Full year results for the twelve months ended 31 December 2017
Full year results for the twelve months ended 31 December 2017
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR TO U.S. PERSONS. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION.
- Another solid year of progress with strong dividend yield and significant new investment activity totalling £464 million, generating considerable prospects for further NAV growth.
- Carillion-related issues substantially resolved with estimated overall impact projected to be less than £1.5 million. No increased costs are anticipated for the public sector nor any job losses for site-based former Carillion employees.
- While noting recent political debate about the merits of private capital in financing public infrastructure, INPP believes substantial protections to shareholder value exist. Nevertheless, INPP acknowledges its continued responsibility to demonstrate the value for money it delivers to the assets under its management and to their end-users.
- Continued focus on harder-to-access opportunities with 73% of assets in the portfolio developed or originated in the primary market as an early stage investor and 12% of assets currently in construction.
- Two-year forward dividend growth guidance with 2018 and 2019 projecting annual dividend increases of c.2.5% - continuing trend since IPO in 2006.
- Total Shareholder Return since IPO, in 2006, is now 165.4%, an average compound growth rate of 9.2% per annum, ahead of the long-term 8-9% returns target.1
- NAV per share growth of 2% in 2017 reflects steady progression throughout the year but does not capture the future value of recent acquisitions that are expected to bring growth to the portfolio once ‘bedded down’.
- Successful completion of two capital raisings in 2017, securing a total £410 million, before issue costs, fully deployed into new opportunities.
Financial Highlights2
- Net Asset Value (‘NAV’) growth to £2.0 billion (2016: £1.6 billion)
- NAV per share growth to 145.0 pence (2016: 142.2 pence)
- Full-year dividend increase of c.2.5% to 6.82 pence per share (2016: 6.65 pence per share)
- Profit before tax of £106.4 million (2016: £175.3 million) – 2016 reflected exceptional foreign exchange gains consequent on Brexit
- Strong inflation linkage - projected increase in return of 0.79% p.a. for each 1.00% p.a. increase in inflation (2016: 0.78%)3
- Target 2018 and 2019 full-year dividends of 7.00 and 7.18 pence per share respectively
- 2017 cash dividend cover of 1.2x4
Portfolio Update
In 2017, the Company continued to pursue its proven long-term strategy of value-focused portfolio development, active asset management and effective financial management in high quality, predictable, long-duration assets including:
- Selective exposure to stable, inflation-linked regulated assets
- £272.5 million investment in National Grid’s gas distribution networks, Cadent.
- £78.2 million follow-on and final investment in London’s new super sewer, the Thames Tideway Tunnel.
- Growth of leadership position in UK offshore transmission (‘OFTO’) investment
- Appointed preferred bidder on seventh OFTO project with c.£50 million investment in connection to 402MW Dudgeon Offshore Wind Farm.
- Continued global portfolio diversification
- A$154 million (£86.8 million) additional interest in Australian rolling stock project, Reliance Rail.
- €8 million (£7 million) commitment to new German police centre, Offenbach.
- A$35.6 million (£20.8 million) investment in Australian schools project, Victoria New Schools.
- Strategic use of pre-emption rights to increase stakes in existing assets
- £1.5 million investment to acquire further interest in Wolverhampton Building Schools for Future (‘BSF’) project, increasing the Company’s stake to 90%.
- Proportion of a further 14% interest in Cadent subject to put and call options between a consortium of leading long-term UK and international investors, Quad Gas Group, and National Grid.
- Early mover into emerging low-risk core infrastructure asset classes
- £45 million commitment to invest alongside HM Government in UK digital infrastructure and fibre-to-the-home broadband connections via the National Digital Infrastructure Fund (NDIF).
Rupert Dorey, Chairman of International Public Partnerships Limited, commented: “I am pleased to report another successful year for all our stakeholders where we continued to exceed our dividend return targets and prove our commitment to delivering sustainable, long-term, inflation-linked returns to our shareholders. We continue to believe in the strong risk mitigation that exists across our portfolio and as facilitators of public services through the long-term private investment we provide, we continue to have a responsibility to demonstrate the public benefit of all our activities, to all our stakeholders.”
ENDS
INPP will be holding an analyst and investor presentation and conference call at 9.30am on the day of announcement (21 March 2017).
For those analysts or investors who cannot attend in person, a conference call facility will also be available by dialling +44 (0)330 336 9105 and using the confirmation code 3321121. Please note the conference call is not open to the media or third-party representatives thereof.
Notes to Editors
Erica Sibree
Ed Berry / Mitch Barltrop
+44 (0)20 7939 0558
+44 (0)20 3727 1046 / 1039
Amber Infrastructure
FTI Consulting
Important Information
This announcement contains information that is inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014.
This announcement is an advertisement. It does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor.
Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement. The Company, Amber and Numis Securities expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.
About International Public Partnerships:
International Public Partnerships (‘INPP’) is a listed infrastructure investment company which invests in global public infrastructure projects developed under the public private partnerships (‘PPP’), private finance initiative (‘PFI’), regulated asset and other similar procurement methods.
Listed in 2006, INPP is a long-term investor in 129 social and transport infrastructure projects, including schools, hospitals, courts, police headquarters, transport and utility and transmission projects in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth through investment across both construction and operational phases typically of 25-40 year concessions.
Amber Infrastructure Group (‘Amber’) is the Investment Adviser to INPP and has over 100 dedicated staff who manage, advise on and originate projects for INPP.
Notes:
- Bloomberg – share price appreciation plus dividends assumed to be reinvested – from IPO in November 2006 to 31 December 2017.
- For the year ended 31 December 2017 unless otherwise stated.
- Projected increase in portfolio return for a 1.00% p.a. increase in the inflation rate assumed in the current valuation analysis for each asset in the portfolio.
- Cash dividend payments to investors are paid from net operating cash flow before non-recurring operating costs.