Half-year results for the six months ended 20 June 2018
Half-year results for the six months ended 20 June 2018
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME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.
- Continued robust portfolio performance with strong dividend yield and further growth in Net Asset Value (‘NAV’), driven by active asset management and highly selective, accretive investments and commitments totalling c.£50.5 million.
- Strength of the Investment Adviser’s active asset management and portfolio risk management approach demonstrated by the prompt resolution of Carillion plc-related matters impacting a small number of projects, at no material financial impact to the Company or its public-sector clients.
- Post-period end, successful renewal and extension of corporate debt facility to £400 million on improved terms.
- Sustained track record of delivering stable and growing shareholder returns with two-year forward dividend guidance for 2018 and 2019 projecting annual dividend increases of c.2.5%.
- Total Shareholder Return since IPO now 148.6% - an average compound annual growth rate of 8.1% since IPO in 2006, in line with the long-term returns target of 8-9%1.
- The Company’s contribution to the achievement of public sector value for money, customer satisfaction and sustainability over the period includes the maintenance of strong public-sector relationships with over 4002 scheduled management meetings led by the Investment Adviser focussing on the smooth running of the assets and ensuring 99.6%2 asset availability across our accommodation-based assets during the period.
Financial Highlights3
- Net Asset Value (‘NAV’) growth to £2.1 billion (31 December 2017: £2 billion)
- NAV per share growth to 146.3 pence (31 December 2017: 145.0 pence)
- Interim dividend increase to 3.50 pence per share (30 June 2017: 3.41 pence per share)
- IFRS profit before tax of £65.9 million (30 June 2017: £57.1 million)
- Enhanced inflation-linkage with projected increase in return of 0.81% p.a. for each 1% p.a. increase in inflation (31 December 2017: 0.79%)4
- Target 2018 and 2019 full-year dividends of 7.00 and 7.18 pence per share, respectively
- 2018 cash dividend cover of 1.2x5
Portfolio Update
In the first half of 2018, 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:
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Selective exposure to stable, inflation-linked regulated assets
- c.£35-40 million investment commitment to acquire further interest in gas distribution network, Cadent, as part of a consortium of leading long-term U.K. and international institutional investors.
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Early mover into emerging low-risk core infrastructure asset classes
- c.£17 million commitment to invest in two separate U.K. alternative network providers, including Community Fibre, during the period, and subsequently in Airband Community Internet Limited, as part of the £45 million commitment to invest alongside HM Government in U.K. digital infrastructure and fibre-to-the-home broadband connections via the National Digital Infrastructure Fund (‘NDIF’).
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Strategic use of pre-emption rights to increase stakes in existing assets
- £1.7 million investment to acquire further interest in Hertfordshire Building Schools for Future (‘BSF’) project, increasing ownership level to 100%.
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Continued global portfolio diversification
- £0.6 million final investment into the second stage of the Gold Coast Light Rail PPP concession, Australia.
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Post period end
- Recent transactions and proposed transactions in the sector augur positively for future valuation increases.
Strong Asset Stewardship6
The Company’s investments continue to deliver sustained value to all stakeholders by supporting their public-sector partners and the wider communities in which they operate. Owing to the Investment Adviser’s active asset management approach, the Company delivered, among other things:
- 4152 scheduled management meetings with project counterparties, equating to one meeting per month, per asset;
- 6%2 asset availability for those investments whose performance is measured by availability, equating to over 269,000 successful operating hours in the period;
- 446 commissioned contract variations resulting in over c.£5.3 million of additional investment;
- 83,000 additional hours of asset availability dedicated to community use provided;
- 2,3002 full time jobs provided across our accommodation-based assets, with 72%2 employed living within the local community in which they work (within an 8km radius).
Directorate Changes
As previously announced on 4 September 2018, the Company has appointed Mr. Michael Gerrard as an independent non-executive director with the expectation that he will assume the role of Chairman following Mr. Rupert Dorey’s planned retirement as Chairman on 31 December 2018. Mr. John Le Poidevin was also appointed as Chairman of the Audit and Risk Committee with effect from 1 July 2018. His predecessor, Mr. John Whittle remains as Senior Independent Director of the Company’s Board of Directors.
Rupert Dorey, Chairman of International Public Partnerships Limited, commented: “As a result of the ongoing robust portfolio performance in a period in which we continued to maintain full asset availability for our end-users, I am pleased to report sustained delivery of long-term inflation-linked returns to our shareholders. The market for the type of assets in which the Company invests remains buoyant and we remain confident in our ability to realise a long-term pipeline of harder-to-access opportunities that meet our established risk-return profile.”
ENDS.
INPP will be holding an analyst and investor presentation and conference call at 9.30am on the day of announcement (6 September 2018).
For those analysts or investors who cannot attend in person, a conference call facility will also be available by dialling +44 (0)330 336 9125 and using the confirmation code 3027905. Please note the conference call is not open to the media or third-party representatives thereof.
A copy of the results presentation can be downloaded here.
Notes to Editors
Erica Sibree / Amy Joslin
Ed Berry / Mitch Barltrop
+44 (0)20 7939 0558 / 0587
+44 (0)20 3727 1046 / 1039
Amber Fund Management Limited
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.
Listed in 2006, INPP is a long-term investor in 129 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 consists over 100 dedicated staff who manage, advise on and originate investments for INPP.
Notes:
- Bloomberg – share price appreciation plus dividends assumed to be reinvested – from IPO in November 2006 to 30 June 2018
- Only applicable for projects where the Investment Adviser provides oversight of the management services. Where applicable, jobs referred to are employees of the Company’s Facilities Management subcontractors and not of the Company of its subsidiaries
- For the half-year ended 30 June 2018 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 as detailed
- Please note all metrics exclude the digital infrastructure investments (held in a fund structure), Brescia Hospital, Italy (where we do not provide asset management services) and U.S. Military Housing (where only senior debt is held)