RMII Rm Infrastructure Income Plc

TIDMRMII TIDMTTM

RNS Number : 7643Z

RM Infrastructure Income PLC

16 January 2024

 
                               RM Infrastructure Income Plc 
 
                                ("RMII" or the "Company") 
 
                                LEI: 213800RBRIYICC2QC958 
 
                                     Net Asset Value 
  On 20 December 2023, at General Meeting shareholders approved 
   the implementation of the Managed Wind-down of the Company as 
   further described in the Circular published on 30 November 2023. 
   Accordingly, at that time the Company's investment objective 
   was restated as follows: "The Company aims to conduct an orderly 
   realisation of the assets of the Company, to be effected in a 
   manner that seeks to achieve a balance between returning cash 
   to Shareholders promptly and maximising value." 
   NAV & Share Price Performance 
   The Company's NAV % Total Return for the month of December was 
   1.80%, which brings the NAV % Total Return for the quarter to 
   1.59%. 
   The NAV % Total Return over the last twelve months was 4.83% 
   and inception to date (ITD) 43.85%. 
   The Ordinary Share NAV as at 31(st) December 2023 was 90.35 pence 
   per share. This monthly NAV return of 0.003 pence per share arose 
   primarily from the ex-dividend effect of the 1.625 pence per 
   Ordinary Share dividend for the period Q3 2023, declared and 
   paid in December 2023. Otherwise, there was positive interest 
   income, net of expenses, of 0.556 pence per share and an increase 
   in portfolio valuations of 1.07 pence per share. 
     Summary for December 2023 (pence 
                 per share) 
    Net interest income         +0.556p 
    Change in portfolio 
     valuations                 +1.072p 
    Payment of Dividend 
     (Q4 2023)                  -1.625p 
    Net NAV Movement            +0.003p 
   -------------------------  --------- 
 
 
   Since inception, the portfolio's valuation approach has been 
   based around fair value where the independent third-party valuation 
   agent looks at observable pricing for similar sectors and values 
   the assets based upon where comparables are valued. This incorporates 
   the broader market returns as well as any idiosyncratic risks. 
   Through review of the latest iteration of the extant IPEV guidelines 
   and discussions with the Company's valuation agent and a review 
   of industry practice in light of the change in guidelines, the 
   Company has now moved to a valuation process that is driven by 
   a yield-based methodology. This change has given an uplift to 
   the portfolio valuation over the month. 
   Market Update 
   Government bonds saw a big reversal in the final quarter with 
   5-year yields moving from 4.6% to 3.45% over the quarter and 
   this was the same picture across the gilt curve. Credit spreads 
   moved in from 450 to end the year at 310 in ITRX Crossover index. 
   So overall it was an exceptional quarter for fixed income products. 
                                    Total Return (%) 
                                 1yr       3yr      5yr 
   --------------------------  ------- 
    RM Infrastructure Income 
     NAV                        4.83%    18.44%    32.17% 
    RM Infrastructure Income 
     Share Price                -4.63%    7.66%    7.28% 
    S&P European Leveraged 
     Loan Index                 5.16%    -1.50%    -1.40% 
    iShares Core Corp Bond 
     UCITS ETF GBP              8.53%    -14.85%   3.09% 
                               -------  --------  ------- 
 
 
   Portfolio Update 
   The Investment Manager remains confident with regards to the 
   low interest rate sensitivity of the portfolio. This is largely 
   driven by its short average duration, which is currently 1.69 
   years. The weighted average yield of the portfolio has increased 
   to 10.91% at the end of the reporting period, a widening in yield 
   of 53bps versus September 2023 or 176bps versus same period last 
   year. 
   We outline below the key investment activities for Q4 2023: 
   New Investments: 
   Given the outcome of the Board's strategic review and the resulting 
   Shareholder-approved managed wind down of the Company, there 
   will be no new investments (save for drawdowns against committed 
   facilities) unless the Board considers that doing so will maximise 
   returns to Shareholders in the timeframe in which the Company 
   will otherwise be dealing with the managed wind down. 
   Material Repayments: 
    *    Healthcare, Ref #82: GBP5m 
 
 
    *    Healthcare, Ref #83: GBP2.8m 
 
 
    *    Accommodation, Ref #84: GBP4m 
 
 
 
   In addition, during the reporting quarter, the Company claimed 
   against its CBILS guarantee for investment loans Ref #78 and 
   Ref #89, successfully recovering GBP4.4m in aggregate, in line 
   with book values. Proceeds of said guarantee payment receipts 
   have been utilised in repayment of the Company's outstanding 
   leverage. 
   The Company is also expecting prepayment at par of investment 
   loan Ref #71 during the month of January 2024. 
   As disclosed in December 2023, the Company has Investment loans 
   (Ref #58, #80, #92 and #79) junior secured against and / or exposed 
   to the Virgin Clyde Street Hotel in the city-centre of Glasgow, 
   Scotland. The senior secured lender has initiated an administration 
   process to recover value with the hotel now being closed. The 
   Company's total nominal outstanding balance in respect of said 
   loans is circa GBP15m, with investment loans Ref #80, #92 and 
   #79 (or circa 83% of nominal outstanding) underwritten via the 
   Coronavirus Business Interruption Loan Scheme ("CBILS") and / 
   or the Recovery Loan Scheme ("RLS) which benefit from a partial 
   contractual government-backed guarantee. CBILS and RLS related 
   investment loans have all been marked at their guarantee level, 
   and as a result, RM does not foresee any further write downs 
   of these loans. We are currently forecasting CBILS and RLS claims 
   being made towards the end of H2-2024 with funds being received 
   in December 2024 - this has been factored in the Portfolio's 
   duration workings. Investment loan Ref #58 benefits from a valuable 
   additional 3(rd) party security package and has therefore been 
   valued accordingly by the valuation agent. 
   Finally, the Company has been pursuing a legal claim against 
   the former main contractor of investment loan Ref #68, a wholly 
   owned 79 beds student accommodation located in the city centre 
   of Coventry-UK, since September 2022 via an adjudication process. 
   On the 2(nd) of January 2024, RMII was successfully awarded circa 
   GBP1.2m by the adjudicator (or circa 1 pence per Ordinary Share), 
   with circa 90% of said sums now having been received in cleared 
   funds. Following a lengthy legal process, it is very pleasing 
   to be able to deliver a positive value accretive outcome for 
   Shareholders. 
   All leverage facilities were fully repaid during the reporting 
   quarter with the Company now completely ungeared. Current cash 
   balance sits at circa GBP9m. The Company will seek to hold circa 
   GBP6m in unrestricted cash reserves to fund undrawn committed 
   facilities and other Company-related working capital requirements. 
   This is expected to start decreasing in Q2-2024 as and when undrawn 
   committed facilities are utilised. 
 The Company also announces that the Monthly Report for the period 
  to 31 December 2023 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/ 
 
 
 
                                            END 
 
 
 
   For further information, please contact: 
 RM Capital Markets Limited - Investment Manager 
 James Robson 
 Thomas Le Grix De La Salle 
 Tel: 0131 603 7060 
 
 FundRock Management Company (Guernsey) Limited - AIFM 
 Chris Hickling 
 Dave Taylor 
 Tel: 01481 737600 
 
 Apex Listed Companies Services (UK) Ltd - Administrator and 
  Company Secretary 
 Jenny Thompson 
 Tel: 07767102572 
 
 Singer Capital Markers Advisory LLP - Financial Adviser and 
  Broker 
 James Maxwell 
 Asha Chotai 
 Tel: 020 7496 3000 
 
 
 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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