Net asset value (“NAV”) per share (as at 30 September 2015) of 139.1p; up 2.4p (1.8%) from the NAV per share of 136.7p at 31 March 2015.
Total shareholder return for the period of 9.0% (annualised), based on interim dividends declared plus uplift in NAV per share in the six month period.
Aggregate quarterly dividends declared for the first half of 3.72p per share (2014: 3.62p); on track to achieve the Company’s aggregate dividend target of 7.45p per share for the full year1.
Target dividend guidance for the financial year to 31 March 2017 of 7.60p per share1.
Value of the Group’s investment portfolio up 8.1% in the six months, based on a 30 September 2015 valuation of £1,872.1m2 (31 March 2015: £1,732.2m2).
Weighted average discount rate reduced from 7.9% to 7.7% over the six month period, reflecting projects reaching construction completion and ongoing, strong demand for similar infrastructure investments.
Two new investments and two incremental stakes acquired during the period for £130.7m funded by £91.2m equity tap issue in July and drawings under the Group’s revolving credit facility.
Current net funding requirement of approximately £30m – Board considering a tap issue in the near future.
Since the period end, the Group has increased its revolving credit facility from £150m to £200m on improved terms, including a reduction in the margin.
Graham Picken, Chairman of the Board, said:
“Sound portfolio performance has generated strong cashflow from the Group’s investments, enabling the Board to remain confident in the achievement of the Company’s dividend target for the year to 31 March 2016.
1. These are targets only and not profit forecasts. There can be no assurance that these targets will be met or that the Company will make any distributions at all.
2. Includes £21.8m of future investment obligations (March 2015: £22.5m).
In addition, the valuation uplift has benefitted from a 0.2% lowering of the weighted average discount rate for the portfolio. This was driven by two factors: the successful completion of construction of the Allenby & Connaught MoD accommodation project, coupled with continuing strong secondary market demand for social and transportation infrastructure investments.
Pricing discipline, effective execution and utilising the Investment Adviser’s network of industry relationships all serve to create off-market positions on transactions which offer good value, both in the UK and abroad. The Board has recently re-affirmed its willingness to invest outside the UK and in a slightly broader range of assets than hitherto, provided our overarching Investment Policy is observed, our risk/return profile remains broadly unchanged and new acquisitions are value accretive to the established portfolio.
The Directors were pleased to observe that investors’ confidence in the Company’s shares remained positive throughout the stock market correction of the late summer. Low share price volatility and a low correlation to broader equity markets continue to make the Company’s stock attractive to institutional investors looking for low beta and the opportunity to match out their long-term liabilities.
The first two quarterly interim dividends amounted to 3.72p per share and we remain on track to achieve the target of 7.45p per share for the year ending 31 March 2016. Looking forward the Board is targeting an aggregate dividend for the financial year to 31 March 2017 of 7.60p per share.”
Tony Roper, Director at InfraRed Capital Partners Limited (the Company’s Investment Adviser), said:
“Whilst the investment market remains as competitive as ever, we have successfully transacted on a number of value accretive investments in the period. One of these, Southmead Hospital in Bristol, is material in the context of the portfolio’s value. In addition, just before the period end, we completed our third investment in Canada – a police headquarters building in British Columbia.
Our Asset and Portfolio Managers continue to focus on ensuring service delivery meets or exceeds contractual commitments and that the value of the Group’s equity interests is thus preserved or enhanced.
Currently, we are evaluating a range of opportunities both in the UK and internationally. These range by sector, geography and/or stage of investment, but all fit the Company’s stated investment objectives and Acquisition Strategy. We are confident the pipeline will result in new value accretive investments for the Group.”
The full announcement can be found at www.hicl.com.