REG - International PPL - Portfolio Update: 1 January 2022 to 31 May 2022

International Public PartnershipsAnnouncement

08/06/2022 07:00

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RNS Number : 1215O  International Public Partnerships  08 June 2022

INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
PORTFOLIO UPDATE
FOR THE PERIOD 1 JANUARY 2022 TO 31 MAY 2022

8 June 2022

International Public Partnerships Limited ('INPP', the 'Company'), the FTSE
250 listed investment company which invests in public or social infrastructure
assets and related businesses internationally, has today issued the following
portfolio update for the period 1 January to 31 May 2022.

OPERATIONAL HIGHLIGHTS

·      The Company has continued to deliver strong performance over the
period across its portfolio of over 140 projects and businesses

·      Approximately £48 million of investments and commitments were
made during the period, including an additional c.£40 million investment
being announced into Tideway, the company building a 25km 'super-sewer' under
the River Thames

·      Successfully completed a significantly oversubscribed £325
million capital raising during the period exceeding the initial target of
£250 million demonstrating strong support from both existing and new
shareholders. Approximately £160 million of the proceeds were used to pay
down  the Company's revolving credit facility with the remaining proceeds
available to support the Company's investment pipeline of c.£180 million. The
revolving credit facility remains available for re-drawing

·      The Company has now delivered a Total Shareholder Return(1) since
IPO in November 2006 to 31 May 2022 of 245.8% or 8.3% on an annualised basis

·      Dividend guidance was reaffirmed for 2022 of 7.74 pence per
share, and new guidance was issued for 2023 of 7.93 pence per share which is
consistent with the Company's historic c.2.5% average annual dividend
growth(2)

·      The Company considers sustainability and ESG integration to be an
essential part of investment risk management and value creation. In
conjunction with the recent capital raising, the Company has categorised
itself as an Article 8 financial product following an internal assessment of
the application of the EU Sustainable Finance Disclosure Regulations ('SFDR')

PORTFOLIO REVIEW

The portfolio continues to deliver essential services to its stakeholders,
maintaining high levels of asset availability. The portfolio's cash flows
continue to be underpinned by strong inflation-linkage such that a 1% increase
in assumed inflation is projected to result in a 0.7% increase in portfolio
return(3). Cash generation continues to be in line with projections supporting
the Company's established average historical dividend growth.

The Company has continued to source new investments during the period
including further investment commitments in Gold Coast Light Rail Stage 3 and
Tideway. In addition, the Company, through its Investment Adviser, has a
strong future pipeline of investments across the social, transport and
regulated utilities sectors of c.£180 million over the next 12 months. This
includes the previously announced investments into two further offshore
transmission projects ('OFTOs'), East Anglia One OFTO and Moray East OFTO, UK
PPP portfolio and a further contingent commitment remains available to Diabolo
Rail Link, if required. Please see the 2021 Annual Report for more
information.

INVESTMENT ACTIVITY

Since 1 January 2022, the Company has made new investments and investment
commitments of c.£48 million.  New investment commitments included:

·      On 1 June 2022, the Company announced that it has conditionally
agreed to acquire a further shareholding in Tideway.  The investment
opportunity arose as a consequence of another existing investor having to
dispose of its stake as an underlying investment fund is coming to the end of
its life.  If completed, the acquisition will result in INPP increasing its
stake in Tideway to approximately 18% and deploying approximately £40 million
of additional capital.  Tideway continues to be a successful investment for
INPP and will provide several significant environmental and social benefits
once operational.

·      In March 2022, the Company announced it had reached financial
close on Stage 3 of the Gold Coast Light Rail project (the 'Project'). Under
the terms of the acquisition the Company will make an investment totalling
approximately A$12.5 million (c.£7.0 million at current exchange rates). The
follow-on investment has arisen through the Company's existing 30% interest.
The Project extends the existing Gold Coast Light Rail network (known as
G:link) a further 6.7 kilometres south from Broadbeach to Burleigh Heads. It
will include eight new stations, five additional light rail trams, new bus and
light rail connections at Burleigh and Miami, and an upgrade of existing depot
and stabling facilities. At completion of Stage 3 in 2025, Queensland's only
light rail system will have a route 27 kilometres long from Helensvale to
Burleigh Heads, stopping at 27 stations and serviced by 23 trams. This follows
the success of Stages 1 and 2, of which the Company is invested. Over 60
million passenger trips have taken place to date and One of the many benefits
of the rail system has been an overall increase in public transport use on the
Gold Coast with a 43% uplift for combined tram and bus use since light rail
opened in 2014.

FINANCIAL HIGHLIGHTS(4)

The Company's investment portfolio valuation is determined semi-annually by
the Directors after advice from the Investment Adviser and is reviewed by the
Company's auditors. This semi-annual valuation is published within the
Company's interim and annual accounts, the last of which was published with
the Company's full-year results ending 31 December 2021 on 24 March 2022,
reporting:

·      The net asset value ('NAV') per share was 148.2 pence as at 31
December 2021

·      The cash flows generated by the Company's investment portfolio
continue to be underpinned by strong inflation-linkage (a 1.0% increase in
assumed inflation rates across all assets is projected to result in a 0.7%
increase in portfolio returns (3)

·      A second half-year 2021 dividend of 3.77 pence per share was
declared on 24 March 2022 and was paid on 7 June 2022. This dividend is in
respect of the period 1 July 2021 to 31 December 2021 and represents a c.2.5%
increase on the dividend paid in the corresponding period in the prior year

·      The Scrip Dividend Alternative Circular applicable to that
dividend was available to investors and the associated scrip allotment will be
made on 13 June 2022

·      As referred to above, the Company is currently maintaining its
previously announced dividend targets of 7.74 and 7.93 pence per share in
respect of 2022 and 2023, respectively. This is in line with the current
targeted annual increase of c.2.5%(2)

·      As at 31 May 2022, the Company's £250 million revolving credit
facility was undrawn in cash with £16.9 million committed in respect of
letters of credit

 

INVESTMENT ENVIRONMENT AND OUTLOOK

·      There continues to be strong macro fundamentals that support the
Company's portfolio and whilst we continue to manage and mitigate risk, the
portfolio has continued to be resilient

·      The Company is closely monitoring the current macroeconomic
environment and in particular notes the sharp increase in nearer term
inflation rates. The Company will, as it always does, review its macroeconomic
assumptions in advance of the next formal valuation date being 30 June 2022

·      The result of the capital raise that took place during the period
demonstrates the attractiveness of the Company's investment case, including
its strong inflation linkage in the current high inflationary environment, as
well as support for the Company's future pipeline

·      Governments have acknowledged the key role infrastructure
spending will play in driving economic recovery, creation of jobs and
addressing challenges such as climate change

·      The Company is now categorised as an Article 8 financial product
and the Company and its Investment Adviser will continue to monitor the
emerging requirements of the EU SFDR and EU Taxonomy Regulation

·      The pipeline for the types of assets the Company invests in
remains strong and the Company continues to remain confident in its ability to
continue to source and develop quality, high-performing opportunities, across
the Company's target geographies, that deliver long-term, predictable cash
flows with strong inflation-linkage that meet the Company's risk-return
profile

 

Notes to Editors:

While it is no longer a requirement under the Disclosure Guidance and
Transparency Rules for the Company to issue Interim Management Statements, the
Board believes it is in the interest of shareholders for the Company to
provide quarterly updates in addition to its half year reports.

1.   Source: Bloomberg. Share price appreciation plus dividends assumed to
be reinvested.

2.   Future profit projection and dividends cannot be guaranteed.
Projections are based on current estimates and may vary in future.

3.   Calculated by running a 'plus 1.0%' inflation sensitivity for each
investment and solving each investment's discount rate to return the original
valuation. The inflation-linked return is the increase in the portfolio
weighted average discount rate.

4.   For the full year to 31 December 2021 unless stated otherwise.

 

ENDS.

For further information:

Erica Sibree/Amy
Edwards
+44 (0) 7557 646 499 / (0) 7827 238 355

Amber Fund Management
Limited

 

Hugh
Jonathan
                                 +44 (0)20
7260 1263

Numis Securities

 

Ed Berry/Mitch
Barltrop
 +44 (0) 7703 330 199 / (0) 7807 296 032

FTI Consulting

 

About International Public Partnerships (INPP):

INPP is a listed infrastructure investment company that invests in global
public infrastructure projects and businesses, which meets societal and
environmental needs, both now, and into the future.

INPP is a responsible, long-term investor in over 140 infrastructure projects
and businesses. The portfolio consists of utility and transmission, transport,
education, health, justice and digital infrastructure projects and businesses,
in the UK, Europe, Australia and North America. INPP seeks to provide its
shareholders with both a long-term yield and capital growth.

Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and
consists of over 150 staff who are responsible for the management of, advice
on and origination of infrastructure investments.

Visit the INPP website at www.internationalpublicpartnerships.com
(http://www.internationalpublicpartnerships.com) for more information.

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