US Solar Fund PLC Results analysis from Kepler Trust Intelligence

TIDMUSF

US Solar Fund PLC

24 March 2022

US Solar Fund (USF)

24/03/2022

Results analysis from Kepler Trust Intelligence

US Solar Fund (USF) has reported its first results covering a full year of operations for the total portfolio. In the year ending 31/12/2021, the trust paid dividends of 5.5 cents a share, in line with the target declared at launch. Additionally, the NAV rose 1% over the year to $0.975, boosted by useful life extensions for a number of assets, a reduction in the discount rates as market interest rates fell, and an uplift in the valuation of USF's interest in and option over the MS2 project in California.

Chairman Gill Nott said: "2021 was an exciting year for the Company as it continued to deliver on its targets. The board and the investment manager remain focused on delivering steady cash flows from the existing portfolio of assets, whilst looking for suitable opportunities in solar and storage to grow the company."

Kepler View

This was a promising year for US Solar Fund (USF), with the portfolio fully operational and delivering the dividends targeted at launch. The refinancing has put the trust in an advantageous position for the future, while it has cash on hand to finance further expansion. We think that expanding into battery storage should offer a diversified source of resilient cashflows. It also burnishes the ESG credentials of the trust: expanding the use of renewables to power the grid will likely require expanding battery capacity.

USF offers an attractive prospective yield of 5.9% on the current share price (as of 23/03/2022). This yield is relatively secure thanks to the policy of fixing out the majority of the trust's cash flows - at a weighted average of 14.4 years. As a consequence of this stability shareholders do give up exposure to the near term power price. Although this protects the trust from near term volatility including downward movements, it also means that USF will not see uplift from short term movements. USF's peers largely do have exposure to short- and medium-term power price fluctuations, and some of them have seen a rise in income and NAV via recent increases in wholesale power prices. We think this may explain USF's wider discount than peers. However, for investors looking to lock in long-term income, the discount has created an opportunity to do so at a higher initial yield.

CLICK HERE TO READ THE FULL REPORT

Visit http://www.trustintelligence.co.uk/investor for more high quality independent investment trust research.

Important information

This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word "Reach" in the source column of the News Explorer pages of London Stock Exchange's website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

NRAFLFFIVSISFIF

(END) Dow Jones Newswires

March 24, 2022 06:27 ET (10:27 GMT)

Us Solar (LSE:USF)
Historical Stock Chart
From Jul 2024 to Jul 2024