RM Infrastructure Income PLC Net Asset Value(s) (9964C)
17 Octubre 2022 - 1:00AM
UK Regulatory
TIDMRMII TIDMTTM
RNS Number : 9964C
RM Infrastructure Income PLC
17 October 2022
RM Infrastructure Income Plc
("RMII" or the "Company")
LEI: 213800RBRIYICC2QC958
Net Asset Value
NAV & Share price performance
The Company's NAV % Total Return for the month of September was
-0.37%, which brings the NAV % Total Return for the quarter to
+0.72%.
The NAV % Total Return over the last twelve months was +2.73%,
since January 2020 pre-COVID-19 pandemic the NAV % Total Return
has been +14.81%, since January 2022 the NAV % Total Return has
been +3.42% and inception to date has been +35.19%.
The Ordinary Share NAV as at 30(th) September 2022 was 92.726
pence per share. This monthly NAV return of -1.971 pence per
share arose primarily from the ex-dividend effect of the 1.625
pence per share ordinary dividend for the period Q2 2022, declared
in August 2022 and paid in September 2022. Otherwise, there was
positive interest income, net of expenses, of 0.469 pence per
share and a decrease in portfolio valuations of 0.815 pence per
share.
The decrease in portfolio valuations arose due to the mark to
market of Level 2 assets and an increase of 50bps of yield attributed
to the fixed rate Level 3 assets to reflect some of the increase
in the underlying government yield curve which moved dramatically
higher over the month of September, particularly after the mini
budget.
Summary for September 2022 (pence
per share)
Net interest income +0.469p
Change in portfolio
valuations -0.815p
Payment of Dividend
(Q2 2022) -1.625p
-1.971
Net NAV Movement p
-------------------------- ---------
The net interest income includes an accounting adjustment during
the month of September, and would have been circa +0.523p without
it.
The closing mid-market share price at the quarter-end was 85
pence which is 2 pence lower than the opening mid-market share
price at the start of the year and represents a total shareholder
return(12) of +2.53% over the twelve months to 30(th) September
2022.
Market Update
Credit spreads closed the period slightly wider and saw significant
volatility with an initial Markit ITRX European Crossover Index
tightening from 590 into 460 before moving to close the quarter
at 640. The real story was in the rates markets as UK government
bond yields rose steadily through the quarter and then accelerated
significantly after the mini budget. As the yield increases accelerated,
Liability Driven Investment "LDI" strategies sold assets to meet
margin calls which put further pressure across all risk assets
and in particular UK government bonds. This doom loop was stabilised
by the Bank of England intervening in the UK government bond
market, however, systemic risk is now back on investors' minds.
It is also notable that the shape of the UK yield curve moved
as the spread between 2 year and 10 year gilts started the quarter
at circa +35bps and closed the period at -20bps. This is a leading
indicator of recession within the UK and is an indicator of weak
credit and growth.
RMII has significantly outperformed benchmark loan and bond indices
year to date, in FY2022 with a share price total return of -5.56%
versus
-13.60% for the S&P European Leverage Loan Index Total Return
and -25.74% for the Ishares Core Corp Bond UCITS ETF GBP.
Total Return
YTD ITD
-------------------------- --------
RM Infrastructure Income
NAV +3.42% +35.19%
RM Infrastructure Income
Share Price -5.56% +22.40%
S&P European Leveraged
Loan Index -13.60% -0.10%
Ishares Core Corp Bond
UCITS ETF GBP -25.74% -21.65%
-------------------------- -------- --------
Portfolio Update
The Investment Manager remains confident with regards to the
low interest rate sensitivity of the portfolio, despite the persistently
high inflation levels and likely further interest rate hikes
by global central banks. This is largely driven by the short
duration nature of the portfolio which is currently 1.70 years
which in turn means that loans can be repaid relatively quickly
and reinvested at higher yields.
The Investment Manager has continued to focus on investments
under its enhanced monitoring list and during the third quarter
of 2022 the Investment Manager, reached positive outcomes for
two of the three investments:
* Social Infrastructure - Student Accommodation, Ref 68
: A wholly-owned purpose-built student accommodation
property based in Coventry (80 beds). After extensive
remedial works, predominantly required by
non-compliant cladding, the Company has now
successfully received approval from the relevant
authorities to occupy the property which is now being
tenanted by students. We note that the property
benefits from a number of key attributes that will
enable it to outperform in a stagflation environment;
namely (i) the property offers low weekly rates (sub
GBP100/week) which should lead to high demand with
residents with lower disposable income and (ii) the
property benefits from solar rooftop panels providing
direct power to the building and its appliances. In
addition, the Company has served its legal claim
letter to the former main contractor, with a claim
amount in excess of GBP3m (c.2.5p/share). This claim
has not been valued yet within the Company's NAV.
* Environmental Infrastructure - Energy Efficiency, Ref
62 & 63 : Loans to a business that sells
energy-efficient heating & cooling devices (electric
boilers, air source heat pumps etc.). The loan has
been reduced by approximately GBP600,000 over the
quarter as the borrower has conducted asset sales. It
is expected that this loan balance will continue to
reduce over the final quarter. Operationally the
business is trading well with several new material
buyers of zero carbon home heating products (electric
boilers & Air Source Heat Pumps "ASHP") contributing
to profitability.
The last investment remaining under RM's enhanced monitoring
list relates to the Clyde St investment, a Glasgow-based hotel
development (Ref 58, 79, 80 & 92). The Borrower has been facing
well-publicised construction delays driven by inflationary pressures,
supply chain issues and labour shortages within the construction
sector. The result of this is evidenced by their inability to
reach practical completion within the previously forecasted timing.
Limited works remain to be completed on site, as such, with practical
completion now confirmed to be at year-end 2022, and, the Operator,
Virgin Hotels, has started to market the rooms for this year-end.
In terms of new investments, scheduled drawdowns and repayments
/ prepayments during the reporting quarter, activity was limited
as outlined below:
Increased investments
* Social Infrastructure - Aged Care, Ref 88 :
c.GBP950,000
* Social Infrastructure - Health & Well-being, Ref 76 :
GBP12,500
* Environmental Infrastructure - Energy Efficiency, Ref
96 : GBP400,000
New Investments
* Social Infrastructure - Childcare, Ref 95 :
GBP3,000,000
Repayment:
* Non-Core - Other Manufacturing, Ref 62: c.GBP780,000
* Social Infrastructure - Health and Well-being, Ref
94: c.GBP56,000
* Environmental Infrastructure - Renewable Heat
Incentive, Ref 9&52 : GBP140,000
Partial Divestment
* Social Infrastructure - Health and Well-being, Ref 15
(Voyage Care 1L): GBP2,500,000
A quarterly update webinar from the Investment Manager can be
viewed via the following link https://rm-funds.co.uk/2022/10/rmii-third-quarter-investor-update/
and on the RM Funds website.
The Company also announces that the Monthly Report for the period
to 30 September 2022 is now available to be viewed on the Company
website:
https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/
For further information, please contact:
RM Capital Markets Limited - Investment Manager
James Robson
Thomas Le Grix De La Salle
Tel: 0131 603 7060
Sanne Fund Management (Guernsey) Limited - AIFM
Chris Hickling
Shaun Robert
Tel: 01481 737600
Tulchan Group - Financial PR
Elizabeth Snow
Oliver Norgate
Tel: 0207 353 4200
Sanne Fund Services (UK) Limited - Administrator and Company
Secretary
Brian Smith
Ciara McKillop
Tel: 020 3327 9720
Singer Capital Markers Advisory LLP - Financial Adviser and
Broker
James Maxwell
Asha Chotai
Tel: 020 7496 3000
Peel Hunt LLP - Financial Adviser and Broker
Luke Simpson
Liz Yong
Tel: 020 7418 8900
About RM Infrastructure Income
RM Infrastructure Income Plc ("RMII" or the "Company") is a closed-ended
investment trust established to invest in a portfolio of secured
debt instruments.
The Company aims to generate attractive and regular dividends
through loans sourced or originated by the Investment Manager
with a degree of inflation protection through index-linked returns
where appropriate. Loans in which the Company invests are predominantly
secured against assets such as real estate or plant and machinery
and/or income streams such as account receivables.
For more information, please see
https://rm-funds.co.uk/rm-infrastructure-income/
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