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Foresight Environmental Infrastructure – Strategic refresh

Foresight Environmental Infrastructure (FGEN) has set out its strategic focus over the medium term that will centre on core renewable energy generation assets. This will see it sell its growth assets once operations have ramped up and valuation maximised. This will provide the company with capital allocation flexibility and allow it to invest the sales proceeds into assets that display attractive income characteristics such as visible, stable and secure long-term revenue with inflation linkage (revenues that increase in line with inflation, helping to preserve real returns). This will help the company build on its enviable dividend track record, which has grown every year since inception in 2014 and has been comfortably covered by income. FGEN’s manager stresses that it is not abandoning growth-style assets, but that these will be targeted in mature technologies with a proven market.

The capital growth potential of its readymade disposal pipeline, along with record cash flows from its core portfolio, makes FGEN’s discount to NAV highly attractive.