TIDMINPP
RNS Number : 5716A
International Public Partnerships
25 May 2023
INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
PORTFOLIO UPDATE
FOR THE PERIOD 1 JANUARY 2023 TO 24 MAY 2023
25 May 2023
International Public Partnerships Limited, the listed
infrastructure investment company ('INPP', or the 'Company'), which
invests in public or social infrastructure assets and related
businesses internationally, has today issued a portfolio update for
the period 1 January 2023 - 24 May 2023.
KEY HIGHLIGHTS
-- The Company's portfolio of 138 projects and businesses has
continued to perform well during the period, delivering strong
operational and financial performance.
-- Consistent with previous forecasts, a second half-year 2022
dividend of 3.87 pence per share was declared on 30 March 2023(1)
.
-- The Company reaffirms its future dividend targets of 7.93 and
8.13 pence per share for 2023 and 2024, respectively, representing
a c.2.5%(2) increase on the preceding distributions and in line
with the growth target indicated at the time of INPP's IPO in 2006.
These dividends are expected to be fully covered by net operating
cash flows.
-- The Company published its second Sustainability Report in
March 2023, providing enhanced ESG disclosures that will support
its shareholders to meet their obligations under the EU Sustainable
Finance Disclosure Regulation ('SFDR') and the recommendations of
the Taskforce on Climate-related Financial Disclosures
('TCFD').
-- In April 2023, the Company increased the committed size of
its corporate debt facility ('CDF') from GBP250 million to GBP350
million. In addition, the Company retains a flexible 'accordion'
component which would, subject to lender approval, allow for a
further increase in the committed size of the facility to GBP400
million. The maturity date of the CDF was also extended from March
2024 to June 2025. This ensures the Company has more than enough
liquidity to meet its investment commitments which total c.GBP240
million across the transport, digital, offshore transmission, and
social infrastructure sectors.
-- The Company has delivered a Total Shareholder Return (3)
since IPO in November 2006 to 24 May 2023 of 206.3% or 7.0% on an
annualised basis.
FINANCIAL PERFORMANCE
-- The Company's investment portfolio valuation is determined
semi-annually by the Directors after advice from the Investment
Adviser, and is reviewed by the Company's auditors. This
semi-annual valuation is published within the Company's interim and
annual accounts, the last of which was published with the Company's
full-year results ending 31 December 2022 on 30 March 2023. This
reported that as at 31 December 2022, the net asset value ('NAV')
per share was 159.1 pence.
-- Since 31 December 2022, the Company has observed a
strengthening of Sterling against the currencies it is exposed to,
including the Australian Dollar, Canadian Dollar, Danish Krone,
Euro, and US Dollar. Other things being equal, this would have a
minor negative impact (less than 0.5%) on the Company's NAV.
-- The majority of jurisdictions the Company is invested in are
experiencing higher-than-anticipated inflation rates. Given the
portfolio's high (0.7%(4) ) level of inflation linkage, these
higher inflation rates would, other things being equal, have a
positive impact on the Company's NAV.
-- The Company observes that the relevant government bond yields
have increased modestly since the publication of the 31 December
2022 NAV, although it notes that historically discount rates have
not moved in lockstep with government bond yields. The Company
continues to see strong demand for well-structured infrastructure
assets.
INVESTMENT ACTIVITY
-- Since 1 January 2023, the Company has made new investments
totalling c.GBP0.7 million and investment commitments of GBP13.7
million;
o In March 2023, the Company acquired a further 20% investment
in the Ealing Building Schools for the Future ('BSF') scheme for
c.GBP0.7 million, increasing its holding to 100%. This BSF scheme
provides education facilities to over 1,400 pupils.
o In May 2023, the Company made a further GBP13.7 million
commitment to toob, alongside other co-investors in the
Amber-advised National Digital Infrastructure Fund ('NDIF'). The
business has a current fibre network covering c.140,000 premises
across Southampton and other towns in the South of England. INPP's
commitment is part of a wider GBP300 million of additional funding
raised by the business, which will enable the business to reach
over 300,000 premises. INPP's investment will be made during the
course of 2024. Other things being equal, it is estimated that the
Company's exposure to digital investments will continue to
represent less than 3% of the portfolio by fair value.
-- In addition, the Company has previously noted its commitment
to acquire a c.NZD 200 million portfolio of five investments in New
Zealand and this acquisition is expected to reach financial close
shortly. This acquisition will mark the Company's first investment
into New Zealand and the underlying investments are high-quality,
operational infrastructure assets, delivering long-term stable cash
flows with strong linkage to inflation.
OUTLOOK
-- Along 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 respond 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 but
continues to actively monitor the share price and discount
carefully.
-- Despite these challenges the Company's underlying portfolio
of essential infrastructure investments has proven its resilience
due to: the predictability of the underlying cash flows which are
typically underpinned by regulated or contracted government-backed
revenues, with high levels of inflation correlation; and the
Company's active approach to asset management.
-- Whilst lower volumes of transactions are taking place across
the market, the Company continues to see attractive investment
opportunities within the countries where it invests.
-- The Company's investment portfolio continues to generate cash flows underpinned by robust inflation-linkage (a 1.0% increase in assumed inflation rates across all assets is projected to result in a 0.7% increase in portfolio returns(4) ). The Company is therefore well positioned in the event the current higher rates of inflation persist.
-- Governments continue to acknowledge the key role
infrastructure plays in helping to achieve economic growth,
improved productivity, decarbonisation targets and resilience to
the effects of climate change.
Notes to Editors:
While it is no longer a requirement under the Disclosure
Guidance and Transparency Rules for the Company to issue Interim
Management Statements, the Board believes it is in the interest of
shareholders for the Company to provide quarterly updates in
addition to its half year reports.
1. The forecast date for payment of the H2 2022 dividend is 7 June 2023.
2. Future profit projection and dividends cannot be guaranteed.
Projections are based on current estimates and may vary in
future.
3. Source: Bloomberg. Share price appreciation plus dividends assumed to be reinvested.
4. Calculated by running a 'plus 1.0%' inflation sensitivity for
each investment and solving each investment's discount rate to
return the original valuation. The inflation-linked return is the
increase in the portfolio weighted average discount rate.
ENDS.
For further information:
Erica Sibree
Amber Fund Management Limited +44 (0) 7557 676 499
Hugh Jonathan
Numis Securities +44 (0)20 7260 1263
Ed Berry/Mitch Barltrop +44 (0) 7703 330 199 / (0) 7807
FTI Consulting 296 032
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, New Zealand and North America. INPP seeks to provide its
shareholders with both a long-term yield and capital growth.
Amber Infrastructure Group ('Amber') is the Investment Adviser
to INPP and consists of over 170 staff who are responsible for the
management of, advice on and origination of infrastructure
investments.
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