International PPL plays down nationalisation risk in portfolio update
Infrastructure investor International Public Partnerships updated the market for the period from 1 July to 19 November on Wednesday, reporting that its portfolio of 130 investments in public and social infrastructure assets and related businesses were continuing to operate and perform in line with expectations.
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International Public Partnerships Ltd.
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The FTSE 250 company said the “solid and consistent” level of operational performance in the portfolio was driving “strong and sustainable” ongoing financial performance for shareholders, with continued dividend growth.
It said its investments were delivering sustained value by supporting their public sector partners and the wider communities that they served, including its investments in operational rail businesses, which the board said served around 230 million passengers annually.
The company made an additional £70m senior debt investment alongside new bank debt to support the successful refinancing and restructuring of three projects within its offshore transmission (OFTO) portfolio during the period.
It also successfully completed a “significantly oversubscribed” £116.5m capital raising, with strong demand from existing and new shareholders.
The firm said the proceeds of that were used to pay down the cash drawn portion of its corporate debt facility that exists to finance its investments.
International PPL was also appointed as preferred bidder for its eighth UK OFTO, ‘Rampion OFTO’, in August as part of the Transmission Capital Partners consortium.
Looking at its finances, the firm announced its interim results for the six months ended 30 June on 6 September, reporting a 2.2p increase in net asset value per share to 150.3p.
The board said the portfolio maintained a “high level” of inflation-linkage, with a 1% increase in inflation leading to a 0.86% increase in return.
A first half-year dividend of 3.59p per share was declared on 6 September, and was paid on 7 November, with the board setting a target dividend for the 2019 and 2020 financial years at 7.18p and 7.36p per share, respectively, in line with an average increase of around 2.5% or greater each year.
The company said it had delivered a total shareholder return, comprising share price growth and aggregate dividends, since IPO in November 2006 of 197.8%, or 8.7% on an annualised basis.
“The appetite for long-term responsible investment into public and social infrastructure remains high,” the International PPL board said of its outlook.
“There continues to be a positive outlook for private sector investment into public infrastructure across the geographies that the company invests in.
“Whilst the company acknowledges that there is an element of uncertainty in the current political landscape, we continue to monitor these risks such as emerging policies of the UK opposition party to nationalise certain infrastructure in the UK.”
The board said the firm and its investment adviser, as it had previously stated, believed there were “practical mitigants” in place to the implementation of those policies.
“The company continues to monitor developments as Brexit preparations progress and as previously expressed, we do not believe that we are unusually exposed or that there will necessarily be a significant impact on the company's existing investments.
“However, this cannot be guaranteed, and we continue to monitor developments closely, as the withdrawal process continues to evolve.
“The pipeline for the types of assets the company invests in is positive and the company remains confident in the ability to continue to source and develop high-quality, well-performing opportunities, globally, that deliver long-term, predictable cash flows with strong inflation-linkage that meet the company's risk-return profile.”
At 1044 GMT, shares in International Public Partnerships were down 0.08% at 160.47p.