TIDM3IN
RNS Number : 5092A
3i Infrastructure PLC
30 September 2020
30 September 2020
3i Infrastructure plc - Pre-close update
Portfolio performing well; on track to meet dividend target, up
6.5% year-on-year
3i Infrastructure plc ("3i Infrastructure" or the "Company") is
an investment company whose purpose is to deliver a long-term
sustainable return to shareholders from investing in
infrastructure. This statement relates to the period from 1 April
2020 to 29 September 2020 (the "Period").
Highlights
Portfolio performing well: The portfolio continues to
demonstrate its resilience to the effects of Covid-19. Most
portfolio companies have met or exceeded the expectations we set at
the start of the Period, although lower power price forecasts,
ongoing effects of the pandemic and the slow recovery in air travel
will affect some portfolio company valuations at the half year
end.
-- Follow-on investments:
- Tampnet agreed to purchase a 1,200km offshore fibre cable
system in the Gulf of Mexico from BP
- 3i Infrastructure committed additional capital to ESVAGT to
fund further growth in its offshore wind servicing segment
-- Good portfolio income in the Period: Total portfolio income
and non-income cash was slightly ahead of expectations at GBP47
million in the Period. This compares with GBP57 million of income
and non-income cash received in the same period last year.
-- FY21 dividend target: The Company is on track to deliver its
dividend target for the year ending 31 March 2021 of 9.80 pence per
share, a year-on-year increase of 6.5%.
-- Strong available liquidity: The Company's cash balance was
GBP361 million at 29 September 2020 with the full revolving credit
facility of GBP300 million available.
Phil White, Managing Partner and Head of Infrastructure, 3i
Investments plc, Investment Manager of the Company, commented:
"During the Period we have been pleased by the performance of our
investments. We were delighted to secure an important bolt-on
acquisition for Tampnet and to invest capital to fund further
growth at ESVAGT. We remain cautious about the speed of the
recovery in economic activity, but we have a portfolio that is
continuing to prove resilient and we continue to work on a broad
range of potential investment opportunities, seeking to invest in
businesses that enhance the Company's portfolio, taking advantage
of our strong financial position."
Portfolio update
The portfolio overall performed well during the Period. We
remain cautious about the speed of the recovery in economic
activity and conscious of further Covid-19 related risks, but we
have a portfolio that is continuing to prove resilient. We note the
prolonged effects of the pandemic on the air travel sector, which
will have an effect on TCR; and the reduction in power price
expectations which will affect the value of Attero and Infinis,
despite strong operational performance by both companies in the
Period.
Joulz exceeded expectations in the Period, with no noticeable
impact from Covid-19. Both Valorem and Ionisos also performed
strongly. Valorem's operating portfolio benefitted from favourable
wind conditions, good availability, and a partial refinancing,
while a number of new projects became operational. Ionisos has
benefitted from cold sterilisation being an essential service to
the healthcare and pharma industries.
Tampnet, the world's leading operator of offshore fibre
communications networks, agreed to purchase a 1,200km offshore
fibre cable system in the Gulf of Mexico from BP Exploration &
Production Inc. The transaction is expected to be funded from
Tampnet's own resources and existing credit facilities. It gives
Tampnet ownership of a key piece of subsea infrastructure in the
region, enabling Tampnet to replicate its successful North Sea
business model in the Gulf of Mexico. Tampnet's performance during
the Period has been affected by the low oil price delaying some
expected growth, and by the pandemic reducing some offshore
personnel-related activities.
ESVAGT has seen no noticeable impact from Covid-19 on the wind
sector or on the operational performance of the business. As
expected, the relatively low oil price has led to reduced demand in
the emergency rescue and response segment. The Company committed to
invest further capital into ESVAGT to fund continuing growth in its
offshore wind servicing segment, with three new vessels due to
commence operations in the next year. GBP15 million, out of a
commitment of GBP27 million, was invested in September.
TCR performed slightly ahead of our expectations during the
Period, supporting its clients through the crisis in the aviation
sector and seeing increasing interest in its full service rental
business model from a broad range of existing and potential new
customers. However, we now expect a more prolonged period of
gradual recovery to previous air traffic levels. This will be
factored into the half year valuation of TCR.
Oystercatcher performed in line with expectations. The oil
products market continues to be in contango despite the oil price
increases since May as European countries started to ease
government restrictions, but we have seen reduced throughput
activity across the Period as a whole.
The portfolio is delivering a good level of income. Total
portfolio income and non-income cash was GBP47 million in the
Period, comprising portfolio income of GBP45 million and non-income
cash of GBP2 million. This compares with GBP51 million of income
and GBP6 million of non-income cash received in the same period
last year.
As usual, an important element of the determination of the
Company's results for the half-year to 30 September 2020 will be
the valuation exercise carried out on the investment portfolio at
that date.
Balance sheet
At 30 September 2020, the Company's cash balance was GBP361
million, with the full revolving credit facility of GBP300 million
undrawn and available to fund potential new investment
opportunities and to support portfolio companies if needed.
A further GBP205 million of deferred proceeds (including accrued
interest), is due from the sale of WIG, half of which is due to be
paid in December 2020 with the remainder in December 2021.
The Investment Manager continues to see a good flow of potential
new investment opportunities across the Company's target markets,
and expects to invest the Company's cash balance in due course.
Ends
For information, please contact:
Richard Laing Chair, 3i Infrastructure plc +44 1534 847 410
Thomas Fodor Shareholder enquiries +44 20 7975 3469
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Kathryn van der
Kroft Media enquiries +44 20 7975 3021
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About 3i Infrastructure plc
3i Infrastructure plc is a Jersey-incorporated, closed-ended
investment company, an approved UK Investment Trust, listed on the
London Stock Exchange and regulated by the Jersey Financial
Services Commission. The Company is a long-term investor in
infrastructure businesses and assets. The Company's market focus is
on economic infrastructure and greenfield projects in developed
economies, principally in Europe, investing in operating businesses
and projects which generate long-term yield and capital growth.
3i Investments plc, a wholly-owned subsidiary of 3i Group plc,
is authorised and regulated in the UK by the Financial Conduct
Authority and acts as Investment Manager to 3i Infrastructure
plc.
This press release is not for distribution (directly or
indirectly) in or to the United States, Canada, Australia or Japan
and is not an offer of securities for sale in or into the United
States, Canada, Australia or Japan. Securities may not be offered
or sold in the United States absent registration under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), or an
exemption from registration under the Securities Act. Any public
offering to be made in the United States will be made by means of a
prospectus that may be obtained from the issuer or selling security
holder and will contain detailed information about 3i Group plc, 3i
Infrastructure plc, 3i India Infrastructure Fund and management, as
applicable, as well as financial statements. No public offering in
the United States is currently contemplated.
This statement aims to give an indication of material events and
transactions that have taken place in the period from 1 April 2020
to 29 September 2020 and their impact on the financial position of
3i Infrastructure plc. These indications reflect the Board's
current view. They are subject to a number of risks and
uncertainties and could change. Factors which could cause or
contribute to such differences include, but are not limited to,
general economic and market conditions and specific factors
affecting the financial prospects or performance of individual
investments within the portfolio of 3i Infrastructure plc.
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END
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