A strong set of results, driven by good operational performance of the portfolio
Profit before tax was £231.0m (2014: £153.8m), up 50.2%
Total shareholder return of 15.4% and 22.5% in the year (on a NAV and share price basis, respectively)
Four quarterly interim dividends declared totalling 7.30p per share, exceeding the stated target by 0.05p per share, a 2.8% increase on the prior year
New guidance of a target dividend per share of 7.45p for the year to March 2016 (up from the previously published guidance of 7.40p)
Directors’ valuation of the portfolio of £1,732.2m1, up from £1,500.6m1 at 31 March 2014 and £1,639.1m at 30 September 2014, with the weighted average discount rate reduced from 8.2% to 7.9% over the year
NAV per share as at 31 March 2015 of 136.7p, a 10.0p increase from 126.7p as at 31 March 2014
Net investment of £113.1m during the year, comprising nine new investments and 10 incremental acquisitions for £221.4m and one disposal for net consideration of £108.3m
A further two investments and a disposal made since the period end for a net investment of £8.7m
Current net funding requirement of £8m
Demand for infrastructure investments continues to exceed supply in the Company’s target sectors, impacting prices and valuations
A pipeline of new investment opportunities, both in the UK and overseas, expected to deliver further value accretion
1 Includes £22.5m of future investment obligations (2014 : £5.1m)
Graham Picken, Chairman of the Board, said:
“I am pleased to report a strong set of results – the culmination of a focused Acquisition Strategy, better-than-planned portfolio performance, an uplift in valuations due to strong market demand, and the profitable disposal of a significant investment. The Group’s portfolio continues to deliver strong cash generation, enabling the Company to exceed its dividend target for the year of 7.25p per share, delivering instead 7.30p.
The Group made nine new investments and 10 incremental acquisitions in the year, investing £113.1m net of disposal proceeds. This was funded by value-accretive tap issues in June and December, scrip dividends and utilisation of the Group’s revolving credit facility.
Once again, the Board is satisfied that the Group’s portfolio remains in good shape, thus providing it with the confidence to target a total dividend of 7.45p per share for the year to 31 March 2016, in excess of prior guidance of 7.40p. As per the previous financial year, it is intended that four quarterly interim dividends will be paid, the first of which we expect to declare in July for payment in September 2015.”
Tony Roper, Director at InfraRed Capital Partners Limited (the Company’s Investment Adviser), said:
“The team at InfraRed has focused on delivering value for the Group, through both hands-on asset and portfolio management and the sourcing of suitable new investments which add value.
The prices of UK investments have increased to levels which, at times, are unattractive for the Group. Prices paid in auctions have frequently been at levels we feel would not be value accretive to the Group and we have been outbid.
Overseas, we have made progress in Europe, securing new investments in France, Holland and Ireland in the year. The Group continues to look positively but selectively for new investments in Australia, Canada and the USA. Whilst geographic diversity has certain benefits, the balance of the portfolio between UK and overseas investments is expected to remain materially the same in the current year.
Despite keen competition, we believe that we will be able to secure further new investments, both in the UK and abroad, in line with the Group’s stated Acquisition Strategy, with its focus on social and transportation infrastructure plus in-scope areas such as assets under construction and projects with demand revenue.”
The full announcement can be found at www.hicl.com.