and the DTRs of the UK FCA.
Seasonal and cyclical variations
Although the bulk of the Company's electricity generation occurs
during the summer months when the days are longer, the Company's
results do not vary significantly during reporting periods as a
result of seasonal activity.
b) Going concern
The Directors in their consideration of going concern, have
reviewed comprehensive cash flow forecasts prepared by the
Investment Adviser, future projects in the pipeline and the
performances of the current solar plants in operation and, at the
time of approving these financial statements, have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for at least 12 months and do not consider
there to be any threat to the going concern status of the
Company.
The current worldwide Coronavirus outbreak (Covid-19), declared
by the World Health Organization as a global health emergency in
March 2020, has caused disruption to businesses and economic
activity. The Board and Investment Adviser have been closely
monitoring this and it has been considered as part of its going
concern assessment. Operationally the Bluefield Group has adjusted
efficiently to the circumstances imposed by the Covid-19 pandemic
and has continued to run as normal, with only slight adjustments to
service.
Included within the power price forecasts used in the Directors'
Valuation is the latest analysis on the impact of Covid-19 and the
impact on electricity demand. Demand is expected to recover faster
than envisaged in previous forecasts, resulting in a small increase
in near-term prices. Despite a recovery in power prices over the
second half of 2020, the year-on-year comparison shows a decrease
of 10.9% between the UK day ahead market base load power price for
the 12 months to 31 December 2019 of GBP41.35 per MWh to GBP36.85
per MWh for the 12 months to 31 December 2020.
The Directors have concluded that it is appropriate to adopt the
going concern basis of accounting in preparing these financial
statements.
c) Accounting for subsidiaries
The Board considers that both the Company and BSIFIL are
investment entities. In accordance with IFRS 10, all subsidiaries
are recognised at fair value through profit and loss.
d) Segmental reporting
IFRS 8 'Operating Segments' requires a 'management approach',
under which segment information is presented on the same basis as
that used for internal reporting purposes.
The Board, as a whole, has been determined as constituting the
chief operating decision maker of the Company. The key measure of
performance used by the Board to assess the Company's performance
and to allocate resources is the total return on the Company's NAV,
as calculated under IFRS, and therefore no reconciliation is
required between the measure of profit or loss used by the Board
and that contained in these financial statements.
For management purposes, the Company is engaged in a single
segment of business, being investment in renewable infrastructure
assets via SPVs, and in one geographical area, the UK.
e) Fair value of subsidiary
The Company holds all of the shares in the subsidiary, BSIFIL,
which is a holding vehicle used to hold the Company's investments.
The Directors believe it is appropriate to value this entity based
on the fair value of its portfolio of SPV investment assets held
plus its other assets and liabilities. The SPV investment assets
held by the subsidiary, inclusive of their intermediary holding
companies, are valued semi-annually as described in Note 7 based on
referencing comparable transactions supported by discounted cash
flow analysis and are referred to as the Directors' Valuation.
3. Critical accounting judgements, estimates and assumptions in
applying the Company's accounting policies
The preparation of these financial statements under IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and other
factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates.
The area involving a high degree of judgement or complexity or
area where assumptions and estimates are significant to the
financial statements has been identified as the valuation of the
portfolio of investments held by BSIFIL (see Note 7).
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future period
if the revision affects both current and future periods.
As disclosed in Note 7, the Board believes it is appropriate for
the Company's portfolio to be benchmarked on a GBPm / MWp basis
against comparable portfolio transactions and on this basis the
weighted average discount rate remains at 6.00% (6.00% in June
2020), which reflects the return hurdles in the market for lowly
levered, subsidised assets.
4. Income from investments
Six months ended Six months ended
31 December 2020 31 December 2019
GBP'000 GBP'000
Monitoring fee in relation to loans supplied 362 362
362 362
================= =================
The Company provides monitoring and loan administration services
to BSIFIL for which an annual fee is charged and is payable in
arrears.
5. Administrative expenses
Six months ended Six months ended
31 December 2020
31 December 2019
GBP'000 GBP'000
Investment advisory base fee (see Note 14) 170 163
Legal and professional fees(1) 109 65
Administration fees 151 154
Directors' remuneration (see Note 14) 114 109
Audit fees 32 47
Non-audit fees 30 17
Broker fees 25 25
Regulatory Fees 27 22
Registrar fees 26 18
Insurance 5 4
Listing fees 10 14
Other expenses 5 35
704 673
================== =================
1. The increase in legal and professional fees for the six
months ended 31 December 2020 was driven by the legal advice sought
by the Company regarding the change of the Company's investment
policy.
6. Net Asset Value per Ordinary Share
The calculation of NAV per Ordinary Share is arrived at by
dividing the total net assets of the Company as at the unaudited
condensed statement of financial position date by the number of
Ordinary Shares of the Company at that date.
7. Financial assets held at fair value through profit or
loss
Six months ended Twelve months ended
31 December 2020 30 June 2020
Total Total
GBP'000 GBP'000
Opening balance (Level 3) 432,426 435,736
Additions 44,625 -
Change in fair value (1,643) (3,310)
Closing balance (Level 3) 475,408 432,426
================= ====================
Investments at fair value through profit or loss comprise the
fair value of the investment portfolio, which is valued
semi-annually by the Directors, and the fair value of BSIFIL, the
Company's single, direct subsidiary being its cash, working capital
and debt balances. A reconciliation of the investment portfolio
value to financial assets at fair value through profit and loss in
the Unaudited Condensed Statement of Financial Position is shown
below.
31 December 2020 30 June 2020
Total Total
GBP'000 GBP'000
Investment portfolio, Directors'
Valuation 608,415 624,269
BSIFIL
Cash 24,249 16,918
Working capital 2,799 4,012
Debt (160,055) (212,773)
----------------- -------------
(133,007) (191,843)
Financial assets at fair value
through profit or loss 475,408 432,426
================= =============
Analysis of net gains on financial assets held at fair value through profit or loss (per unaudited
condensed statement of comprehensive income)
Six months ended Six months ended
31 December 2020 31 December 2019
GBP'000 GBP'000
Unrealised change in fair value of financial assets held at fair value
through profit or loss (1,643) 10,655
Cash receipts from unconsolidated subsidiary* 15,470 17,332
Net gains on financial assets held at fair value through profit and loss 13,827 27,987
================= =================
*Comprising of repayment of loans and Eurobond interest
Fair value measurements
Financial assets and financial liabilities are classified in
their entirety into only one of the following three levels:
-- Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
-- Level 2 - inputs other than quoted prices included within
Level 1 that are observable for the assets or liabilities, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices);
-- Level 3 - inputs for assets or liabilities that are not based
on observable market data (unobservable inputs).
The determination of what constitutes 'observable' requires
significant judgement by the Company. The Company considers
observable data to be market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The only financial instruments carried at fair value are the
investments held by the Company, through BSIFIL, which are fair
valued at each reporting date. The Company's investments have been
classified within Level 3 as BSIFIL's investments are not traded
and are valued using unobservable inputs.
Transfers during the period
There have been no transfers between levels during the six
months period ended 31 December 2020. Any transfers between the
levels will be accounted for on the last day of each financial
period. Due to the nature of investments, these are always expected
to be classified as Level 3.
Directors' Valuation methodology and process
The same valuation methodology and process for operational solar
plants is followed in these financial statements as was applied in
the preparation of the Company's financial statements for the year
ended 30 June 2020. Solar plants under construction and not yet
operational are valued at cost (deemed to approximate fair value)
and exclude acquisition costs which are expensed in the period in
which they are incurred, whilst investments that are operational
are valued on a DCF basis over the life of the asset (typically
more than 25 years) and, under the 'willing buyer-willing seller'
methodology, prudently benchmarked on a GBP/MWp basis against
comparable transactions for large scale portfolios. As at the end
of the period, there was one asset valued at cost, which is deemed
to approximate fair value.
Each investment is subject to full UK corporate taxation at the
prevailing rate with the tax shield being limited to the applicable
capital allowances from the Company's SPV investments.
The key inputs to a DCF based approach are: the equity discount
rate, the cost of debt (influenced by interest rate, gearing level
and length of debt), power price forecasts, long term inflation
rates, irradiation forecasts, operational costs, asset life and
taxation. Given discount rates are a product of not only the
factors listed previously but also regulatory support, perceived
sector risk and competitive tensions, it is not unusual for
discount rates to change over time. Evidence of this is shown by
way of the revisions to the original discount rates applied between
the first UK solar investments and those witnessed in recent
years.
Given the fact discount rates are subjective, there is
sensitivity within these to the interpretation of factors outlined
above.
Judgement is used by the Board in determining the weighted
average discount rate of 6.00% (6.00% as at 30 June 2020), with
three key factors that have impacted the adoption of this rate
outlined below:
a. Transaction values have remained consistent at c.GBP1.20
-1.40/MWp for large scale portfolios and which the Board have used
to determine that an effective price of GBP1.28/MWp is an
appropriate basis for the valuation of the BSIF portfolio as at 31
December 2020.
b. Inclusion of the latest long term power forecasts from the
Company's three providers.
c. Inclusion of a prudent uplift with respect to asset
extensions of 15 years on a subset (306 MWp) of the portfolio.
The debt assumptions within the valuation reflect all
third-party loans within the Group's capital structure as at the
valuation date. Interest rates and repayment profiles are matched
to the terms of each loan. In the case of any short-term financing,
conservative assumptions are applied with respect to interest rates
and repayment profiles post maturity. As at 31 December 2020, the
Group's short term debt consisted of a GBP110m term loan with
NatWest, maturing in September 2023, and the conversion assumption
within the valuation is aligned to the percentage of the loan that
has been hedged (being 75% with 18-year swaps at a rate of 0.31%
until 2038). The interest rate applied to the converted balance
(being GBP82.5m) is 3.0%. In addition, the Company has a small
project finance loan of GBP10.3m, provided by BayernLB and fully
amortising until maturity in 2029, secured against Durrants, a 5
MWp FiT plant located on the Isle of Wight.
In order to smooth the sensitivity of the valuation to forecast
timing or the opinion taken by a single forecast, the Board
continues to adopt the application of a blended power curve from
three leading forecasters.
The fair value of operational SPVs is calculated on a discounted
cash flow basis in accordance with the IPEV Valuation Guidelines.
The Investment Adviser produces fair value calculations on a
semi-annual basis as at 30 June and 31 December each year.
Sensitivity analysis
The table below analyses the sensitivity of the fair value of
the Directors' Valuation to an individual input, while all other
variables remain constant.
The Board considers the changes in inputs to be within a
reasonable expected range based on its understanding of market
transactions. This is not intended to imply that the likelihood of
change or that possible changes in value would be restricted to
this range.
Change in fair value Change in NAV
of the Directors' Valuation per share
Input Change in input (GBP'M) (pence)
------------------------------------- ---------------- ----------------------------- --------------
Discount Rate (6.00%) +0.5% (16.0) (3.93)
-0.5% 17.1 4.20
------------------------------------- ---------------- ----------------------------- --------------
Power prices +10% 35.8 8.80
(blended curve parallel shift) -10% (36.7) (9.02)
------------------------------------- ---------------- ----------------------------- --------------
Inflation rate (2.75%) + 0.25% 11.7 2.87
- 0.25% (11.6) (2.85)
------------------------------------- ---------------- ----------------------------- --------------
Energy yield (P50) 10 year P90 (60.8) (14.94)
10 year P10 60.1 14.77
------------------------------------- ---------------- ----------------------------- --------------
Interest shield (15.00%) +50% 3.7 0.91
-50% (22.4) (5.50)
------------------------------------- ---------------- ----------------------------- --------------
Operational costs +10% (7.2) (1.77)
-10% 7.2 1.77
------------------------------------- ---------------- ----------------------------- --------------
Asset Life +5 Years 18.7 4.59
( weighted average life 27.1 years) - 5 Years (31.0) (7.62)
------------------------------------- ---------------- ----------------------------- --------------
8. Trade and other receivables
31 December 2020 30 June 2020
GBP'000 GBP'000
Current assets
Monitoring fees receivable (see Note 4) 1,087 725
Other receivables 6 12
Prepayments 39 31
1,132 768
================= =============
There are no other material past due or impaired receivable
balances outstanding at the period end.
The Board considers that the carrying amount of all receivables
approximates to their fair value.
9. Cash and cash equivalents
Cash and cash equivalents comprises cash held by the Company and
short term bank deposits held with maturities of up to three
months. The carrying amounts of these assets approximate their fair
value.
10. Other payables and accrued expenses
31 December 2020 30 June 2020
GBP'000 GBP'000
Current liabilities
Investment advisory fees 83 78
Administration fees 74 74
Audit fees 42 135
Directors' Fees (see Note 14) 60 57
Other payables 113 92
372 436
================= =============
The Company has financial risk management policies in place to
ensure that all payables are paid within the agreed credit period.
The Board considers that the carrying amount of all payables
approximates to their fair value.
11. Earnings per share
Six months ended Six months ended
31 December 2020 31 December 2019
Profit attributable to Shareholders of the Company GBP13,485,183 GBP27,677,999
Weighted average number of Ordinary Shares in issue 377,839,296 369,910,317
Basic and diluted earnings from continuing operations and profit for the period
(pence per
share) 3.57 7.48
----------------- -----------------
12. Share capital
The authorised share capital of the Company is represented by an
unlimited number of Ordinary Shares of no par value which, upon
issue, the Directors may designate into such classes and denominate
in such currencies as they may determine.
Six months ended Year ended
Share capital 31 December 2020 30 June 2020
Number of Number of
Ordinary Shares Ordinary Shares
Opening balance 370,499,622 369,883,530
Shares issued for cash 36,500,000 -
Shares issued in respect of variable fee - 616,092
Closing balance 406,999,622 370,499,622
================== =================
Six months ended Year ended
Shareholders' equity 31 December 2020 30 June 2020
GBP'000 GBP'000
Opening balance 433,505 436,396
Ordinary Shares issued for cash 45,260 -
Ordinary Shares issued in settlement of variable fee - 699
Ordinary Shares to be issued in settlement of variable fee - (699)
Share issue costs (758) -
Dividends paid (14,820) (31,131)
Total comprehensive income 13,485 28,240
Closing balance 476,672 433,505
================== ==============
Dividends declared and paid in the period are disclosed in Note
13.
Shares issued during the period
On 24 November 2020, the Company issued 36,500,000 new Ordinary
Shares following a placing. These Shares were issued at a price of
GBP1.24 per Ordinary Share, raising gross proceeds of
GBP45,260,000.
Rights attaching to shares
The Company has a single class of Ordinary Shares which are
entitled to dividends declared by the Company. At any General
Meeting of the Company each ordinary Shareholder is entitled to
have one vote for each share held. The Ordinary Shares also have
the right to receive all income attributable to those shares and
participate in dividends made and such income shall be divided pari
passu among the holders of Ordinary Shares in proportion to the
number of Ordinary Shares held by them.
Retained earnings
Retained earnings comprise of accumulated retained earnings as
detailed in the statement of changes in equity.
13. Dividends
On 24 July 2020, the Board declared a third interim dividend of
GBP7,224,743, in respect of the year ended 30 June 2020 , equating
to 1.95pps (third interim dividend in respect of the year ended 30
June 2019: 1.90pps), which was paid on 21 August 2020 to
Shareholders on the register on 7 August 2020.
On 22 September 2020, the Board declared a fourth interim
dividend of GBP7,595,242, in respect of the year ended 30 June
2020, equating to 2.05pps (fourth interim dividend in respect of
the year ended 30 June 2019: 2.03pps), which will be paid on or
around 28 October 2020 to Shareholders on the register on 2 October
2020.
Post period end, on 22 January 2021, the Board declared its
first interim dividend of GBP8,139,992, in respect of year ending
30 June 2021, equating to 2.00pps (first interim dividend in
respect of the year ended 30 June 2020: 1.95pps), which will be
paid on 1 March 2021 to Shareholders on the register on 5 February
2021.
14. Related Party Transactions and Directors' Remuneration
In the opinion of the Directors, the Company has no immediate or
ultimate controlling party.
The total Directors' fees expense for the period amounted to
GBP113,250 (31 December 2019: GBP108,750) of which GBP59,750 was
outstanding at 31 December 2020 (30 June 2020: GBP57,375).
Remuneration paid to each Director is as follows:
31 December 2020 31 December 2019
GBP'000 GBP'000
John Rennocks 31 30
Paul Le Page 23 22
Laurence McNairn 20 19
Meriel Lenfestey 20 19
John Scott 20 19
----------------- -----------------
114 109
================= =================
The number of Ordinary Shares held by each Director is as
follows:
31 December 2020 31 December 2019
John Rennocks* 316,011 316,011
John Scott 512,436 512,436
Laurence McNairn 441,764 441,764
Meriel Lenfestey - -
Paul Le Page 35,000 70,000
1,305,211 1,340,211
================= =================
*Includes shares held by PCAs.
John Scott and John Rennocks are Directors of BSIFIL. Neil Wood
and James Armstrong, who are partners of the Investment Adviser,
are also Directors of BSIFIL.
Fees paid during the period by SPVs to BSL, a company which has
the same ownership as that of the Investment Adviser totalled
GBP1,288,761 (31 December 2019: GBP1,111,437).
Fees paid during the period by SPVs to BOL, a company which has
the same ownership as that of the Investment Adviser totalled
GBP1,544,107 (31 December 2019: GBP1,403,087).
Shareholders also approved revisions to the Investment Adviser's
base fee and removal of the Adviser's variable fee which apply from
1 July 2020 onwards. The base fee is payable quarterly in arrears
in cash, at a rate equivalent to 0.8% per annum of the NAV up to
and including GBP750,000,000, 0.75% per annum of the NAV above
GBP750,000,000 and up to and including GBP1,000,000,000 and 0.65%
per annum of the NAV above GBP1,000,000,000. The base fee will be
calculated on the NAV reported in the most recent quarterly NAV
calculation as at the date of payment.
The Company and BSIFIL's investment advisory fees for the period
amounted to GBP1,894,986 (31 December 2019: GBP1,678,266) of which
GBP82,774 (30 June 2020: GBP255,331) was outstanding at the period
end and is to be settled in cash. Included within the investment
advisory fee expense for 2019 is GBP699,080 in respect of
performance fees for the year ended 30 June 2019. The Investment
Adviser received the variable element of its 2019 fees through the
issue 0f 616,092 Ordinary Shares on 23 December 2019 (See Note
13).
The Company's loan monitoring fee income for the period, due
from its subsidiary BSIFIL, amounted to GBP362,500 (31 December
2019: GBP362,500) of which GBP1,087,500 was outstanding at the
period end (30 June 2020: GBP 725,000).
15. Risk Management Policies and Procedures
As at 31 December 2020 there has been no change to financial
instruments risk to those described in the financial statements of
30 June 2020.
16. Subsequent events
Post period end, on 8 January 2021, the Company completed the
acquisition of Bradenstoke Solar Park Limited, an operational 70MWp
solar plant for a total cash consideration of GBP89m. The Company
will receive the economic benefit of all cash flows from the plant
from 1 April 2020.
On 22 January 2021, the Board declared its first interim
dividend of GBP8,139,992, in respect of year ending 30 June 2021,
equating to 2.00pps (first interim dividend in respect of the year
ended 30 June 2020: 1.95pps), which will be paid on 1 March 2021 to
Shareholders on the register on 5 February 2021.
Glossary of Defined Terms
Administrator means Ocorian Administration (Guernsey)
Limited
AGM means the Annual General Meeting
AIC means the Association of Investment Companies
AIC Code means the Association of Investment Companies Code of
Corporate Governance
AIF means Alternative Investment Fund
AIFM means Alternative Investment Fund Manager
AIFMD means the Alternative Investment Fund Management
Directive
Articles means the Memorandum of 29 May 2013 as amended and the
Articles of Incorporation as adopted by special resolution on 7
November 2016.
Auditor means KPMG Channel Islands Limited (see KPMG)
Aviva Investors means Aviva Investors Limited
BEIS means the Department for Business, Energy & Industrial
Strategy
BEPS means Base erosion and profit shifting
Bluefield means Bluefield Partners LLP
Bluefield Group means Bluefield Partners LLP and Bluefield
Companies
BOL means Bluefield Operations Limited
Board means the Directors of the Company
Brexit means departure of the UK from the EU
BSIF means Bluefield Solar Income Fund Limited
BSIFIL means Bluefield SIF Investments Limited being the only
direct subsidiary of the Company
BSL means Bluefield Asset Management Services Limited
BSUoS means Balancing Services Use of System charges: costs set
to ensure that network companies can recover their allowed revenue
under Ofgem price controls
Business days means every official working day of the week,
generally Monday to Friday excluding public holidays
CAGR means compound annual growth rate
Calculation Time means the Calculation Time as set out in the
Articles of Incorporation
CCC means Committee on Climate Change
CfD means Contract for Difference
Company means Bluefield Solar Income Fund Limited (see BSIF)
Companies Law means the Companies (Guernsey) Law 2008, as
amended (see Law)
Cost of debt means the blended cost of debt reflecting fixed and
index-linked elements
C Shares means Ordinary Shares approved for issue at no par
value in the Company
CSR means Corporate Social Responsibility
DCF means Discounted Cash Flow
DECC means the Department of Energy and Climate Change
Defect Risk means that there is an over-reliance on limited
equipment manufacturers which could lead to large proportions of
the portfolio suffering similar defects
Directors' Valuation means the gross value of the SPV
investments held by BSIFIL, including their holding companies
DNO means Distribution Network Operator
DSCR means Long Term Debt Service Cover Ratio calculated as net
operating income as a multiple of debt obligations due within one
year
DTR means the Disclosure Guidance and Transparency Rules of the
UK's Financial Conduct Authority
EBITDA means earnings before interest, tax, depreciation and
amortisation
EGM means Extraordinary General Meeting
EIS means Enterprise Investment Scheme
EPC means Engineering, Procurement & Construction
ESG means Environmental, Social and Governance
EU means the European Union
EV means enterprise valuation
FAC means Final Acceptance Certificate
FATCA means the Foreign Account Tax Compliance Act
Financial Statements means the unaudited condensed interim
financial statements
FiT means Feed-in Tariff
GAV means Gross Asset Value on Investment Basis including debt
held at SPV level
GDPR means General Data Protection Regulation
GFSC means the Guernsey Financial Services Commission
Group means Bluefield Solar Income Fund Limited and Bluefield
SIF Investments Limited
Guernsey Code means the Guernsey Financial Services Commission
Finance Sector Code of Corporate Governance
GWh means Gigawatt hour
GWp means Gigawatt peak
IAS means International Accounting Standard
IASB means the International Accounting Standards Board
IFRS means International Financial Reporting Standards as
adopted by the EU
Investment Adviser means Bluefield Partners LLP
IPEV Valuation Guidelines means the International Private Equity
and Venture Capital Valuation Guidelines
IPO means initial public offering
IRR means Internal Rate of Return
KPI means Key Performance Indicators
KPMG means KPMG Channel Islands Limited (see Auditor)
KWh means Kilowatt hour
KWp means Kilowatt peak
Law means Companies (Guernsey) Law, 2008 as amended (see
Companies Law)
LCOE means Levelised Cost of Electricity: average unit cost of
electricity over the lifetime of a generating asset expressed on a
net present cost basis
LD means liquidated damages
LIBOR means London Interbank Offered Rate
Listing Rules means the set of FCA rules which must be followed
by all companies listed in the UK
LSE means London Stock Exchange plc
LTF agreement means Long Term Financing agreement with Aviva
Investors
Main Market means the main securities market of the London Stock
Exchange
Mutualisation Rebate means the additional payments made when a
shortfall occurs if a supplier is unable to meet its obligation
under the RO Buy-Out Scheme
MW means Megawatt (a unit of power equal to one million
watts)
MWh means Megawatt hour
MWp means Megawatt peak
NAV means Net Asset Value as defined in the prospectus
NMPI means Non-mainstream Pooled Investments and Special Purpose
Vehicles and the rules around their financial promotion
NPPR means the AIFMD National Private Placement Regime
O&M means Operation and Maintenance
Official List means the Premium Segment of the UK Listing
Authority's Official List
Ofgem means Office of Gas and Electricity Markets
Ordinary Shares means the issued ordinary share capital of the
Company, of which there is only one class
Outage Risk means that a higher proportion of large capacity
assets hold increased exposure to material losses due to
curtailments and periods of outage
P10 means Irradiation estimate exceeded with 10% probability
P90 means Irradiation estimate exceeded with 90% probability
PCA means Persons Closely Associated
PPA means Power Purchase Agreement
pps means pence per share
PR means Performance Ratio (the ratio of the actual and
theoretically possible energy outputs)
PV means Photovoltaic
RBS means The Royal Bank of Scotland plc
RBSI means Royal Bank of Scotland International plc
RCF means Revolving Credit Facility
RO Scheme means the Renewable Obligation Scheme which is the
financial mechanism by which the UK Government incentivises the
deployment of large-scale renewable electricity generation by
placing a mandatory requirement on licensed UK electricity
suppliers to source a specified and annually increasing proportion
of electricity they supply to customers from eligible renewable
sources or pay a penalty
ROC means Renewable Obligation Certificates
ROC recycle means the payment received by generators from the
redistribution of the buy-out fund. Payments are made into the
buy-out fund when suppliers do not have sufficient ROCs to cover
their obligation
RPI means the Retail Price Index
SDG means the United Nations Sustainable Development Goals
SPA means Share Purchase Agreement
SPV means a Special Purpose Vehicle which hold the Company's
investment portfolio of underlying operating assets
Sterling means the Great British pound currency
TISE means The International Stock Exchange (based in the
Channel Islands)
UK means the United Kingdom of Great Britain and Northern
Ireland
UK Code means the UK Corporate Governance Code
UK FCA means the UK Financial Conduct Authority
United Nations Principles for Responsible Investment means an
approach to investing that aims to incorporate environmental,
social and governance factors into investment decisions, to better
manage risk and generate sustainable, long term returns.
Alternative Performance Measures (Unaudited)
APM Definition Purpose Calculation
Total return The percentage A key measure The quotient of
increase/(decrease) of the success the NAV per share
in NAV, inclusive of the Investment at the end of the
of dividends paid, Adviser's investment period (117.12p)
in the reporting strategy. and the NAV per
period. share at the beginning
of the period (117.01p),
plus any dividends
paid, minus one
expressed as a percentage.
------------------------ -------------------------- ----------------------------
Shareholder The percentage A measure of the The quotient of
Total return increase/(decrease) return that could the price per share
in share price, have been obtained at the end of the
inclusive of dividends by holding a share period (130.0p)
paid, in the reporting over the reporting and the price per
period. period. share at the beginning
of the period (134.5p),
plus any dividends
paid, minus one
expressed as a percentage.
The measure excludes
transaction costs.
------------------------ -------------------------- ----------------------------
Underlying Total net income A measure to link Total income of
Earnings of the Company's the underlying the Company's portfolio
investment portfolio. financial performance minus Group operating
of the operational costs minus Group
projects to the debt costs.
dividends declared
and paid by the
Company.
------------------------ -------------------------- ----------------------------
NAV per The Company's A measure of the The net assets attributable
Ordinary closing share value of one Ordinary to Ordinary Shares
Share price on the London Share. on the Statement
Stock Exchange of Financial Position
for a specified (GBP476.7m) divided
date. by the number of
Ordinary Shares
in issue (406,999,622)
as at the calculation
date.
------------------------ -------------------------- ----------------------------
Sale of The total proportion A measure to understand The amount of revenue
Electricity of revenue generated the proportion attributable to
by the Company's of revenue attributable electricity sales
portfolio that to sales of electricity. divided by the total
is attributable revenue generated
to electricity by the Company's
sales. portfolio, expressed
as a percentage.
------------------------ -------------------------- ----------------------------
Total Revenue Total net income A measure to outline Total income of
of the Company's the Total revenue the Company's portfolio
investment portfolio. of the portfolio owned for a full
on per MWp basis. 12 months.
------------------------ -------------------------- ----------------------------
PPA Revenue Revenue generated A measure to outline Total revenue from
through PPAs. the revenue earned all power price
by the portfolio sales during the
from power sales. period from the
Company's portfolio.
------------------------ -------------------------- ----------------------------
Regulated Revenue generated A measure to outline Total revenue from
Revenue from the sale the revenue earned all subsidy income
of FiTs and ROCs. by the portfolio earned during the
from government period from the
subsidies. Company's portfolio.
------------------------ -------------------------- ----------------------------
Ongoing The recurring A measure of the Calculated in accordance
charges costs that the minimum gross with the AIC methodology
ratio Company and BSIFIL profit that the detailed in the
has incurred during Company needs table below.
the period excluding to produce to
performance fees make a positive
and one off legal return for Shareholders.
and professional
fees expressed
as a percentage
of the Company's
average NAV for
the period.
------------------------ -------------------------- ----------------------------
Weighted A relative indicator A measure of the Total Regulated
Average of the regulatory Company's portfolio Revenue received
ROC revenues within earnings as a by the portfolio
a renewable portfolio. proportion of divided by the product
its assets. of the current market
value of a ROC and
the annual generation
capacity of the
portfolio.
------------------------ -------------------------- ----------------------------
Weighted The average operational A measure of the The sum of the product
Average life of the Company's Company's progress of each plant's
Life portfolio. in extending the operational capacity
life of its portfolio in MWp and the plant's
beyond the end expected life divided
of the subsidy by the total portfolio
regime in 2036. capacity in MWp.
------------------------ -------------------------- ----------------------------
Directors' The gross value An estimate of A reconciliation
Valuation of the SPV Investments the sum that would of the Directors'
held by BSIFIL, be realised if Valuation to financial
including their the Company's assets at fair value
holding companies portfolio was through profit and
minus project sold on a willing loss is shown in
level debt. buyer, willing Note 7 of the financial
seller basis. statements.
------------------------ -------------------------- ----------------------------
Gross Asset The Market Value A measure of the The total assets
Value of all Assets total value of attributable to
within the Company. the Company's Ordinary Shares
Assets. on the Statement
of Financial Position.
------------------------ -------------------------- ----------------------------
Total Outstanding The total outstanding A measure that The sum of the Sterling
Debt balances of all is used to establish equivalent values
debt held within the Company's of all loans held
the Company and level of gearing. within the Company.
its subsidiaries.
------------------------ -------------------------- ----------------------------
Ongoing Charges Period to 31 December 2020
The Company BSIFIL Total
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- -------------
Fees to Investment
Adviser 170 1,725 1,895
Legal and professional
fees 139 56 195
Administration fees 151 - 151
Directors' remuneration 114 6 120
Audit fees 32 22 54
Other ongoing expenses 98 1,285 1,383
Total expenses 704 3,094 3,798
------------- ------------- -------------
Non-recurring expenses (37) (1,066) (1,103)
Total ongoing expenses 667 2,028 2,695
------------- ------------- -------------
Average NAV 444,838
Annualised Ongoing Charges (using AIC methodology) 1.21%
-------------
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March 02, 2021 02:00 ET (07:00 GMT)
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