BBGI Global Infrastructure (LON:BBGI) is the topic of conversation when Hardman and Co’s Analyst Nigel Hawkins caught up with DirectorsTalk for an exclusive interview.
Q1: BBGI Global Infrastructure, what is its core business and in what sectors does it invest?
A1: They invest in long-term and low-risk infrastructure assets, with bridges and roads being particularly favoured investments. These shareholdings deliver stable and predictable cashflows, thereby enabling the payment of progressive dividends.
Q2: So, how are the company’s investments spread? Do they operate in markets with high risks?
A2: The company’s most important markets are the UK and North America, especially Canada. They are very selective in their investments; it seeks secure earnings and high-quality counterparties.
Q3: How have shares performed since its IPO in 2011?
A3: For an infrastructure investment company paying a decent dividend, the shares have been very solid performers during the last seven years. Over that period, total shareholder returns have averaged an impressive 10.6% per year. The company shares are now valued by the market at over £1.1bn.
Q4: What is their dividend policy?
A4: They operated a progressive dividend policy, which has seen its dividend increase every year since its IPO in 2011. For the 2020 financial year, the company plans to pay a dividend of 7.18p per share, which is expected to rise to 7.33p for 2021.
Q5: What has been the impact of COVID-19 on BBGI Global Infrastructure‘s operations?
A5: While COVID-19 has had devastating consequences in many areas, it has barely impacted them. Importantly, virtually all their revenues are availability-based – and not demand-based. Some infrastructure investment companies, particularly those with transport investments, have faced setbacks – a scenario that their availability-based revenue model has avoided.