Resetting the dividend

Estimated dividend for FY27 is 4.0p–4.6p

This year’s dividend target of 8.43p will be met. Going forward, the dividend would be set at 75% of operating free cashflows, post debt servicing and portfolio and fund operating expenses.

The estimated dividend range for the financial year ended 31 March 2027 is 4.0p-4.6p.

Reducing the dividend would free up an estimated £40m over the next five years.

On the current share price, the lower dividend translates into a yield for FY27 of between 8.3% and 9.6%.

Helpfully, NESF has set out – in the form of the chart in Figure 1 – some guidance around how the dividend might evolve as the company pursues its new objective. The dividend would likely fluctuate rather than grow every year, but the indication is that there is a good chance it would grow from the indicated level for FY27.

As shareholders should already be aware, without making new investments, the company’s cash flows and dividend paying ability would decline as subsidies roll off and assets reach the end of their lives. This is already modelled within NESF’s NAV calculation.

However, Figure 2 demonstrates there is a chance that the dividend can be maintained if a proportion of operational cash flows are reinvested. The chart is based on what could happen to the dividend if 25% of operational cashflows are reinvested back into the portfolio post subsidy end. The scenario is described as conservative.

Figure 1: Indicative long-term ordinary share dividend guidance

Figure 2: Possible long-term ordinary share dividend path post ROC / FiT subsidy end

Conclusion of the capital recycling programme

£119m freed up by capital recycling programme

On 10 March 2026, NESF announced that it had sold the two remaining solar plants that had been identified for sale under its capital recycling programme. The sale of The Grange and South Lowfield raises £46.2m, which will be applied to reducing the balance on NESF’s revolving credit facility, which was £151.9m at the end of December. The sale price came in marginally below the carrying value in the NAV, reducing it by 0.32p. However, overall, the programme freed up £119m, crystalised a 1.1x multiple on invested capital, and added 2.44p to the NAV.

In his remarks, NextEnergy Capital’s investment director Stephen Rossiter observed that there is “renewed momentum in the solar M&A market as we move into 2026”.

New capital recycling targets

Further asset sales planned

The board has plans for up to further 120MW of additional asset sales. The realisations of NESF’s $50m investment in NextEnergy III and two co-investments (from 2027 onwards) – about 116MW in total – will free up additional capital.

A stronger balance sheet

The board believes that the lower dividend and ongoing asset sales can both help fund new investments and bring NESF’s loan-to-value ratio (LTV) to within a 40%-45% range, well inside its 50% investment policy limit.

At the end of December 2025, NESF had total debt of £509.1m, equivalent to LTV of 51%. £200m of that was in relation to its preference shares. The preference shares pay a preferred dividend of 4.75% p.a. until March 2036, after which they have the right to convert, based on 100p per preference share and the NAV per ordinary share at the time of conversion, into new ordinary shares or a new class of unlisted B shares with dividend and capital rights ranking pari passu with the ordinary shares. The preference shares are redeemable at the option of the company at any time after 1 April 2030, in full or in part.

£143.7m of NESF’s long-term debt is amortising and will be repaid in line with the remaining life of the portfolio’s subsidised assets.

The balance relates to NESF’s revolving credit facility (RCF). NESF renewed this £205m facility in March 2025, securing finance at 120bps over SONIA. This is set to mature in June 2026, but NESF has options to extend it up to June 2028.

Significant new investment opportunities

In the face of growing demand for power, the UK government has ambitions to triple the UK’s operational solar capacity to 50GW and quadruple the amount of installed battery storage to 27GW by 2030. Solar has the advantage of being the cheapest form of renewable energy (even here in the UK). It would also help increase our energy security and better insulate us from spikes in fossil fuel prices such as those being currently experienced as a consequence of the Iranian war.

For investors, the availability of predictable, inflation-linked, 20-year revenue streams provided under the government’s new contract for difference (CfD) contracts should help attract private funding.

NextEnergy Capital believes that NESF ought to be playing its part in channelling investors’ capital into this opportunity. It can leverage Starlight, the investment adviser’s development arm, and the considerable resources of Wise Energy, the world’s largest solar-focused asset manager to help it achieve its goals.

Energy storage targeted to rise to 30% of the portfolio

However, given NESF’s inability to raise fresh capital, this morning’s statement identifies more modest goals of improving the health of NESF’s portfolio by repowering existing solar assets with new technology to enhance energy yields and the installation of co-located energy storage. The overall exposure to energy storage is targeted to rise to 30% of the portfolio (this will need shareholder approval, which will be sought at the upcoming AGM).

Co-located storage can optimise generation to align with demand

The board observes that co-located storage can optimise generation to align with demand, unlock additional revenue streams, and materially strengthen project economics by maximising the value of existing grid connections (a lack of grid connectivity is a significant constraint on delivering the government’s clean energy ambitions). NESF says investments in two-hour duration storage can generate IRRs of 10%-13%.

Figure 3: The future of NESF’s portfolio

Figure 3 is designed to give an indication of the potential evolution of NESF’s portfolio. The darker orange boxes represent operational solar assets that can be retained and enhanced, the lighter orange represents the potential to add new-build solar assets, and the dark green boxes are the NextEnergy III and co-investment assets that will be realised. The light green box outlined in orange dashes are the assets that will go into the new recycling programme. There is a chance that this will be expanded over time to encompass the rest of the light green assets. The existing Camilla battery storage asset is in blue, and the dark blue box represents potential new energy storage assets.

A brief history

In April 2023, NESF announced a capital recycling programme, with plans to sell a portfolio of subsidy-free assets comprised of five solar plants – Hatherden (which was still at the ready- to-build stage at the time of disposal), Whitecross, Staughton, The Grange, and South Lowfield. The sale of Hatherden for £15.2m was announced in November 2023, Whitecross was sold in June 2024 for £27.0m, and Staughton in November 2024 for £30m.

In May 2025, the board announced that the dividend target for the financial year ended 31 March 2026 would be maintained at 8.43p, and that it expected this to be covered 1.1x-1.3x by earnings post-debt amortisation. The latest quarterly update from NESF reconfirmed this dividend cover forecast.

Fee cut boosts the dividend cover

In June 2025, the annual results statement included a statement that “NESF continues to explore multiple strategic options for the future”. A couple of days later, the company announced that NESF had negotiated a reduction in management fees, which would now be based 50% on NAV and 50% on market cap (down from 100% on NAV). The estimate at the time was this would save the company about £0.6m per annum, boosting the dividend cover.

At the AGM in August 2025, 12% of the shares that were voted, equivalent to 7% of NESF’s shares in issue, voted in favour of discontinuation.

In November 2025, the UK government launched a consultation on changes to the indexation of subsidies (ROCs and FiTs) and then ignored the feedback it received, opting to impose a switch to using CPI with effect from April 2026. This took 2p off NESF’s NAV.

Covenant restricts buybacks

In December 2025, the interim results announcement highlighted the enterprise value covenant ratio that is part of the USS preference share subscription agreement had been breached. The requirement is that this does not exceed 50% (at 31 December 2025, it was 60.1%). This means that USS’s approval or waiver is needed before NESF can buy back shares, distribute special dividends, or take on additional debt.

No shares have been repurchased since the end of April 2025. The issued share capital had been reduced by about 15m shares from end March 2023 until then.

In February 2026, NESF announced that its end December 2025 NAV was 84.9p (this is before the 2p impact of the indexation change referred to above). This represents a 31% decline from its peak at end September 2022. Various factors have been at work here, including a rise in the weighted average discount rate used to forecast NESF’s future cash flows from 6.8% to 8.0%.

Figure 4: UK power prices (£/MWh)

However, chief of these factors has been falls in power prices. In September 2022, NESF was using £139.1/MWh as its estimate of short-term power prices (between 2022 and 2026). That is the equivalent of £156.8/MWh in today’s money (using CPI). However, in its September 2025 NAV calculation, the estimate of short-term power prices (out to 2029) had fallen to £60.7/MWh.

A significant influence on UK power prices is the price of natural gas. That peaked in August 2022 and at the end of September 2022 it was about 350p/therm. At the end of September 2025, it was closer to 80p/therm. Today, following the outbreak of war with Iran, it is about 125p/therm. If the disruption to gas supplies persists, power prices could be set to climb once again.

Important Information

This marketing communication has been prepared for NextEnergy Solar Fund Limited by Marten & Co (which is authorised and regulated by the Financial Conduct Authority) and is non-independent research as defined under Article 36 of the Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing the Markets in Financial Instruments Directive (MIFID). It is intended for use by investment professionals as defined in article 19 (5) of the Financial Services Act 2000 (Financial Promotion) Order 2005. Marten & Co is not authorised to give advice to retail clients and, if you are not a professional investor, or in any other way are prohibited or restricted from receiving this information, you should disregard it. The note does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

I’ve bought back the position in TFIF 9082 shares for 10k.

If the oil price stays higher for longer, it will have to be sold, most probably at a loss, until then

The next dividend income due at the end of this month is £348.00 and the final dividend under the old dividend policy, will be £478.00.

The SNOWBALL will bank both these dividends and then look again to see if the management have made any progress in the roadmap printed above.

NextEnergy Solar Fund Announces Strategic Reset to Target Higher Total Returns

Fiona Craig

NextEnergy Solar Fund Limited (LSE:NESF) has completed a strategic review and introduced a “strategic reset” designed to shift its focus from primarily delivering income to generating a balanced total-return profile. Under the revised approach, the fund is targeting long-term annual returns of 9%–11%.

A key change involves moving away from a progressive dividend policy. Instead, the fund will distribute 75% of operating free cash flow, a structure expected to release roughly £40m over the next five years. Management plans to use this capital to reduce debt, repower existing solar assets and invest in higher-return opportunities. The dividend for the 2026/27 financial year is projected at between 4.0p and 4.6p per share, representing an estimated yield of around 7%–8% at current share prices.

Alongside the revised payout model, the company intends to lower leverage to a target range of 40%–45% of gross asset value. It also plans to expand its asset recycling programme by selling up to 120MW of capacity and capturing additional realisations equivalent to 116MW starting from 2027. These measures are aimed at supporting renewed growth in net asset value.

Operational improvements will include upgrading existing solar facilities and integrating co-located battery storage. Management expects energy storage exposure to rise to as much as 30% of gross assets over time. The board believes the strategic reset will help narrow the persistent discount to net asset value seen across listed renewable energy funds, strengthen the balance sheet and position the portfolio to benefit from rising demand for clean power aligned with the UK’s long-term energy transition goals.

Despite these initiatives, the company’s outlook remains affected by recent financial pressures. Revenue has declined sharply and the business has recorded net losses in each of the past two years, while technical indicators suggest weak share price momentum. These challenges are partly balanced by strong operating cash flow, a debt-free position reported in 2025 and a relatively high dividend yield.

More about NextEnergy Solar Fund

NextEnergy Solar Fund Limited is a specialist infrastructure investor focused on utility-scale solar power generation and energy storage. Its portfolio includes 99 operational solar sites, primarily located in the UK, as well as a $50m commitment to private solar infrastructure. The fund seeks to deliver stable, inflation-linked cash flows through a mix of subsidised and merchant electricity sales while expanding into co-located and standalone battery storage as part of the UK’s accelerating transition to clean energy.

This article was written by the editorial team at InvestorsHub/ADVFN and is provided for informational purposes only.

As there is cash sitting waiting to be re-invested, I’ve bought 6177 shares in NESF for 3k. As the yield is will no longer be an outlier there may be some buyers for the discount.

The SNOWBALL will lose around £500 of income when NESF cut their dividend.

The yield will still be above 7% so can still contribute to the current plan.

This income will have to be replaced so It’s unlikely the intended/hopeful purchase of some Dividend Hero’s will complete.

Dividend Policy Change:

·    Following the completion of this year’s target dividend of 8.43p, the Company will transition from a progressive dividend policy to a percentage‑based dividend policy, targeting a 75% distribution of operating free cashflows, post debt servicing and portfolio and fund operating expenses. The new dividend policy is expected to free up approximately £40m of operational free cash flows over the next five years, unlocking capital for the Company to strengthen its balance sheet through additional debt repayments while also supporting future Net Asset Value growth opportunities. Following the sale of the final phase, the current capital recycling programme, during which 100MW of operational assets were successfully sold, and also reflecting the impact of lower power prices, the estimated dividend range for FY26/27 would be 4.0p to 4.6p per Ordinary Share, which is the equivalent to a c.7% to c.8% dividend yield as at 10 March 2026.

·     Cashflows that are not distributed to shareholders will be used to accelerate debt reduction and redeploy capital into higher‑yielding opportunities such as repowering and co‑located energy storage to support long-term growth.

·    The Company is on track to meet its current full-year target dividend of 8.43p per Ordinary Share for the financial year ending 31 March 2026.

I’ve bought for the SNOWBALL a further 5893 shares in TRIG for 4k filling to a full position.

Not buy advice, the trade only for the dividend.

I’ve bought for the SNOWBALL 20711 shares in SDCL Efficiency Income for 10k, mainly for the dividend and as a possible future pair trade for the SNOWBALL

We consider the outlook for energy, diversifers such as gold, inflation and valuations.

9th March 2026

by Dave Baxter from interactive investor

Escalating conflict in the Middle East comes with a huge humanitarian cost but it also, unavoidably, raises big questions for markets.  

And while we might feel reluctant to trade too much in response to such an event, it’s at least worth understanding how it can affect your portfolio, now and in future. 

US and Israeli forces first launched air strikes in Iran on 28 February and we’ve seen some massive gyrations in markets since then. The potential knock-on effects for portfolios deserve consideration. 

Back to the energy mix 

The most eye-catching move so far has been for the oil price, which has soared amid concerns of disruption to supply. The price of Brent Crude oil surged as high as $119 a barrel in early trading today, marking its highest level since 2022. Ahead of the air strikes, it was trading at just below $70 a barrel. 

This has a few effects. It is, of course, good for conventional energy funds. Performance data from 28 February to 6 March 2026 shows the

 iShares Oil & Gas Explr&Prod ETF USD Acc GBP  SPOG

having returned around 5%, with 

Guinness Global Energy Y GBP Acc on 3.7%. 

It also offers a sliver of hope for beaten-up renewable energy funds, such as ii investor favourite Greencoat UK Wind  UKW

A higher energy price, and a fresh focus on investing in renewables to secure energy independence for the likes of UK, could drive better sentiment (and returns) for the sector. 

Inflation and rates 

But if it lasts, a higher oil price becomes a problem if it feeds into higher inflation. 

I should note that some specialists have so far dismissed this as a major worry. But if things worsen we could find that further interest rates cuts are off the table for now – something that hurts the prospects for bonds, but also potentially for equity funds with a growth investment style.  

Managers on funds such as Scottish Mortgage Ord  SMT

will hope the companies in their portfolio have truly adapted to a world of higher rates as they claim they did in 2022. 

If inflation and rates stay higher, bond yields also stay higher. This has a knock-on effect for “alternative” assets whose value is pretty closely correlated to government bonds.  

A higher energy price could bolster renewables but higher gilt yields are still unhelpful for infrastructure fund

from Renewables Infrastructure Grp  TRIG

 to HICL Infrastructure PLC Ord  HICL

as they are for property investment trusts.  

But as with growth companies, we may find that such portfolios are more robust in the wake of 2022: property investment trusts, for one, have undergone significant consolidation in recent years. 

Watch your diversifiers 

I note that fresh inflation talk does not bode well for the likes of government bonds, which explains why they have tended to sell off.  

The average fund in the Investment Association’s (IA) UK Gilts sector has lost around 2% over a week or so, while the yield on the 10-year UK government bond has risen from around 4.3% to almost 4.8%. Yields move inversely to prices. 

Those who piled into gold and silver in the last few months have also had a rough week. Prices for both tumbled between 28 February and 6 March, while funds such as BlackRock World Mining Trust Ord  BRWM

 and Jupiter Gold & Silver I GBP Acc (BYVJRH9) suffered double-digit losses.

The sight of bonds and gold selling off alongside stock markets is not exactly welcome, but at least there are explanations.  

The US dollar has strengthened, something that doesn’t bode well for gold, while any prospect of higher interest rates would make the opportunity cost of holding the metal greater.

But it’s worth remembering that the drop also likely relates to the fact that some investors need liquidity (or have to meet margin calls after other assets fell in value) – prompting them to take profits on it as a recent winner. Geopolitical uncertainty should also keep driving demand for safe-haven assets like this. 

On a similar note, this is a good time to look at how traditional defensive funds, from Ruffer Investment Company  RICA

 to BH Macro GBP Ord  BHMG

have fared, and how they are positioned. 

A reset for valuations 

Last year was a bit of an everything rally, with equities and gold enjoying huge gains. But those gains do leave plenty of room for a fall, meaning some of your favourite markets, funds and shares have seen a big pullback. 

We already have a few examples. South Korea’s Kospi index, which delivered phenomenal gains in 2025 and has a notable presence in all manner of global funds (from AVI Global Trust Ord  AGT

 to Artemis Global Income I Inc), plummeted over the course of a week, although the narrative of corporate reform driving returns there is presumably unchanged.  

Shares in Europe, the emerging markets and Japan had a bad week or so, as did the FTSE 100, while some popular funds like Seraphim Space Investment Trust Ord  SSIT

 suffered surprisingly heavily since the onset of the conflict. Meanwhile, banking shares, a big driver of returns for many funds last year, were showing weakness this morning amid concerns of a knock for economic growth.

We recently noted that investors should avoid knee-jerk reactions when things seem uncertain. That can certainly apply here –although market shifts might also present a small buying opportunity on some of your favourite funds.