HICL Infrastructure reports solid full-year return
HICL Infrastructure reported a surge in income to £405.8m in its annual results on Wednesday, up from £188.7m year-on-year, as it maintained a “strong pipeline” of investments.
The FTSE 250 company said profit before tax totalled £368.4m for the year ended 31 March, up from £152.1m a year earlier.
Earnings per share jumped to 19p from 7.9p, while the board maintained the dividend at 8.25p per share.
HICL reported a total shareholder return of 12.8% for the year, up from 5.5% a year earlier, reflecting its “strong” financial and operating performance, and of 9% for the 16 years since initial public offering, which the board said reflected the “resilient and defensive” nature of HICL's investment proposition in a range of market conditions.
It reported a 10.8p, or 7.1%, increase in the net asset value per share to 163.1p, driven by the portfolio's “strong correlation” to inflation, the sale of the Queen Alexandra Hospital, and continued competitive pricing for infrastructure assets.
The firm also reported a 9.9% increase in the directors' valuation of the portfolio as at 31 March, to £3.3bn.
Looking at the portfolio, HICL said it made investments of £110.4m in the year, with an additional investment agreed post year-end in ADTIM SAS.
Three divestments were meanwhile agreed during the period, generating proceeds of £126.3m.
The board reconfirmed its dividend guidance for the 2023 financial year at 8.25p per share, and announced guidance for the 2024 dividend of 8.25p per share as well.
HICL said it ended the year with a “robust” balance sheet, supported by a new £400m multi-currency facility announced in April, and the divestment proceeds from the Queen Alexandra Hospital.
The company said it had “significant” cash resources available to pursue investment opportunities as they arose.
Its investment manager InfraRed was building a “strong pipeline” of “attractive” investments for HICL, the directors added, underpinned by its “differentiated capability” to source new investments across traditional and modern economy infrastructure sectors.
The pipeline included both incremental acquisitions and greenfield opportunities.
“HICL has clearly demonstrated the resilient and defensive nature of its investment proposition against an uncertain macroeconomic and geopolitical backdrop, delivering a total return for shareholders of 12.8%,” said chairman Ian Russell.
“HICL's stable and consistent performance is supported by its considered portfolio composition, notably the contribution of the portfolio's deliberate inflation linkage in the period.”
Russell said the asset mix had been further improved by the year's investment activity, coupled with InfraRed's “active approach” to asset and portfolio management.
“With a robust balance sheet and well-developed pipeline curated by InfraRed, the company continues to position itself for growth to capture the significant investment opportunity identified across HICL's core markets.”
At 1031 BST, shares in HICL Infrastructure were up 1.28% at 180.08p.
Reporting by Josh White at Sharecast.com.