The entire investment business of HICL Infrastructure PLC (LON: HICL) was transferred from HICL Infrastructure Company Limited to the Company on 1 April 2019, by way of a scheme of arrangement as detailed in the Prospectus dated 4 March 2019.
The Board of HICL Infrastructure PLC announces Interim Results for the six months ended 30 September 2019.
For the six months ended 30 September 2019
· Resilient portfolio performance underpinning continued growth in Net Asset Value of 0.3p per share to 157.8p for the six months to 30 September 2019.
· The Company is on target to deliver aggregate target dividends of 8.25p per share for the current financial year1 and the Board re-affirms the 8.45p per share target dividend guidance for the next financial year, ending 31 March 20211.
· New target dividend guidance is given for the financial year ending 31 March 2022 of 8.65p per share1, reflecting the Board’s confidence in the resilience of the long-term forecast cash flows from HICL’s portfolio.
· Portfolio optimisation remains a core focus, with two accretive investments and two strategic disposals delivering improvements in the Company’s key portfolio metrics.
· With a total return featuring strong inflation correlation, low sensitivity to deposit rate changes and a low correlation to UK GDP, HICL’s portfolio provides a measure of mitigation against ongoing political uncertainty in the UK.
· The infrastructure asset class continues to hold unique attractions for yield investors in a low interest rate environment; and HICL has market-leading, differentiated characteristics such as low single asset concentration, a well-diversified portfolio and a pipeline of opportunities for growth.
· Steady share price progression over the period has seen the Company’s shares move to a healthy premium to Net Asset Value reflecting renewed appetite for yield as a low interest rate environment persists; the increasing relevance of investments such as HICL that have a meaningful sustainability profile; and a more supportive political backdrop in the UK.
· The Investment Manager continues to progress a healthy pipeline of core infrastructure opportunities including PPPs in Northern Europe and North America and regulated assets in selected geographies, including additional OFTOs.
- This is a target only and not a profit forecast. There can be no assurance that this target will be met.
Ian Russell, HICL Infrastructure Chairman of the Board, said:
“I am pleased to report resilient performance in the first half of the year, with Total Shareholder Return on an annualised basis of 5.7% and NAV of 157.8p, being growth of 0.3p per share. The predictability of the long-term, stable cashflows from HICL’s portfolio enables the Board to re-affirm the existing dividend targets of 8.25p for the current year and 8.45p for the year ending 31 March 2021. In addition, I am delighted to announce target dividend guidance of 8.65p for the year ending 31 March 2022.
“With a long-term mindset at its core, the Directors believe the Company’s strategy will continue to deliver responsibly managed, core infrastructure for communities and sustainable returns for shareholders.”
Harry Seekings, Co-Head of Infrastructure at InfraRed Capital Partners Limited, HICL’s Investment Manager added:
“Portfolio optimisation remains a core component of HICL’s strategy and an important driver of shareholder value. This strategy has continued to be successfully implemented, with InfraRed both making accretive acquisitions and utilising favourable market conditions to undertake strategic disposals.
“HICL has a uniquely well-diversified portfolio of sustainable and resilient core infrastructure investments. InfraRed recognises that taking a long-term, stakeholder-led view unlocks the potential of investments, reduces risk in the portfolio, and creates enduring benefits for local communities.
“The acquisition pipeline for HICL remains healthy, with InfraRed leveraging its expertise and network of relationships to generate new investment opportunities for the Group. These include PPPs in Northern Europe and North America and regulated assets in selected geographies, including additional OFTOs. The Company has a current funding requirement of approximately £90m and the Board continues to assess market conditions with regards to managing this.”