TIDMHICL
RNS Number : 1419T
HICL Infrastructure PLC
16 July 2020
16 July 2020
HICL Infrastructure PLC
"HICL" or "the Company" and, together with its subsidiaries,
"the Group", the London-listed infrastructure investment company
managed by InfraRed Capital Partners Limited ("InfraRed" or "the
Investment Manager".)
Interim Update Statement
The Board of HICL is issuing this Interim Update Statement,
which relates to the period from 1 April 2020 to 15 July 2020.
Ian Russell, Chairman of HICL Infrastructure PLC, said:
"I am pleased with the solid progress the Company has made in
the period, in both the management of the existing portfolio and
the execution of its investment strategy. Importantly, we have
continued to ensure that our infrastructure assets have remained
available for the communities they serve throughout the
pandemic.
"Operational performance of HICL's demand-based assets has been
reassuring in the context of the gradual easing of travel
restrictions. Revenue on the toll roads is ahead of expectations at
the current time, underlining that these investments benefit from
strategically important positioning in their respective
regions.
"There is continued market appetite for high quality, core
infrastructure assets. The Investment Manager has been actively
pursuing attractive investment opportunities, with the Company
announcing accretive acquisitions in the period, demonstrating
HICL's commitment to its strategy of delivering stable and socially
responsible long-term returns from core infrastructure investments
at the lower end of the risk spectrum.
" The Company has today announced an equity fund raising at an
issue price of 164p, a discount to the pre-announcement share price
of 5.7%, to pay down the Revolving Credit Facility in respect of
these investments and to provide additional resources to fund
HICL's near-term pipeline of attractive opportunities ."
Investment Activity
-- The Group has a portfolio of 118 investments located in the UK, continental Europe and North America.
-- In June 2020, the Company announced the completion, by Diamond Transmission Partners ("DTP"), of the acquisition
of the transmission assets associated with the Walney Extension Offshore Windfarm located in the Irish Sea. DTP
is a consortium comprising HICL and Diamond Transmission Corporation Limited (a subsidiary of Mitsubishi
Corporation) and Chubu Electric Power Company Netherlands B.V. (a subsidiary of Chubu Electric Power Co., Inc).
-- In June 2020, the Company also announced the acquisition of a further 74% interest in Holdfast Training Services
Limited ("Holdfast"), a public-private partnership ("PPP") project that supports the Royal School of Military
Engineering. The 30-year PPP was signed in August 2008 and covers the design, construction, refurbishment and
maintenance of a number of buildings and training areas across three UK locations on behalf of the UK Ministry of
Defence.
Portfolio Performance
-- PPP projects represented 72% of portfolio value at 31 March 2020. Activity during the period has been focused on
active asset management, particularly ensuring that the portfolio's hospitals, emergency services and schools
projects have been fully supported as they deal with stakeholder requirements to respond to the Covid-19 pandemic
and subsequently to transition back to business as usual operations over time.
-- The Group's demand-based investments represented 20% of portfolio value at 31 March 2020. The table below shows
the reduction in revenue levels versus budgeted pre-Covid-19 levels for the quarter ended 30 June 2020, across
the three largest GDP-linked demand-based assets:
Valuation Actual Week to
Assumptions
(for the period 30 June 2020
31 Mar - 30 (for the period (latest available)
Jun 20)
31 Mar - 30
Jun 20 )
A63 Motorway, France -60% -36% -8%
Northwest Parkway,
USA(1) -75% -59% -44%
High Speed 1, UK(2) -12% -14% -14%
--------------------- ----------------- ----------------- --------------------
(1) Traffic volumes used as a proxy for revenue over these time
frames for Northwest Parkway .
(2) Estimate , based on latest available management information .
-- The gradual easing of lockdown conditions in Europe and North America has enabled traffic on the Company's two
toll roads, the A63 Motorway (France) and Northwest Parkway (USA), to commence their recovery earlier than
assumed in the March 2020 Valuation. The improvement in traffic levels is encouraging and has added to the
financial resilience of the assets. Importantly, this recovery reconfirms the strategic positioning of these
assets in their respective regions to facilitate, and benefit from, the resumption of movement and economic
activity in these areas. Notwithstanding the positive trajectory, we remain mindful that the recovery has a
significant course to run and any resumption of restrictions to contain further pandemic waves would weigh on
asset performance.
-- In relation to High Speed 1 ("HS1"):
3/4 Contracted train path access charges in relation to HS1's
international and domestic services (32% and 68% respectively of
annual track access revenue in the year to 31 March 2020) continue
to provide a high degree of visibility over short-term revenues out
to December 2020.
3/4 In relation to international services beyond this point,
Eurostar International Limited ("EIL") has elected not to pre-book
train paths beyond December 2020 and instead utilise the more
flexible 'spot' booking provisions available to it. Principally
this impacts timing of receipt of revenues, as well as train path
visibility beyond December 2020. From week commencing 20 July 2020,
EIL is scheduling services at approximately 40% of the pre-Covid-19
budgeted level and, from December 2020, for services equivalent to
60% of pre-Covid-19 levels; we expect these levels to continue to
increase in line with the broader recovery.
3/4 Domestic train path bookings remain at 100% of the budgeted
level, with pre-bookings received out to May 2021.
3/4 Contracted track access charges to December 2020 are
sufficient to cover debt service payments in 2020 and the project
benefits from significant liquidity to cover debt service through
2021 in a range of plausible downside scenarios.
-- Regulated assets represented 8% of portfolio value at 31 March 2020. The acquisition of the Walney OFTO in June
2020 marks the fourth offshore transmission asset in the portfolio. These facilitate, in aggregate, the
transmission of green energy to over 1.7m UK homes and are actively supporting the UK's transition to a low
carbon future.
-- While Covid-19 has presented challenges to the performance of Affinity Water in some areas, something which the
regulator has acknowledged across the water sector, the company has been agile in its response to the virus and
continues to engage with the wider industry and Ofwat. The company has implemented working from home for many
staff and rigorously developed and implemented Covid-19 safe working protocols for water production and network
operations, to be able to continue to deliver essential activities, outside of work in customers' homes. Affinity
Water has been working closely with communities and other utilities, supporting customers through payment plans,
prioritising vulnerable customers and supporting those facing financial difficulties possibly for the first time,
which the company has provisioned for.
Dividends and Financing
-- The Company announced a final quarterly interim dividend for the financial year ended 31 March 2020 of 2.07 pence
per Ordinary Share (the "Q4 Dividend") on 13 May 2020. The shares went ex-dividend on 4 June 2020 and the Q4
Dividend was paid on 30 June 2020. The interest streaming percentage for the Q4 Dividend was 39%, bringing the
total streaming percentage for the financial year ended 31 March 2020 to 54%, in line with the Directors'
expectation of approximately 60%, as outlined in the Company's Prospectus dated 4 March 2019.
-- The Company announced a first quarterly interim dividend for the financial year ending 31 March 2021 of 2.06
pence per Ordinary Share (the "Q1 Dividend") on 15 July 2020. The interest streaming percentage for the Q1
Dividend will be 56%.
-- The Board remains comfortable that cash generation from the portfolio remains in line with forecast and
re-affirms the target dividend guidance of 8.25 pence per Ordinary Share for the financial year to 31 March
20213.
-- Based on previously announced acquisition activity and advanced pipeline opportunities, the Company has announced
today its proposal to raise additional equity capital through the issue of new Ordinary Shares by way of
non-pre-emptive tap issuance , priced at 164.0p per Ordinary Share.
Issued Capital
-- As at 15 July 2020, the Company's issued share capital consists of 1,863,642,769 ordinary shares of 0.01p each,
all of which carry voting rights.
-- Following the Company's July 2020 Annual General Meeting ("AGM") when shareholders granted the Board authority to
issue up to 10% of outstanding shares on a non pre-emptive basis, the Company's current tap capacity is
approximately 186.4m shares (limited by the AGM authority), prior to the proposed additional capital raising
announced today .
September 2020 Valuation
-- The next valuation of the Group's portfolio will be as at 30 September 2020 and will be published as part of the
Company's Interim Results in November 2020.
-- Institutional investors continue to view core infrastructure as an important source of stable income during a
time of uncertainty, and current asset pricing reflects this. If current market conditions are sustained, and the
downward pressure on discount rates observed at the beginning of the year (as discussed in the Company's May 2020
Annual Report) persists, this would be expected to be recognised in the September 2020 Valuation.
-- After a period of volatility during March 2020, interest rates have settled at a lower level than earlier in the
year which, if sustained to September 2020, are expected to be reflected in the valuation assumptions.
-- Within the portfolio, based on current information, each of the following is expected to have an immaterial
impact on the September 2020 Valuation:
3/4 An increase in the liability for the remediation of
construction quality issues at one of the portfolio's healthcare
assets, where the responsibility for resolution resides with the
Group.
3/4 The remainder of the PPP portfolio is expected to deliver
outperformance in the period, driven by accretive investment and
lifecycle savings.
3/4 As disclosed in the Company's May 2020 Annual Report, the
Company's three GDP-linked demand-based assets (18% by value as at
31 March 2020) were valued using the median of economist forecasts
for GDP for the calendar years 2020 and 2021, collated up to 27
April 2020. In the period, the Investment Manager has seen a
deterioration in median GDP forecasts for 2020 and 2021 in each of
the USA, France and the UK. Additionally, the trajectory for the
recovery of international train paths on HS1 is behind HICL's
expectation, which is expected to negatively impact the Company's
forecast train paths beyond the current contracted period to
December 2020.
Company and Governance
-- The Company's Annual Report for the year ended 31 March 2020 was published on 20 May 2020, and copies were posted
to shareholders who elected to receive a printed copy.
-- The Company held its Annual General Meeting ("AGM") on 14 July 2020. All resolutions were passed with a
substantial majority.
-- As in previous years, and aligned to corporate governance best practice, the existing Directors offered
themselves for re-election at the AGM on 14 July 2020 and were duly re-elected. Ms Rita Akushie was appointed to
the Board effective from 1 January 2020. She was proposed for election at the July 2020 AGM, and was duly elected
by shareholders.
-- An updated Key Information Document, based on the costs disclosed in the May 2020 Annual Report, was published on
the Company's website on 4 June 2020.
Market and Outlook
-- Whilst uncertainty stemming from Covid-19 continues to create a degree of volatility in financial markets, the
resumption of transaction activity in the sector demonstrates continued investor appetite for core infrastructure
assets. InfraRed has, and will continue to, pursue acquisitions in line with HICL's stated strategy and execute
on its attractive pipeline of opportunities, in line with HICL's objective of growing a diversified portfolio of
investments in assets that share underlying characteristics of cash flow quality, defensive market positioning
and criticality.
-- The pipeline remains focused on HICL's core geographies (UK, Europe, North America and Australia / New Zealand)
and comprises further investments within HICL's existing sectors, as well as sectors essential to the functioning
of a modern economy (e.g. infrastructure to support the energy transition and communications infrastructure),
where these meet the Company's clearly defined core infrastructure characteristics.
-- The Investment Manager and the Board will also continue to consider opportunities to make accretive disposals
where these improve portfolio construction. Overall, the Company continues to be well-positioned to identify and
act on new opportunities to further enhance the Company's portfolio construction and improve key portfolio
metrics.
(3) This is a target only and not a profit forecast. There can
be no assurance that this target will be met.
-Ends-
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800 / info@hicl.com
Harry Seekings
Keith Pickard
Edward Hunt
Kirsty MacCallum
Teneo +44 (0) 7342 031051 / HICL@teneo.com
George Hutchinson
Haya Herbert-Burns
Investec Bank plc +44(0) 20 7597 4952
David Yovichic
RBC Capital Markets +44 (0) 20 7653 4000
Darrell Uden
Aztec Financial Services (UK) Limited +44(0) 203 818 0246
Chris Copperwaite
Sarah Felmingham
HICL Infrastructure PLC
HICL Infrastructure PLC ("HICL" or the "Company", and together
with its subsidiaries the "Group") is a long-term investor in
infrastructure assets which are predominantly operational and
yielding steady returns. It was the first infrastructure investment
company to be listed on the London Stock Exchange.
With a current portfolio of over 100 infrastructure investments,
HICL is seeking further suitable opportunities, which are
positioned at the lower end of the risk spectrum within core
infrastructure.
Further details can be found on the HICL website www.hicl.com
.
Investment Manager (InfraRed Capital Partners)
The Investment Manager to HICL is InfraRed Capital Partners
Limited ("InfraRed") which has successfully invested in over 200
infrastructure projects since 1997. InfraRed is a leading
international investment manager focused on infrastructure and real
estate. It operates worldwide from offices in London, Hong Kong,
New York, Seoul and Sydney. With over 190 professionals it manages
in excess of US$12bn of equity capital in multiple private and
listed funds, primarily for institutional investors across the
globe. InfraRed is authorised and regulated by the Financial
Conduct Authority.
The infrastructure investment team at InfraRed consists of over
90 investment professionals, all with an infrastructure investment
background and a broad range of relevant skills, including private
equity, structured finance, construction, renewable energy and
facilities management.
InfraRed implements best-in-class practices to underpin asset
management and investment decisions, promotes ethical behaviour and
has established community engagement initiatives to support good
causes in the wider community. InfraRed is a signatory of the
Principles of Responsible Investment.
Further details can be found on InfraRed's website www.ircp.com
.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCSFEFAIESSEEW
(END) Dow Jones Newswires
July 16, 2020 02:01 ET (06:01 GMT)
Hicl Infrastructure (LSE:HICL)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Hicl Infrastructure (LSE:HICL)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
