FGEN (Foresight Environmental Infrastructure) has reported annual results showing another year of dividend growth, positive NAV total return and strong dividend cover despite continued challenges across the listed infrastructure sector.

The environmental infrastructure investment company, which invests in renewable energy, waste and resource efficiency assets across the UK and Europe, increased its FY27 dividend target by 1% to 8.04p per share. The increase marks the twelfth consecutive annual dividend increase since launch.

Dividend cover remained strong at 1.25x during FY26, with management guiding towards a similar level for the current financial year.

For income investors, dividend cover remains one of the most important numbers in the results. While many infrastructure and renewable energy funds have faced pressure from higher interest rates and falling asset values in recent years, FGEN continues to generate sufficient cash from its operating assets to support shareholder distributions.

The company reported NAV per share of 105.2p at 31 March 2026, compared with 106.5p a year earlier. After including dividends paid during the year, NAV total return was 6.2%.

Management highlighted that the portfolio’s operational assets continue to provide resilient cash generation despite regulatory challenges affecting parts of the renewable energy sector.

A key part of the FGEN investment case is the nature of the underlying assets. Many benefit from long-term contracted revenues and inflation linkage, helping revenues rise alongside inflation over time. This can provide a degree of protection for both asset values and shareholder income during periods of higher inflation.

Alongside the mature operating assets, FGEN continues to invest in projects already within the portfolio where management believes additional capital can create value for shareholders. During the year the company completed further value-accretive follow-on investments while continuing to advance a number of growth assets.

The strategy is designed to balance current income with future NAV growth.

The operational assets generate the cash flows that support the dividend today. The growth assets are intended to drive future increases in portfolio value as they mature and move into operation.

The balance sheet remains conservatively positioned. Gearing is low relative to many peers and the portfolio continues to be valued using a comparatively high discount rate.

Since IPO, FGEN has delivered annualised NAV total returns of 7.2% while increasing the dividend every year. Management continues to target long-term NAV total returns of between 8% and 10% per annum.

In the video above, the FGEN management team discusses the annual results, dividend growth, portfolio performance and the opportunities they see across the portfolio in the years ahead.