REG - 3i Infrastructure - 3i Infrastructure plc - Pre-close update

3i InfrastructureAnnouncement

31/03/2025 07:15

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RNS Number : 7950C  3i Infrastructure PLC  31 March 2025

 

31 March 2025

 

3i Infrastructure plc - Pre-close update for Full Year 2025

 

 

Income ahead of expectations

Continued portfolio earnings momentum

Successful refinancing activity

 

3i Infrastructure plc ('3iN' or the 'Company') is an investment company whose
purpose is to invest responsibly in infrastructure, delivering long-term
sustainable returns to shareholders and having a positive influence on our
portfolio companies and their stakeholders.

 

This statement relates to the period from 1 October 2024 to 28 March 2025 (the
'Period').

 

Bernardo Sottomayor, Managing Partner and Head of European Infrastructure, 3i
Investments plc, Investment Manager of the Company, commented:

 

"We continue to see earnings momentum in the portfolio, driven by our
strategic focus on prioritising growth investments in our existing portfolio
companies.

 

We have a focused portfolio of attractive infrastructure businesses in
structural growth markets. Working closely with management teams, we actively
manage our portfolio to drive future growth through capex and strategic
expansion. The value created by this approach is demonstrated by our long
track record of accretive realisations.

 

We have a proactive approach to debt refinancing, and combined with the
earnings growth has driven income in excess of expectations.

 

For FY25, we expect to report another period of good performance for the
Company and are on track to deliver the dividend target for the year, which is
expected to be c.2.5x covered by net income."

 

Highlights:

 

Valorem sale: As announced previously, 3iN completed the sale of its 33% stake
in Valorem in January for net proceeds of €310 million, a 31% uplift to the
pre-transaction valuation, generating a 21% gross annual IRR over the life of
the investment.

 

Refinancing activity: Three refinancings successfully closed in the Period on
better terms than assumed in our September 2024 valuations. TCR closed a
€450 million refinancing, comprising €250 million of new term debt and a
refreshed revolving credit facility of €200 million. This enabled a €73
million distribution to 3iN, with the balance available for reinvestment by
TCR. Additionally, debt raised at Oystercatcher, the holding company for the
stake in Advario Singapore, enabled a sizeable distribution to 3iN of €114
million. In March, Future Biogas increased the size of its available debt
facilities enabling the company to fund future growth opportunities. The debt
market continues to be favourable for high-quality infrastructure businesses,
as demonstrated by the strong lender appetite for these three transactions.

 

Balance sheet: As per our capital allocation policy, the proceeds from the
sale of Valorem and distributions from the aforementioned refinancings have
been used to repay drawings on the Company's Revolving Credit Facility
('RCF'). Expected drawings on the £900 million multi-currency RCF at 31 March
2025 are €310 million, a reduction of €406 million since the beginning of
the Period, alongside a cash balance of c.£4 million.

 

Portfolio update:

 * TCR continues to perform well, with prolonged higher interest rates and
continued balance sheet discipline by customers driving growth in TCR's
leasing solution. TCR has continued its expansion, increasing its global
footprint to 234 airports, 22 more than the same time last year. TCR has also
secured multiple commercial wins including a centralised all-electric Ground
Support Equipment pooling contract at JFK International Airport New Terminal
One.

 * Infinis has had a strong year, with earnings outperforming driven by Captured
Methane output consistently exceeding expectations throughout the Period. The
business has made further progress with its solar development pipeline,
bringing forward 150MW into construction. Infinis is now targeting over 650MW
of solar in operation by 2030.

 * Global Cloud Xchange ('GCX') and Tampnet are both experiencing strong demand
for subsea cable capacity driving up average revenue per user. As previously
announced, in December 2024, GCX committed to invest $34 million (funded from
the company's own resources) to acquire strategically important new capacity
on the India-Asia-Xpress and India-Europe-Xpress cable systems. The sales
pipeline for GCX's capacity remains strong, driven by the increasing need for
subsea fibre capacity. Tampnet also has a strong pipeline of new projects
including in new geographies and continues to invest in developing the
opportunities around Carbon Capture and Renewables.

 * As trailed over the year, SRL has experienced a downturn in activity from the
Local Authority and fibre segments, together with competitive pressure
impacting rental rates. The increase in costs seen across the UK labour
market, including from forthcoming minimum wage and national insurance
increases, has put significant cost pressure on the business. The new
management team is focussed on controlling costs as part of a revised business
plan. We expect these macro-economic challenges to be reflected in the
projected cash flows, impacting the full year valuation.

 * Ionisos continues to experience some softness in its non-core industrial
segment, as previously announced. In the Period, the business also experienced
unplanned downtime at some sites, resulting in short-term performance behind
expectations. The core healthcare division continues to perform well and drive
overall solid revenue growth in the period.

 * DNS:NET has met its objectives in the Period and is at the key milestone of
100k paying customers. The network penetration rate and average revenue per
user are ahead of previous assumptions. On 14 January 2025, 3iN invested a
further €24 million in the business to continue the next stage of the
network rollout through 2025.

 * The remaining portfolio companies are performing broadly in line with
expectations.

 

Income ahead of expectations: Total income and non-income cash in the Period
was £273 million, 163% higher than the comparable period in the prior year.
The increase was principally due to distributions following the refinancing
activity in the Period.

 

FY25 dividend target: The Company is on track to deliver the FY25 dividend
target of 12.65 pence per share, up 6.3% from FY24, which is expected to be
c.2.5x covered by net income.

 

 

Ends

 

For information, please contact:

 

  Thomas Fodor             Shareholder enquiries    +44 20 7975 3469
  Kathryn van der Kroft    Media enquiries          +44 20 7975 3021

 

 

 

 

About 3i Infrastructure plc

3i Infrastructure plc is a Jersey-incorporated, closed-ended investment
company, an approved UK Investment Trust, listed on the London Stock Exchange
and regulated by the Jersey Financial Services Commission. The Company's
purpose is to invest responsibly in infrastructure, delivering long-term
sustainable returns to shareholders and having a positive influence on its
portfolio companies and their stakeholders.

 

3i Investments plc, a wholly owned subsidiary of 3i Group plc, is authorised
and regulated in the UK by the Financial Conduct Authority and is the
investment manager of 3i Infrastructure plc.

 

This press release is not for distribution (directly or indirectly) in or to
the United States, Canada, Australia, or Japan and is not an offer of
securities for sale in or into the United States, Canada, Australia or Japan.
 Securities may not be offered or sold in the United States absent
registration under the U.S. Securities Act of 1933, as amended (the
'Securities Act'), or an exemption from registration under the Securities Act.
Any public offering to be made in the United States will be made by means of a
prospectus that may be obtained from the issuer or selling security holder and
will contain detailed information about 3i Group plc, 3i Infrastructure plc
and management, as applicable, as well as financial statements. No public
offering in the United States is currently contemplated.

 

This statement aims to give an indication of material events and transactions
that have taken place in the period from 1 October 2024 to 28 March 2025 and
their impact on the financial position of 3i Infrastructure plc. These
indications reflect the Board's current view. They are subject to a number of
risks and uncertainties and could change. Factors which could cause or
contribute to changes include, but are not limited to, general economic and
market conditions and specific factors affecting the financial prospects or
performance of individual investments within the portfolio of 3i
Infrastructure plc.

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