· The portfolio achieved good cashflow generation and an annualised total return ahead of expectations.
· NAV per share of 151.6p as at 30 September 2017 (149.0p as at 31 March 2017).
· Annualised NAV total return of 8.9% for the period (NAV per share appreciation plus dividends paid basis).
· The Company remains on target to deliver aggregate dividends of 7.85p per share for the current financial year and the Board re-affirms the 8.05p target for the next financial year ending 31 March 2019.
· New dividend guidance for the financial year ending 31 March 2020 of 8.25p per share reflects the Board’s confidence in the forecast cashflow performance of the Group’s portfolio.
· The Directors’ valuation of the portfolio on an Investment Basis at 30 September 2017 is £2,844.4m (£2,380.0m at 31 March 2017).
· Two new investments in the period in regulated (Affinity Water) and demand-based (High Speed 1) assets for a combined consideration of £452m.
· The Company continues to play its part in providing proven capital for investment in long-term, critical infrastructure throughout the economic cycle.
Ian Russell, Chairman of the Board, said:
“I am pleased to report that the Company delivered a solid performance in the six months to 30 September 2017. The portfolio achieved good cashflow generation and an annualised total return of 8.9%, ahead of expectations.
“The Company’s strategy is to maintain a disciplined and proactive approach to investment and asset management, whilst executing its three-pillar business model of both preserving and enhancing the value of the existing portfolio, and making accretive new investments.
“As at 30 September, 80% by value of HICL’s portfolio and approximately 90% of its shareholders were located in the UK. Our shareholders include local authority and corporate pension funds, and a large number of retail investors. The Board recognises that heightened political uncertainty in the UK is a key concern for the Company’s shareholders.
“The private sector plays a key role in the efficient delivery and management of infrastructure assets. Western economies face ever-pressing financial challenges posed by ageing societies, technological change and, in the UK, population growth. The Board is confident that HICL will continue to play its part in providing proven capital for investment in long-term, critical infrastructure throughout the economic cycle.”
Harry Seekings, Director – Infrastructure, InfraRed Capital Partners Limited, the Investment Adviser added:
“HICL’s portfolio uniquely combines low asset concentration risk, strong correlation between portfolio returns and inflation and long-dated, predictable cashflows.
“Investments in PPP projects represent 74% of the portfolio by value as at 30 September 2017, and overall continue to perform well. The Group’s existing demand-based assets have also seen good performance, with traffic and revenue of the two toll road investments, Northwest Parkway and the A63 Motorway, ahead of assumptions made at the time of acquisition.
“New investments in Affinity Water and High Speed 1 were completed in the period. In both cases, InfraRed secured aligned co-investment (from UK pension funds and international institutions) which facilitated prudent management of portfolio exposure. At 30 September 2017, the ten largest assets in the portfolio represented circa 45% of portfolio value.
“We expect acquisition activity for the remainder of the financial year to be muted and largely focused on PPP projects and existing bids for OFTO Tender Round 5. Looking further into 2018, we are optimistic that opportunities will arise to add value to the existing portfolio.”
For the full report, please follow the link to the RNS issued by HICL.
