International PPL upbeat on outlook after decent start to year
Public infrastructure project and business investor International Public Partnerships updated the market on its portfolio performance for the period from 1 July to 16 November on Monday, reporting a 0.9% increase in its net asset value per share to 146.3p for the six months ended 30 June.
Equity Investment Instruments
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International Public Partnerships Ltd.
124.80p
13:09 24/04/24
The FTSE 250 firm said its portfolio had maintained a “high level” of inflation-linkage, such that a 1.00% increase in inflation would lead to a 0.81% increase in return.
It noted that a first half-year 2018 dividend of 3.50p per share was declared on 6 September, and was paid on 8 November.
A minimum target dividend for the 2018 and 2019 financial years was set at 7.00p and 7.18p per share respectively, which was in line with an average increase of around 2.5% or greater each year.
The company had now delivered a total shareholder return, comprising share price growth and aggregate dividends, since its initial public offering in November 2006 of 172.5%, or 8.7% on an annualised basis.
On the operational front, International PPL said its portfolio of 130 investments in public and social infrastructure assets and related businesses was operating and performing in line with expectations.
It said the “solid and consistent” level of operational performance in the portfolio was continuing to drive “strong and sustainable” ongoing financial performance for shareholders, with continued dividend growth.
The firm successfully completed a £116m capital raising during the period, with the board noting that a portion of the proceeds were used to repay the company's cash drawn portion of its existing debt facility.
It said the remainder would be deployed into its “strong” pipeline of opportunities, where it had existing committed near term future investment obligations.
International PPL made an additional £51.8m of investments during the period, including a £46m investment in its seventh offshore transmission investment, Dudgeon and further investment into UK digital infrastructure.
It successfully completed the refinancing of the senior debt in Durham Building Schools for Future during the period as well.
The board said the refinancing delivered a significant financial benefit to Durham County Council, and demonstrates investment adviser Amber's active asset management approach across the portfolio, where it seeked to add and deliver value for money to all stakeholders.
It had previously announced its commitment to acquire a further investment into the Cadent gas distribution business, to a level that enabled the permanent right to appoint a board director.
International PPL said it now expected it would make a further investment of between £150m and £155m, subject to price adjustment per the terms of the option agreements, into Cadent by the end of June 2019, following National Grid's announcement that it had elected to exercise the options that it held with the Quadgas consortium, of which International PPL was a member.
“The market for the type of assets in which the company invests remains buoyant and governmental and regulatory environments in which we operate continue to be supportive of long-term investment into public infrastructure,” said International PPL’s board of its outlook.
“Market sentiment has continued to improve throughout the period and the share price has continued to trade at a premium to NAV.
“Recent transactions have demonstrated the continued strong investor demand to access infrastructure assets and the inherent underlying value of high-quality infrastructure portfolios.”
The board said it was continuing to monitor the market to ensure that valuations reflected the latest market-based evidence of pricing.
“The company has identified a pipeline of additional opportunities that are currently under review by the Investment Adviser, including current bids, preferred bidder opportunities and opportunities to acquire additional investments include pre-emption/first refusal rights, that meet the company's risk-return profile,” the board explained.
“The company remains focused on the completion of its existing commitments, as well as a strong pipeline of longer-term potential opportunities including regulated utilities - including offshore transmission - health, judicial, other accommodation and transport projects.”