NextEnergy Solar Fund Limited (NESF) Earnings Call Transcript & Summary

Well, welcome to the NextEnergy Solar Fund Results. I was supposed to say my script is here, you're about to see a short video. Well, you've already seen it. But thank you very much for joining us for our presentation. I'm Helen Mahy, Chairwoman of NESF. And I'm joined here today by our Investment Adviser, NextEnergy Capital. And we have Ross Grier on my right, Chief Operating Officer and Head of U.K. Investments; and Stephen Rosser on my left, Investment Director and U.K. Counsel. Both of them are the lead managers of NESF alongside Michael Bonte-Friedheim, CEO; and Aldo Beolchini CIO, who sit on NESF's Investment Committee. I will make some opening remarks about the depth and experience of NESF Board of Directors, highlights some of NESF's successes over the last decade and presents NESF's track record of a growing and covered dividend since it listed in 2014. Then Ross and Stephen will take you through recent developments in our capital recycling program. The steps NESF is actively taking to tackle the current discount to our share price, the full year results; and finally, our long-term future growth plans. NESF has a highly experienced independent Board of Directors with over 150 years of combined expertise across a wide skill set, ranging from lawyers, accountants to engineers with all vast investment company experience. I have to say not all of those 150 years of me, although sometimes it feel as if they are. Over the past 18 months, we've welcomed Paul Le Page and Caroline Chan bringing considerable experience and we said goodbye to Vic Holmes, who retired from the Board at Christmas. We will also be saying goodbye to Patrick Firth, who will be retiring shortly later this summer. Both of them served their full 9-year tenure. I, along with the other NESF Board members, both old and new would like to thank them for their dedicated service to NESF and its shareholders over the years. The Board of NESF are very active and highly engaged with both NESF's investment adviser, but also NESF investors and wider stakeholders. We're actively taking steps to tackle the current discount in our share price with the recently announced GBP 20 million share buyback program and view the current discount as unjustified, given the high-quality assets that are in the portfolio and the recent data points where we have sold assets. I would personally like to reassure investors that both this Board and the investment adviser are absolutely focused on delivering long-term value and results to NESF shareholders. Ross will talk shortly about some of the additional value-add initiatives that NESF has achieved across the capital recycling program and its capital structure, highlighting this mindset of acting in shareholders' best interest. As well as this being our full year results presentation, it is also the tenth anniversary since we floated here on the LSE. During that time, we've grown from being a proposal into one of the U.K.'s leading solar power providers with 103 operating assets that together now produce more than 1 gigawatt of electricity enough to power more than 301,000 homes each year. More recently, we've also begun to diversify first into Europe with assets across Italy, Portugal and Spain and more recently into energy storage, which is an essential counterpart to renewable energy going forward. We proud to highlight that NESF is still the only generator in the peer group to have successfully constructed and energized an operating stand-alone storage asset to date. During the past decade, we've also increased our dividend every year and have now delivered returns of GBP 345 million to shareholders, which is 67.8p per share. In terms of our dividend, we announced last month the 10 successive increase to a projected target dividend of 8.43p for this financial year. Our dividend is well covered by cash flow and that the current share price offers a highly attractive yield of around 11%, one, if not the highest dividend yield in the FTSE 350. We are conscious that NESF will face a discontinuation vote at our upcoming AGM in August and believe that investors will recognize NESF's inherent value and potential and will support our continued progress given our recent progress on the capital recycling and share buyback programs. Elsewhere, we've broadened our share register significantly to improve liquidity and as a Board, investment adviser have shown our confidence in the company by holding almost 2 million shares between us. Rest assured that the Board and the investment adviser are extremely frustrated with the current discount which has been largely caused by market and macroeconomic issues and in no way reflects the strength of the business, its achievements or its potential. I would also like to take this opportunity to thank shareholders for their patience as the team continues to work tirelessly to actively narrow the discount between our share price and our net asset value. And with that, I will hand over to Ross to take you through the results. Thank you.

Thanks, Helen. Good morning, everybody. We'll talk briefly in a moment around what we've been doing to tackle the discount but I just wanted to take a moment to highlight the progress that we've made against the capital recycling program ambitions. So post period end, we successfully delivered Phase 2 of this program. And that has taken us to now 2 assets sold with a total installed capacity of 95 megawatts and that's raised over GBP 42 million in capital recycled through that process and had a NAV impact of 1.84p. Obviously, very important from our perspective to achieve these results. And not only has it generated significant benefit for the platform in the incremental value that we've created, but it's also given that valuable data point to prove that the NAV that we generate is robust. So I think those two important components feed well into the continued ongoing management of the discount. So into the backdrop of the tricky environment in which we're operating in, the team have been doing exceptional work to achieve the plan that we set out over a year ago in relation to managing the discount key component of that, as we've said, is returning cash. And we've achieved that through the sale process that we've achieved so far. But we've also continued the operational excellence within the platform to generate revenues and therefore, continue to well service a leading dividend within the sector. So a paid dividend of 8.35p and an announced dividend target of 8.43% for the financial year '24, '25. What's important from my perspective there is we've managed to continue to drive the growth in that dividend, but we've also done so on a very conservative basis given the backdrop in which we're operating in. We've continued to drive forward transparency through operations this year and continue to professionalize our interface with our shareholders. So we've given longer visibility of forecasted revenue, additional information on things like generation and irradiance with increased disclosures around health and safety. And also we've published our sustainability report, which is industry-leading in so far as we have become an early adopter of the ISSP standard. It's important to us that we continue to drive that transparency for our shareholder base. It's something we've always led to market in, and we will continue to adopt that mentality as we drive the platform further forward. We have continued to ensure governance within the platform with a robust set of additional directors hired to have both industry experience in a rich, deep experience of the fund market as well. That allows us to continue to be industry leading in the governance that we apply to all activities within the operations. We've got a disciplined capital structure, which we'll talk about a little bit later on but what we've critically achieved again in this cycle is to extend the RCF within the platform, which has reduced any perceived refinancing risk and we've done so again industry-leading rates. So we are [indiscernible] plus 1.2% to 1.5%, which again comparing against peers is very attractive. We've also managed to continue the asset growth, so we've energized 4 assets over the last year, and that continues to add to the portfolio geographic and technology diversification. So that's where we've been. Where are we going? We obviously have the discontinuation vote coming up, and we will continue to work with investors to build confidence in what we're doing as a platform to engage with the continued growth and operations plans we have as a business and to ensure that we vote to continue the good work that the platform has done so far and will do in the future. We see attractive opportunities within the market to continue the journey that NESF has, and we believe the underlying performance of the assets and also underlying reliability of the NAV is a very good core investment case that we should continue to back and operate. We're going to continue with the capital recycling program. We are very well advanced with the third phase. We obviously can't say more about that at the moment because it's in a competitive process, but we'll update due course. And we continue to look also at the rest of the portfolio as well to ensure that we're considering the right prospects for each asset within the platform. We've recently announced a share buyback program as well, important to ensure that we have all of the tools available to us in terms of that capital allocation discipline in the future. So the Board has made the decision at the right time is now to introduce that as we continue to drive that capital recycling program and generate proceeds, which we can then utilize in due course from a disciplined capital allocation approach. So we will continue to update investors as we see it appropriate to start our buyback program in earnest. The assets continue to operate well, but we are focusing on some key aspects of the portfolio. We are repowering some assets to ensure that they are generating as robustly as they can. We have targeted improvement programs across all of our assets to ensure that asset health is at the core of everything that we do and that we've been very strategic in our spare parts management. This is something we started back around Brexit and then through COVID to ensure that we have rapid reenergization of assets as they come off-line, but something that has been a real challenge for the industry is managing that supply chain through the last few years. So something that we remain very alive to and that we have strategic plans in place across the entire portfolio. Finally, we also continue to drive forward the growth plans. We have secured proprietary pipeline for the platform itself and also have external and internal opportunities for continued asset growth as well. So we see plenty of opportunity for the fund to continue to deploy into exciting opportunities. However, we will, of course, allocate capital in a highly disciplined fashion, as we've already said. So a year of solid progress this year. We energized our first stand-alone battery storage asset, 50 megawatts in Scotland, which we call [ Camilla ]. That's a really important milestone for the platform as we know, as we look to the energy ecosystem that continues to evolve around us, it's important that NESF continues to keep pace with that change as well. So a very important milestone for us. First amongst peer group, as we've said at the top of the presentation, and we're pleased to bring that into the platform and to demonstrate it's success over the coming years. We also energized two assets across Europe, bringing additional geographic diversification, totaling 46 megawatts and again, what we're achieving there is bringing those assets through construction and bringing them into the operational phase, bolstering the revenue generation potential of the platform and at the same time, driving that energy market diversification. As we've said already, we've refinanced the RCF's important component of what we do, the RCF. We're obviously using proceeds from any sale activity to down pay revolving credit facility as aggressively as possible. That's our primary goal from the capital recycling program, but the team have done a very good job of securing industry-leading rates in the refinance of those processes, and that gives us additional headroom for the coming years before a further refinance of those facilities comes about. So on to key financial highlights for the year. The company is now valued at around GBP 1.2 billion. We have cash income of around GBP 80 million. We had a very well-covered dividend last year to 1.3x covered. We have increased that dividend target to 8.43p, as we've said, and we continue to see that cash covered in our forecast into the future. We are a leading dividend yield payer. So 11% yield makes us a top payer, not only in the peer group, but also in that FTSE 350 as well. So that demonstrates that this really is a very strong dividend play. We continue to maintain our disciplined capital structure with conservative levels of gearing and very well hedged debt as well. So around 70% of our debt is fully interest rate hedged. The balance of that is on those revolving credit facilities that we are down paying through the proceeds of that recycling program. The portfolio remains robust. We have excellent operational outcomes from the portfolio and as we've said, we've continued to bring assets online, adding to that diversification geographically and from an energy market perspective as well. We'll continue to look at optimizing assets through their life, and we look at how we can do that from both a technology perspective and also from an operations perspective to ensure that we're maximizing yield from each of those assets over the long term. So asset health is a core component of what the management team focused on within the NextEnergy Solar Fund structure. NAV Bridge for the 12 months. Key highlights in here. Power price forecasts have come down from the highs of Ukraine and COVID which was entirely anticipated been quite offset by the change in short-term inflation rates because of market dynamics we're all aware of. We've also added value through the energization of additional assets and also through the revaluation of the private fund, which we call NextPower III, which we've invested in as well, which saw some uplift in its valuation and during the period, we also increased the discount rate to 7.5% unlevered for U.K. assets with a weighted average of 8 across the portfolio. Again, that brings us back to a position where we believe the NAV is very robust. So the external data points that we've seen from third-party selling, combined with our own demonstrates that we have to correct valuation methodology in place. We do believe that the NAV that we produce is extremely robust. And we use external data points wherever possible to drive those NAV outcomes and also our models are continuously audited to ensure that they remain robust. The capital structure remains disciplined, as we've said. So our leverage levels remain below 50% at around GBP 46.4 million. We have the tranche of preference shares, which we count within our leverage structure. So GBP 200 million of preference shares in there as well as pure financing in the form of long and short-term debt as well. The long-term debt is all hedged. As we've said, the short-term debt is subject to those attractive rates that we brought through during the period. I'll hand over to Stephen for a brief operational update.

Thank you, Ross. So portfolio performance is really the area where we see the benefit of the resilient and geographically diversified portfolio that we have within the fund, but also the work we do to maintain the health of the assets, as Ross was talking about. So over the year, radiance ever so slightly above budget at 2.6% and portfolio generation pretty much in line with budget at 0.3% favorable. It's worth saying that conditions for generation were wet, which can have an impact on aspects of Solar Farms, and we've managed that pretty carefully throughout the year to minimize any impacts there. So really pleased to see that come in on budget. We also -- moving on to the next slide, also maintain our high visibility of future cash flows. The cornerstone obviously being the subsidies, the renewable obligation certificates and the feed-in tariffs but a very active hedging program into the future, seeking value, where there's liquidity further down the curve, which gives us good visibility out until 2028, '29, as you can see here on the slide. And as Ross has talked about, converting irradiance into cash and our disciplined approach to capital allocation are absolutely critical here. So what we've outlined is just a very simplistic breakout turning those 852 gigawatt hours of portfolio generation into GBP 80 million of income. And you can see there how that breaks down through costs and into shareholder value. So paying dividends, ordinary shareholder dividends of GBP 48 million through the year against that 8.35p dividend target that we achieved for the full year.

So we continue to be very disciplined in the allocation of capital within the group. So we're very thoughtful around how we apply surplus dividend cover and also the proceeds of the capital recycling program, with the primary aim of down paying the revolving credit facility first, but also having launched that share buyback scheme how we can continue to manage that discount over time. A brief word on the future prospects of the group. So the market in which we're operating in remains very attractive. So we sit on the government's solar task force in the U.K., the expectation despite political change is that we will see quite exponential growth in Solar PV and renewables across the U.K. landscape in the coming years. What we see at the moment is around 16 gigawatts of operational solar in the U.K. We are shooting for a target of somewhere between kind of 50 and 70 gigawatts by 2035, which shows material growth prospects for the technology class. Lots of challenges in the way of that, which are well publicized, including managing grid connections and planning processes. We obviously have a very bumpy ride through to delivery of that new technology. But what Solar PV has proven is that it's a very valuable component of the current energy generating set. And it will be good news for existing investors in operational assets as we see that bumpy road emerge for new technologies to be applied because we will see that reflected in power price. Solar continues to drive its levelized cost of energy down the way, quite technical terminology, but it means it's the most cost-effective way to generate energy. So it is now the cheapest form of energy generation available to us between solar and offshore wind. And therefore, it makes logical economic sense for us to continue to drive the energy transition in the way that we are. Energy storage forms a very important part of how we manage that additional growth. It's one of the reasons why we are very happy to have energized our first storage assets. The majority of the revenue case for those vehicles is bringing around grid stability and also in arbitrage. So looking at the volatility in power price created by unpredictable generating stations and demand and smoothing out those curves as well. So there is a rich deep market of opportunities over the long term to stabilize the way in which our power flows through the grid and battery storage is a very key component of that. A slide that we've shown before, what's important here is we continue to maintain optionality for the NextEnergy Solar Fund. Obviously, funds like ourselves have been capital constrained recently. We're operating at a discount. So our key focus really is around managing that discount in the short run, but we're maintaining optionality for growth in the future. So we have within the platform, a suite of physical assets, which we're able to bring forward at the appropriate time to drag them through the back end of their development cycle and into construction or to bring them through construction and realization. That's pretty unique in the sector that we maintain those within the platform itself. So it gives us good control over how we would deploy in the event that with our disciplined allocation of capital, we decided the right thing to do is allocate it to an asset. We also, within the NextEnergy Group, have launched an internal developer called Starlight. This is something that allows us additional access for the NextEnergy Solar Fund platform to new pipeline that is emerging across the globe. We now have 10 gigawatts of development activity within that vehicle across the globe. So it creates another opportunity for the NextEnergy Solar Fund, which has a right of first refusal against U.K. assets that come through that development cycle. So we see plenty of opportunities to allocate two projects in the future. We see an attractive growing market opportunity, and therefore, NextEnergy Solar Fund is very well positioned in due course to access significant additional growth prospects. So the future plan for NextEnergy Solar Fund, as we've said, we are very focused on the discount. We continue to manage as closely as we can that share price discount to NAV. We've shown you our -- we've set out our plan a year ago as to how we were going to combat the discount, and we have executed on all aspects of it, and we continue to execute on further rounds of the capital recycling program. We will continue to drive forward the growth in Solar PV and energy storage with those attractive opportunities that we see. And in so doing, we will also continue to generate robust revenues from the operational assets within the platform and service a very attractive dividend so that we are very mindful and continuing to present very strong returns to shareholders on a total return basis. We will continue to update the market on our capital recycling program when the time is right. Obviously tricky for us to talk about what's in a competitive process. But from my perspective, we've made very good progress to date in announcing Phase II. We will update on Phase III in due course, and we continue to consider options around the other assets within the portfolio as we continue to look at narrowing the discount over time. So the future remains bright for the NextEnergy Solar Fund, and we'll be excited to update you in due course. On that basis, I will open up to Q&A. I think we have a roving microphone in the form of P. If you could please introduce yourselves alongside your question, we'll be pleased to take it.

Joe Pepper from RBC and just 2 questions from me. In terms of the long-term corporate PPA market, it's clearly been something that's been growing quite significantly in Europe. I was just wondering if, within your portfolio, you've seen much opportunity to extend on the 4% corporate PPA split, you can show in the outer years on Slide 19 and whether that would be something you'd be interested in from a strategy perspective? And then secondly, on the operational assets, you bring fence for disposals, there's a mix of different revenue agreements, merchant CFT PPA. Just wondering if you see any material difference in terms of investor demand for these different assets and whether, again, that's shaping your thinking in terms of portfolio evolution going forward?

I'll take these. So corporate PPA market is very interesting in the U.K. and globally at this point. It's quite early in its maturity cycle in the U.K. So we see lots of desire to achieve decarbonization outcomes for businesses and also to remove some of the volatility in power pricing. However, it is very tricky to get all of the stars to align to get to a successful outcome in a corporate PPA. So we see lots of failure in the negotiations around corporate PPAs. The majority of those are looking for additionality as well. So they're looking for a new asset rather than a pre-existing asset to take power from. So there are limited opportunities, but they do exist for existing generators to benefit from the corporate PPAs in today's market. However, we do see increasing maturity and liquidity in that space over the next 10 or so years. And therefore, we will be able to participate towards the back end of the rock and the feed-in tariff of the existing asset base that we have within the platform. We've already secured several of these across the funds as we know, including an industry-leading negotiation with AB InBev, which was one of the first corporate PPAs to come through in the U.K. market, and we've had that in the platform for a number of years now. So yes, we see opportunity there. It's still working its way through the maturity. What we see in terms of future growth in the U.K. market is we're quite heavily dominant on contracts for difference as subsidy mechanism for revenue stabilization mechanism for new assets coming through. And predominantly, that is because it is easier to get to a contract for difference as a developer than it is to get to a corporate PPA because of what I've just talked to. So see lots of CFD in the future. We hope to continue to unlock value through corporate PPAs as a platform and as an industry over the next decade. In relation to the further assets identified for disposal, so few things to look at in here. There is some read across from the existing value that we've created from Phases I and II of the platform. But obviously, each asset is relatively unique in the platform. So we see different buyers seeking different types of exposure. And therefore, the reason we identified that portfolio is to pick out those pockets of buying expertise where we can unlock value. We've been very successful today as we've demonstrated in identifying and running competitive processes with those buyers. So we do see buyers looking for all sorts of different revenue models in there from merchant right the way through to the contracts or a difference in the longer-term corporate PPA model as well. So lots of opportunities, deep rich buy and market across a bunch of those, and we remain in a competitive process.

It's Iain Scouller from Stifel. I've got three, if I may. Firstly, I think you said there were four assets energized over the past year, what was the typical uplift on those over the prior valuation and then I guess following on from that, the asset you sold yesterday, how was that valued at the end of September? I mean, I guess that was prior to the energization. And then the third point is in terms of future disposals, what is the intention as to how you're going to use these proceeds? I mean, are you likely to increase the buyback amount above the GBP 20 million? How much is going to go into new investments? And then how much do you want to use to repay debt? And what sort of level of debt would you like to get down to in due course?

I think there were seven questions in there. We can follow up in terms of uplift in valuation. I think the headlines are we saw some uplift relative to the holding value as we energized assets. So we hold in our NAV assets during construction development at cost, and we migrate them to fair value at the point of energization. So in White Cross, for example, we did see that commensurate uplift, but it was relatively tight relative to NAV. So we -- what's nice there is that our valuation methodology remains robust. Again, we can follow up in relation to the uplift relative to the September for White Cross. You have got that...

[indiscernible] have been in the RNSs that were announced at the time. So they are all available.

It is in the pack, I think, somewhere as well. So we can follow up with that problem. In terms of proceeds, which I think is the detailed question there. Initial focus on the process, as we've said, is to down pay RCF immediately. We've announced the share buyback scheme, but not yet initiated. Our plan there is to have it as part of our disciplined allocation to future assets. So what we're looking at there is, is it better for us to buy shares back or is it better for us to allocate to new asset growth opportunities with the prevailing discount, it's very difficult, I think, to justify additional asset growth at the moment. We would probably prioritize share buyback, but we're going to go through a process with the Board to identify exactly how and when we apply to supply proceeds through the share buyback process. In relation to sizing of buyback, look, important that we've started that journey. We've created an up to GBP 20 million meaningful buyback program and we will continue to monitor the impact of that relative to the discount and the opportunities that the market presents us in terms of allocation to assets themselves as well. What's key there is the Board is very focused on this. So a Board decision, of course, in terms of size and buyback and therefore, the Board continues to monitor with the manager very closely what's going on in that space. What level of debt. So we're comfortable with the level of gearing in the platform. As we've said and we have less than 50% gearing, which is relatively conservative, we believe. We obviously have a high level of subsidies within the portfolio and a high level of long-term contracted revenues. And therefore, theoretically, banks would lend more than 50% to us. We are comfortable around the sort of level of gearing that we are at the moment. We believe that provides us ample opportunity to continue to manage the platform in an optimized fashion. And we will continue to monitor that in lines with continued asset growth and also operations over life as well. So something we continue to focus on, but we believe where we are is robust for today's operations. Anything else you'd like to add to that?

Three questions as well, and I'll try and keep it three. Actually, essentially, there's a bit of a follow-up to that capital allocation question. I mean, on the face of it, it would seem to be just comparing the discount rate to the IRR of future projects. To the extent that it's not that simple, what other things are you taking into consideration and particularly strategic considerations? Then just on storage, both in terms of the existing assets and the NAV calculation but also looking forward to new opportunities. How do you see the -- it's been an interesting market over the past 6 months and particularly the changes in the balancing mechanism rules, how do you view storage at this point? And then maybe a simple one. Labor looking to ease up on planning for new project opportunities. Do you see that as a benefit? Or is it not really that material?

Great. a number of considerations in terms of the allocation of capital to future projects. Obviously, we are thoughtful around the existing operational portfolio, the cash flows that they generate, how we service the dividend commitment that we have out there and how we continue to operate the capital structure that we have in play. That feeds well into then kind of further analysis around the returns expectation of that relative to what a buyback would achieve. So on face value, relatively straightforward, but there are the additional operational considerations of the platform as well to build into that thought process. Storage for us, so we've always maintained that storage is an important component of the NextEnergy Solar Fund's story. It's an important part of the market. What we didn't particularly believing is the entire concentration of risk. So we wanted to blend it into existing portfolio as opposed to it being a stand-alone investment in battery storage. And that's really down to the volatility in the income streams. So it's doing a job of managing volatility, therefore, means its income streams are extremely volatile. What we know is that the market is rich and deep in terms of the revenue potential that is there, and we see it maturing rapidly. So the U.K. has got one of the leading storage markets in the world, and that's all to do with the way that National Grid has adopted storage in its future energy scenario. So storage is being better understood. The mechanisms are in place to bring stability to those revenue streams in the short and medium terms. And from our perspective, we have a small proportion of our overall gas dedicated to energy storage solutions. And therefore, we are small exposure, but small exposure in a controlled way to what is an important part of the energy mix over time. From a returns perspective, we obviously see a premium for storage relative to solar again, down to what we've just talked about from an asset dynamics perspective, and we blend that into our thinking on how we want to continue to allocate capital in the future. So expect more over time, but controlled as we look at continued growth of the renewables sector. Final point on labor. So I think the headlines from a labor perspective are we like the ambition. So there's clearly a drive towards setting and achieving all something that we've often struggled with the existing government in place. There are lots of challenges in achieving that new capacity, as we've said already. One of those is planning, another is grid. So any ambition needs to be followed up with a very robust plan on how we're going to allocate any capital towards the infrastructure that's needed to realize that new capacity, which is the sort of stuff that we've been discussing at length with the labor team. So I think good news, they get the challenge and they have set the ambition that they want to do it differently. I think that's very positive for the sector. The devil is in the detail always with this type of thing.

Maybe just a follow-up on the storage. If you're trying to match storage with the existing assets, are you looking at any of the longer duration storage technologies, which would seem to be a better fit, given 8 hours of [indiscernible] on an average?

So at the moment, we blend into the portfolio on a stand-alone basis. So they're not physically co-located to any of our assets, as you know. So they're really looking at kind of the macro fluctuations in the grid as opposed to changing the shape of generation of the solar assets itself. We are running a retrofit co-locate program. We've identified 5 assets that are working their way through the development process, and they are beholden to that same grid lock that we've spoken about already. So they will be delivered over time, but we have to wait for the appropriate time to realize them. But we do see that as an important part of the evolution of the platform over time. And what we're looking at there is a combination of short and long duration blended in within storage over time because they're doing different things. They're achieving different revenue outcomes from what they're providing for the grid as well. So yes, over time, longer duration will be important. It's very embryonic at the moment. And therefore, what we're expecting to see is improvements in technology, both on the short duration side but also on that longer duration technology to help us to integrate over the coming decade or so. Good. Any other questions in the room? If not, I will jump on to the ones we have online. The first one is, can you talk through the profile of the fixed debt such as schedule of maturities and interest rates. So the full details of this are in the appendix. I think it's Page 52 which includes full detail. So we're very transparent around all aspects of our debt. So I would direct you to that for a deep dive. Second question is, what options are available for NESF to redeem or cancel the preference shares ahead of the 2030 dates? The Preference shares are a very important part of our capital structure. They have a fixed coupon of 4.75%, so are very attractive in terms of the kind of cost of maintaining leverage within the structure. We have options between 2030 and 2036 where NESF can redeem at par. So plenty of flexibility and optionality in terms of how we are able to consider those longer term within the platform itself. Third question, has preannouncing the disposal of assets hindered the capital recycling program. Not at all. I think we wanted to very early on when the discount emerged set out what we believed was the answer to narrowing the discount to -- for investors, and we did so in a very transparent fashion. And we have worked our way through that process in due course. It hasn't impacted the competitiveness of the process, the M&A market, as we all know, has been challenging over the recent 12 to 18 months. So that has slowed in some areas, but from our perspective, we weren't in any form of [indiscernible] environment here, what we wanted to do was identify the right assets and then run an appropriately competitive process to deliver value for the platform, which is exactly what we've achieved. So I think it has not hindered what we set out to do and the outcomes speak for themselves. As I've said already, Phase III deepen a competitive process, we will update in due course. But again, the existence of the fact that we are bringing assets to the market has not impacted that process in any way, shape or form. We've also seen external sell as well. So there are other data points out there from peers who are running similar exercises as well. So it's a well-understood component of what is going on in the renewables market at the moment. Final question is in the shareholder value slide showing GBP 80 million of income, where are you counting debt interest payments, OpEx or debt repayment within the shareholder return. And on Page 20, we've labeled costs and OpEx and debt interest is captured within that component of the slide. I think that's all the questions we've got online. Any final questions in the room? Otherwise, I will thank everybody for their time this morning, and we look forward to more positive updates in the future.