TIDMBBGI
RNS Number : 1395P
BBGI SICAV S.A.
15 November 2016
15 November 2016
BBGI SICAV S.A.
Quarterly Management Statement
This announcement contains inside information
BBGI SICAV S.A. ('BBGI' or the 'Company'), the listed global
infrastructure investment company, is today issuing this Quarterly
Management Statement ("QMS"). Any reference to the Company or BBGI
below also refers to its subsidiaries (where applicable). This
statement relates to the period from 1 July 2016 to 14 November
2016.
Highlights
-- Portfolio performance and cash receipts during the period
were slightly ahead of the business plan and underlying financial
models.
-- On 26 October 2016, the Company paid an interim dividend of
3.125 pence per share, which is in line with the Company's revised
annual dividend target of 6.25 pence per share.
-- The net effect of foreign exchange movements on the
Investment Basis NAV ("NAV") from 1 July to 11 November 2016 was an
increase of approximately GBP13.4 million.
-- Construction of the Mersey Gateway Bridge, Ohio River Bridges
and North Commuter Parkway projects is progressing well with no
significant delays currently expected.
-- In October, BBGI was part of a consortium shortlisted to
develop a bid for the Fargo-Moorhead flood diversion P3 in North
Dakota, USA.
-- The Company's shares continue to trade at a premium to NAV
closing at GBP1.44 on 11 November 2016, representing a premium of
19.2% to the 30 June 2016 NAV of GBP1.208.
-- Total Shareholder Return since listing in December 2011 to 11
November 2016 of 78.81% equating to a compound annual growth rate
of 12.62%.
Asset Performance
The existing portfolio of projects continues to perform well
with no material exceptions. Cash flows generated from the projects
in the period are slightly in excess of project budgets and
Management's expectations.
Dividends
BBGI announced in August 2016 an increase in its 2016 dividend
target from 6.00 pence per share to 6.25 pence per share, which
represents an increase of 4.16%. The 2016 interim dividend of 3.125
pence per share was paid on 26 October 2016.
Portfolio
BBGI's existing portfolio comprises 39 projects spread across a
range of sectors including roads, education, healthcare and
justice. All the projects in BBGI's portfolio are
availability-based and are supported by contracted,
government-backed revenue streams, with inflation protection
characteristics. The portfolio analysis below is based on the
existing portfolio value as at 30 June 2016 adjusted for subsequent
foreign exchange movements.
The portfolio currently has the following estimated sector,
geographical and project status split:
-- Sector split: 39% Roads & Bridges, 22% Justice, 22% Health, 15% Education and 2% other assets
-- Geographical split: 39% UK, 27% Canada, 21% Australia, 9% Continental Europe and 4% USA
-- Status split: 96% operational, 4% late stage construction and
0% early stage construction([1]) (,[2])
Assets in Construction
BBGI currently has three assets in construction. Ohio River
Bridges in the US is expected to become operational in late 2016,
Mersey Gateway Bridge in the UK in 2017 and North Commuter Parkway
in Canada in 2018. Construction for each of the three projects
continues to be on schedule with no significant completion delays
currently expected.
Valuation of the Portfolio
The Company reports its NAV semi-annually when it publishes its
results for the half and full year periods ending in June and
December respectively. The Company, in its QMS, also provides
guidance in terms of the impact of foreign exchange movements in
the period on the NAV.
Over the period from 1 July 2016 to 11 November 2016 there has
been a continued depreciation in the value of Sterling against the
AUD, CAD, EUR, NOK and USD. The overall impact on the NAV, as
calculated at 30 June 2016, is an increase of approximately GBP13.4
million.
Hedging
In July, the Company entered into a number of additional
currency forwards, in accordance with its hedging policy.
Net Debt
As at 11 November 2016, the Company had net debt of
approximately GBP23.0 million, 4.4% of the NAV as calculated at 30
June 2016, after taking account of approximately GBP22.3 million of
currently available cash.
As at 11 November 2016 the amount utilised under the credit
facility was GBP70.3 million, of which GBP25.1 million is being
used to cover letters of credit and the remaining GBP45.2 million
is drawn to provide bridge financing for acquisitions. BBGI retains
the flexibility under the accordion tranche to further increase the
total facility from GBP110 million to GBP180 million. No commitment
fees are paid on the GBP70 million unused accordion tranche.
The facility is used primarily to fund acquisitions and provide
letters of credit for investment obligations, and the intention is
to repay the facility from time to time through equity
fundraisings. The term of the facility is three years from
establishment and it will expire in January 2018.
Regulatory
At the Company's EGM in April 2016, the shareholders voted
unanimously in favour of amending the Company's Articles of
Association ("Articles") in order to remove the NAV +5% premium
limitation imposed when setting the price of secondary issuances of
the same class of shares. This amendment of the Articles remains
subject to the enactment of a new bill into Luxembourg law with the
bill currently going through the Luxembourg Parliamentary
legislative process.
Outlook and Investment Opportunities
The Supervisory and Management Boards are pleased to report that
the portfolio of assets continues to perform well, and are
confident of the Company's ability to deliver predictable dividends
to shareholders.
The landscape for secondary market for social and transport
infrastructure remains very competitive. We evaluated a number of
opportunities during the period but did not find sufficient value
to justify the Company's further participation. BBGI will continue
to follow a path of disciplined growth, being selective and
surgical in its approach to identifying opportunities and buying
secondary assets on an opportunistic basis. We believe that this
approach ensures that the Company does not deviate from its
investment objectives and is in the best interest of
shareholders.
In addition, we continue to identify and assess additional
attractive opportunities in new "greenfield" infrastructure
projects which we believe are typically better priced on a
risk-adjusted basis. During the period the Company was shortlisted
for the Fargo-Moorhead flood diversion P3 in North Dakota, USA and
is currently in the process of submitting documents to prequalify
for the Silvertown Tunnel PPP project in London, UK.
BBGI is a member of one of three consortia which were
short-listed in Q1 2016 to develop proposals for the Gordie Howe
International Bridge, a project that will connect Michigan, US and
Ontario, Canada. The Request for Proposal was issued on 10 November
2016. BBGI is also member of a consortium to pre-qualify for an
upcoming pipeline of PPP road projects in Norway.
Due to the internal management structure, the interests of the
management of BBGI and its shareholders are aligned and management
is not incentivised to grow the Company to the detriment of its
return targets.
Cautionary Statement
This QMS aims to give an indication of material events and
transactions that have taken place during the period from 1 July
2016 to 14 November 2016, and their impact on the financial
position of the Company. These indications reflect BBGI's current
views and 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 BBGI.
This QMS contains forward-looking statements that are based on
current expectations or beliefs, as well as assumptions about
future events. Undue reliance should not be placed on any such
statements because they speak only as at the date of this document
and, by their very nature, they are subject to known and unknown
risks and uncertainties and can be affected by other factors that
could cause actual results and BBGI's actions to differ materially
from those expressed or implied in the forward-looking
statements.
This QMS has been prepared solely to provide additional
information to shareholders as a body and should not be relied upon
by any other party or for any other purpose.
For further information, please contact:
BBGI Management Team +352 263 479-1
Frank Schramm
Duncan Ball
([1]) Early-stage construction assets are scheduled to become
operational in 2017 and 2018. The late-stage construction asset is
scheduled to become operational in December 2016.
([2]) BBGI has equity and subordinated debt subscription
obligations in Mersey Gateway Bridge ("MGB") and equity
subscription obligations in North Commuter Parkway ("NCP"),
collectively amounting to approximately GBP23.5 million. The
subscription obligations are due for payment upon the scheduled
construction completion of the respective projects. Assuming, for
pro-forma purposes only, that the equity and/or subordinated debt
subscription obligations for MGB and for NCP were paid down then
the current estimated portfolio split would be 93% operational, 3%
early-stage construction and 4% late-stage construction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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