REG - International PPL - Portfolio Update

International Public PartnershipsAnnouncement

25/05/2023 07:00

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RNS Number : 5716A  International Public Partnerships  25 May 2023

INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
PORTFOLIO UPDATE
FOR THE PERIOD 1 JANUARY 2023 TO 24 MAY 2023

25 May 2023

International Public Partnerships Limited, the listed infrastructure
investment company ('INPP', or the 'Company'), which invests in public or
social infrastructure assets and related businesses internationally, has today
issued a portfolio update for the period 1 January 2023 - 24 May 2023.

KEY HIGHLIGHTS

·      The Company's portfolio of 138 projects and businesses has
continued to perform well during the period, delivering strong operational and
financial performance.

·      Consistent with previous forecasts, a second half-year 2022
dividend of 3.87 pence per share was declared on 30 March 2023(1).

·      The Company reaffirms its future dividend targets of 7.93 and
8.13 pence per share for 2023 and 2024, respectively, representing a c.2.5%(2)
increase on the preceding distributions and in line with the growth target
indicated at the time of INPP's IPO in 2006. These dividends are expected to
be fully covered by net operating cash flows.

·      The Company published its second Sustainability Report in March
2023, providing enhanced ESG disclosures that will support its shareholders to
meet their obligations under the EU Sustainable Finance Disclosure Regulation
('SFDR') and the recommendations of the Taskforce on Climate-related Financial
Disclosures ('TCFD').

·      In April 2023, the Company increased the committed size of its
corporate debt facility ('CDF') from £250 million to £350 million. In
addition, the Company retains a flexible 'accordion' component which would,
subject to lender approval, allow for a further increase in the committed size
of the facility to £400 million. The maturity date of the CDF was also
extended from March 2024 to June 2025. This ensures the Company has more than
enough liquidity to meet its investment commitments which total c.£240
million across the transport, digital, offshore transmission, and social
infrastructure sectors.

·      The Company has delivered a Total Shareholder Return(3) since IPO
in November 2006 to 24 May 2023 of 206.3% or 7.0% on an annualised basis.

FINANCIAL PERFORMANCE

·      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 2022 on 30
March 2023. This reported that as at 31 December 2022, the net asset value
('NAV') per share was 159.1 pence.

·      Since 31 December 2022, the Company has observed a strengthening
of Sterling against the currencies it is exposed to, including the Australian
Dollar, Canadian Dollar, Danish Krone, Euro, and US Dollar. Other things being
equal, this would have a minor negative impact (less than 0.5%) on the
Company's NAV.

·      The majority of jurisdictions the Company is invested in are
experiencing higher-than-anticipated inflation rates. Given the portfolio's
high (0.7%(4)) level of inflation linkage, these higher inflation rates would,
other things being equal, have a positive impact on the Company's NAV.

 

·    The Company observes that the relevant government bond yields have
increased modestly since the publication of the 31 December 2022 NAV, although
it notes that historically discount rates have not moved in lockstep with
government bond yields. The Company continues to see strong demand for
well-structured infrastructure assets.

INVESTMENT ACTIVITY

·      Since 1 January 2023, the Company has made new investments
totalling c.£0.7 million and investment commitments of £13.7 million;

o  In March 2023, the Company acquired a further 20% investment in the Ealing
Building Schools for the Future ('BSF') scheme for c.£0.7 million, increasing
its holding to 100%. This BSF scheme provides education facilities to over
1,400 pupils.

o  In May 2023, the Company made a further £13.7 million commitment to toob,
alongside other co-investors in the Amber-advised National Digital
Infrastructure Fund ('NDIF').  The business has a current fibre network
covering c.140,000 premises across Southampton and other towns in the South of
England. INPP's commitment is part of a wider £300 million of additional
funding raised by the business, which will enable the business to reach over
300,000 premises. INPP's investment will be made during the course of 2024.
Other things being equal, it is estimated that the Company's exposure to
digital investments will continue to represent less than 3% of the portfolio
by fair value.

·      In addition, the Company has previously noted its commitment to
acquire a c.NZD 200 million portfolio of five investments in New Zealand and
this acquisition is expected to reach financial close shortly. This
acquisition will mark the Company's first investment into New Zealand and the
underlying investments are high-quality, operational infrastructure assets,
delivering long-term stable cash flows with strong linkage to inflation.

OUTLOOK

·      Along with its infrastructure sector peers and the broader listed
investment trust world, the Company's share price has not been immune to
market volatility, as financial markets respond to various political and
economic headwinds. The Board notes that this is one of only a few occasions
in the Company's 16-year history in which the Company's shares have traded at
a discount to NAV but continues to actively monitor the share price and
discount carefully.

·      Despite these challenges the Company's underlying portfolio of
essential infrastructure investments has proven its resilience due to: the
predictability of the underlying cash flows which are typically underpinned by
regulated or contracted government-backed revenues, with high levels of
inflation correlation; and the Company's active approach to asset management.

·      Whilst lower volumes of transactions are taking place across the
market, the Company continues to see attractive investment opportunities
within the countries where it invests.

·      The Company's investment portfolio continues to generate cash
flows underpinned by robust 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(4)). The Company is therefore well positioned in the event
the current higher rates of inflation persist.

·      Governments continue to acknowledge the key role infrastructure
plays in helping to achieve economic growth, improved productivity,
decarbonisation targets and resilience to the effects of climate change.

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.   The forecast date for payment of the H2 2022 dividend is 7 June 2023.

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

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

4.   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.

 

ENDS.

For further information:

 Erica Sibree                                 +44 (0) 7557 676 499

 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 138 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, New Zealand 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 170 staff who are responsible for the management of, advice
on and origination of infrastructure investments.

 

 

 

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