TIDMINPP
RNS Number : 1215O
International Public Partnerships
08 June 2022
INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
PORTFOLIO UPDATE
FOR THE PERIOD 1 JANUARY 2022 TO 31 MAY 2022
8 June 2022
International Public Partnerships Limited ('INPP', the
'Company'), the FTSE 250 listed investment company which invests in
public or social infrastructure assets and related businesses
internationally, has today issued the following portfolio update
for the period 1 January to 31 May 2022.
OPERATIONAL HIGHLIGHTS
-- The Company has continued to deliver strong performance over
the period across its portfolio of over 140 projects and
businesses
-- Approximately GBP48 million of investments and commitments
were made during the period, including an additional c.GBP40
million investment being announced into Tideway, the company
building a 25km 'super-sewer' under the River Thames
-- Successfully completed a significantly oversubscribed GBP325
million capital raising during the period exceeding the initial
target of GBP250 million demonstrating strong support from both
existing and new shareholders. Approximately GBP160 million of the
proceeds were used to pay down the Company's revolving credit
facility with the remaining proceeds available to support the
Company's investment pipeline of c.GBP180 million. The revolving
credit facility remains available for re-drawing
-- The Company has now delivered a Total Shareholder Return(1)
since IPO in November 2006 to 31 May 2022 of 245.8% or 8.3% on an
annualised basis
-- Dividend guidance was reaffirmed for 2022 of 7.74 pence per
share, and new guidance was issued for 2023 of 7.93 pence per share
which is consistent with the Company's historic c.2.5% average
annual dividend growth(2)
-- The Company considers sustainability and ESG integration to
be an essential part of investment risk management and value
creation. In conjunction with the recent capital raising, the
Company has categorised itself as an Article 8 financial product
following an internal assessment of the application of the EU
Sustainable Finance Disclosure Regulations ('SFDR')
PORTFOLIO REVIEW
The portfolio continues to deliver essential services to its
stakeholders, maintaining high levels of asset availability. The
portfolio's cash flows continue to be underpinned by strong
inflation-linkage such that a 1% increase in assumed inflation is
projected to result in a 0.7% increase in portfolio return(3) .
Cash generation continues to be in line with projections supporting
the Company's established average historical dividend growth.
The Company has continued to source new investments during the
period including further investment commitments in Gold Coast Light
Rail Stage 3 and Tideway. In addition, the Company, through its
Investment Adviser, has a strong future pipeline of investments
across the social, transport and regulated utilities sectors of
c.GBP180 million over the next 12 months. This includes the
previously announced investments into two further offshore
transmission projects ('OFTOs'), East Anglia One OFTO and Moray
East OFTO, UK PPP portfolio and a further contingent commitment
remains available to Diabolo Rail Link, if required. Please see the
2021 Annual Report for more information.
INVESTMENT ACTIVITY
Since 1 January 2022, the Company has made new investments and
investment commitments of c.GBP48 million. New investment
commitments included:
-- On 1 June 2022, the Company announced that it has
conditionally agreed to acquire a further shareholding in Tideway.
The investment opportunity arose as a consequence of another
existing investor having to dispose of its stake as an underlying
investment fund is coming to the end of its life. If completed, the
acquisition will result in INPP increasing its stake in Tideway to
approximately 18% and deploying approximately GBP40 million of
additional capital. Tideway continues to be a successful investment
for INPP and will provide several significant environmental and
social benefits once operational.
-- In March 2022, the Company announced it had reached financial
close on Stage 3 of the Gold Coast Light Rail project (the
'Project'). Under the terms of the acquisition the Company will
make an investment totalling approximately A$12.5 million (c.GBP7.0
million at current exchange rates). The follow-on investment has
arisen through the Company's existing 30% interest. The Project
extends the existing Gold Coast Light Rail network (known as
G:link) a further 6.7 kilometres 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. At
completion of Stage 3 in 2025, Queensland's only light rail system
will have a route 27 kilometres long from Helensvale to Burleigh
Heads, stopping at 27 stations and serviced by 23 trams. This
follows the success of Stages 1 and 2, of which the Company is
invested. Over 60 million passenger trips have taken place to date
and One of the many benefits of the rail system has been an overall
increase in public transport use on the Gold Coast with a 43%
uplift for combined tram and bus use since light rail opened in
2014.
FINANCIAL HIGHLIGHTS(4)
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 2021 on 24 March 2022,
reporting:
-- The net asset value ('NAV') per share was 148.2 pence as at 31 December 2021
-- The cash flows generated by the Company's investment
portfolio continue to be underpinned by strong 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 (3)
-- A second half-year 2021 dividend of 3.77 pence per share was
declared on 24 March 2022 and was paid on 7 June 2022. This
dividend is in respect of the period 1 July 2021 to 31 December
2021 and represents a c.2.5% increase on the dividend paid in the
corresponding period in the prior year
-- The Scrip Dividend Alternative Circular applicable to that
dividend was available to investors and the associated scrip
allotment will be made on 13 June 2022
-- As referred to above, the Company is currently maintaining
its previously announced dividend targets of 7.74 and 7.93 pence
per share in respect of 2022 and 2023, respectively. This is in
line with the current targeted annual increase of c.2.5%(2)
-- As at 31 May 2022, the Company's GBP250 million revolving
credit facility was undrawn in cash with GBP16.9 million committed
in respect of letters of credit
INVESTMENT ENVIRONMENT AND OUTLOOK
-- There continues to be strong macro fundamentals that support
the Company's portfolio and whilst we continue to manage and
mitigate risk, the portfolio has continued to be resilient
-- The Company is closely monitoring the current macroeconomic
environment and in particular notes the sharp increase in nearer
term inflation rates. The Company will, as it always does, review
its macroeconomic assumptions in advance of the next formal
valuation date being 30 June 2022
-- The result of the capital raise that took place during the
period demonstrates the attractiveness of the Company's investment
case, including its strong inflation linkage in the current high
inflationary environment, as well as support for the Company's
future pipeline
-- Governments have acknowledged the key role infrastructure
spending will play in driving economic recovery, creation of jobs
and addressing challenges such as climate change
-- The Company is now categorised as an Article 8 financial
product and the Company and its Investment Adviser will continue to
monitor the emerging requirements of the EU SFDR and EU Taxonomy
Regulation
-- The pipeline for the types of assets the Company invests in
remains strong and the Company continues to remain confident in its
ability to continue to source and develop quality, high-performing
opportunities, across the Company's target geographies, that
deliver long-term, predictable cash flows with strong
inflation-linkage that meet the Company's risk-return profile
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. Source: Bloomberg. Share price appreciation plus dividends assumed to be reinvested.
2. Future profit projection and dividends cannot be guaranteed.
Projections are based on current estimates and may vary in
future.
3. 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.
4. For the full year to 31 December 2021 unless stated otherwise.
S.
For further information:
Erica Sibree/Amy Edwards +44 (0) 7557 646 499 / (0) 7827 238
355
Amber Fund Management Limited
Hugh Jonathan +44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0) 7703 330 199 / (0) 7807 296
032
FTI Consulting
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 over 140
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 Infrastructure Group ('Amber') is the Investment Adviser
to INPP and consists of over 150 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.
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