TIDMINPP
RNS Number : 6951U
International Public Partnerships
30 March 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
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CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION.
30 MARCH 2023
INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
('INPP', 'the Company')
FULL YEAR RESULTS FOR THE YEARED 31 DECEMBER 2022
A successful year characterised by strong portfolio performance
against a persistently volatile economic and geopolitical
backdrop.
London - International Public Partnerships (LON: INPP), the FTSE
250-listed infrastructure investment company, is pleased to
announce its results for the year ended 31 December 2022.
The Company enjoyed a successful year in 2022. It was
characterised by continued strong performance of its investments,
and cash generation in line with projections which has enabled the
Company to continue its established trend of dividend growth.
HIGHLIGHTS FOR THE YEAR TO 31 DECEMBER 2022
-- The Company generated a total NAV return of c.12.5%[i] for
the year to 31 December 2022.
-- NAV per share increase of 7.3% to 159.1 pence per share (31
December 2021: 148.2 pence per share) driven by, among other
factors, the positive impact of the portfolio's inflation-linkage.
-- As a result of the portfolio's strong performance over 2022,
the Company has delivered full-year dividend growth of c.2.5%
to 7.74 pence per share (31 December 2021: 7.55 pence per
share) supported by 2022 cash dividend cover of 1.3x[ii].
-- The cash flows generated by the Company's investment portfolio
continue to be underpinned by strong inflation-linkage.
-- IFRS profit before tax increase of 153% to GBP326.8 million
(31 December 2021: GBP129.2 million), reflecting the unrealised
fair value gain on the portfolio in the year.
-- The Company's investment activity remaining aligned to the
Company's value-focused approach to portfolio development.
During the year, the Company made investments or investment
commitments totalling over GBP310 million across the energy,
wastewater, social infrastructure and transport sectors.
The Company continued to diversify its portfolio, and committed
to acquire its first investment in New Zealand.
-- The Company continues to see attractive investment opportunities,
with a strong near-term pipeline of GBP230 million, including
its existing investment commitments, across the energy, transport
and social infrastructure sectors. In order to support this
pipeline, the Company has, in principle, agreed an increase
in the committed size of its Corporate Debt Facility ('CDF')
to GBP350 million and an extension of the maturity date to
June 2025.
-- During the year, the Company successfully raised additional
equity totalling GBP325 million, through a Placing, Open
Offer, Offer for Subscription and Intermediaries Offer of
Ordinary Shares, the proceeds of which were fully deployed
to support recent investment activity.
-- In line with its commitment to put responsible investment
at the core of all its activities, the Company maintains
strong screening and due diligence processes relating to
ESG, and has strengthened the disclosures it provides to
shareholders and regulators. Improved data capabilities are
reflected in the second edition of INPP's Sustainability
Report, published in conjunction with the 2022 Annual results.
-- The Company's shares also maintain a low correlation to the
FTSE All Share Index of 0.33 over the 12 months to 31 December
2022 (31 December 2021: 0.22), demonstrating the resilience
of the Company's activities.
Mike Gerrard, Chair of International Public Partnerships, said:
"I am pleased to report that INPP has continued to deliver strong
operational and financial performance, despite the current ongoing
international economic and political uncertainties. The resilience
of INPP's portfolio of essential infrastructure projects and
businesses is largely attributable to the predictability of the
underlying investment cash flows, the high level of inflation
correlation, and the Company's active approach to asset management.
The Board is confident in the Company's ability to continue
evolving its portfolio in line with its investment objectives,
focusing on sustainable and attractive investment opportunities.
INPP remains well-positioned for future growth and to continue
generating stable, inflation-linked returns that deliver long-term
benefits for all its stakeholders."
INVESTMENT ACTIVITY
There was significant investment activity during 2022, with new
cash investments and investment commitments totalling over GBP310
million across the energy, wastewater, social infrastructure and
transport sectors. Highlights include:
East Anglia One Offshore Transmission project ('OFTO'), UK: The
Company reached financial close for the long-term ownership and
ongoing operation of the transmission link to the 714MW East Anglia
One ('EA1') offshore wind farm. EA1 is located 50km off the Suffolk
coastline and provides the EA1 Wind Farm access to transmit clean
power to more than 600,000 UK homes by transmitting electricity
generated by 102 offshore wind turbines. The Company owns 100% of
the equity and subordinated debt. The investment is the Company's
tenth OFTO and will further increase the Company's contribution to
a net zero carbon economy.
Thames Tideway, UK: During the year, INPP increased its holding
in Tideway to approximately 18%, deploying GBP42 million of
additional capital. Tideway will help to create a healthier
environment for London by cleaning up the city's greatest natural
asset (further information on Tideway is available in 'Operational
Approach and Stewardship' below).
Family Housing for Service Personnel ('FHSP'), US: The Company
completed a follow-on investment of c.US$ 45 million (c.GBP37
million) in FHSP, one of the longest-standing social infrastructure
sectors in the US, in December 2022. The investment represents two
additional interest-bearing subordinated debt instruments
underpinned by security over seven operational P3 FHSP projects,
comprising c.21,800 housing units across the US. The additional
investment marks the continued growth of the Company's investment
portfolio in the US, with approximately 4% of the portfolio by
investment fair value invested in the US.
Other: Further investments totalling c.GBP7.5 million were made
during the year, including into several availability-based UK
public-private partnership ('PPP') schemes, the Diabolo Rail Link
('Diabolo') and the National Digital Infrastructure Fund
('NDIF').
INVESTMENT COMMITMENTS
Gold Coast Light Rail, Australia: During the year, the Company
announced that financial close had been reached on Stage 3 of the
Gold Coast Light Rail project, where it will make an additional
investment of c.GBP7.0 million upon construction completion in
2026. The project extends the existing Gold Coast Light Rail
network a further 6.7km south from Broadbeach to Burleigh Heads. It
will include eight new stations, five additional light rail trams,
new bus and light rail connections at Burleigh and Miami, and an
upgrade of existing depot and stabling facilities.
PPP portfolio, New Zealand: In December 2022, the Company agreed
binding terms to acquire five infrastructure investments in New
Zealand for approximately GBP113 million. The acquisition will mark
the Company's first investment in New Zealand and includes three
school projects, a correctional facility and a purpose-built
student accommodation facility at the Auckland University of
Technology. These high-quality infrastructure investments are
already operational, delivering long-term stable cash flows linked
to inflation. The return profile is significantly based upon
government backed revenue streams generated through standard PPP
contracts in another highly rated, stable, OECD geography.
Financial close is expected to be reached during 2023.
OPERATIONAL APPROACH AND STEWARDSHIP
Responsible investment is a core component of the Company's
ability to deliver essential public services, maintain
relationships with its clients and local communities, and preserve
and grow the long-term value of each investment. The references to
SDGs below refer to the contribution of each mentioned asset to
defined UN Sustainable Development Goals.
Wastewater | SDGs 6, 8, 9 & 11: clean water and sanitation;
decent work and economic growth; industry innovation and
infrastructure; sustainable cities and communities
Tideway has continued to make good progress, and achieved a
number of milestones during 2022, including reaching the end of the
primary tunnelling phase in April 2022, and completing the majority
of its secondary lining at the end of the year. Overall
construction works were c.85% complete at the end of the year.
The amendments to Tideway's licence that were agreed with Ofwat
to mitigate the impact of both Covid-19 related cost overruns and
the Financing Cost Adjustment Mechanism came into effect in March
2022. The amendments provide greater certainty for the business,
and have already previously been reflected within the forecast cash
flows.
Gas distribution | SDGs 8, 9 & 11: Decent work and economic
growth; industry innovation and infrastructure; sustainable cities
and communities
Cadent continues to support the UK Government in meeting its net
zero target. It has worked closely with the Department for Energy
Security and Net Zero ('DESNZ') in supporting its Heat and
Buildings Strategy and Hydrogen Strategy with a view to ensuring
hydrogen is an integral part of the future energy mix. Cadent
remains actively engaged with the UK Government and regulators to
build awareness of the opportunities offered by green gases in the
journey towards net zero. The business remains largely insulated
from changes in gas prices and the associated energy price caps but
the Company continues to closely monitor these and other
developments within the sector.
Energy transmission | SDG 7 & 13: Affordable and clean
energy; climate action
The Company's OFTO investments are regulated by Ofgem, which has
granted those OFTOs a licence to transmit electricity generated by
an offshore wind farm to bring it into the onshore grid. The
revenues generated are not linked to electricity production or
price; the OFTO is paid a pre-agreed availability-based revenue
stream for a fixed period of time. The Ofgem consultation regarding
the potential regulatory developments underpinning an extension of
the OFTO revenue stream is ongoing, and the Investment Adviser
remains actively engaged with all relevant industry
stakeholders.
OUTLOOK
Together with its infrastructure sector peers and the broader
listed investment trust world, the Company's share price has not
been immune to market volatility, as financial markets continue to
adjust to various political and economic headwinds. The Board notes
that this is one of only a few occasions in the Company's 16-year
history in which the Company's shares have traded at a discount to
NAV and, whilst we will continue to monitor the share price and
discount carefully, we remain confident in the robustness and
reliability of the Company's future cash flows.
The Board is therefore pleased to reaffirm its dividend guidance
for 2023 of 7.93 pence per share and today has issued new guidance
for 2024 of 8.13 pence per share[iii], which is consistent with the
Company's historic c.2.5% average annual dividend growth.
Persistent high levels of inflation remain a key issue across
the economies where the Company invests. The Company, and its
investors, continue to be reassured by the strong inflation-linked
nature of the cash flows generated by the Company's investment
portfolio.
Infrastructure investment and performance remain high priorities
for the governments in countries INPP invests in, to help achieve
economic growth, improved productivity, decarbonisation targets and
resilience to the effects of climate change. As such, the Company
remains confident in the role infrastructure will play at the heart
of governments' efforts to deliver sustainable, fairer
societies.
INPP is well-positioned to lead the response to these
challenges, and continues to see attractive investment
opportunities across the markets where it is most active, as well
as in new priority geographies. The Company continues to work with
the Investment Adviser to ensure strong investment stewardship and
active risk mitigation.
OTHER INFORMATION
The 2022 Annual Report and financial statements for the year
ended 31 December 2022 has today been published on the Company's
website, along with a copy of the results presentation, and can be
accessed and downloaded at
https://www.internationalpublicpartnerships.com/investors/results-reports-presentations-and-circulars/.
In compliance with LR 9.6.1, a copy of the 2022 Annual Report
has been submitted to the National Storage Mechanism and will
shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. In
accordance with DTR 6.3.5(1A), the regulated information required
under DTR 6.3.5 is available in unedited full text within the 2022
Annual Report as uploaded and available on the National Storage
Mechanism and on the Company's website as noted above.
ENDS
NOTES TO EDITORS
Amber Infrastructure FTI Consulting
Erica Sibree / Amy Edwards Ed Berry / Mitch Barltrop / Jenny Boyd
+44 (0) 7557 676 499 / (0) 7827 +44 (0) 7703 330 199 / (0) 7807 296
238 355 032 / (0) 7971 005 577
About International Public Partnerships ('INPP'):
INPP is a listed infrastructure investment company that invests
in global public infrastructure projects and businesses, which
meets societal and environmental needs, both now, and into the
future.
INPP is a responsible, long-term investor in 138 infrastructure
projects and businesses. The portfolio consists of utility and
transmission, transport, education, health, justice and digital
infrastructure projects and businesses, in the UK, Europe,
Australia and North America. INPP seeks to provide its shareholders
with both a long-term yield and capital growth.
Amber Fund Management Limited ('AFML'), the Investment Adviser
to INPP, is part of the Amber Infrastructure Group ('Amber') which
consists of approximately 170 staff who are responsible for the
management of, advice on and origination of infrastructure
investments.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
Important Information
This announcement contains information that is inside
information for the purposes of the UK version of the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018 (as amended and
supplemented from time to time).
This announcement 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. The
issuance programme, as described in Part VI of the Prospectus
issued by the Company on 8 April 2022, available on the website, is
closed.
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
Limited 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 Regulation Rules of the Financial Conduct Authority
or other applicable laws, regulations or rules.
[i] Reflects dividends paid in the year and increase in NAV on a
per share basis.
[ii] Cash dividend payments to investors are paid from net
operating cash flows before capital activity.
[iii] Future profit projection and dividends cannot be
guaranteed. Projections are based on current estimates and may vary
in future.
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