TIDMRMII TIDMTTM

RNS Number : 1558V

RM Infrastructure Income PLC

08 August 2022

RM INFRASTRUCTURE INCOME PLC

HALF-YEARLY REPORT

FOR THE SIX MONTHSED 30 JUNE 2022

About us

How we invest

RM Infrastructure Income plc (the 'Company') aims to generate attractive and regular dividends through investment in secured debt instruments of UK Small and Medium sized Enterprises ('SMEs'), and mid-market corporates and/or individuals including any loan, promissory notes, lease, bond, or preference share (such debt instruments, as further described in the prospectus, being 'Loans') sourced or originated by RM Capital Markets Limited (the 'Investment Manager') with a degree of inflation protection through index-linked returns where appropriate.

Where we invest

Having had a general sectoral lending approach since inception, the Company has narrowed the sector focus since 2021 to investments within the social and environmental infrastructure sectors.

Our ethos

The Company aims to make a difference with the deployment of its capital and as such has adopted an impact framework allowing the measurement and reporting of impact from investments made. In addition to this the firm seeks to target investments directly linked to achieving outcomes linked to six Sustainable Development Goals ("SDGs").

 
 Company highlights (as at 30 June 
  2022) 
 
 3.250p                               27% of GAV               GBP128.6m 
 Dividend pence per share             CBILS* and RLS** loans   Gross assets 
 
 +2.7%                                35                       1.91 years 
                                                               Average life of 
 NAV Total return                     Number of loans           investments 
 
 *Coronavirus Business Interruption 
  Loan Scheme 
  **Recovery Loan Scheme 
 

Portfolio at a glance

Financial Information

 
                                            As at 30 June   As at 30 June 
                                                     2022            2021 
-----------------------------------------  --------------  -------------- 
 Gross asset value (GBP'000)                  GBP 128,630      GBP124,769 
 Net Asset Value ("NAV") (GBP'000)           GBP110,389      GBP112,348 
 NAV per Ordinary Share (pence)                    93.68p          95.25p 
 Ordinary Share price (pence)                      90.75p          90.00p 
 Ordinary Share price discount to NAV(1)           (3.1%)          (5.5%) 
 Dividend (pence) paid in respect of the 
  Period                                           3.250p          3.250p 
 
 
   Performance Summary 
                                            % change(2,4)   % change(3,4) 
-----------------------------------------  --------------  -------------- 
 Total return - Ordinary Share NAV and 
  dividends(1)                                      +2.7%           +5.0% 
 Total return - Ordinary Share price and 
  dividends(1)                                      -1.1%           +7.3% 
 

(1) These are Alternative Performance Measures ("APMs").

(2) Total returns for the period to 30 June 2022, including dividend reinvestment.

(3) Total returns for the period to 30 June 2021, including dividend reinvestment.

(4) Source: The Company's Factsheet.

Alternative Performance Measures ("APMs")

The financial information and performance summary data highlighted in the footnote to the above tables represent are considered to represent the APMs of the Company. Definitions of these APMs together with how these measures have been calculated can be found in the Interim Report.

PORTFOLIO SUMMARY ( as at 30 June 2022)

Largest 10 loans by drawn amounts across the entire portfolio

 
                                   Investment type                Valuation   Percentage 
                                                                        (+) 
 Business activity                 (Private/Public/Bond)            GBP'000     of gross 
                                                                               asset (%) 
--------------------------------  -----------------------  ----------------  ----------- 
 Care home                         Private Loans                     11,830          9.2 
 Asset finance                     Private Loans                     10,163          7.9 
 Automotive parts manufacturing    Private Loans                      8,899          6.9 
 Hotel                             Private Loans                      8,474          6.6 
 Gym franchise                     Private Loans                      7,906          6.1 
 Healthcare                        Bond                               6,891          5.4 
 Hotel                             Private Loans                      6,468          5.0 
 Care home                         Private Loans                      4,985          3.9 
 Hotel                             Private Loans                      4,982          3.9 
 Student Accommodation             Private Loans                      4,981          3.9 
--------------------------------  -----------------------  ----------------  ----------- 
 Ten largest holdings                                                75,579         58.8 
 Other private loan investments                                      47,288         36.8 
 Wholly owned asset                                                   3,593          2.8 
---------------------------------------------------------  ----------------  ----------- 
 Total holdings                                                     126,460         98.4 
 Other net current assets                                             2,170          1.6 
---------------------------------------------------------  ----------------  ----------- 
 Gross assets                                                       128,630        100.0 
---------------------------------------------------------  ----------------  ----------- 
 

* The Company's gross assets comprise the net asset values of the Company's Ordinary Shares and the Bank loan, with the calculation can be found in the Interim Report.

(+) Valuation conducted by external Valuation Agent.

CHAIR'S STATEMENT

Introduction

Dear Shareholders,

On behalf of the Board, I am pleased to report on the first half of 2022 (the "Period"). The first six months of the year have seen a robust Net Asset Value ("NAV") and Share Price Total Return outperformance versus more traditional corporate bond funds and leveraged loan indices.

I noted 12 months ago in this report that "the Board is conscious of rising prices and the threat of inflation to fixed income securities. With that in mind the Investment Manager has constructed a high yielding portfolio of largely fixed rate exposures with a short duration...should a global bond market sell-off materialise this will mitigate the risk for the Company portfolio". This expected global bond decline has occurred sharply over the first half of the year and our focus on investing in bespoke, short duration and high yielding loans originated by the Investment Manager combined with robust security packages has served us well during this period.

Credit spreads as measured by the Markit iTraxx Europe Crossover index have widened materially, doubling from 240 to 580 at the Period end. These levels were last seen during the peak fear month of March 2020 from Covid-19 and before that 10-years ago during the European sovereign debt crisis.

In addition to wider corporate spreads, UK government bond yields have risen by approximately 125bps on 5 year and 140bps on 10 year instruments. This increase in government yields has contributed to UK government and corporate bonds that price over the "risk free rate" to fall by approximately 5% for 5-year instruments and 10% for 10-year instruments. This vindicates our intention at this point of the interest cycle to keep the duration of the RMII portfolio at or under 3 years and thus minimise any interest rate exposure.

During the Period, The Good Economy released their first Impact Report which had several positive conclusions and a number of recommendations to achieve further progress which are now being implemented. The Investment Manager will go into this in further details within their report.

Robust NAV performance

The NAV % Total Return for the Period was 2.68% which is slightly behind our target, however, when set against the weaker backdrop for credit as described above, we believe this is satisfactory.

Delivering stable income

Since inception there have been 21 quarterly distributions on or above target to Shareholders totalling 32.35 pence.

The Company paid the fourth interim dividend for the fourth quarter of 2021 of 1.625 pence per Ordinary Share on 25 March 2022 leading to a full year dividend for 2021 of 6.5 pence per share. In addition, the first interim dividend of 1.625 pence per share for Q1 2022 was paid on 24 June 2022.

The Board has declared a second interim dividend of 1.625 pence per Ordinary Share for Q2 2022, which will be payable on 30 September 2022 to Shareholders on the register at the close of business on 2 September 2022. Therefore, the aggregate dividend in respect of the Period is 3.25 pence per Ordinary Share.

As of 30 June 2022, the Company had 117,840,988 Ordinary Shares in issue and the closing mid-price was 90.75 pence per Ordinary Share. The NAV per Ordinary Share was 93.68 pence, correspondingly the share price to NAV was a circa 3.1% discount.

Portfolio

The portfolio remained stable with 35 loans, which is the same number of loans as at 31 December 2021 and invested assets of GBP131m (GBP132m as at 31 December 2020). Overall private debt investments represent circa 94% of the portfolio holdings and 4% within equity (unlevered ownership of investment reference 68, student accommodation asset Coventry.)

Compared to the position at the Company's year end, the average yield on investments of 8.73% for the Period is 30 basis points higher and the weighted average life of the investments for the Period is approximately 1.91 years, which has fallen from 2.22 years at the Company's year end. The percentage of investments linked to Sonia/Libor reduced from 11% to 8% as some floating rate exposure was repaid. However, this is expected to increase again over H2 2022 as most new investments have coupons linked to SONIA or Bank of England base rates. Our messaging has been consistent since IPO; government yields have been unsustainably low and within the portfolio we have not been seeking to take duration risk. Thus, during the Period, the short dated average life of the portfolio has been a key component of the outperformance versus other more liquid fixed income funds and the investment manager will further elaborate on this within their report.

The number of senior secured loans or Coronavirus Business Interruption Loan Scheme ("CBILS") / Recovery Loan Scheme ("RLS") classified loans within the portfolio has increased over the Period from 61% to 63%.

The portfolio continues to be well diversified across investments and sectors and the top 10 investments represent circa 67.7% of NAV and with regards to the focus sectors 50% of NAV is now invested into Social & Environmental Infrastructure transactions.

During the latter part of July and in early August the Board visited two of your holdings, Trent and Clyde Street. These two investments could not be more different. Trent is a manufacturing business with a long and proud history, adapting to a changing world and reinventing itself as all businesses must do from time to time. On the other hand, Clyde Street is a brand-new hotel with Virgin Group as its operator which is due to open soon. The Board wishes both ventures every success in the future.

Outlook

For the first time since pre-quantitative easing, we are now seeing dispersion within the broader corporate bond market where risk is currently being more accurately reflected by individual credit spreads. This offers opportunities in more broadly syndicated private loans which we have not seen since the RMII IPO in 2016, furthermore the bespoke loans originated by RM Funds price above the syndicated credit curve and allows for wider pricing and better terms to be negotiated by the Investment Manager.

Our key theme is that now is a good time to be a credit investor and probably the best environment to be deploying and investing capital. Risk is being appropriately priced and, in our view, offers compelling investor returns with the ability to structure enhanced security and improved covenants on transactions at this point of the economic cycle as credit conditions tighten. Since IPO, private credit as measured by RMII and other investment trusts specialising in direct lending have demonstrated resilience in preserving capital versus public bond and loan markets alternatives (as measured by high yield and leveraged loan indices or exchange traded funds). This is important for investors looking to generate total returns principally from fixed income and in particular corporate lending.

The Board are grateful for the support of Shareholders and are delighted to have such a broad investor base. We would also like to thank RM Funds and the other professional advisors for their hard work and support. Please do not hesitate to contact me through Peel Hunt or Singer Capital Markets if any additional information is required.

Norman Crighton

Chairman

5 August 2022

INVESTMENT MANAGER'S REPORT

Overview

Income Performance & NAV % Total Return

RM Funds is pleased with the Company's continued positive performance in the Period, in which the portfolio delivered a steady net interest income with two further dividends declared and paid in the Period totalling 3.25 pence per Ordinary Share. Overall, since inception there have been 21 distributions totalling 32.35 pence per Ordinary Share to Shareholders.

The NAV % Total Return for the period was 2.68%. Whilst slightly behind the Company's target, the portfolio's performance versus the observable credit peer group is favourable, as outlined below:

 
                                   NAV % Total 
                                    Return 
                                  --------------- 
                                   YTD      ITD 
                                  -------  ------ 
 RM Infrastructure Income NAV      2.68     34.22 
 RM Infrastructure Income Share 
  Price TR                         -1.06    28.23 
 S&P European Leveraged Loan 
  Index                            -7.62    8.73 
 MarkIT iBoxx EUR Liquid High 
  Yield TRI                        -13.40   0.21 
 

Since IPO in December 2016 the Markit iBoxx EUR liquid High Yield Total Return has been broadly flat with the index down YTD -13.4%. The S&P European Leverage Loan index has fared better, however is still down -7.62% YTD and up 8.73% since December 2016. Set against this, the Share Price Total Return % and NAV Total Return % for RMII has been materially better than these comparables.

Share Price

The Company's share price has pulled back from 95.00 pence to 90.75 pence at the Period end. Again, as shown in the table above, when set against the performance of other fixed income funds this we believe is satisfactory. The share price discount has remained relatively stable moving from -0.89% at year end to -3.13% as of 30 June 2022, with no buybacks conducted during the Period.

The target remains to continue to reduce this discount and return to a share price premium to NAV. Overall, the share price/discount trend is supportive that this will happen when fixed income markets start to firm up a little and capital starts to flow back into the space.

Sustainability and Impact Framework

Sustainability and ESG are at the heart of the RM Fund's investment process. The Investment Manager incorporates comprehensive ESG screening for each transaction in addition to the independent Impact Reporting Score and targeting sustainability linked lending.

The Good Economy, a leading social advisory firm, has been engaged by the Company to provide an independent assessment on the ESG and Impact outcomes of the portfolio. They conducted a scoring of the portfolio during H1 2021 and released their first impact report during April 2022. The key findings were as follows:

-- Portfolio alignment with RMII impact objectives has increased by 4% in the last 12 months above the baseline alignment figure of 46%.

-- The average Impact Score across the portfolio for only those investments which align to RMII's impact objectives is 42.56, which will provide a baseline against which to measure progress in future reporting cycles.

-- RMII's current portfolio of loans is estimated to support approximately 1,115 jobs. The majority of these are in the construction industry.

-- RMII continues to be more regionally distributed than the average private debt fund, with 99% of the value of live loans in the UK being invested outside of London compared to the industry average of 65%

Investment Manager aligned with Shareholder interest

RM Funds purchased 25,000 Ordinary Shares in the Company during the Period. This takes the direct investment in the Company to 1,291,625. The Investment Manager continues to believe this is the best way of demonstrating its alignment with the interests of other Shareholders. Since the Period end RM Funds have acquired a further 12,500 Ordinary Shares, taking the Investment Manager's total holding of Ordinary Shares to 1,304,125.

Market environment

Quantitative easing compressed spreads in liquid bonds as central bank buying combined with cheap money meant that in the search for yield investors purchased many names indiscriminately and taking substantial duration and credit exposures. This risk /reward profile in traditional corporate bond funds seemed unattractive to RM Funds. The recent reversal in credit spreads and underlying government bond yields has been swift and regardless of whether there is a recession or not, credit now offers attractive opportunities. For private credit, all in yields and borrower cost of funds are rising to reflect tighter credit conditions. This is a good thing for investors seeking to allocate to the sector as this lender led market allows for continued strengthening of covenant and security packages combined with higher returns.

A year ago, in the 2021 Interim Report we noted that "the yield on the 10-year UK government bond rose during the period from circa 30bps to 85bps. Whilst this is a material move given the initial starting point as the yield has more than doubled the current 85bps yield level is still extremely low by historic standards. There are therefore clear risks to government bonds, investment grade and high yield prices should these government benchmark yields move materially higher".

Within the investment team at RM Funds this has therefore been our base case scenario outcome for several years and hence the focus on short-dated maturities and high yielding well covenanted loans. UK Government 10-year yields are at 2.2% at the Period end leading to price declines in the "risk free" 10-year UK Government bonds of circa 15% since the last half yearly report was released. This higher UK government yield curve combined with wider credit spreads has led to meaningful price reductions across corporate bonds.

Portfolio Update

As at the Period end, the capital available for investment was largely fully deployed and the average yield on investments was 8.73%, this has increased by 30bps since the year ended 31 December 2021 and reflects the yield widening during the Period. The portfolio remains well diversified with 35 investments across 12 sectors. RM Funds continues to believe that the CBILS and the Recovery Loan Scheme, UK Government partial guarantee also offers a material credit enhancement for the portfolio.

RM Funds continue to be able to originate a strong pipeline of transactions and the constraining factor is the availability of capital due to the share price discount to NAV. Should this change, the Investment Manager is well placed to be able to swiftly deploy further capital.

Overall, income generation of GBP5.25m was similar to the first half of 2021 (GBP5.3m H1 2021), split between cash pay and Payment in Kind ("PIK") 85%/15% which is up from 79%/21% during the same period last year. For the Period, there were nine drawdowns to existing facilities, five new investments, six partial repayments and three full repayments which again further demonstrate the successful execution of the business strategy as the Company makes loans, receives interest from borrowers and continues to get repaid.

The portfolio NAV was circa 50% invested into the focus sectors of Social & Environmental which is expected to increase to over 60% by year end as several vintage loans are expected to be repaid over the remainder of the year having now come out of their non-call period and are relatively expensive capital for our borrowers.

As at 31 December 2021 there were three loans which were under enhanced monitoring by the investment team and at the end of the Period this still remains the case. The key developments during the Period for each of these loans are detailed below:

   1.    Trent Capital (Loan Reference 62 & 63) 

Overview: This loan is to a company focused on the manufacture of zero carbon home heating products: air source heat pumps and electric boilers. It is estimated that 31% of UK carbon reduction comes from domestic heating and hot water and RM sees the support of these businesses operating in this sector as key to meeting carbon reduction targets. This loan also has a property portfolio providing significant additional collateral. The total market value exposure is currently 4.15 % of Company net assets.

Update: The loan balance has reduced by GBP392,900 during the Period due to a partial refinancing of the secured assets. Realising the secured collateral is expected to accelerate in H2 as marketing of the secured properties is well underway. Underlying business performance of the operating entity has been robust in the Period with a material increase in gross margin observed. Operating costs have been reduced over recent months which will lead to material improvements in credit metrics over the remainder of the year, allowing further deleveraging of the exposure. The Company also has an equity position in Trent, currently valued at zero.

   2.    Hotel development & contractor, Glasgow (Loan References 58, 79, 80 & 92) 

Overview: This hotel was scheduled to open in June 2022 and is to be operated by Virgin Hotels under a 35-year Hotel Management Agreement. The total market value exposure that is correlated to the outcome of this asset is currently 10.38% of Company net assets.

Update: Well documented global supply chain issues have delayed practical completion from June 2022 to October 2022. This has led to increased cost overrun on the project which is currently being addressed by the lending group. To reflect the increase in risk of this project, the credit provisions have been increased over the Period. Most of the exposure has been funded by CBILS or RLS loans and to date the loans have been marked lower to reflect the delayed opening date. Consequently, the downside exposure from current marks is limited given the partial government guarantee provided by such CBILS/RLS facilities.

   3.    Purpose Built Student Accommodation ("PBSA"), Coventry (Loan reference 68) 

Overview: This asset is wholly owned by RMII and has had delays becoming income generative due to issues obtaining recommissioning approval from the fire department. These issues largely relate to the works conducted by the original scheme architect and main contractor and are being addressed so that students can take occupation of the building.

Update : a substantial works programme has been undertaken over recent months to assess why the current cladding and building is non-compliant and to appoint contractors and consultants to ensure compliance. Work is progressing with a view to being open during the 2022/2023 academic year. Concurrent to this work stream a legal claim is being progressed with a view to obtaining payment for these works from the original scheme contractors.

Construction assets

Overall construction funding accounts for 16.39% of gross assets. RM Funds has successfully originated several aged care construction facilities. A lack of bank funding has offered opportunities for specialist lenders such as RMII to structure high quality loans with excellent risk adjusted returns. One aged care home construction project has reached practical completion during the Period and a second is due to reach practical completion shortly. A third aged care home is about to start the construction cycle with the loan document being recently executed.

The other material construction asset is the hotel development as described above which is expected to reach completion during the second half of 2022.

Outlook

Whilst the markets are volatile with inflation and rises in interest rates dominating investors thoughts, the actual outlook for investors seeking corporate bond exposure is now better than it has been for many years. Quantitative Easing and the movement to Quantitative Tapering combined with a shift in interest rate expectations have led to a significant movement in prices such that credit and interest rate risks are beginning to be priced more appropriately by the public markets. Benchmark names are trading at multi year elevated yield levels thus offering real value. Importantly private credit prices over public credit curves and therefore we are expecting to see RMII portfolio yields continue to rise as new capital is deployed with higher coupons. RM expect to see continued higher pricing over the coming months leading to increased coupons and thus RM think this environment is an excellent one to be allocating capital to bespoke loans. Our focus for the deployment of these new loans remains on linking coupons to SONIA or Bank of England base rate and working with borrowers that can pass through inflationary cost pressures within their business.

RM Capital Markets Limited

5 August 2022

INTERIM MANAGEMENT REPORT

The Directors are required to provide an Interim Management Report in accordance with the Financial Conduct Authority ("FCA") Disclosure Guidance and Transparency Rules ("DTR"). The Chair's Statement and the Investment Manager's Report in this half-yearly report provide details of the important events which have occurred during the Period and their impact on the financial statements. The following statements on related party transactions, going concern and the Directors' Responsibility Statement, together, constitute the Interim Management Report for the Company for the six months ended 30 June 2022. The outlook for the Company for the remaining six months of the year ending 31 December 2022 is discussed in the Chair's Statement and the Investment Manager's Report.

Principal and emerging risks and uncertainties

The Board has a dynamic risk management register in place to help identify principal and emerging risks in the business and oversee the effectiveness of internal controls and processes. The principal and emerging risks and uncertainties facing the Company are as follows:

   --    Market risk; 
   --    Liquidity risk; 

-- Risks associated with meeting the Company's investment objective or target dividend yield of 6.5%;

   --    Financial risk including leverage and borrowing risk; 
   --    Regulatory risk and internal controls risk; 
   --     The ongoing impact of the global pandemic; and 
   --     The increasing geopolitical tensions in the region. 

Emerging risks are considered by the Board at its quarterly meetings and by the Audit and Management Engagement Committee as part of its risk management and internal control review. Failure to identify emerging risks may cause reactive actions rather than being proactive and the Company could be forced to change its structure, objective or strategy and, in worst ca se, could cause the Company to become unviable.

A detailed explanation of the principal and emerging risks and uncertainties to the Company are detailed in the Company's most recent Annual Report for the year ended 31 December 2021, published on 21 April 2022, which can be found on the Company's website at https://rm-funds.co.uk/rm-infrastructure-income/investor-relations/. The Board is of the opinion that these principal and emerging risks are equally applicable to the remaining six months of the financial year as they were to the six months being reported on.

Since the publication of the 2021 Annual Report and Accounts, there continues to be increased risk levels within the global economy posed by the secondary effects of the Covid-19 pandemic and the war in Ukraine. The Board has considered the impact of the continued uncertainty on the Company's investment objectives, portfolio and stakeholders and, continues to monitor the situation closely to both assess and mitigate any impact.

The Investment Manager and other key service providers provide periodic reports to the Board on operational resilience. The Board is satisfied that the key service providers have the ability to continue their operations efficiently a hybrid working environment.

Related party transactions

The Company's Investment Manager, RM Capital Markets Limited is considered a related party under the Listing Rules. Details of the amounts paid to the Company's Investment Manager and the Directors during the Period are detailed in the Notes to the Financial Statements.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements. The following is a summary of the Directors' assessment of the going concern status of the Company.

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of this document. In reaching this conclusion, the Directors have considered the Company's portfolio of loan investments of GBP126.5 million (30 June 2021: GBP123.3 million; 31 December 2021: GBP126.7 million) as well as its income and expense flows and the cash position of GBP0.7 million (30 June 2021: GBP4.2 million; 31 December 2021: GBP3.3 million). The Company's net assets at 30 June 2022 were GBP110.4 million (30 June 2021: GBP112.3 million; 31 December 2021: GBP111.3 million). The total expenses (excluding finance costs and taxation) for the period ended 30 June 2022 were GBP1.1 million (30 June 2021: GBP1.0 million; 31 December 2021: GBP2.6 million). At the date of approval of this document, based on the aggregate of investments and cash held, the Company has substantial operating expenses cover.

As part of their assessment, the Directors have fully considered each of the Company's loans, giving careful consideration to the consequences for the Company of continuing uncertainties in the global economy. Income obligations have been met by borrowers and there is a diverse portfolio of Loan investments; Directors see an increase in the risk to the income from the Company loans within the portfolio as the outlook is uncertain. However, these loans have a number of specific lender protections (such as loan to value covenants and cashflow or earnings covenants) which are being monitored.

Given the level of market volatility experienced due to the ongoing impact of the Covid-19 pandemic, the Investment Manager has performed stress tests on the Company's income and expenses and the Directors remain comfortable with the liquidity of the Company. As part of their assessment, the Board have fully considered and assessed the Company's portfolio of investments, giving careful consideration to the consequences for the Company of continuing uncertainties in the global economy. The Russian invasion of Ukraine and the ongoing Covid-19 pandemic have created significant supply chain disruption, exacerbating inflationary pressures worldwide. A prolonged and deep market decline could lead to falling values to the underlying business or interruptions to cashflow, however the Company currently has more than sufficient liquidity available to meet any future obligations.

Statement of Directors' responsibility for the Interim Report

The Directors confirm to the best of their knowledge that:

-- The condensed set of financial statements contained within the Half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting.

-- The Interim Management Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules.

Norman Crighton

Chairman

For and on behalf of the Board of directors

5 August 2022

 
 Condensed unaudited Statement of Comprehensive Income 
 For the six months ended 30 June 2022 
 
 
                                  Six months ended                  Six months ended              Year ended 31 December 
                                    30 June 2022                       30 June 2021                        2021* 
                           Revenue   Capital        Total     Revenue     Capital       Total   Revenue   Capital     Total 
                   NOTES   GBP'000   GBP'000      GBP'000     GBP'000     GBP'000     GBP'000   GBP'000   GBP'000   GBP'000 
 (Losses)/gains 
  on investments                 -     (929)        (929)           -       2,310       2,310         -     1,263     1,263 
 Income              4       5,446         -        5,446       5,311           -       5,311    11,164         -    11,164 
 Investment 
  management 
  fee                5       (490)         -        (490)       (517)           -       (517)   (1,013)         -   (1,013) 
 Other expenses      5       (612)         -        (612)       (523)        (36)       (559)   (1,598)         -   (1,598) 
----------------  ------  --------  --------  -----------  ----------  ----------  ----------  --------  --------  -------- 
 Return before 
  finance costs 
  and taxation               4,344     (929)        3,415       4,271       2,274       6,545     8,553     1,263     9,816 
 Finance costs               (431)         -        (431)       (373)           -       (373)     (797)         -     (797) 
----------------  ------  --------  --------  -----------  ----------  ----------  ----------  --------  --------  -------- 
 Return on ordinary 
  activities before 
  taxation                   3,813     (929)   2,984      3,898       2,274     6,172   7,756     1,263     9,019 
 Taxation            6        (15)         -         (15)         (4)           4           -      (14)         -      (14) 
----------------  ------  --------  --------  -----------  ----------  ----------  ----------  --------  --------  -------- 
 Return on 
  ordinary 
  activities 
  after taxation             3,898     (929)        2,969       3,894       2,278       6,172     7,742     1,263     9,005 
----------------  ------  --------  --------  -----------  ----------  ----------  ----------  --------  --------  -------- 
 Return per 
  ordinary 
  share (pence)      8       3.31p   (0.79p)        2.52p       3.30p       1.93p       5.23p     6.56p     1.07p     7.63p 
----------------  ------  --------  --------  -----------  ----------  ----------  ----------  --------  --------  -------- 
 
 *Audited 
 
  The total column of this statement is the profit and loss account of the 
  Company. 
 All the revenue and capital items in the above statement derive from continuing 
  operations. 
 'Return on ordinary activities after taxation' is also the 'Total comprehensive 
  income for the Period'. 
 The notes in the Interim Report form an integral part of these financial 
  statements. 
 
 

Condensed unaudited Statement of Financial Position

 
                                                    As at 30     As at 30          As at 31 
                                                   June 2022    June 2021    December 2021* 
                                          Notes      GBP'000      GBP'000           GBP'000 
---------------------------------------  ------  -----------  -----------  ---------------- 
 Fixed assets 
 Investments at fair value through 
  profit or loss                            3        126,460      123,347           126,674 
 
 Current assets 
 Cash and cash equivalents                               690        4,176             3,310 
 Receivables                                           3,187        3,405             2,684 
---------------------------------------  ------  -----------  -----------  ---------------- 
                                                       3,877        7,581             5,994 
 Payables: amounts falling due 
  within one year 
 Payables                                            (1,707)      (6,159)           (1,847) 
 Bank loan - Credit facility                        (18,241)     (12,421)          (19,571) 
                                                    (19,948)     (18,580)          (21,418) 
---------------------------------------  ------  -----------  -----------  ---------------- 
 Net current liabilities                            (16,071)     (10,999)          (15,424) 
---------------------------------------  ------  -----------  -----------  ---------------- 
 
 Total assets less current liabilities               110,389      112,348           111,250 
---------------------------------------  ------  -----------  -----------  ---------------- 
 
 Net assets                                          110,389      112,348           111,250 
---------------------------------------  ------  -----------  -----------  ---------------- 
 
 Capital and reserves: equity 
 Share capital                              7          1,178        1,179             1,178 
 Share premium                                        70,168       70,167            70,168 
 Special reserve                                      44,813       44,910            44,813 
 Capital reserve                                     (9,078)      (7,134)           (8,149) 
 Revenue reserve                                       3,308        3,226             3,240 
 Total shareholders' funds                           110,389      112,348           111,250 
---------------------------------------  ------  -----------  -----------  ---------------- 
 NAV per share - Ordinary Shares 
  (pence)                                   9         93.68p       95.25p            94.41p 
---------------------------------------  ------  -----------  -----------  ---------------- 
 

*Audited

Approved by the Board of Directors and authorised for issue on 5 August 2022.

RM Infrastructure Income plc incorporated in England and Wales with registered number 10449530.

The notes in the Interim Report form an integral part of these financial statements.

 
 Condensed unaudited Statement of Changes in Equity 
 For the six months ended 30 
  June 2022 
                                             Share      Share    Special    Capital    Revenue 
                                           capital    premium    reserve    reserve    reserve          Total 
                                  Notes    GBP'000    GBP'000    GBP'000    GBP'000    GBP'000        GBP'000 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 Balance as at beginning 
  of the period                              1,178     70,168     44,813    (8,149)      3,240        111,250 
 Return on ordinary activities                   -          -          -      (929)      3,898          2,969 
 Redemption of shares               7            -          -          -          -          -              - 
 Share buyback costs                             -          -          -          -          -              - 
 Dividend paid                     10            -          -          -          -    (3,830)        (3,830) 
 Balance as at 30 June 
  2022                                       1,178     70,168     44,813    (9,078)      3,308        110,389 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 
 For the six months ended 30 June 2021 
                                             Share      Share    Special    Capital    Revenue 
                                           capital    premium    reserve    reserve    reserve          Total 
                                           GBP'000    GBP'000    GBP'000    GBP'000    GBP'000        GBP'000 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 Balance as at beginning 
  of the period                              1,184     70,168     45,277    (9,412)      3,167        110,384 
 Return on ordinary activities                   -          -          -      2,278      3,894          6,172 
 Redemption of shares               7          (5)          5      (367)          -          -          (367) 
 Share buyback costs                             -        (6)          -          -          -            (6) 
 Dividend paid                     10            -          -          -          -    (3,835)        (3,835) 
 Balance as at 30 June 
  2021                                       1,179     70,167     44,910    (7,134)      3,226        112,348 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 
 For the year ended 31 December 2021* 
                                             Share      Share    Special    Capital    Revenue 
                                           capital    premium    reserve    reserve    reserve          Total 
                                           GBP'000    GBP'000    GBP'000    GBP'000    GBP'000        GBP'000 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 Balance as at beginning of 
  the year                                   1,184     70,168     45,277    (9,412)      3,167        110,384 
 Return on ordinary activities                   -          -          -      1,263      7,742          9,005 
 Buy back of shares                 7          (6)          6      (464)          -          -          (464) 
 Shares buy back costs                           -        (6)          -          -          -            (6) 
 Dividend paid                     10            -          -          -          -    (7,669)        (7,669) 
-------------------------------  ------  ---------  ---------  ---------  ---------  ---------  ------------- 
 Balance as at 31 December 
  2021                                       1,178     70,168     44,813    (8,149)      3,240        111,250 
 *Audited 
 
  Distributable reserves comprise: the revenue reserve; capital reserve 
  attributable to realised profits; and the special reserve. 
 
 Share capital represents the nominal value of shares that have been issued. 
  The share premium includes any premiums received on the issue of share 
  capital. Any transaction costs associated with the issuing of shares are 
  deducted from share premium. 
 
 The notes in the Interim Report form an integral part of these financial 
  statements. 
 
 
 
 Condensed unaudited Statement of Cash Flows 
 For the six months ended 
  30 June 2022 
                                                      Six months       Six months         Year ended 
                                                   ended 30 June    ended 30 June        31 December 
                                                            2022             2021              2021* 
                                                         GBP'000          GBP'000            GBP'000 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 Operating activities 
 Return on ordinary activities 
  before finance costs and taxation**                      3,415            6,545              9,816 
 Adjustment for losses/(gains) 
  on investments                                             720          (2,310)              (823) 
 Adjustment to amortisation 
  costs                                                        -                -                114 
 (Increase)/decrease in receivables                        (503)            (237)                484 
 Decrease in payables                                      (155)            (320)              (812) 
 PIK adjustments to the operating 
  cash flow                                              (1,310)          (1,306)            (2,539) 
 Net cash flow from operating 
  activities                                               2,167            2,372              6,240 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 Investing activities 
 Private loan repayments/ bonds 
  sales proceeds                                          13,455           37,816             56,292 
 Private loans issued/ bonds 
  purchases                                             (12,651)         (30,583)           (44,582) 
 Realisation of investment 
  in subsidiary - non cash adjustment                          -                -                 50 
 Purchase of equity investments                                -          (5,100)            (5,100) 
 Net cash flow from investing 
  activities                                                 804            2,133              6,660 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 Financing activities 
 Finance costs                                             (431)            (260)              (684) 
 Zero Dividend Preference Shares 
  ('ZDP') loan principal                                       -           10,870                  - 
 ZDP loan interest payable                                     -            1,186                  - 
 ZDP loan principal and accumulated 
  interest paid                                                -         (12,056)           (12,056) 
 Ordinary Share bought back                   7                -            (367)              (464) 
 Ordinary Share buyback costs                                  -              (6)                (6) 
 Oaknorth loan facility drawdown                           5,670           18,521             30,071 
 Oaknorth loan facility repaid                           (7,000)         (16,600)           (21,000) 
 Equity dividends paid                       10          (3,830)          (3,835)            (7,669) 
 Net cash flow used in financing 
  activities                                             (5,591)          (2,547)           (11,808) 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 (Decrease)/Increase in cash                             (2,620)            1,958              1,092 
 Opening balance at beginning 
  of the period/year                                       3,310            2,218              2,218 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 Balance as at the period/year 
  end                                                        690            4,176              3,310 
------------------------------------------  ---  ---------------  ---------------  ----------------- 
 
 *Audited 
  ** Cash inflow from interest on investment holdings was GBP3,650,000 
  (30 June 2021: GBP3,352,000; 31 December 2021: GBP9,561,000). 
  Notes to the financial statements 
 
  1. GENERAL INFORMATION 
 
  RM Infrastructure Income plc (the "Company") was incorporated in England 
   and Wales on 27 October 2016 with registered number 10449530, as a closed-ended 
   investment company. The Company commenced its operations on 15 December 
   2016. The Company intends to carry on business as an investment trust 
   within the meaning of Chapter 4 of Part 24 of the Corporation Tax Act 
   2010. 
  The Company's investment objective is to generate attractive and regular 
   dividends through investment in secured debt instruments of UK SMEs and 
   mid-market corporates including any loan, promissory notes, lease, bond 
   or preference share sourced or originated by the Investment Manager with 
   a degree of inflation protection through index-linked returns where appropriate. 
 
  The registered office is 6(th) Floor, 125 London Wall, Barbican, London 
   EC2Y 5AS. 
  2. BASIS OF PREPARATION AND ACCOUNTING POLICIES 
  Statement of compliance 
  The interim unaudited financial statements have been prepared in accordance 
   with IAS 34 Interim Financial Reporting and the Disclosure Guidance and 
   Transparency Rules ('DTRs') of the UK's Financial Conduct Authority. They 
   do not include all of the information required for full annual financial 
   statements and should be read in conjunction with the financial statements 
   of the Company as at and for the year ended 31 December 2021. The financial 
   statements for the year ended 31 December 2021 have been prepared in accordance 
   with the UK adopted international accounting standards. The financial 
   information for the year ended 31 December 2021 in the interim unaudited 
   financial statements has been extracted from the audited Annual Report 
   and Accounts. 
  When presentational guidance set out in the Statement of Recommended Practice 
   ('SORP') for Investment Companies issued by the Association of Investment 
   Companies ('the AIC') in April 2021 is consistent with the requirements 
   of UK adopted international accounting standards, the Directors have sought 
   to prepare the financial statements on a basis compliant with the recommendations 
   of the SORP. 
 
    Going concern 
  The Directors have adopted the going concern basis in preparing the financial 
   statements. Details of the Directors 
  assessment of the going concern status of the Company, which considered 
   the adequacy of the Company's resources and the impacts of the ongoing 
   Covid-19 pandemic and the Russian invasion of Ukraine, are given in the 
   Interim Report. 
 
  Accounting policies 
  The accounting policies used by the Company in preparing these interim 
   unaudited financial statements are the same as those applied by the Company 
   in its financial statements as at and for the year ended 31 December 2021. 
 
 
 
 3. INVESTMENT AT FAIR VALUE THROUGH PROFIT 
  OR LOSS 
                                                       Six months     Year ended 
                             Six months ended 30    ended 30 June    31 December 
                                       June 2022             2021           2021 
                                         GBP'000          GBP'000        GBP'000 
--------------------------  --------------------  ---------------  ------------- 
 Financial assets held: 
 Equity investments                        3,593            5,100          3,600 
 Bond investments                          6,891            2,695          7,346 
 Private loan investments                115,976          115,552        115,728 
                                         126,460          123,347        126,674 
--------------------------  --------------------  ---------------  ------------- 
 
 
 4. INCOME 
 
                               Six months ended   Six months ended    Year ended 31 
                                   30 June 2022       30 June 2021    December 2021 
                                        GBP'000            GBP'000          GBP'000 
----------------------------  -----------------  -----------------  --------------- 
 Income from investments 
 Bond and loan interest                   3,913              3,814            8,581 
 Bond and loan PIK interest               1,494              1,307            2,277 
 Arrangement fees                            22                 31              102 
 Delayed Compensation fees 
  received                                    -                  -               19 
 Other income                                17                159              185 
                              -----------------  -----------------  --------------- 
 Total                                    5,446              5,311           11,164 
----------------------------  -----------------  -----------------  --------------- 
 
 
 5. INVESTMENT MANAGEMENT FEE AND OTHER EXPENSES 
 
                           Six months ended   Six months ended    Year ended 31 
                               30 June 2022       30 June 2021    December 2021 
                                    GBP'000            GBP'000          GBP'000 
------------------------  -----------------  -----------------  --------------- 
 Expenses charged 
  to revenue: 
 Investment management 
  fees                                  490                517            1,013 
 Other administration 
  charges                               612                523            1,598 
 Total revenue expenses               1,102              1,040            2,611 
------------------------  -----------------  -----------------  --------------- 
 
 Expenses charged to capital: 
 Capital transaction 
  costs                                   -                 36                - 
------------------------  -----------------  -----------------  --------------- 
 Total capital expenses                   -                 36                - 
------------------------  -----------------  -----------------  --------------- 
 
 
The Company's Investment Manager is RM Capital Markets Limited. Under the 
 amended Investment Management Agreement, effective 1 April 2020, the Investment 
 Manager is entitled to receive a management fee payable monthly in arrears 
 or as soon as practicable after the end of each calendar month an amount 
 one-twelfth of: 
 (a) 0.875 per cent. of the prevailing NAV in the event that the prevailing 
 NAV is up to or equal to GBP250 million; or 
 (b) 0.800 per cent. of the prevailing NAV in the event that the prevailing 
 NAV is above GBP250 million but less than GBP500 million; or 
 (c) 0.750 per cent. of the prevailing NAV in the event that the prevailing 
 NAV is above GBP500 million. 
 The management fee shall be payable in sterling on a pro-rata basis in respect 
 of any period which is less than a complete calendar month. 
There is no performance fee payable to the Investment Manager. 
 6. TAXATION 
                              Six months ended              Six months ended            Year ended 31 December 
                                 30 June 2022                  30 June 2021                       2021 
                         Revenue   Capital     Total   Revenue   Capital     Total   Revenue   Capital       Total 
                         GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000     GBP'000 
----------------------  --------  --------  --------  --------  --------  --------  --------  --------  ---------- 
 Analysis of tax charge 
  / (credit) 
  for the period/year: 
 Corporation tax              15         -        15         4       (4)         -        14         -          14 
----------------------  --------  --------  --------  --------  --------  --------  --------  --------  ---------- 
 Total current 
  tax charge/(credit)         15         -        15         4       (4)         -        14         -          14 
----------------------  --------  --------  --------  --------  --------  --------  --------  --------  ---------- 
 
 
 
 7. SHARE CAPITAL 
                                                                       As at 31 December 
                      As at 30 June 2022      As at 30 June 2021              2021 
                    ----------------------  ----------------------  ---------------------- 
                          No. of                  No. of                  No. of 
                          Shares   GBP'000        Shares   GBP'000        Shares   GBP'000 
------------------  ------------  --------  ------------  --------  ------------  -------- 
 Allotted, issued 
  & fully paid: 
 Ordinary shares 
  of 1p              117,840,988     1,178   117,944,782     1,179   117,840,988     1,178 
------------------  ------------  --------  ------------  --------  ------------  -------- 
 
 

At the period end, the Company has 117,840,988 (30 June 2021: 117,944,782; 31 December 2021: 117,840,988) Ordinary Shares in issue with voting rights and 4,383,593 (30 June 2021: 4,279,799; 31 December 2021: 4,383,593) Ordinary Shares held in Treasury.

 
 Share movement 
 The table below sets out the share movement for the six months 
  ended 30 June 2022. 
------------------------------------------------------------------------ 
                                                                                 Shares 
                                                                               in issue 
                                                                  Shares             at 
                                     Opening       Shares         bought        30 June 
                                     balance       issued           back           2022 
-----------------------    -----------------  -----------  -------------  ------------- 
 Ordinary Shares                 117,840,988            -              -    117,840,988 
-------------------------  -----------------  -----------  -------------  ------------- 
 
 The table below sets out the share movement for the six months 
  ended 30 June 2021. 
------------------------------------------------------------------------ 
                                                                                 Shares 
                                                                               in issue 
                                                                  Shares             at 
                                     Opening       Shares         bought        30 June 
                                     balance       issued           back           2021 
-----------------------    -----------------  -----------  -------------  ------------- 
 Ordinary Shares                 118,364,282            -      (419,500)    117,944,782 
-------------------------  -----------------  -----------  -------------  ------------- 
 
 The table below sets out the share movement for the year ended 
  31 December 2021. 
------------------------------------------------------------------------ 
                                                                                 Shares 
                                                                               in issue 
                                                                  Shares             at 
                                     Opening       Shares         bought    31 December 
                                     balance       issued           back           2021 
-----------------------    -----------------  -----------  -------------  ------------- 
 Ordinary Shares                 118,364,282            -      (523,294)    117,840,988 
-------------------------  -----------------  -----------  -------------  ------------- 
 
 
 8. RETURN PER ORDINARY 
  SHARE 
 
 Total return per Ordinary Share is based on the gain on ordinary activities 
  after taxation of GBP2,969,000 (30 June 2021: gain of GBP6,172,000; 
  31 December 2021: gain of GBP9,005,000). 
 Based on the weighted average of number of 117,840,988 (30 June 2021: 
  118,014,265; 31 December 2021: 117,976,668) Ordinary Shares in issue 
  for the six months ended 30 June 2022, the returns per share were as 
  follows: 
 
                                   Six months ended 30 June       Six months ended 30 June 
                                                       2022                           2021 
                                 Revenue    Capital   Total     Revenue    Capital   Total 
----------------------------  ----------  ---------  ------  ----------  ---------  ------ 
 Return per ordinary 
  share                            3.31p    (0.79p)   2.52p       3.30p      1.93p   5.23p 
----------------------------  ----------  ---------  ------  ----------  ---------  ------ 
 
                                                                    Year ended 31 December 
                                                                                      2021 
                                                                Revenue    Capital   Total 
----------------------------  ----------  ---------  ------  ----------  ---------  ------ 
 Return per ordinary 
  share                                                           6.56p      1.07p   7.63p 
----------------------------  ----------  ---------  ------  ----------  ---------  ------ 
 
 
 9. NET ASSET VALUE PER SHARE 
 
 The net asset value per share is based on Company's total shareholders' 
  funds of GBP110,389,000 (30 June 2021: GBP112,348,000; 31 December 2021: 
  GBP112,750,000), and on 117,840,988 (30 June 2021: 117,944,782; 31 December 
  2021: 117,840,988) Ordinary Shares in issue at the period/year end. 
 
   10. DIVID 
 
 On the 3 March 2022, the Directors approved the payment of a final interim 
  dividend for year ended 31 December 2021 to Ordinary Shareholders at the 
  rate of 1.625 pence per Ordinary Share. The dividend had a record date 
  of 4 March 2022 and was paid on 25 March 2022. The dividend was funded 
  from the Company's revenue reserve. 
 
 On 25 May 2022, the Directors approved the payment of an interim dividend 
  at the rate of 1.625 pence per Ordinary Share. The dividend had a record 
  date of 6 June 2022 and was paid on 24 June 2022. The dividend was funded 
  from the Company's revenue reserve. 
 
 On 2 August 2022, the Directors approved the payment of an interim dividend 
  at the rate of 1.625 pence per Ordinary Share. The dividend will have a 
  record date of 2 September 2022 and will be payable on 30 September 2022. 
  The dividend will be funded from the Company's revenue reserve. 
 
 
 
 11. RELATED PARTY TRANSACTION 
 
 Fees payable to the Investment Manager are shown in the Statement of 
  Comprehensive Income. As at 30 June 2022 the fee outstanding to the Investment 
  Manager was GBP80,000 (30 June 2021: GBP82,000; 31 December 2021: GBP84,000). 
 
   Fees are payable at an annual rate of GBP36,000 to the Chair, GBP33,000 
   to the Chair of the Audit and Management Engagement Committee and GBP30,000 
   to the other Director. 
 The Directors had the following shareholdings in the Company, all of 
  which are beneficially owned. 
 
                                    As at 30 June     As at 30 June   As at 31 December 
                                             2022              2021                2021 
                                  Ordinary shares   Ordinary shares     Ordinary shares 
 Norman Crighton                           29,982            29,982              29,928 
 Guy Heald                                 20,000            20,000              20,000 
 Marlene Wood                              20,000            20,000              20,000 
 
 
 
 12. CLASSIFICATION OF FINANCIAL INSTRUMENTS 
 
 IFRS 13 requires the Company to classify its investments in a fair value 
  hierarchy that reflects the significance of the inputs used in making the 
  measurements. IFRS 13 establishes a fair value hierarchy that prioritises 
  the inputs to valuation techniques used to measure fair value. The three 
  levels of fair value hierarchy under IFRS 13 are as follows: 
 Level 1 
 Inputs are quoted prices in active markets for identical assets or liabilities 
  that the entity can access at the measurement date. 
 
 Level 2 
 Inputs other than quoted market prices included within Level 1 that are 
  observable for the asset or liability, either directly or indirectly. 
 
 
 Level 3 
 Inputs are unobservable for the asset or liability. 
 
 The classification of the Company's investments held at fair value through 
  profit or loss is detailed in the table below: 
 
                                        30 June 2022                                30 June 2021 
                              Level     Level     Level                  Level     Level     Level 
                                  1         2         3      Total           1         2         3         Total 
                            GBP'000   GBP'000   GBP'000    GBP'000     GBP'000   GBP'000   GBP'000       GBP'000 
-----------------------  ----------  --------  --------  ---------  ----------  --------  --------  ------------ 
 Financial assets: 
 Financial assets - 
  Private 
  loans and bonds                 -     6,891         -      6,891           -    13,528         -        13,528 
 Financial assets - 
  Private 
  loans                           -         -   115,976    115,976           -         -   109,819       109,819 
 Financial assets - 
  Equity 
  investment                      -         -     3,593      3,539           -         -         -             - 
 Forward contract 
  unrealised 
  loss                            -      (66)         -       (66)                     -         -             - 
 Net financial assets 
  (including forwards)*           -     6,825   119,569    126,394           -    13,528   109,819       123,347 
-----------------------  ----------  --------  --------  ---------  ----------  --------  --------  ------------ 
 *The net unrealised loss of GBP66,300 (30 June 2021: GBPnil) on forwards 
  is recognised within other creditors in the Statement of Financial Position. 
------------------------------------------------------------------------------------------------------------- 
                                                                                                31 December 2021 
                                                                         Level     Level     Level 
                                                                             1         2         3         Total 
                                                                       GBP'000   GBP'000   GBP'000       GBP'000 
-----------------------  ----------  --------  --------  ---------  ----------  --------  --------  ------------ 
 Financial assets: 
 Financial assets - Private 
  loans and bonds                                                            -     7,346         -         7,346 
 Financial assets - Private 
  loans                                                                      -         -   115,728       115,728 
 Financial assets - Equity 
  Investments                                                                -         -     3,600         3,600 
 Forward contract unrealised 
  gain                                                                       -       137         -           137 
 Net financial assets 
  (including forwards)*                                                      -     7,483   119,328       126,811 
-----------------------------------  --------  --------  ---------  ----------  --------  --------  ------------ 
 *The net unrealised gain of GBP136,729 on forwards is recognised within 
  other debtors in the Statement of Financial Position. 
 As at 30 June 2022, the fair value of the Company's loans is materially 
  equal to the carrying value. 
 
   Investments that trade in markets that are not considered to be active 
   but are valued based on quoted market prices, dealer quotations or alternative 
   pricing sources supported by observable inputs are classified within Level 
   2. 
 Level 3 holdings are valued using a discounted cash flow analysis and benchmarked 
  discount/interest rates appropriate to the nature of the underlying loan 
  and the date of valuation. 
 Interest rates are a significant input into the Level 3 valuation methodology. 
 There have been no movements between levels during the reporting period. 
  The Company considers factors that may necessitate the transfers between 
  levels using the definition of the levels 1, 2 and 3 above. 
 
 
 
 13. POST BALANCE SHEET EVENTS 
 
 Since the Period end the Investment Manager has acquired a further 12,500 
  Ordinary Shares, taking the Investment Manager's total holding of Ordinary 
  Shares to 1,304,125. 
  There are no other post period end events other than those disclosed 
  in this report. 
 

14. STATUS OF THIS REPORT

These interim financial statements are not the Company's statutory accounts for the purposes of section 434 of the Companies Act 2006. They are unaudited. The unaudited Half-yearly report will be made available to the public at the registered office of the Company. The report will also be available in electronic format on the Company's website, https://rm-funds.co.uk/ . The information for the year ended 31 December 2021 has been extracted from the last published audited financial statements, unless otherwise stated. The audited financial statement has been delivered to the Registrar of Companies. The Company's auditor reported on those accounts and their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. The Half-yearly report was approved by the Board of Directors on 5 August 2022.

ALTERNATIVE PERFORMANCE MEASURES ('APMS')

 
 Gross asset 
 The Company's gross assets comprise the net asset values of the Company's 
  Ordinary Shares and the bank loan-credit facility, with the breakdown 
  as follows: 
 
                                                                          Per Share 
 As at 30 June 2022                                        GBP'000          (Pence) 
------------------------------------------  -------   ------------  --------------- 
 Ordinary Shares - NAV                          a          110,389            93.68 
 Bank Loan-Credit facility                      b           18,241                - 
 Gross asset value                             a+b         128,630              n/a 
------------------------------------------  --------  ------------  --------------- 
 
 
 Discount 
 The amount, expressed as a percentage, by which the share price is less 
  than the Net Asset Value per share. 
                                                                       Per Share 
 As at 30 June 2022                                                      (Pence) 
-----------------------------------------------   -------------   -------------- 
 NAV per Ordinary Share (pence)                           a                 93.68 
 Share price (pence)                                      b                 90.75 
 Discount                                              (b/a)-1              -3.1% 
------------------------------------------------   --------------  -------------- 
 
 
 Total return 
 A measure of performance that includes both income and capital returns. 
  This takes into account capital gains and reinvestment of dividends paid 
  out by the Company into its Ordinary Shares on the ex-dividend date. 
 
 As at 30 June 2022                                             NAV     Share Price 
-------------------------------------------  -----------   --------  -------------- 
 Opening at 1 January 2022 (pence)                 a          94.41           95.00 
 Closing at 30 June 2022 (pence)                   b          93.68           90.75 
 Dividend adjustment factor                        c         1.0348          1.0357 
 Adjusted closing (d = b x c)                      d          96.94           93.99 
 Total return                                   (d/a)-1       2.68%          -1.06% 
-------------------------------------------  ------------  --------  -------------- 
 

GLOSSARY

 
 AIC                             Association of Investment Companies 
 Alternative Investment          An investment vehicle under AIFMD. Under 
  Fund or "AIF"                   AIFMD (see below) the Company is classified 
                                  as an AIF. 
 Alternative Investment          A European Union directive which came 
  Fund Managers Directive         into force on 22 July 2013 and has been 
  or "AIFMD"                      implemented in the UK. 
 Annual General Meeting          A meeting held once a year which Shareholders 
  or "AGM"                        can attend and where they can vote on 
                                  resolutions to be put forward at the 
                                  meeting and ask directors questions 
                                  about the Company in which they are 
                                  invested. 
 C Shares                        C Shares of 10 pence each in the capital 
                                  of the Company. 
 CTA 2010                        Corporation Tax Act 2010. 
 Custodian                       An entity that is appointed to safeguard 
                                  a company's assets. 
 Discount                        The amount, expressed as a percentage, 
                                  by which the share price is less than 
                                  the net asset value per share. 
 
 Dividend                        Income receivable from an investment 
                                  in shares. 
 Ex-dividend date                The date from which you are not entitled 
                                  to receive a dividend which has been 
                                  declared and is due to be paid to Shareholders. 
 Financial Conduct Authority     The independent body that regulates 
  or "FCA"                        the financial services industry in the 
                                  UK. 
 Gearing                         A way to magnify income and capital 
                                  returns, but which can also magnify 
                                  losses. A bank loan is a common method 
                                  of gearing. 
 Index                           A basket of stocks which is considered 
                                  to replicate a particular stock market 
                                  or sector. 
 Investment company              A company formed to invest in a diversified 
                                  portfolio of assets. 
 Investment Trust                An investment company which is based 
                                  in the UK and which meets certain tax 
                                  conditions which enables it to be exempt 
                                  from UK corporation tax on its capital 
                                  gains. The Company is an investment 
                                  trust. 
 Leverage                        An alternative word for "Gearing". 
 
                                  Under AIFMD, leverage is any method 
                                  by which the exposure of an AIF is increased 
                                  through borrowing of cash or securities 
                                  or leverage embedded in derivative positions. 
 
                                  Under AIFMD, leverage is broadly similar 
                                  to gearing, but is expressed as a ratio 
                                  between the assets (excluding borrowings) 
                                  and the net assets (after taking account 
                                  of borrowing). Under the gross method, 
                                  exposure represents the sum of the Company's 
                                  positions after deduction of cash balances, 
                                  without taking account of any hedging 
                                  or netting arrangements. Under the commitment 
                                  method, exposure is calculated without 
                                  the deduction of cash balances and after 
                                  certain hedging and netting positions 
                                  are offset against each other. 
 Liquidity                       The extent to which investments can 
                                  be sold at short notice. 
 Loans or Secured Debt           Secured debt instruments of UK SMEs 
  Instruments                     and mid-market corporates and/or individuals 
                                  including any loan, promissory notes, 
                                  lease, bond, or preference share such 
                                  debt instruments. 
 Net assets                      An investment company's assets less 
                                  its liabilities 
 Net asset value (NAV)           Net assets divided by the number of 
  per Ordinary Share              Ordinary Shares in issue (excluding 
                                  any shares held in treasury) 
 Ordinary Shares                 The Company's Ordinary Shares of 1 pence 
                                  each in the capital of the Company. 
 Portfolio                       A collection of different investments 
                                  held in order to deliver returns to 
                                  Shareholders and to spread risk. 
 Share buyback                   A purchase of a company's own shares. 
                                  Shares can either be bought back for 
                                  cancellation or held in treasury. 
 Share price                     The price of a share as determined by 
                                  a relevant stock market. 
 
 Treasury shares                 A company's own shares which are available 
                                  to be sold by a company to raise funds. 
 
 Volatility                      A measure of how much a share moves 
                                  up and down in price over a period of 
                                  time. 
 

DIRECTORS, INVESTMENT MANAGER AND ADVISERS

 
 DIRECTORS                           INVESTMENT MANAGER 
  Norman Crighton (Non-Executive      RM Capital Markets Limited 
  Chair)                              4th Floor, 7 Castle Street, 
  Guy Heald                           Edinburgh 
  Marlene Wood                        EH2 3AH 
 JOINT BROKER                        REGISTERED OFFICE* 
  Singer Capital Markets Advisory     6(th) Floor 
  LLP                                 125 London Wall 
  1 Bartholomew Lane                  London 
  London                              EC2Y 5AS 
  EC2N 2AX 
 JOINT BROKER                        ADMINISTRATOR AND COMPANY SECRETARY 
  Peel Hunt LLP                       Sanne Fund Services (UK) Limited 
  100 Liverpool Street                6(th) Floor 
  London                              125 London Wall 
  EC2M 2AT                            London 
                                      EC2Y 5AS 
 CUSTODIAN                           AUDITORS 
  US Bank Global Corporate Trust      Ernst & Young LLP 
  Services                            25 Churchill Place 
  125 Old Broad Street                Canary Wharf 
  London                              London 
  EC2N 1AR                            E14 5EY 
 AIFM                                Legal advisers 
  Sanne Fund Management (Guernsey)    Gowling WLG (UK) LLP 
  Limited Sarnia House                4 More London Riverside 
  Le Truchot                          London 
  St Peter Port                       SE1 2AU 
  Guernsey 
  GY1 4NA 
 REGISTRAR                           VALUATION AGENT 
  Link Asset Services                 Mazars LLP 
  Central Square                      Tower Bridge House 
  29 Wellington Street                Katherine's Way 
  Leeds                               London 
  LS1 4DL                             E1W 1DD 
 

* Registered in England and Wales No. 10449530

For further information contact:

Sanne Fund Services (UK) Limited

Tel: 020 3327 9270

END

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IR SSAFMIEESEFA

(END) Dow Jones Newswires

August 08, 2022 02:00 ET (06:00 GMT)

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