Half year results for the six months ended 30 June 2017
Half year results for the six months ended 30 June 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THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME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.
International Public Partnerships Limited
Half Year Results For The Six Months Ended 30 June 2017
- Invested £323.8 million across energy distribution, waste water and education sectors, either as primary or early-stage investor, or as part of a large investor consortium, with further commitments to invest in digital infrastructure and energy distribution
- Recent acquisitions have strongly bolstered inflation linkage within the portfolio – a 0.83% p.a. projected increase in return for a 1.00% p.a. increase over assumed inflation rates (0.78% p.a. as at 31 December 2016)
- Enhanced opportunities for capital growth with 11.7% of the portfolio currently under construction
- Successful completion of significantly oversubscribed equity capital raising of £330 million used to fully repay the Company’s cash drawn portion of existing debt facility
- Highly visible and balanced future pipeline in regulated and other public infrastructure projects in developed OECD geographies, including U.K., Europe, North America and Australia
Financial Highlights1
- Net Asset Value (‘NAV’) growth of 21.8% to £2.0 billion (31 December 2016: £1.6 billion)
- NAV per share growth of 1.8% to 144.7 pence (31 December 2016: 142.2 pence)
- IFRS profit before tax of £57.1 million (30 June 2016: £109.6 million)
- Average annual dividend increase of 2.5% to 3.41 pence per share (30 June 2016: 3.325 pence per share); representing a 1.3x cash dividend cover
- Minimum target 2017 and 2018 full-year dividend of 6.82 and 7.00 pence per share, respectively2
- Total Shareholder Return of 162.5% since inception in November 2006, representing an average compound annual return of 9.5% per annum3
Portfolio Update
In the first six months of 2017, INPP continued to pursue its long-term strategy of value-focused portfolio development, active asset management and effective financial management in high quality, predictable, long-duration infrastructure projects. This activity included:
Expansion of regulated asset base
- £274.0 million investment for a 4.4% interest in Cadent (formerly National Grid’s gas distribution networks), as part of a consortium acquisition which collectively acquired a 61% interest in the company;
- £48.3 million follow-on investment in the Thames Tideway Tunnel, leaving £30 million to be invested during the remainder of 2017 (currently supported by a letter of credit).
Exercise of pre-emption rights over existing investments
- £1.5 million follow-on investment in Wolverhampton Building Schools for the Future.
Maximisation of primary origination of emerging core infrastructure assets
- In July 2017, commitment of up to £45.0 million in UK fibre optic broadband connections through the National Digital Infrastructure Fund (NDIF) alongside HM Government and Amber Infrastructure
Rupert Dorey, Chairman of International Public Partnerships Limited, commented: “Following another strong period of operational and financial performance with substantial levels of new investment, I am pleased to report an interim dividend of 3.41 pence per share, bringing our total shareholder return to 162.5% since 2006.”
“We continue to capitalise on our Investment Adviser’s combination of primary origination capability, leading technical expertise and strong industry relationships to allow the Company to assess a wide variety of comparable investment opportunities, from multi-million pound regulated infrastructure transactions to emerging core infrastructure sectors like UK fibre optic broadband.”
“We continue to see upward pressure on valuations from current market comparables which, if sustained, can be expected to filter through to future NAV increases over time. We also note that our NAV is calculated according to our published methodology, which for instance, assumes a sum-of-the-parts valuation and does not account for any value attributable to matters such as the size, scarcity and diversification of our portfolio.”
“The significant oversubscription of a further capital raising reaffirms the broad confidence in this well-established strategy and the Company’s future prospects. Owing to this confidence and the predictability of the Company’s outlook, I am pleased to provide shareholders with additional visibility in targeting a full-year dividend distribution per share of 6.82p and 7.00p in 2017 and 2018, respectively.”
Outlook
- Building on a strong track record in generating sustainable, long-term and inflation-linked returns to shareholders, the Company remains positive about its prospects regarding both the performance of its existing investments and the opportunity to add high-quality investments to the portfolio in the short-to-medium term. Based on an established and highly disciplined investment mandate, this includes:
- Pursuing large-scale opportunities in UK regulated utility assets including offshore transmission and exercising the Company’s commitment to acquire a share in conjunction with a consortium of investors of an additional 14% stake in Cadent (subject to a put and call option);
- Assessing UK businesses and projects that own and build digital fibre-based network assets and related infrastructure through NDIF, a bespoke co-investment vehicle;
- Leveraging the Investment Adviser’s unique primary access to the North American P3 market, following the investments in the US military housing sector.
The market outlook for the Company remains positive as enhanced capital investment into the asset class continues to rank highly on government agendas globally as a key economic growth driver. The nature of INPP’s portfolio and the active approach to asset and capital management undertaken continues to provide means to protect the Company from any emerging political and macroeconomic risks.
ENDS
INPP will be holding an analyst and investor presentation and conference call at 9.30am on the day of announcement (7 September 2017).
For those investors and analysts wishing to join remotely, a conference call facility will also be available by dialling +44 (0)330 336 9105 and using the confirmation code 9053092. The analyst and investor presentation is not open to media or third-party representatives of.
A copy of the results presentation can be downloaded here.
A copy of the 2017 Interim Report can be downloaded here.
For further information:
Erica Sibree
Ed Berry / Mitch Barltrop
+44 (0)20 7939 0558
+44 (0)20 3727 1046 / 1039
Amber Fund Management Limited
FTI Consulting
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 127 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.
- As at 30 June 2017 unless otherwise stated
- These are targets only and not profit forecasts. There can be no assurance that these targets will be met or that the Company will many any distributions at all.
- Since inception (November 2006). Source: Bloomberg. Share price plus dividends assumed to be reinvested.