REG - BBGI Global Infrast. - Annual Financial Report FY2024
28/03/2025 07:15
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RNS Number : 5972C BBGI Global Infrastructure S.A. 28 March 2025
The information contained within this Announcement is deemed by the Company to
constitute inside information. Upon the publication of this Announcement via a
Regulatory Information Service this inside information is now considered to be
in the public domain.
28 March 2025
BBGI Global Infrastructure S.A.
('BBGI' or the 'Company')
Annual results for the financial year ended 31 December 2024
BBGI Global Infrastructure S.A. (LSE ticker: BBGI), the global infrastructure
investment company, is pleased to announce its full year results for the year
ended 31 December 2024.
A copy of the Annual Report is available at
https://www.bb-gi.com/annual-report-2024/
(https://www.bb-gi.com/annual-report-2024/) and this is also attached to the
announcement: http://www.rns-pdf.londonstockexchange.com/rns/5972C_1-2025-3-27.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5972C_1-2025-3-27.pdf)
Key Highlights
· Resilient performance of BBGI's globally diversified portfolio of 56
high-quality, 100% availability-style core-infrastructure assets.
· Dividend remains well covered at 1.37x, with a targeted increase
of 2% to 8.57pps for 2025.
· NAV total return in the year of 2.1%.
· BBGI's ability to invest in new opportunities remained constrained
by its share price trading at a discount to NAV and the continued disconnect
between public and private markets.
Subsequent event
· Recommended cash offer for BBGI.
Duncan Ball, CEO of BBGI, said:
"Over the past year, we have navigated a challenging market environment by
maintaining financial discipline and focusing on delivering sustainable cash
flows from our defensive infrastructure portfolio. Our investments in
essential Social Infrastructure assets have ensured stability across the
portfolio.
Despite this, BBGI's share price has consistently traded at a discount to NAV
since April 2023 which has constrained our access to capital markets and
remains a key impediment to seizing new growth opportunities. Over time, as
concessions expire and assuming no access to capital and no further
investments, eventually the NAV of the business would be expected to decline
on an annual basis given the amortising nature of BBGI's assets.
The Offer from BCI presents an opportunity for shareholders to realise in cash
the value of their holdings at a level that may not be achievable in the
medium term under current market conditions."
Sarah Whitney, Chair of Supervisory Board, commented:
"BBGI's globally diversified portfolio has continued to deliver reliable cash
flows in line with expectations, despite the challenging macroeconomic
environment.
While we remain confident in BBGI's ability to generate stable returns for
shareholders over the long term, the Boards' recommendation of the Offer from
BCI was made after careful evaluation of all available options. We believe the
terms of the Offer are fair and reasonable, and offers an attractive value
that is in excess of the Company's reasonable medium-term prospects on a
standalone basis."
Financial highlights
FY 2024 dividend declared FY 2025 target dividend growth Cash dividend cover
8.40pps +2% 1.37x
+6% increase year-on-year 8.57pps (FY 2023: 1.40x)
NAV FY 2024 NAV total return Annualised NAV total return since IPO
142.7pps +2.1% 8.1%
(31 December 2023: 147.8p) (FY 2023: +3.8%) as at 31 December 2024
High-quality inflation linkage Ongoing charges Net cash
0.5% 0.92% £27.4m
(FY 2023: 0.5%) (FY 2023: 0.93%) No drawings under RCF
Recommended cash offer for BBGI
§ On 6 February 2025, BBGI and Boswell Holdings 3 S.C.Sp ('Bidco')
announced a Board-recommended all-cash Offer (the 'Offer') for the entire
issued and to be issued share capital of BBGI by Bidco, which is a newly
formed special limited partnership indirectly controlled by British Columbia
Investment Management Corporation ('BCI'), for a price of 147.5pps. As a
result of the declaration and payment of the second interim dividend, and as
set out in the Offer Document published on 6 March 2025, the offer price was
reduced to 143.3pps.
§ A Circular was published on 6 March 2025 convening a General Meeting
of BBGI on 10 April 2025 to consider and, if thought fit, approve: (i) the
sale by BBGI, directly or indirectly, of all or any of its assets and
undertakings to Bidco (or an affiliate of Bidco) following the Offer becoming
unconditional and the de-listing of the BBGI shares; and (ii) the appointment
of Bidco's nominees to the Supervisory Board subject to the de-listing of the
BBGI shares and the approval of the Luxembourg Commission de Surveillance du
Secteur Financier, in each case as further described in the Circular.
§ The BBGI Boards, who have been so advised by Jefferies International
Limited as to the financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable. In providing advice to the BBGI Boards,
Jefferies has taken into account the commercial assessments of the BBGI
Boards. Accordingly, the BBGI Boards are unanimously recommending shareholders
accept the Offer and vote in favor of the proposed resolutions as they have
irrevocably undertaken to do, or procure to be done, in respect of their own
beneficial holdings of BBGI shares.
Financial and operational highlights
Operational performance
§ BBGI maintains a globally diversified portfolio of 56 high-quality, 100%
availability-style infrastructure assets
§ Achieved a consistently high asset availability rate of 99.9%.
§ Net cash generated at the Portfolio Company level ahead of projections,
with no material lockups or defaults.
§ Focus on partnering with highly rated, creditworthy public sector entities
in countries with solid credit ratings (AA to AAA).
Generating high-quality, predictable and inflation-linked cash flows
§ Contracted high-quality inflation linkage of 0.5%.
§ 6% dividend growth achieved for FY 2024; FY 2025 target growth of 2%
reaffirmed.
§ The cash dividend cover was 1.37x.
§ Weighted average discount rate increased to 7.6% (FY 2023: 7.3%),
reflecting an equity risk premium of c.3.5%.
§ Portfolio of investments continued to perform strongly over the year, with
net cash generated ahead of projections.
Continued focus on prudent financial management
§ In FY 2024, NAV total return per share was 2.1%, driven by dividends paid
(8.2pps), partially offset by higher discount rates and foreign exchange
movements.
§ As of 31 December 2024, BBGI maintained a net cash position of £27.4
million with no structural gearing at Group level and no refinancing risk at
the Portfolio Company level.
§ Despite the increasing cost pressures attributed to heightened levels of
inflation in recent times, the ongoing charges of 0.92% remained at
competitive levels.
Active asset management
§ BBGI remains committed to optimising operational performance to drive
efficiencies and maximise portfolio value.
§ A Net Promoter Score of 56 reflects strong client satisfaction and the
Company's commitment to operational performance.
Disciplined capital allocation strategy
§ BBGI's approach to capital allocation remains focused on portfolio
accretive growth rather than just growth in assets under management.
§ The Company's ability to invest in new opportunities was constrained by its
share price trading at a discount to NAV throughout the year.
§ The Management Board continues to assess investment opportunities within
the existing portfolio and through selective new investments.
Progressing on sustainability commitments
§ BBGI continued to build on its responsible investment approach by enhancing
practices and governance.
§ During the year the Company made notable progress on several sustainability
initiatives.
FOR FURTHER INFORMATION, PLEASE CONTACT:
BBGI +352 263 479-1
Duncan Ball, CEO
Michael Denny, CFOO
Dilip Kejriwal, Director of Investor Relations
NOTES
BBGI Global Infrastructure S.A. (BBGI) is a responsible infrastructure
investment company and a constituent of the FTSE 250 that invests in and
actively manages for the long-term a globally diversified, low-risk portfolio
of essential social infrastructure investments.
BBGI is committed to delivering stable and predictable cash flows with
progressive long-term dividend growth and sustainable, returns for
shareholders. BBGI has a proactive approach to preserving and enhancing the
value of its investments, and to delivering well maintained social
infrastructure for communities and end users.
All of BBGI's investments are supported by secure public sector-backed
contracted revenues, with high-quality inflation linked characteristics.
BBGI's investment portfolio is 100% operational with all its investments
located across highly rated investment grade countries with stable, well
developed operating environments.
Further information about BBGI is available on its website at www.bb-gi.com*.
The Company's LEI: 529900CV0RWCOP5YHK95
Any reference to the Company or BBGI refers also to its subsidiaries (where
applicable).
* Neither the Company's website nor the content of any website accessible from
hyperlinks on its website (or any other website) is (or is deemed to be)
incorporated into, or forms (or is deemed to form) part of this announcement.
------------------------------
INVESTING IN GLOBAL INFRASTRUCTURE
Annual Report 2024
www.bb-gi.com
About BBGI
BBGI Global Infrastructure S.A. (BBGI, the 'Company', and together with its
consolidated subsidiaries, the 'Group') is a global infrastructure investment
company providing responsible capital to build and maintain critical Social
Infrastructure i .
From hospitals to schools, to affordable housing and safer roads, we partner
with the public sector to deliver Social Infrastructure that forms the
building blocks of local economies, while creating sustainable value for all
stakeholders.
Our purpose:
Our purpose is to deliver Social Infrastructure for healthier, safer and more
connected communities, while creating sustainable value for all stakeholders.
Our vision:
We invest to serve and connect people.
Our values:
• Trusted to deliver
• Dependable partner
• Investor with impact
• Present-focused, future-ready
Financial Highlights ii
FY 2024 dividend declared FY 2025 target dividend growth Cash dividend cover
8.40pps iii +2% 1.37x
+6% increase year-on-year 8.57pps (FY 2023: 1.40x)
NAV FY 2024 NAV total return Annualised NAV total return since IPO
142.7pps +2.1% 8.1%
(31 December 2023: 147.8p) (FY 2023: +3.8%) as at 31 December 2024
High-quality inflation linkage Ongoing charges Net cash
0.5% 0.92% £27.4m
(FY 2023: 0.5%) (FY 2023: 0.93%) No drawings under RCF
On 6 February 2025, the Company and Boswell Holdings 3 S.C.Sp announced a
Board-recommended all cash offer by British Columbia Investment Management
Corporation ('BCI') of 147.5pps.
Under the terms of the offer, which is subject to certain terms and conditions
set out in the offer document published on 6 March 2025, BBGI shareholders who
accept the offer will be entitled to receive 143.3pps in cash. As further
described in the offer document, BBGI shareholders on the register on 7 March
2025 will also be entitled to retain a cash dividend of 4.2pps. The dividend
will be paid on 16 April 2025.
Further details are available on our website:
https://www.bb-gi.com/investors/offer/
Portfolio Highlights
Strong operational performance of BBGI's globally diversified portfolio of 56
high-quality, 100% availability-style core infrastructure assets.
Maintained a consistently high asset availability rate of 99.9%.
Contracted high-quality inflation linkage of 0.5%.
6% dividend growth achieved for FY 2024; FY 2025 target growth of 2%
reaffirmed.
Net cash generated at the Portfolio Company level ahead of projections, with
no material lock-ups or defaults.
No cash drawings outstanding on the Revolving Credit Facility ('RCF').
No structural gearing at Group level.
No refinancing risk at the Portfolio Company level, following the refinancing
of the Northern Territory Secure Facilities.
Weighted average discount rate increased to 7.6% (FY 2023: 7.3%), reflecting
an equity risk premium of c.3.5%.
Internal management structure which supports alignment with our investors.
Ongoing charges of 0.92%.
High degree of climate resilience independently confirmed across asset
portfolio.
Focus on delivering social impact across portfolio - Sustainable Financial
Disclosure Report ('SFDR') Article 8.
Portfolio at a Glance
The fundamentals
Based on portfolio value as at 31 December 2024
Investment type
100% availability-style iv revenue stream.
Investment Type
Availability-style revenue assets 100%
Regulated Assets -
Demand-based Assets -
100%
Investment status
Low-risk operational portfolio.
Investment Status
Operational 100.0%
Under construction -
100%
Geographical split
Geographically diversified in stable
developed countries.
Geographic Split
Canada 35%
UK 33%
Continental Europe 12%
US 10%
Australia 10%
100%
Sector split
Well-diversified sector split with exposure to low-risk core infrastructure
assets.
Sector Split
Transport 54%
Healthcare 20%
Civic infrastructure 12%
Education 9%
Affordable housing 3%
Clean energy 2%
Other -
100%
Investment life
Long-duration portfolio with weighted average remaining asset life of 22.2
years.
Investment Life
Non-concession assets 6%
Concession assets 94%
≥25 years 14%
≥20 years and <25 years 15%
≥10 years and <20 years 55%
<10 years 10%
Country rating
All assets located in countries with Standard & Poor's credit ratings
between AA and AAA.
Country Rating
AAA 57%
AA+ 10%
AA 33%
100%
Investment ownership
80% of assets by value that are 50% owned or greater.
Investment Ownership
100% 47%
≥75% and <100% 7%
≥50% and <75% 26%
<50% 20%
100%
Top ten investments
Well-diversified portfolio with no major single asset exposure.
Top Ten Investments
Golden Ears Bridge (CA) 11.0%
Ohio River Bridge (US) 10.0%
Northern Territory Secure Facilities (AUS) 4.0%
A7 Motorway (DE) 4.0%
A1/A6 Motorway (NL) 4.0%
Victorian Correctional Facilities (AUS) 4.0%
M1 Westlink (UK) 3.0%
Liverpool & Sefton Clinics (UK) 3.0%
Women's College Hospital (CA) 3.0%
McGill University Health Centre (CA) 3.0%
Remaining 46 investments 51.0%
100%
Our portfolio of assets
56 Total assets
UK 25 assets | Canada 16 assets | Germany 7 assets
Australia 3 assets | Netherlands 3 assets
Norway 1 asset | US 1 asset
Chair's Statement
Our portfolio of defensive core infrastructure assets remained resilient,
delivering cash distributions in line with expectations, despite the
challenging macroeconomic environment.
Offer to acquire the Company (the 'Offer')
On 6 February 2025, the Company and Boswell Holdings 3 S.C.Sp ('Bidco')
announced a Board-recommended all cash offer for the entire issued and to be
issued share capital of the Company by Bidco, which is a newly formed special
limited partnership indirectly controlled by British Columbia Investment
Management Corporation ('BCI') for a price of 147.5pps, representing a premium
of 21.1% to the Company's share price pre-announcement.
On 27 February 2025, the Company declared a second interim cash dividend of
4.20pps for the period 1 July - 31 December 2024, to be paid on 16 April 2025.
Payment of the second interim dividend is consistent with the Company's target
dividend payment of 8.40pps in respect of the financial year ending 31
December 2024. As a result of the declaration and payment of the second
interim dividend, and as set out in the Offer document published on 6 March
2025, the Offer price reduced to 143.3pps. Eligible BBGI shareholders on the
register on the dividend record date will be entitled to retain the second
interim dividend.
On 6 March 2025, the Company published a Circular convening a General Meeting
to consider and, if thought fit, approve resolutions authorising; (i)the sale
by BBGI, directly or indirectly, of all or any of its assets and undertakings
to Bidco (or an affiliate of Bidco), subject to the Offer becoming
unconditional and the occurrence of the Delisting Date; and (ii) the
appointment of Bidco's nominees to the Supervisory Board with effect from the
later of the Delisting Date and the date on which such appointments are
approved by the CSSF. This General Meeting will take place on 10 April 2025 at
the Company's head office.
The Offer document sets out the full terms of the Offer and the timetable of
the Offer. The Offer Document and circular have been published and sent to
BBGI shareholders and are also available on the Company's website:
www.bb-gi.com/investors/offer/. I would advise all our shareholders to review
carefully these documents.
Although both the Supervisory Board and the Management Board are confident
that BBGI can continue to deliver sustainable cash flows to its shareholders,
the Boards believe that the Offer provides shareholders with the opportunity
to realise in cash the value of their holdings, at an attractive value that is
in excess of the reasonable medium-term prospects for the Company on a
standalone basis. The Boards, who have been so advised by Jefferies as to the
financial terms of the Offer, consider the terms of the Offer to be fair and
reasonable. Jefferies is providing independent financial advice to the BBGI
Boards.
If the Offer is declared unconditional, BBGI is expected to delist from the
London Stock Exchange within 20 business days of the date on which the Offer
is declared or becomes unconditional. However, at present the Offer remains
conditional and consequently this Annual Report has been prepared in a manner
consistent with past practice with prior reporting documents including in
respect of the annual audit.
Governance
BBGI maintains high corporate governance standards. During the year, the
Supervisory Board, alongside the Management Board and members of the senior
Asset Management Team, conducted site visits to two assets in Scotland. These
visits provided an opportunity to engage with key stakeholders, including
local authority and service providers. I am pleased to report that our active
asset management was demonstrably evident. The sites were well-maintained, and
discussions with stakeholders were open and constructive.
In accordance with the UK Association of Investment Companies Code of
Corporate Governance (the 'AIC Code'), the Company conducted an independent,
externally-facilitated evaluation of the Supervisory Board. The review
concluded that the Board is well constituted, effective and operates
efficiently. Further details of this evaluation can be found in the Nomination
Committee section of this Report.
In August 2024, the AIC updated the AIC Code, effective for the 2025 financial
year, with certain provisions applying from 2026, and we intend to maintain
our high standard of compliance with the Code as and when the new provisions
take effect.
Engaging with stakeholders
By fostering open dialogue and transparent communication, we aim to build
lasting relationships with all our stakeholders, supporting our vision of
delivering Social Infrastructure that promotes healthier, safer, and more
connected societies while creating sustainable value. In 2024, alongside our
Management Board, I continued engaging with stakeholders and the Supervisory
Board conducted site visits to the M80 and Clackmannanshire Schools, further
enhancing our oversight of the portfolio. We also maintained regular meetings
with employees and remain committed to proactive communication with
shareholders.
ESG commitments
In 2024, we continued to build on our responsible investment approach by
enhancing practices and governance. We maintained a diverse Supervisory Board,
with 60% female representation and we met the Parker Review recommendation of
having at least one Board member from an ethnic minority background.
Throughout the year, our portfolio delivered tangible social benefits. Over
four million patients accessed our healthcare facilities, 36,000 pupils
benefited from educational infrastructure, 200 people were provided with
affordable housing, 300 million vehicles used our road assets and 40 million
passengers travelled via public transport infrastructure.
We made notable progress on our sustainability initiatives, external
verification of our Greenhouse Gas ('GHG') portfolio emissions and the launch
of a dedicated Environmental, Social and Governance ('ESG') and carbon data
collection platform.
Looking forward
Despite the robust performance of our portfolio in recent years, as at 31
December 2024 the Company's share price continued to trade at a discount to
the NAV, reflecting macroeconomic factors beyond our control. It was against
this backdrop that BBGI received an initial proposal from BCI and after a
period of negotiation it was concluded that both the BBGI Supervisory Board
and the Management Board would recommend the Offer.
While the outcome of the Offer is currently unknown, the Boards remain
confident about the Company's future prospects, either as an ongoing core
infrastructure-focused investor listed on the London Stock Exchange, or as an
infrastructure investor under BCI's ownership.
In addition, and on behalf of the Supervisory Board, I would like to take this
opportunity to express my gratitude to all of the Company's employees for
their substantial contribution to managing and operating the Company. I would
also like to thank my fellow Board members for their contribution through a
challenging period for London-listed Investment Companies. Lastly, I would
like to thank shareholders for their continued support of the Company.
Sarah Whitney
Chair of the Supervisory Board
27 March 2025
CEO's Statement
Amid a challenging macroeconomic environment, we have remained focused on
maintaining a robust balance sheet, delivering on our commitments to
stakeholders and preserving and enhancing long-term shareholder value.
Our investment portfolio generates long-term, inflation-linked and sustainable
cash flows, positioning BBGI at the lower end of the risk spectrum relative to
other infrastructure asset classes. Our globally diversified portfolio
includes low-risk, essential Social Infrastructure assets, backed by
creditworthy public-sector counterparties.
During the year, our assets delivered predictable performance, consistently
achieving a high asset level availability rate, and remaining fully
operational. Our strong overall Net Promoter Score of 56, which places us in
the top quartile of the achievable range, highlights our continued commitment
to delivering high-quality service for our public sector clients and
preserving value for our investors.
We ended the year with a robust balance sheet, no structural gearing at the
Group level and strong dividend coverage. At the portfolio level, we
refinanced the Northern Territory Secure Facilities with a full-term financing
solution, eliminating refinancing exposure across our entire portfolio for the
duration of all concession periods.
Financial performance
As at 31 December 2024, our Net Asset Value ('NAV') was 142.7pps (December
2023: 147.8pps). The NAV total return per share was +2.1% (FY 2023: +3.8%).
The decline in NAV was largely driven by an increase in the weighted average
discount rate to 7.6% from 7.3%, reflecting, in particular, the rise in
risk-free rates during the reporting period across all countries in which the
Company invests. The net negative impact of foreign exchange movements further
contributed to the decline, which was partially mitigated by our hedging
strategy. The adverse valuation impacts were partially offset by portfolio
value enhancements.
We remain on track to deliver our targeted 6% dividend increase to 8.40pps for
FY 2024, following a similar increase in FY 2023, and 2% target increase (to
8.57pps) for FY 2025. Dividend cash cover during the year was 1.37x and we are
confident that cash flows can continue to sustain a progressive dividend
policy well into the future.
Further details on valuation factors can be found in the Valuation section of
this Report.
Capital allocation
BBGI's approach to capital allocation remains focused on portfolio accretive
growth rather than just growth in Assets Under Management ('AUM'). Despite
ending the year with a net cash position, our ability to invest in new
opportunities was again constrained by the high discount rate implied by our
share price, resulting in a significantly higher hurdle rate for new
investments. Plans of a share buyback programme were suspended following BCI's
approach and remain so subject to the outcome of the Offer.
Looking forward, the Management Board will continue to evaluate investment
opportunities both within the existing portfolio and through selective new
investments, aimed at enhancing BBGI's portfolio quality and delivering
long-term shareholder value. The decision-making process for new investments
remains disciplined: a clear focus on preserving the low-risk nature of the
portfolio and accretion to the overall valuation. Any new investment decision
will also be informed by rigorous benchmarking against alternative value
accretive options, including share buybacks.
Financial management
During the year, we reduced our RCF from £230 million to £150 million,
resulting in lower commitment fees and reflecting our proactive approach to
managing our capital structure.
Our proportionate share of Portfolio Company deposits was in excess of £300
million as at 31 December 2024. We actively manage treasury operations through
cash pooling arrangements in Canada and the UK, alongside proactive treasury
management in other jurisdictions, to maximise the interest earned on cash
deposits. This strategy enables us to achieve competitive rates across all
currencies, with a weighted average interest rate of approximately 4.5% as at
December 2024.
There were no material lock-ups or default events in the underlying debt
financing agreements reported during the period. This means that all our
investments contributed to our strong dividend cover with net cash generated
by our Portfolio Companies ahead of projections. We are very proud of this
achievement.
Internally managed structure
BBGI's internally managed structure positions us uniquely among infrastructure
investment companies listed on the London Stock Exchange. With no competing
investment mandates, our management team is exclusively dedicated to BBGI,
ensuring full alignment of its interests with those of our shareholders.
The Management Board is incentivised for long-term value creation and
preservation, focusing on enhancing the quality of the underlying portfolio
and shareholder returns, rather than merely expanding AUM, which could
potentially dilute portfolio quality and shareholder returns. This alignment
is further demonstrated by 100% of Management Board and Supervisory Board
members, along with 91% of employees, being shareholders - ensuring
significant 'skin in the game'.
Our valuation process is rigorous, with the portfolio valuation produced by
our internal team and reviewed by an external valuation expert.
BBGI continues to maintain a competitive ongoing charges figure, at 0.92%,
reflecting an efficient and cost-effective internal management.
Outlook
The long-term outlook for infrastructure investment remains positive,
underpinned by governments' ongoing need for renewal and expansion of
essential infrastructure amid fiscal constraints, and specialist investors
like BBGI are well placed to play a critical role. However, over the last few
years there has been a widespread de-rating of share prices amongst the UK
listed investment funds invested across all alternative asset classes. A
disconnect between public and private market valuations coupled with BBGI
shares consistently trading at a discount to NAV since April 2023 has
constrained BBGI's access to capital markets and remains a key impediment to
seizing the growth opportunities. Over time, as concessions expire and
assuming no access to capital and no further investments, eventually the NAV
of the business would be expected to decline on an annual basis given the
amortising nature of BBGI's assets.
The Offer
Although both the Supervisory Board and the Management Board are confident in
BBGI's ability to continue to deliver sustainable cash flows to its
shareholders, the Boards believe that the Offer provides shareholders with an
opportunity to realise in cash the value of their holdings at an attractive
value, that is in excess of the reasonable medium-term prospects for the
Company on a standalone basis.
The Supervisory Board and Management Board, having received financial advice
from Jefferies on the terms of the Offer, consider the terms of the Offer to
be fair and reasonable. In forming its advice, Jefferies has taken into
account the Boards' commercial assessments and is acting as an independent
financial adviser.
Accordingly, the Boards unanimously recommend that BBGI shareholders accept
the Offer and vote in favour of the resolutions to be proposed at the General
Meeting as they have irrevocably undertaken to do, or procure to be done, in
respect of their own beneficial holdings of BBGI shares. The rationale for
this recommendation was included in the 6 February 2025 market announcement
and the Offer Document and Convening Notice sent to shareholders on 6 March
2025.
Duncan Ball
CEO
27 March 2025
Highlights
Dividend
8.40pps
for the year, a six per cent increase and in line with our target.
Annualised total NAV return per share
8.1% since IPO
Ongoing charges
0.92%
Internal management structure, which supports alignment with our investors.
High-quality inflation linkage
0.5%
Investment Strategy
BBGI provides access to a globally diversified portfolio of infrastructure
investments, which generate long-term, sustainable returns and serve a
critical social purpose in their local communities.
BBGI's business model is built on four strategic pillars:
Low-risk
• Availability-style core-infrastructure assets.
• Secure, public sector-backed contracted revenues.
• Stable, predictable cash flows, with
high-quality inflation linkage.
Internally managed
• Management Board interests aligned with
those of shareholders.
• Disciplined investment and portfolio
construction approach.
• Competitive ongoing charges.
Strong Approach TO Sustainability
• Sustainability fully integrated into the
business model.
• Comprehensive ESG monitoring,
GHG inventory and climate resilience
analysis across the portfolio.
• Focus on delivering positive social
impact - SFDR Article 8.
Globally diversified
• Well-constructed portfolio with investments in highly rated
investment grade countries.
• Stable, well-developed operating environments.
• No excessive reliance on any single market.
Operating Model
BBGI's operating model is built on three core principles: value-driven active
asset management, prudent financial management, and a selective investment
strategy. This approach focuses on building a high-quality asset portfolio,
preserving and optimising the value of the existing investments, and driving
sustainable long-term growth.
Value-driven active asset management
BBGI's active asset management approach is designed to ensure stable
operational performance, preserve value and identify opportunities for value
enhancements throughout the lifecycle of Company assets.
Model in action:
• BBGI's Portfolio Companies continued to deliver consistent operational
performance in FY 2024. Through the Company's active value-driven approach to
asset management, it has achieved an asset availability level of 99.9%.
• High client satisfaction is an important goal for BBGI and the success
of those efforts is reflected with a high Net Promoter Score.
• There were no material lock-ups or default events in the underlying debt
financing agreements. As a result, all BBGI's investments contributed
positively to strong dividend cover, with net cash generated by the Portfolio
Companies ahead of projections.
• BBGI Portfolio Company cash flows benefit from high-quality inflation
linkage. BBGI passes on the indexation mechanism to its subcontractors, which
acts as a natural hedge to manage cost effectively. The cash flows on a net
basis are positively inflation-linked as the indexation of revenues is greater
than the indexation of expenses.
• All BBGI's assets are availability-style, meaning the revenues are
unaffected by demand elasticity. The inflation adjustment is also automatic
and contractual and is not subject to regulatory review or substantial lags,
therefore providing strong visibility and predictability of future cash flows.
• By implementing cost-saving initiatives, including leveraging economies
of scale at the Portfolio Company level such as insurance, standardised
management contracts and rigorous lifecycle cost reviews, BBGI drives
sustainable cost efficiencies and long-term value.
• BBGI maintains a diverse contractor base and implement risk mitigation
measures to address proactively any potential issues in its supply chain. The
Management Board has thoroughly assessed the risk exposure and has not
identified any significant risks.
Project hand-back
At the end of a concession, the private partner transfers the management of
the project back to the public sector. This process is termed 'hand-back'. In
the majority of the hand-backs, the obligation is contractually passed down to
the Facilities Management ('FM') provider, significantly mitigating the risks.
BBGI has established transparent communication channels with its
subcontractors and public partners, fostering a collaborative partnership
built on measurable outcomes, including clear hand-back requirements.
Two assets representing less than 1% of BBGI's portfolio are subject to
hand-back over the next three years, in January 2026 and August 2027.
Preparations for their 'hand-back' are progressing well. Following the
Infrastructure and Projects Authority UK's guidelines, collaborative working
groups have been established, comprising representatives from the Client, the
FM provider and the Portfolio Company, involved in the respective project. The
FM provider bears the hand-back risk for both assets.
6% of BBGI's portfolio consists of non-concession assets, which are not
subject to hand-back.
Latent defects limitations / warranty period remaining
Latent defects risk was mitigated during the FY 2024 reporting period, with
40% of portfolio value covered by either limitation or warranty periods, and
there were no material defects reported on any of BBGI's portfolio assets.
Latent Defects Limitations / Warranty Period Remaining
Expired 60%
Within 1 year 4%
1-2 years 14%
2-5 years 7%
5-10 years 10%
10+ years 5%
100%
Top ten Operation and Maintenance ('O&M') contractors((i))
Exposure well diversified across several contractors.
O&M Contractors
Portfolio Company inhouse 12%
Capilano Highway Services 11%
AtkinsRéalis 9%
Black & McDonald 5%
Cushman and Wakefield 5%
Integral FM 5%
Hochtief Solutions AG 4%
Honeywell 4%
Intertoll Ltd 3%
Amey Community Ltd 3%
Remaining investments 39%
100%
(i) For this illustration, when a project has more than one FM provider
and/or O&M contractor, the exposure is allocated equally among the
contractors. For simplicity, the O&M contractors in the chart above
include both the FM providers and the O&M contractors.
Prudent financial management
BBGI's prudent financial management approach emphasises maintaining a
conservative capital structure, efficient cash and corporate cost management,
and robust foreign exchange hedging to ensure financial resilience.
Model in action:
• BBGI's portfolio of high-quality Social Infrastructure investment
generates inflation-linked cash flows from creditworthy counterparties which
allows the Company to provide strong predictability for progressive dividend
growth.
• BBGI manages its debt facilities with discipline, expanding its
portfolio carefully without overleveraging. During the FY 2024, BBGI reduced
the size of its RCF from £230m to £150m, lowering commitment fees and
further optimising capital structure. At Group level, financial liquidity
remained robust with a net cash position, no structural gearing and strong
dividend cover.
• The refinancing of the Northern Territory Secure Facilities during the
reporting period has removed all refinancing exposure from BBGI's portfolio.
With limited exceptions, borrowing costs are fixed at the Portfolio Company
level, providing stability and predictability.
• BBGI's hedging strategy mitigates foreign exchange risk by hedging
forecast portfolio distributions, balance sheet hedging through foreign
exchange forward contracts and the ability to borrow in non-Sterling
currencies.
• Despite inflationary pressures, BBGI's efficient internal management
structure has kept ongoing charges at a competitive 0.92%.
Treasury management
BBGI has adopted a proactive treasury management approach to optimise the
interest earned on the cash reserve accounts of its Portfolio Companies. Its
share of cash reserves across the Portfolio Companies was in excess of £300
million as at 31 December 2024. The elevated interest rates across all
jurisdictions allowed the Company to benefit from cash pooling arrangements in
the UK and Canada to maximise interest generated on cash deposits of its
Portfolio Companies. BBGI earned a weighted average interest rate of
approximately 4.5% across jurisdictions.
Selective investment strategy
BBGI's selective investment strategy emphasises sustainable growth and
diversification, focusing on accretive opportunities that enhance portfolio
quality and construction rather than simply growing AUM.
Model in action:
• BBGI prioritises low-risk, availability-style assets with high-quality
inflation linkage, backed by creditworthy counterparties in highly rated
geographies. The Company's disciplined approach ensures investments remain
within its core areas of expertise and avoids undue exposure to any single
market. BBGI also has a robust framework embedding sustainability screening
into investment due diligence.
• BBGI leverages its extensive industry relationships across multiple
geographies to source attractive investment opportunities, including
pre-emption rights to acquire co-shareholders' interests.
• BBGI operates within a specialised segment of the infrastructure sector,
characterised by modest-scale transactions. In recent times, a significant
portion of capital has flowed into a handful of sizeable infrastructure funds,
many of which have raised fund targets in excess of US$10 billion. These
larger funds prioritise the deployment of substantial amounts of capital and,
as a result, do not actively engage in the smaller-scaled transaction space
where the Company excels. Within its market niche, it is recognised as a
dependable partner and consequently has very good visibility of potential
opportunities.
• BBGI leverages its strong relationships with leading construction
companies to source potential investments. Typically, these contractors have
secured the mandate to design and build new assets but often look to divest
financially after the construction period has finished - thereafter often
maintaining facility management contracts through a long-term partnership.
BBGI is an attractive partner for several reasons, including its:
- reputation as a long-term investor, attractive to government and
government-backed counterparties;
- reliability as a liquidity provider for contractors seeking to divest;
- ability to help construction companies avoid consolidating Portfolio
Company debt onto their balance sheets;
- extensive credentials and strong track record, enhancing the
likelihood of being shortlisted for new projects;
• BBGI has avoided value destructive acquisitions. The disconnect between
private market valuations - evidenced by recent secondary market transactions
in core infrastructure assets - and the valuations currently ascribed by
public markets continues to persist. BBGI shares have consistently traded at a
discount to NAV since April 2023, which has limited the Company's ability to
issue new equity and pursue attractive investment opportunities.
Portfolio Review
Portfolio summary
BBGI investments as at 31 December 2024 consisted of 56 high-quality,
availability-style Social Infrastructure assets, 100% of which are fully
operational. The portfolio is well diversified across sectors in education,
healthcare, civic infrastructure (fire stations, police stations, modern
correctional facilities, municipal and administrative buildings), affordable
housing, clean energy and transport low-risk core infrastructure assets.
Located in Australia, Canada, Germany, the Netherlands, Norway, the UK and the
US, all Portfolio Companies are in stable, well-developed and highly rated
investment grade countries.
No. Asset* Country Percentage holding %
1 A1/A6 Motorway Netherlands 37.1
2 A7 Motorway Germany 49
3 Aberdeen Western Peripheral Route UK 33.3
4 Avon & Somerset Police HQ UK 100
5 Ayrshire & Arran Hospital UK 100
6 Barking Dagenham & Havering (LIFT) UK 60
7 Bedford Schools UK 100
8 Belfast Metropolitan College UK 100
9 Burg Correctional Facilities Germany 90
10 Canada Line Canada 26.7
11 Champlain Bridge Canada 25
12 Clackmannanshire Schools UK 100
13 Cologne Schools Germany 50
14 Coventry Schools UK 100
15 E18 Motorway Norway 100
16 East Down Colleges UK 100
17 Frankfurt Schools Germany 50
18 Fürst Wrede Military Base Germany 50
19 Gloucester Royal Hospital UK 50
20 Golden Ears Bridge Canada 100
21 Highway 104 Canada 50
22 John Hart Generating Station Canada 80
23 Kelowna & Vernon Hospitals Canada 100
24 Kent Schools UK 50
25 Kicking Horse Canyon Canada 50
26 Lagan College UK 100
27 Lisburn College UK 100
28 Liverpool & Sefton Clinics (LIFT) UK 60
29 M1 Westlink UK 100
30 M80 Motorway UK 50
31 McGill University Health Centre Canada 40
32 Merseycare Hospital UK 79.6
33 Mersey Gateway Bridge UK 37.5
34 N18 Motorway Netherlands 52
35 North Commuter Parkway Canada 50
36 North East Stoney Trail Canada 100
37 North London Estates Partnership (LIFT) UK 60
38 North West Fire and Rescue UK 100
39 North West Regional College UK 100
40 Northern Territory Secure Facilities Australia 100
41 Northwest Anthony Henday Drive Canada 50
42 Ohio River Bridges US 66.7
43 Poplar Affordable Housing & Recreational Centres UK 100
44 Restigouche Hospital Centre Canada 80
45 Rodenkirchen Schools Germany 50
46 Royal Women's Hospital Australia 100
47 Scottish Borders Schools UK 100
48 South East Stoney Trail Canada 40
49 Stanton Territorial Hospital Canada 100
50 Stoke & Staffs Rescue Service UK 85
51 Tor Bank School UK 100
52 Unna Administrative Centre Germany 90
53 Victorian Correctional Facilities Australia 100
54 Westland Town Hall Netherlands 100
55 William R. Bennett Bridge Canada 80
56 Women's College Hospital Canada 100
*Projects are listed in alphabetical order
Portfolio Snapshot: Top Ten Assets
Our ten largest assets
The summary below highlights BBGI's top ten assets by fair value, representing
49% of its total portfolio fair value.
1
Golden Ears
Bridge
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
100%
Total investment volume:
(debt and equity)
C$1.1 billion
Financial close/operational:
March 2006/June 2009
Concession period:
32 years (post-construction)
ending in 2041
Golden Ears Bridge represented the largest privately financed greenfield
Public Private Partnership ('PPP') in Canada at the time of its launch. The
project involves the design, build, financing, operation and maintenance of
the bridge, which is a 1km, six-lane road that spans the Fraser River and
connects Maple Ridge and Pitt Meadows to Langley and Surrey. The road opened
in March 2009 and includes more than 3.5km of ramps, viaducts, minor bridges
and underpasses, and more than 13km of mainline roadway - a large part of
which has been landscaped.
In 2024, major rehabilitation works were successfully completed by the
Portfolio Company, effectively de-risking large sections of pavement on the
project.
2
Ohio River
Bridges
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
66.7%
Total investment volume:
(debt and equity):
US$1.175 billion
Financial close/operational:
March 2013/December 2016
Concession period:
35 years (post-construction)
ending in 2051
The project includes a 760m cable-stay bridge, a 500m long twin vehicular
tunnel and 2.25km of associated six-lane interstate highway, with more than 21
bridges and multiple roundabout-style interchanges. The asset greatly improves
connectivity, public safety and economic growth, which benefits residents,
businesses and visitors in the Southern Indiana region.
The monitoring of Ohio River Bridges' energy reduction programme indicates
ongoing reductions in GHG emissions. Since the installation of solar panels on
the O&M buildings, the surplus renewable electricity generated has
exceeded the amount consumed. Additionally, the transition of the project's
fleet to electric-powered vehicles has halved the fleet's fossil fuel
consumption since 2019. The Portfolio Company and the client have started to
implement their biodiversity proposal to establish wildflower plots around the
project. The trial areas agreed total approximately 28,000m².
3
Northern Territory Secure Facilities
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
100%
Total investment volume:
(debt and equity)
A$620 million
Financial close/operational:
October 2011/November 2014
Concession period:
30 years (post-construction)
ending in 2044
Located near Darwin, in the Northern Territory, Australia, the project
involves the design, build, financing, operation and maintenance of three
separate centres including: a 1,000-bed multi-classification male and female
correctional centre, a 24-bed secure mental health and behavioural management
centre (the first of its kind in the Northern Territory), and a 48-bed
supported accommodation and programme centre for community-based offenders.
The latter is designed to support the Australian Government's goals of
enhanced rehabilitation, education and reduced reoffending rates in the
Northern Territory. The asset is one of the largest Social Infrastructure
projects in the Northern Territory and is the largest PPP ever procured to
date.
In late 2024, BBGI successfully refinanced its senior debt, including Facility
A, ahead of its October 2025 maturity, and Facility B, taking advantage of
highly competitive pricing on a full-term debt solution. This refinancing
eliminated future refinancing risk by securing senior debt at market-leading
terms.
4
A7 Motorway
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
49%
Total investment volume:
(incl. state subsidy of €213 million)
€773 million
Financial close/operational:
September 2014/December 2019
Concession period:
30 years (post-financial close)
ending in 2044
The A7 Motorway project is an availability-style design, build, finance,
operate and maintain project located between the cities of Neumünster and
Hamburg in Germany. The project comprises c.65km of highway widening from four
to six lanes including 11 interchanges, six parking facilities, four rest
areas and 79 engineering structures, including a 550m noise tunnel at the City
of Schnelsen.
The noise tunnel provides green spaces and parks, including 400 allotment
gardens, which reconnect two previously divided neighbourhoods. Additionally,
over 100,000m(2) of noise protection barriers were built to meet local
requirements. Wildlife crossings were implemented along the motorway to
preserve natural habitats and wildlife migration patterns.
In FY 2024, the Portfolio Company has continued the transition process of its
vehicle fleet to electric vehicles. The project is also committed to
installing solar panels on the O&M building, which is expected to deliver
approximately 60 kWp per year of renewable energy.
5
A1/A6 Motorway
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
37.1%
Total investment volume:
(debt and equity)
€727.4 million
Financial close/operational:
February 2013/June 2017
Concession period:
25 years (post-construction)
ending in 2042
At the time of its launch, the A1/A6 Motorway project represented one of the
largest greenfield PPP projects in the Netherlands and forms part of the wider
Schiphol - Amsterdam - Almere corridor. The project is for the design,
construction, financing and maintenance of 18km of the A1 and A6 motorways to
the south of Amsterdam, and involves the re-routing and widening of the A1 (to
two x five lanes and two reversible lanes), reconstruction of two major
interchanges, expansion of the A6 (to two x four lanes and two reversible
lanes) and the construction of various new bridges, an aqueduct and the
longest free span railway bridge in Europe, as well as demolition of the old
part of the A1 motorway.
Since replacing 2,000 fixtures of traditional street lighting with
Light-Emitting Diode in 2020, the project has reduced its electricity
consumption by approximately 525,000kWh per year compared to previous years'
annual consumption. This decreases the CO₂-footprint of the project by at
least 350 metric tonnes per year.
6
Victorian
Correctional Facilities
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
100%
Total investment volume:
(debt and equity)
A$242 million
Financial close/operational:
January 2004/March 2006
Concession period:
25 years (post-construction)
ending in 2031
The Victorian Correctional Facilities project is an availability-based PPP
including the design, finance, construction and maintenance of two
correctional facilities for the State of Victoria, Australia (the 'State').
The first facility, the maximum security Metropolitan Remand Centre ('MRC'),
accommodates up to 1,009 male offenders and is located approximately 20km from
Melbourne's city centre. The second, smaller facility is the medium security
Marngoneet Correctional Centre ('MCC') that accommodates up to 599 male
offenders and is located approximately 65km from Melbourne's city centre.
The project is currently undertaking a significant expansion of both
facilities which will see the bed capacity numbers increase to 1,210 at MRC
and 653 at MCC. The Portfolio Company is delivering these works via an
augmentation with the State, with works at MCC completed in 2024 and works at
MRC expected to be completed in 2025.
Energy reduction and waste management programmes are in place at both
facilities, with monitoring indicating continuous reductions in GHG emissions.
In 2024, approximately 402 tonnes of GHG were saved by diverting waste from
landfill.
7
M1 Westlink
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
100%
Total investment volume:
(debt and equity)
£161 million
Financial close/operational:
February 2006/November 2009
Concession period:
30 years (post-financial close) ending in 2036
The M1 Westlink project involved the design, upgrade, finance and operation of
60km two to five lane motorway and dual carriageway and associated assets
including structures, street lighting and safety barriers. The project
included the widening of 4.5km of the M1 and A12 between Stockman's Lane and
Divis junction to a dual three-lane carriageway and grade separation of three
major junctions. In addition, a third lane was added to 5km of the downhill
section between Sandyknowes and Greencastle junctions on the M2, including the
construction of four new bridges.
In 2024, the Portfolio Company and the operator agreed to replace the current
conventional lighting with LED lighting. The investment programme of c.£1.2
million will be funded by the Portfolio Company, with financial contributions
from the operator. This investment is expected to generate savings in
electricity consumption in the order of magnitude of 1.6 million kWh per year,
resulting in a reduction in GHG emissions of c.8,000 tons until the end of the
concession in 2036.
8
Liverpool and Sefton Clinics (LIFT)
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
60%
Total investment volume:
(debt and equity)
£89 million
Financial close/operational:
June 2004 - November 2011/June 2005 - February 2013
NON-Concession ASSET
The Liverpool and Sefton Clinics project is a long-term, public-private
strategic partnering agreement to provide strategic estates services and
develop, fund, build, operate and manage primary healthcare facilities in
Liverpool and Sefton. Each new development is delivered by a portfolio company
sitting under this development company. To date there are five such portfolio
companies and 14 completed facilities. Typical services include GP practices,
chiropody, speech and language therapy, community nursing, dental surgery and
family planning.
Construction is continuing on the new capital-funded development scheme for
MerseyCare NHS Foundation Trust on the Mossley Hill site in Liverpool for a
new 80-bed low secure mental health facility, which is on schedule to complete
in May 2025. The project companies have established their buildings as an
integral part of the local communities.
9
Women's
College Hospital
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
100%
Total investment volume
(debt and equity, incl. government subsidy):
C$421 million
Financial close/operational:
July 2010/May 2013
and September 2015
Concession period:
30 years (post-construction
phase 1) ending in 2043
The Women's College Hospital project comprises the design, build, finance,
operation and maintenance of the Women's College Hospital in Toronto, Ontario.
The hospital is a multi-story building (approximately 60,000m(2)) consisting
of ambulatory care, surgical research and educational facilities, as well as
administrative, parking and other non-clinical space to support Women's
College Hospital's comprehensive and integrated approach to providing quality
women's health care to patients with a need for diagnostics, extended
treatments and chronic care.
The project achieved a gold certification for Leadership in Energy and
Environmental Design ('LEED') in 2017. In 2024, the replacement programme for
traditional lighting continued, transitioning 60% of the site to LED lighting
with further upgrades to happen over the next few years. In 2024, the
Portfolio Company partnered with the client, upgrading 14 electric vehicle
charging stations and adding six new charging stations for a total of 20 new
stations located at the facility.
10
McGill University
Health Centre (MUHC)
Type:
Availability-style
Status:
Operational
Equity holding BBGI:
40%
Total investment volume:
(debt and equity, incl. government subsidy)
C$2 billion
Financial close/operational:
July 2010/October 2014
Concession period:
30 years (post-construction)
ending in 2044
The project involves the design, build, finance, operation and maintenance of
MUHC's campus in Montreal. It comprises two hospitals, a cancer centre and a
research institute with a total of 500 beds. MUHC is one of the most
innovative academic health centres in North America. At 214,000m(2), one
integrated campus consolidates the Montreal Children's Hospital, the Royal
Victoria Hospital and the Montreal Chest Institute, as well as the new Cedars
Cancer Centre and the Research Institute of the MUHC.
The campus project achieved a gold certification for Leadership in Energy and
Environmental Design in 2016. The Portfolio Company regularly makes a
financial contribution to the MUHC Foundation, supporting medical research
programmes at MUHC.
Market Trends
The global economy demonstrated resilience in 2024, avoiding contraction
despite persistent inflationary pressures and elevated interest rates.
However, the economic momentum remains fragile, shaped by ongoing geopolitical
uncertainties, fiscal constraints and shifting monetary policies. Rising
commodity prices and supply chain disruptions remain potential inflationary
catalysts, underscoring the importance of policy stability.
For the infrastructure sector, interest rate trends are particularly critical,
as borrowing costs influence asset valuations, capital flows and deal
activity. Infrastructure deal activity moderated, reflecting a measured
approach to capital deployment. Publicly traded infrastructure assets have
seen valuation compression, reflecting capital market volatility and higher
interest rates.
Looking beyond near-term macroeconomic factors, long-term secular trends
continue to reinforce infrastructure's role as a critical asset class. Key
investment themes shaping the next decade include digitalisation,
decarbonisation, demographics, and modernisation and renewal of aging
infrastructure.
According to the Global Infrastructure Hub v , the world faces an
infrastructure investment gap of approximately US$15 trillion by 2040,
highlighting the urgent need for private capital. With governments constrained
by high debt and fiscal deficits, specialist investors like BBGI are well
positioned to bridge this gap. BBGI's team is dedicated to identifying
attractive core infrastructure opportunities that offer long-term cash flow
visibility, strong inflation linkage and a meaningful social purpose.
The disconnect between private market valuations - evidenced by recent
secondary market transactions in the core infrastructure sector - and the
valuations currently ascribed by the public markets to the listed
infrastructure sector continues to persist. Activity in the secondary market,
particularly private market participants, reaffirms BBGI's confidence in the
attractiveness of these asset classes. However, over the last few years, this
disconnect between public market and private market valuations has constrained
BBGI's access to capital markets and remains a key impediment to seizing the
growth opportunities.
Canada
Canada's Investing in Canada Plan vi commits over C$180 billion to
infrastructure projects until 2028. The plan is designed to achieve three key
objectives: fostering long-term economic growth, enhancing community
resilience and promoting social inclusion. To achieve these goals, investments
are distributed across five streams: public transit, green infrastructure,
Social Infrastructure, trade and transportation, and rural and northern
communities. So far, over C$155 billion has been invested, with the Government
continuing to roll out additional initiatives to support critical
infrastructure development.
Launched in 2024, the Canada Public Transit Fund vii will, for instance,
allocate C$30 billion over ten years to improve and expand public transit
infrastructure. This initiative aligns with the broader effort to enhance
urban mobility, reduce emissions and support sustainable transportation
networks. To further advance Canada's infrastructure ambitions, the Canada
Infrastructure Bank ('CIB') plays a key role in developing and investing in
next-generation infrastructure projects. The CIB's focus areas include clean
power, green infrastructure, public transit, trade and transportation,
broadband expansion and Indigenous infrastructure. As at December 2024, the
CIB viii has invested over C$13 billion in 75 projects, supporting the
country's transition to a more sustainable and resilient infrastructure
network.
While Canada has reduced its reliance on PPPs in recent years, collaboration
with the private sector remains crucial for delivering the country's estimated
C$224 billion infrastructure backlog. Discussions are ongoing about how to
recalibrate public-private cooperation models to improve efficiency, while
procurement of infrastructure projects continues at federal, provincial and
local levels.
US
In the US, deglobalisation and energy security concerns are key drivers for
infrastructure investments, requiring upgrades in transportation, utilities
and digital infrastructure. With the new administration, federal
infrastructure priorities are shifting from climate-focused projects to
traditional energy, private-sector-led development and deregulation. The
administration has suspended funding for Infrastructure Investment and Jobs
Act (IIJA) projects and the Inflation Reduction Act ('IRA'), with a new focus
on initiatives such as the US$500 billion Stargate AI programme, suggesting
that technological infrastructure will be a major federal investment focus,
alongside energy and industrial projects.
While federal priorities are evolving, state and municipal governments remain
pivotal in funding and managing core Social Infrastructure, including
education, healthcare, public safety and water systems. Despite substantial
public investment, many communities struggle to maintain and upgrade essential
services, leading to increased collaboration with the private sector to
address funding gaps and accelerate development.
EU
Europe is facing headwinds, from rising costs of living and housing shortages,
to business and migration management. These issues have been impacted by
broader societal, environmental, security and economic shifts. In response,
the new European Commission has outlined key priorities aimed at making Europe
more competitive and is establishing a framework that significantly influences
public and private infrastructure investments across various sub-sectors in
its member states.
Achieving these objectives will require substantial financial commitments.
According to a report ix published by a former president of the European
Central Bank, an additional annual investment of at least €750 billion to
€800 billion is necessary to maintain competitiveness and drive sustainable
growth, the majority of which is expected to come from private sources. To
support economic resilience and long-term sustainability, the EU's
infrastructure investment priorities are centred on three key areas:
sustainable energy, digital transformation and strategic connectivity
projects. Another major pillar of EU investment is transportation and
mobility. The EU is continuing the development of the Trans-European Transport
Network, a comprehensive system of roads, railways, airports and waterways
designed to ensure seamless and efficient movement across member states.
Beyond EU-led initiatives, individual member states are advancing their own
infrastructure agendas. Many governments are prioritising Social
Infrastructure, such as housing, healthcare and education, to improve access
to essential services and address challenges like housing affordability and
regional disparities.
UK
The UK's National Infrastructure and Construction Pipeline x - published in
2023 - estimates that £700 billion to £775 billion in infrastructure
investment will be required over the next decade, with energy, transportation
and Social Infrastructure identified as the most critical areas. The
Government has introduced structural changes that will reshape the
implementation and priorities of this pipeline, and is merging the National
Infrastructure Commission with the Infrastructure and Projects Authority
('IPA') to create a single, more powerful infrastructure oversight body. The
resulting National Infrastructure and Service Transformation Authority
('NISTA'), set to launch in April 2025, will have an expanded mandate to
streamline infrastructure delivery, align projects with strategic government
goals and accelerate execution.
Recognising the need to mobilise private capital for infrastructure
development amid fiscal constraints, the UK Infrastructure Bank was
restructured into the National Wealth Fund ('NWF') in October 2024, expanding
its mandate beyond traditional infrastructure to support the broader
industrial strategy. With an estimated initial £27.8 billion in capital, the
NWF aims to catalyse private investment in key sectors.
The Government's infrastructure strategy focuses on sustainable development
and economic growth, with transport, housing and healthcare forming key
investment pillars. For example, the Government has pledged to build 1.5
million new homes, and by combining public and private sector funding, the
Government aims to drive housing growth, improve regional connectivity and
create sustainable urban expansion. The Government has also outlined a vision
for transforming the National Health Service ('NHS') into a more
community-based model, prioritising localised health service delivery.
Australia and New Zealand
The Infrastructure Investment Program ('IIP') remains the Australian
Government's primary funding mechanism for major infrastructure projects,
supporting a rolling ten-year pipeline of investments in roads, rail, public
transport and regional connectivity. According to Infrastructure Australia's
latest report, the nation's major public infrastructure pipeline is valued at
A$213 billion over the five years from 2023-24 to 2027-28, with a growing
emphasis on energy transition and Social Infrastructure. Infrastructure
Australia projects a six-fold increase in renewable energy projects over the
next five years, making strategic planning for logistics and enabling
infrastructure critical for both the government and private sector.
Aligned with these priorities, the Australian Government announced a new
investment mandate for the Future Fund to accelerate energy transition
initiatives, boost economic resilience and expand domestic infrastructure,
including residential housing. A notable component is the partnership with
states and territories under Labour's Housing Australia Future Fund ('HAFF'),
which aims to unlock up to A$3 billion for social housing development.
State and territory governments are prioritising energy transformation and
Social Infrastructure, including investments in hospitals, education and
housing. PPPs continue to play a critical role in delivering these projects.
In New Zealand, the Government introduced an NZ$32.9 billion investment plan
for the 2024-27 National Land Transport Programme to enhance efficiency in
infrastructure delivery.
Performance Overview and Key Metrics
for the year ended 31 December 2024.
Highlights and Key Performance Indicators
Certain key performance indicators ('KPIs') for the past five years are
outlined below:
KPI Target Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Commentary
Dividends Progressive long-term dividend growth (pps) 7.18 7.33 7.48 7.93 8.40 Achieved
(paid or declared)
Cash dividend cover >1.0x 1.27x 1.31x 1.47x 1.40x 1.37x Achieved
NAV per share Positive NAV per share growth 1.2% 2.1% 6.6% (1.4%) (3.5%) Not achieved during the reporting period
Annualised NAV per share total return since IPO 7% to 8% annualised 8.9% 8.8% 9.1% 8.6% 8.1% Achieved
Annualised Total Shareholder Return since IPO 11.0% 10.4% 8.8% 7.6% 6.4% Refer to 'Return track record' below for commentary
Ongoing charge Competitive cost position 0.86% 0.86% 0.87% 0.93% 0.92% Achieved
Asset availability > 98% asset availability Yes Yes Yes Yes Yes Achieved
Single asset concentration risk (as a percentage of portfolio) < 25% of portfolio immediately post-acquisition 9% 11% 11% 11% 11% Achieved
(GEB(i))
(ORB(ii))
(ORB)
(GEB)
(GEB)
Availability-style assets > 75% of portfolio is availability-style Yes Yes Yes Yes Yes Achieved
(as a percentage of portfolio)
i Golden Ears Bridge
ii Ohio River Bridges
Investment performance
Return track record
Since Initial Public Offering ('IPO'), BBGI has delivered a total NAV return
of 176.3%, equating to an 8.1% return on an annualised basis.
From IPO to April 2023, BBGI's share price regularly traded at a premium to
its underlying NAV, reflecting BBGI's strong operational track record, its
disciplined approach to portfolio composition and investors' appetite for a
defensive and geographically diversified portfolio of core infrastructure
assets providing stable, predictable and inflation-linked cash flows.
Over the past two years, BBGI and the wider listed infrastructure sector have
been challenged by a number of factors, including:
- Challenging macroeconomic conditions: There has been a widespread
de-rating of share prices among the UK-listed investment funds invested across
all alternative asset classes. This is a result of several key factors
including a rapid rise in interest rates, which has led to a higher cost of
capital for investors and provides investors with the opportunity to obtain
sustainable income through alternative sources; and persistent negative equity
fund flows from the UK, which have particularly impacted FTSE-index
constituents.
- Access to equity capital markets: The discount to NAV at which the
Company's shares have persistently traded in recent years has limited BBGI's
ability to issue new equity. An absence of new equity capital has restricted
the volume of acquisitions BBGI can consider, and with an absence of new
acquisitions, there has been an accelerated decline in the average portfolio
life of BBGI's concession assets.
- Finite project lives: PPP assets have fixed concession lives creating
finite cash flows, which conclude at the end of each concession term. This has
been reflected in the gradual decline of the weighted average remaining asset
life since IPO. Over time, as concessions expire and assuming no access to
capital and no further investments, eventually the NAV of the business should
be expected to decline on an annual basis given the amortising nature of
BBGI's assets.
On average, BBGI's share price traded at an 11.7% discount during FY 2024
compared to the reported NAV for FY 2023.
Dividends
Distributions on the Company's ordinary shares are expected to be paid twice a
year, normally in respect of the six months to 30 June and the six months to
31 December.
In October 2024, BBGI paid a first interim dividend of 4.20pps for the period
1 January 2024 to 30 June 2024. The Company declared a second interim dividend
of 4.20pps for the period 1 July to 31 December 2024, to be paid on 16 April
2025 and is consistent with the target dividend payment of 8.40pps in respect
of the FY 2024.
BBGI Total Shareholder Return
Proven progressive dividend policy
Pence per share
Cumulative dividend growth vs UK CPI
Projected portfolio cash flow
The Company's assets generate long-term cash flows from government or
government-backed counterparties, ensuring high visibility and predictability.
While concession-backed cash flows are resilient, inflation-linked and
defensive, they have a finite life, ending with each concession term.
Concession assets make up 94% of BBGI's portfolio, with the remaining 6%
comprising non-concession assets. Unlike concession arrangements, where assets
return to the public client at the end of the contract, non-concession assets
are freehold or long-term leasehold interests. This category includes a
portion of BBGI's UK Local Improvement Finance Trust ('LIFT') assets such as
primary healthcare facilities, which are designed for long-term use. With
regular maintenance and upgrades, these assets can achieve significant
long-term income-generating lifespans.
This illustrative chart, as at 31 December 2024, is a target only and is not a
profit forecast. There can be no assurance that this target will be met. This
chart reflects the target cash flows, including the cash generated in prior
years that has yet to be distributed to the Company, at the reporting date. It
also does not consider any further acquisitions, unforeseen costs or expenses,
taxes incurred within the Company structure, or other factors that may affect
the portfolio assets, and therefore the impact on the cash flows to the
Company. As such, the chart above should not in any way be construed as
forecasting the actual cash flows from the portfolio. There are cash flows
extending beyond 2051 but for illustrative purposes, these are excluded from
the chart above.
Valuation
The Management Board is responsible for carrying out the fair market valuation
of the Company's investments, which is prepared by the internal valuation team
and subsequently reviewed and approved by the Management Board before being
presented to the Supervisory Board for consideration as part of its approval
of the Annual and Interim Reports. The valuation occurs semi-annually on 30
June and 31 December and is opined on by an independent third-party valuation
expert.
The Company's investments are principally non-market traded investments with
predictable long-term contracted revenues; therefore, the valuation is
determined using the discounted cash flow methodology. BBGI's forecast
assumptions for key macroeconomic factors impacting cash flows include
inflation and deposit rates, changes in tax legislation and enacted changes in
taxation rates, informed by market data, publicly available economic forecasts
and historical trends. BBGI also exercise judgement in assessing the future
Portfolio Company cash flows, using detailed financial models produced by each
Portfolio Company and adjusting where necessary to reflect its assumptions.
The Company's consolidated valuation is a sum-of-the-parts valuation with no
further adjustments made to reflect platform value, scale, scarcity, portfolio
effect or diversification.
The fair value of each investment is determined by applying an appropriate
discount rate, alongside contracted foreign exchange rates or reporting
period-end foreign exchange rates, and withholding taxes (as applicable).
The discount rates applied consider investment risks, including the phase of
the investment (construction, ramp-up or stable operation),
investment-specific risks and opportunities and country-specific factors.
The Management Board's determination of appropriate discount rates involves
judgement based on market transactions and knowledge, and publicly available
information. As a reasonability check to BBGI's market-based approach and
providing further guidance to determine the appropriate market discount rates,
the Company complements its market-based approach with the capital asset
pricing model ('CAPM').
The tables below illustrate the breakdown of movements in the NAV per share
and portfolio value.
NAV per share movements 31 December 2023 to 31 December 2024
The NAV per share as at 31 December 2024 was 142.7p (31 December 2023:
147.8p), representing a decrease of 3.5%. In the period, the Company achieved
a NAV total return of +2.1%.
NAV per share movement 31 December 2023 to 31 December 2024 Pence per share
NAV per share at 31 December 2023 147.8
Dividends paid to BBGI shareholders(i) (8.2)
Performance(ii) 8.3
Change in market discount rate (2.8)
Change in macroeconomic assumptions 0.5
Foreign exchange net movement (2.9)
NAV per share at 31 December 2024 142.7
i This figure represents the cash dividends paid in the period.
ii The Performance represents amongst other things, (i) the unwinding
of the discount factor applied to those future investment cash flows (ii)
portfolio performance, the net effect of actual inflation, and updated
operating assumptions to reflect current expectations, and (iii) changes in
the Company's working capital position.
NAV movements 31 December 2023 to 31 December 2024
The NAV at 31 December 2024 was £1,019.9 million (31 December 2023: £1,056.6
million).
NAV movement 31 December 2023 to 31 December 2024 £ million
NAV at 31 December 2023 1,056.6
Deduct: other net assets at 31 December 2023(i) (9.5)
Portfolio value at 31 December 2023 1,047.1
Distributions from investments(ii) (96.1)
Rebased opening portfolio value at 1 January 2024 951.0
Portfolio return(iii) 78.7
Change in market discount rate (19.8)
Change in macroeconomic assumptions 3.2
Foreign exchange net movement(iv) (20.6)
Portfolio value at 31 December 2024 992.5
Add: Other net liabilities at 31 December 2024 27.4
NAV at 31 December 2024 1,019.9
i These figures represent the net assets of the Group after
excluding the IFRS carrying amount of Investments at fair value through profit
or loss ('FVPL') and the IFRS-reported net positions on currency hedging
instruments. Refer to the Pro Forma Balance Sheet in the Financial Results
section of this Annual Report for further detail.
ii While distributions from Investments at FVPL reduce the portfolio
value, there is no impact on the Company's NAV as the effect of the reduction
in the portfolio
value is offset by the receipt of cash at the consolidated Group
level. Distributions in the above graph are shown net of withholding tax.
iii Portfolio Return comprises the unwinding of the discount rate,
portfolio performance, and updated operating assumptions to reflect current
expectations.
Key drivers for NAV change
The rebased opening portfolio value, after cash distributions from investments
of £96.1 million, was £951.0 million.
Portfolio return:
The portfolio return includes unwinding of the discount rate, portfolio
performance, inflation impact and updated operating assumptions.
During FY 2024, the Company recognised a £78.7 million portfolio return (7.5%
NAV increase) with £74.0 million from discount rate unwinding xi and a net
increase of £4.7 million from portfolio performance, including effective
lifecycle cost management, Portfolio Company cost savings, change order
revenues, structuring and active treasury management.
Change in market discount rates:
The weighted average discount rate increased by 0.3 percentage points to 7.6%
(31 December 2023: 7.3%), which the Management Board believes is appropriate
for a portfolio of stable availability-style Social Infrastructure investments
in the current macroeconomic environment. The increase in the market discount
rate resulted in a reduction of £19.8 million (1.9% NAV decrease).
BBGI's valuation approach is materially unchanged from IPO. To determine the
appropriate discount rate for each jurisdiction, the Company employs its
judgement using a multifaceted market-based approach, combining market
transactional analysis, benchmarking with comparable companies and sectors,
discussions with relevant market advisers and utilising publicly available
information.
Complementing BBGI's market-based approach, particularly in periods of limited
market transaction data, is the CAPM, which integrates government risk-free
rates and a risk premium with adjustments made to account for observed
volatility in risk-free rates during the period. The CAPM analysis acts as a
reasonability check, providing guidance for potential discount rate
adjustments in instances where transaction data is more limited.
During the period, long-term risk-free rates increased between 20 basis points
('bps') to 100bps across the jurisdictions where BBGI invests. The weighted
average risk-free rate increased to 4.1% (31 December 2023: 3.6%), resulting
in a portfolio risk premium of 3.5%. The risk premium is within historic
ranges and supported by observed market transactions.
The geographic diversification of BBGI's portfolio results in a divergence of
the discount rates applied in each jurisdiction. In the UK, the Management
Board believes it is appropriate to apply an 8.0% discount rate for the
Company's portfolio of stable operational availability-based Social
Infrastructure assets.
Specific discount rates consider risks associated with the investment
including the phase the investment is in, such as construction, ramp-up or
stable operation, investment-specific risks and opportunities, and
country-specific factors.
Furthermore, BBGI has applied risk premia or discounts to a limited number of
other investments based on their individual circumstances. For example, BBGI
has maintained the risk premium of 50bps on the only UK acute care hospital in
its portfolio, Gloucester Royal Hospital. This asset represents less than 1%
of the NAV. This risk premium reflects the ongoing situation in the UK where
some public health clients are facing cost pressures and are actively seeking
cost savings, including deductions. To date, BBGI has not been affected.
Change in macroeconomic assumptions:
During the period, changes in macroeconomic assumptions resulted in a £3.2
million (0.3%) increase in NAV. The change was primarily driven by higher
short-term deposit rate assumptions, reflecting continued elevated rates and
an updated long-term deposit rate assumption in the UK. While central banks
have begun cutting rates in the jurisdictions BBGI invests in, the reductions
have been slower than initially forecasted, resulting in higher short-term
deposit rates than assumed in the December 2023 valuation. BBGI's changes in
short-term inflation assumptions had a minor negative effect on the NAV.
Foreign exchange:
A significant proportion of the Company's underlying investments are
denominated in currencies other than Sterling. The Company maintains its
accounts, prepares the valuation and pays dividends in Sterling. Accordingly,
fluctuations in exchange rates between Sterling and the relevant local
currencies affect the value of the Company's underlying investments.
The Group uses forward currency swaps to a) hedge 100% of forecast cash flows
over the next four years on an annual rolling basis, and b) implement balance
sheet hedging in order to limit the decrease in the NAV to approximately 3%,
for a 10% adverse movement in foreign exchange rates. This is achieved by
hedging a portion of the non-Sterling and non-Euro portfolio value. Forecast
distributions in Euro are not hedged, as a natural hedge is in place due to a
significant portion of the Company's running costs being denominated in Euro.
The effect of the Company's hedging strategy can also be expressed as a
theoretical or implicit portfolio allocation to Sterling exposure. In other
words, on an unhedged basis, the portfolio allocation to Sterling exposure at
31 December 2024 would need to be approximately 73% to obtain the same NAV
sensitivity to a 10% adverse change in foreign exchange rates, as shown in the
foreign exchange sensitivity table.
During the period ended 31 December 2024, the appreciation of Sterling ('GBP')
against the Canadian Dollar ('CAD'), Australian Dollar ('AUD'), the Euro
('EUR') and the Norwegian Krone ('NOK'), and the depreciation against the US
Dollar ('USD') accounted for a net decrease in the portfolio value of £20.6
million, or 2.0% of the 31 December 2024 NAV.
The table below shows the closing exchange rates, which were used to convert
unhedged future cash flows into the reporting currency as of 31 December 2024.
GBP/ Valuation impact FX rates as of FX rates as of FX rate change
31 December 2024 31 December 2023
AUD 2.0204 1.8690 (8.10%)
CAD 1.8017 1.6871 (6.79%)
EUR 1.2068 1.1532 (4.65%)
NOK 14.2262 12.9571 (9.79%)
USD 1.2536 1.2731 1.53%
For valuation purposes, the forecast distributions from investments are
converted to Sterling at either the contracted foreign exchange rate, for 100%
of non-Sterling and non-Euro-denominated cash flows forecast to be received
over the next four years, or at the closing foreign exchange rate at 31
December 2024 for the unhedged future cash flows. Although the closing rate is
the required conversion rate to use for the unhedged future cash flows, it is
not necessarily representative of future exchange rates as it reflects a
specific point in time.
Macroeconomic assumptions
In addition to the discount rates, BBGI uses the following assumptions
('Assumptions') for the cash flows:
31 December 2024 31 December 2023
Inflation UK(i) RPI/CPIH 3.50% (actual) for 2024 then 3.00% (RPI) / 2.25% (CPIH) 3.80% for 2024 then 3.00% (RPI) / 2.25% (CPIH)
Canada 2.40% (actual) for 2024 then 2.00% 2.50% for 2024; 2.10% for 2025 then 2.00%
Australia 2.50% for 2024 then 2.50% 3.50% for 2024; 3.00% for 2025 then 2.50%
Germany(ii) 2.60% (actual) for 2024 then 2.00% 2.70% for 2024; 2.10% for 2025 then 2.00%
Netherlands(ii) 3.30% (actual) for 2024 then 2.00% 2.70% for 2024; 2.10% for 2025 then 2.00%
Norway(ii) 2.20% (actual) for 2024 then 2.25% 4.50% for 2024; 2.50% for 2025 then 2.25%
US 2.90% (actual) for 2024 then 2.50% 2.50%
Deposit rates UK 4.00% to December 2025 then 2.75% 4.50% to December 2024 then 2.50%
(p.a.)
Canada 3.00% to December 2025 then 2.50% 4.75% to December 2024 then 2.50%
Australia 4.00% to December 2025 then 3.50% 4.75% to December 2024 then 3.50%
Germany/ Netherlands 2.25% to December 2025 then 2.00% 3.25% to December 2024 then 2.00%
Norway 4.25% to December 2025 then 2.75% 4.75% to December 2024 then 2.75%
US 4.00% to December 2025 then 2.50% 4.50% to December 2024 then 2.50%
Corporate UK 25.00% 25.00%
tax rates
(p.a.)
Canada(iii) 23.00% / 26.50% / 27.00% / 29.00% 23.00% / 26.50% / 27.00% / 29.00%
Australia 30.00% 30.00%
Germany(iv) 15.83% 15.83%
Netherlands 25.80% 25.80%
Norway 22.00% 22.00%
US 21.00% 21.00%
(i) On 25 November 2020, the UK Government announced the phasing out of
the RPI after 2030 to be replaced with the Consumer Prices Index ('CPI')
including owner occupiers Housing costs ('CPIH'). The Company's UK portfolio
indexation factor changes from RPI to CPIH beginning on 1 January 2031.
(ii) CPI indexation only. Where investments are subject to a basket of
indices, a projection for non-CPI indices is used.
(iii) Individual tax rates vary among Canadian Provinces and Territories:
Alberta; Ontario, Quebec, Northwest Territories; Saskatchewan, British
Columbia; New Brunswick, Nova Scotia.
(iv) Including solidarity charge; individual local trade tax rates are
considered in addition to the tax rate above.
Discount rate sensitivity
The weighted average discount rate applied to the Company's portfolio of
investments is the single most important judgement and variable.
The following table shows the sensitivity of the NAV to a change in the
discount rate.
Discount rate sensitivity((i)) Change in NAV
31 December 2024
Increase 1% (£68.7) million,
to c. 8.6% i.e. (6.7%)
Decrease 1% £78.3 million,
to c. 6.6% i.e. 7.7%
(i) Based on the weighted average rate of 7.6%.
Inflation has increased in all jurisdictions across BBGI's geographies, and
interest rates have risen from historical lows in recent years, although in
some jurisdictions these trends have reversed over the period. Should
long-term interest rates change substantially further, this may affect
discount rates, and as a result, impact portfolio valuation.
Inflation sensitivity
The Portfolio Companies are contractually entitled to receive contracted
revenue streams from public sector clients, which are typically adjusted every
year for inflation (e.g. RPI, CPI or a basket of indices). Facilities
management subcontractors for accommodation investments, and operating and
maintenance subcontractors for transport investments have similar indexation
arrangements.
The table below shows the sensitivity of the NAV to a change in inflation
rates compared to the assumptions in the table above:
Inflation sensitivity Change in NAV
31 December 2024
Inflation +1% £40.9 million,
i.e. 4.0%
Inflation −1% (£36.8) million,
i.e. (3.6%)
Deposit rate sensitivity
Portfolio Companies typically have cash deposits that are required to be
maintained as part of the senior debt funding requirements (e.g. six-month
debt service reserve accounts and maintenance reserve accounts). The asset
cash flows are positively correlated with the deposit rates.
The table below shows the sensitivity of the NAV to a percentage point change
in long-term deposit rates compared to the long-term assumptions in the table
above:
Deposit rate sensitivity Change in NAV
31 December 2024
Deposit rate +1% £19.8 million,
i.e. 1.9%
Deposit rate −1% (£19.8) million,
i.e. (1.9%)
Combined sensitivity: inflation, deposit rates and discount rates
It is reasonable to assume that macroeconomic movements would affect discount
rates, deposit rates and inflation rates, and not be isolated to one variable.
To illustrate the effect of this combined movement on the Company's NAV, two
scenarios were created assuming a one percentage point change in the weighted
average discount rate, and a one percentage point change in both deposit and
inflation rates above the macroeconomic assumptions.
Combined sensitivity: inflation, deposit rates and discount rates Change in NAV
31 December 2024
Increase 1% (£13.1) million,
i.e. (1.3%)
Decrease 1% £16.1 million,
i.e. 1.6%
Foreign exchange sensitivity
As described above, a significant proportion of the Company's underlying
investments are denominated in currencies other than Sterling.
The following table shows the sensitivity of the NAV to a change in foreign
exchange rates:
Foreign exchange sensitivity(i) Change in NAV
31 December 2024
Increase by 10% (£29.4) million,
i.e. (2.9%)
Decrease by 10% £27.9 million,
i.e. 2.7%
(i) Sensitivity in comparison to the spot foreign exchange rates at 31
December 2024 and considering the contractual and natural hedges in place,
derived by applying a 10% increase or decrease to the Sterling/foreign
currency rate.
Lifecycle costs sensitivity
Lifecycle costs are the cost of planned interventions or replacing material
parts of an asset to maintain it over the concession term. They involve larger
items that are not covered by routine maintenance and, for roads, will include
items such as replacement of asphalt, rehabilitation of surfaces, or
replacement of equipment. Lifecycle obligations are generally passed down to
the facility maintenance provider, except for transportation investments,
where these obligations are typically retained by the Portfolio Company.
Of the 56 investments in the portfolio, 20 investments retain lifecycle
obligations. The remaining 36 investments have this obligation passed down to
the subcontractor.
The table below shows the sensitivity of the NAV to a change in lifecycle
costs:
Lifecycle costs sensitivity(i) Change in NAV
31 December 2024
Increase by 10% (£23.9) million,
i.e. (2.3%)
Decrease by 10% £20.8 million,
i.e. 2.0%
(i) Sensitivity applied to the 20 investments in the portfolio that
retain the lifecycle obligation i.e. the obligation is not passed down to the
subcontractor.
Corporate tax rate sensitivity
The profits of each Portfolio Company are subject to corporation tax in the
country where the Portfolio Company is located.
The table below shows the sensitivity of the NAV to a change in corporate tax
rates compared to the assumptions in the table above:
Corporate tax rate sensitivity Change in NAV
31 December 2024
Tax rate +1% (£11.8) million,
i.e. (1.2%)
Tax rate −1% £11.7 million,
i.e. 1.1%
Refinancing: senior debt rate sensitivity
BBGI's portfolio is not exposed to refinancing risk.
In December 2024, the Company successfully completed a refinancing of Northern
Territory Secure Facilities putting in place full-term senior debt and
removing any future refinancing risk from its portfolio.
Gross Domestic Product sensitivity
BBGI's portfolio is not sensitive to movements in GDP.
Details of the principal risks faced by the Group are outlined in the Key Risk
Update of this Report.
Key Portfolio Company and portfolio cash flow Assumptions underlying the NAV
calculation include:
The discount rates and the assumptions, as set out above, continue to be
applicable.
The updated financial models used for the valuation accurately reflect the
terms of all agreements relating to the Portfolio Companies and represent a
fair and reasonable estimation of future cash flows accruing to the Portfolio
Companies.
Cash flows from and to the Portfolio Companies are received and made at the
times anticipated.
Non-UK investments are valued in local currency and converted to Sterling at
either the period-end spot foreign exchange rates or the contracted foreign
exchange rate.
Where the operating costs of the Portfolio Companies are contractually fixed,
such contracts are performed according to terms, and where such costs are not
fixed, they remain within the current forecasts in the valuation models.
Where lifecycle costs/risks are borne by the Portfolio Companies, they remain
in line with current forecasts in the valuation models.
Contractual payments to the Portfolio Companies remain on track and contracts
with public sector or public sector-backed counterparties are not terminated
before their contractual expiry date.
Any deductions or abatements during the operations period of concession are
passed down to subcontractors under contractual arrangements or are part of
the planned (lifecycle) forecasts.
Changes to the concession period for certain investments are realised.
In cases where the Portfolio Companies have contracts in the construction
phase, they are either completed on time or any delay costs are borne by the
construction contractors (only applicable if there are Portfolio Companies in
the construction phase).
Enacted tax rates and regulatory changes, or expected regulatory changes with
a high probability, on or prior to this reporting period-end with a future
effect materially impacting cash flow forecasts, are reflected in the
financial models.
In forming the above assessments, BBGI uses its judgement and works with
Portfolio Company management teams, as well as using due diligence information
from, or working with, suitably qualified third parties such as technical,
legal, tax and insurance advisers.
Financial Results
The Consolidated Financial Statements of the Group for the year ended 31
December 2024 are in the Financial Statements section of this Annual Report.
Basis of accounting
BBGI has prepared the Group's Consolidated Financial Statements in accordance
with International Financial Reporting Standards accounting standards ('IFRS')
as adopted by the European Union ('EU'). In accordance with IFRS, the Company
qualifies as an Investment Entity and, as such, does not consolidate its
investments in subsidiaries that qualify as investments at fair value through
profit or loss ('Investments at FVPL'). Certain subsidiaries that are not
Investments at FVPL but instead provide investment-related services or
activities that relate to the investment activities of the Group, are
consolidated. As an Investment Entity, the Company recognises distributions
from Investments at FVPL as a reduction in their carrying value. These
distributions reduce the estimated future cash flows which are used to
determine the fair value of the Investments at FVPL. The accounting principles
applied are in line with those principles applied in the prior year reporting.
Income and costs
Pro forma Income Statement Year ended Year ended
Investment Basis 31 Dec 24 31 Dec 23
£ million £ million
Income from Investments at FVPL 42.8 44.5
Other operating income 2.0 1.4
Operating income 44.8 45.9
Administrative expenses (13.5) (12.1)
Other operating expenses - (1.1)
Net finance costs (1.7) (2.5)
Net gain/(loss) on balance sheet hedging (0.7) 13.4
Profit before tax 28.9 43.6
Tax expense - net (2.7) (3.3)
Profit for the year 26.2 40.3
Other comprehensive loss (4.6) (0.8)
Total comprehensive income 21.6 39.5
Basic earnings per share (pence) 3.7 5.6
( )
During the year, the Group recognised income from Investments at FVPL of
£42.8 million (31 December 2023: £44.5 million). This income comprises the
following components:
Investment Basis Year ended Year ended
31 Dec 24 31 Dec 23
£ million £ million
Discount unwinding 74.0 75.2
Net movement on foreign exchange (20.6) (23.3)
Change in market discount rate (19.8) (41.0)
Value enhancements 4.7 18.5
Change in macroeconomic assumptions 3.2 11.4
Others 1.3 3.7
Income from investments at FVPL 42.8 44.5
Administrative expenses include personnel expenses, legal and professional
fees, and office and administration expenses. For more details, refer to the
Group Level Corporate Cost analysis provided below.
Group Level Corporate Cost Analysis
The table below is prepared on an accrual basis.
Year ended Year ended
31 Dec 24 31 Dec 23
£ million £ million
Personnel expenses 8.8 8.0
Legal and professional fees 3.3 2.7
Office and administration 1.2 1.4
Acquisition-related costs - 0.1
Corporate costs 13.3 12.2
Taxes
Taxes for the year ended 31 December 2024 totalled £2.7 million (31 December
2023: £3.3 million). This includes withholding taxes from the countries of
origin for certain portfolio distributions received by consolidated entities,
the Company's annual subscription tax and both current and deferred taxes of
the consolidated subsidiaries.
The Company, as an undertaking for collective investment, is exempt from
corporate income tax in Luxembourg and instead pays an annual subscription tax
of 0.05% on the value of its total net assets. Moreover, the Company as a
SICAV is not subject to taxes on capital gains or income. All other
consolidated subsidiaries are subject to taxation at the applicable rate in
their respective jurisdictions.
Net finance costs
Year ended Year ended
31 Dec 24 31 Dec 23
£ million £ million
Finance costs on loan and borrowings 2.2 3.1
Interest income on bank deposits (0.5) (0.6)
Net finance costs 1.7 2.5
The net finance costs for the year amounted to £1.7 million (31 December
2023: £2.5 million). This figure includes borrowing costs, commitment fees,
and other related fees associated with the RCF. As of 31 December 2024, the
Group had no outstanding borrowings under the RCF.
Ongoing Charges
The Ongoing Charges ('OGC') percentage presented in the table below is
prepared in accordance with the AIC recommended methodology, latest update
published in October 2024.
Ongoing Charges Information Year ended Year ended
31 Dec 24 31 Dec 23
% of avg. NAV % of avg. NAV
Ongoing Charges (using AIC recommended methodology) 0.92% 0.93%
In accordance with the AIC recommended methodology, fees that are linked to
investment performance could be viewed as analogous to performance fees paid
by externally-managed investment companies and should therefore be excluded
from the principal OGC calculation.
Fees directly linked to investment performance recorded in 2024 as a
percentage of average NAV were 0.14% (2023: 0.11%). Combined, the aggregate of
Ongoing Charges plus investment performance fees was 1.06% in the year (2023:
1.04%).
The table below provides a reconciliation of Ongoing Charges and the Ongoing
Charges Percentage to the administrative expenses under IFRS.
Year ended Year ended
31 Dec 24
31 Dec 23
£ million (except %)
£ million (except %)
Corporate costs to 31 December 13.3 12.2
Less: Non-recurring costs and taxes as per AIC guidelines
Non-recurring professional and external advisory costs (0.5) (0.6)
Non-recurring personnel costs (1.8) (0.5)
Acquisition-related advisory costs - (0.1)
Compensation linked to investment performance (1.5) (1.2)
Recurring costs per AIC guidelines(i) 9.5 9.8
Divided by: 1,037.0 1,056.7
Average undiluted Investment Basis NAV for 2024
(average of 31 December 2024: £1,019.9 million and 30 June 2024: £1,053.4
million)
Ongoing Charges percentage((i)) 0.92% 0.93%
(i) Figures reported are based on actual results rather than the rounded
figures presented in this table.
Movement in net cash/debt
Year ended Year ended
31 Dec 24 31 Dec 23
£ million £ million
Net cash/(debt) at the beginning of the year 9.7 (26.3)
Distributions from Investments at FVPL((i)) 97.3 94.5
Dividends paid (58.4) (53.5)
Net cash flows used in operating activities (17.2) (19.4)
Net cash flows used in other financing activities (3.0) -
Realised hedging gain/(loss) on investing activities (0.7) 13.4
Impact of foreign exchange movements (0.3) 1.0
Net cash at the end of the year 27.4 9.7
(i) Distributions from Investment at FVPL are shown gross of withholding
tax. The associated withholding tax outflow is included in 'Net cash flows
used in operating activities'.
The Group's portfolio of investments continued to perform strongly over the
year, with net cash generated ahead of projections.
The net cash flows used in other financing activities includes the cash
outflow associated with a £1.6 million share purchase to facilitate the
settlement of employee share based awards. Furthermore, the Group entered into
an amendment and restatement of its RCF which includes, among other things,
the accession of a new arranger and issuing bank and the extension of the
final maturity date to 26 May 2028, with further extension options
available. This amendment and restatement resulted in a £1.5 million cash
outflow to service debt issuance costs.
Refer to the Consolidated Statement of Cash Flows for further details on cash
flows during the year ended 31 December 2024.
Cash dividend cover
For the year ended 31 December 2024, the Group achieved a cash dividend cover
ratio of 1.37x (year ended 31 December 2023: 1.40x) calculated as follows:
31 Dec 2024 31 Dec 2023
£ million (except ratio)
£ million (except ratio)
Distributions from Investments at FVPL 97.3 94.5
Less: Net cash flows used in operating activities (17.2) (19.4)
Net distributions 80.1 75.1
Divided by: Cash dividends paid 58.4 53.5
Cash dividend cover (ratio) 1.37x 1.40x
The strong cash dividend coverage for the year was underpinned by BBGI's
contracted, high-quality inflation-linked portfolio cash flows.
Pro Forma Balance Sheet
Investment Basis 31 Dec 2024 31 Dec 2023
£ million £ million
Investments at FVPL 992.5 1,047.1
Trade and other receivables 1.1 0.9
Other liabilities - net (1.1) (1.1)
Net cash 27.4 9.7
NAV attributable to ordinary shares 1,019.9 1,056.6
Three-year comparative of Investment Basis NAV 31 Dec 24 31 Dec 23 31 Dec 22
NAV (millions) 1,019.9 1,056.6 1,069.2
NAV per share (pence) 142.7 147.8 149.9
The NAV decreased by 3.5% to £1,019.9 million at 31 December 2024 (31
December 2023: £1,056.6 million), and by 3.5% on an NAV per share basis. The
NAV per share is calculated by dividing the NAV by the number of Company
shares issued and outstanding at the end of the reporting period. This
information presents the residual claim of each shareholder to the net assets
of the Group.
Reconciliation of Investment Basis to IFRS
31 December 2024 31 December 2023
Reconciliation of Consolidated Income Statement
Investment Basis Adjust Consolidated IFRS Investment Basis Adjust Consolidated IFRS
£ million £ million £ million £ million £ million £ million
Income from Investments at FVPL 42.8 (13.3) 29.5 44.5 (5.6) 38.9
Other operating income((i)) 2.0 5.6 7.6 1.4 9.2 10.6
Operating income 44.8 (7.7) 37.1 45.9 3.6 49.5
Administrative expenses (13.5) - (13.5) (12.1) - (12.1)
Other operating expenses - (0.7) (0.7) (1.1) 0.4 (0.7)
Net finance costs (1.7) - (1.7) (2.5) - (2.5)
Net gain/(loss) on balance sheet hedging((i)) (0.7) 7.7 7.0 13.4 (4.5) 8.9
Profit before tax 28.9 (0.7) 28.2 43.6 (0.5) 43.1
Tax expense - net (2.7) 0.7 (2.0) (3.3) 0.5 (2.8)
Profit for the year 26.2 - 26.2 40.3 - 40.3
(i) The adjustment to Other operating income and Net gain/(loss) on
balance sheet hedging relates to the unrecognised net results from our hedging
transactions. While these transactions are presented separately under IFRS,
they are partly included as part of Income from Investments at FVPL under
Investment basis reporting.
Reconciliation of Consolidated Statement of Financial Position 31 December 2024 31 December 2023
Investment Basis Adjust(i) Consolidated IFRS Investment Basis Adjust(i) Consolidated IFRS
£ million £ million £ million £ million £ million £ million
Investments at FVPL 992.5 (13.1) 979.4 1,047.1 0.1 1,047.2
Trade and other receivables 1.1 - 1.1 0.9 - 0.9
Other liabilities - net (1.1) - (1.1) (1.1) 0.1 (1.0)
Net cash 27.4 - 27.4 9.7 - 9.7
Derivative financial asset/(liability) - net - 13.1 13.1 - (0.2) (0.2)
NAV attributable to ordinary shares 1,019.9 - 1,019.9 1,056.6 - 1,056.6
(i) Under IFRS, unrealised positions on foreign exchange hedging
contracts are reported separately under derivative financial
asset/(liability).
Alternative Performance Measures
Alternative Performance Measures ('APM') are understood as a financial measure
of historical or future financial performance, financial position, or cash
flows, other than a financial measure defined or specified under IFRS. The
Group reports a selection of APM as summarised in the table below and as used
throughout this Annual Report. The Management Board believes that these APM
provide additional information that may be useful to the users of this Annual
Report.
The APM presented here should supplement the information presented in the
Financial Statement section of this Annual Report. The APM used are not
measures of performance or liquidity under IFRS and should not be considered
in isolation or as a substitute for measures of profit, or as an indicator of
the Group's operating performance as determined in accordance with IFRS.
APM Explanation 31 December 2024 31 December 2023
Annualised NAV total return per share On a compounded annual growth rate basis. This represents the steady-state 8.1% 8.6%
annual growth rate based on the NAV per share as at 31 December 2024 assuming
dividends declared since IPO in December 2011 have been reinvested((i)).
Investment performance can be assessed by comparing this figure to the 7% to
8% target set at IPO.
Annualised total shareholder return since IPO ('Annualised TSR') On a compounded annual growth rate basis. This represents the steady state 6.4% 7.6%
annual growth rate based on share price as at 31 December 2024, assuming
dividends declared since IPO in December 2011 have been reinvested.
Asset availability Calculated as a percentage of actual availability payments received, relative 99.9% 99.9%
to the scheduled availability fee payments. The Company targets a rate in
excess of 98%. A high asset availability rate can be viewed as a proxy to
strong underlying asset performance.
Cash dividend cover The cash dividend cover is a multiple that divides the total net cash 1.37x 1.40x
generated in the year (available for distribution to investors) by the total
cash dividends paid in the year based on the cash flow from operating
activities under IFRS. A high cash dividend cover reduces the risk that the
Group will not be able to continue making fully covered dividend payments.
Inflation linkage Represents the contractual, index-linked provisions, which adjust annually to 0.5% 0.5%
provide a positive and high-quality link to inflation. The measure represents
the increase in portfolio returns if inflation is one percentage point higher
than our modelled assumptions for all future periods. Under current
assumptions, the expected portfolio return would increase from 7.6% to 8.1%
for a one percentage point increase to our inflation assumptions.
NAV total return per share The NAV per share total return measures the performance of the investment by 2.1% 3.8%
accounting for changes in the net asset value per share in the reporting
period and reinvested dividends.
Net cash This amount, when considered in conjunction with the available commitment £27.4 million £9.7
under the Group's RCF (unutilised RCF amount of £148.5 million as at 31
December 2024), is an indicator of the Group's ability to meet financial million
commitments, to pay dividends, and to undertake acquisitions.
Ongoing charges Represents the estimated reduction or drag on shareholder returns as a result 0.92% 0.93%
of recurring operational expenses incurred in managing the Group's
consolidated entities and provides an indication of the level of recurring
costs likely to be incurred in managing the Group in the future.
Single asset concentration risk (as a percentage of portfolio) Represents the proportion of the total portfolio value that is attributed to 11% Golden Ears Bridge 11%
the single largest asset. It provides an indication to which the Group's
performance is dependent on the single asset. Golden
Ears Bridge
Target dividend Represents the forward-looking target dividend per share. These are targets 8.57pps for 2025 8.40pps for 2024
only and are not a profit forecast. There can be no assurance that these
targets will be met or that the Company will make any distribution at all.
Ten-year beta Calculated using the FTSE All-Share, ten-year data representing the ten years 0.31 0.28
preceding 31 December 2024. This performance measure demonstrates the level of
volatility of the Company's shares in comparison to the wider equity market. A
low beta suggests that the share price is less volatile than the overall
market.
Total Shareholder Return since IPO ('TSR') The TSR combines share price appreciation and dividends paid since IPO in 125.8% 141.1%
December 2011 to represent the total return to the shareholder expressed as a
percentage. This is based on share price at 31 December 2024 and after adding
back dividends paid or declared since IPO.
Weighted average remaining asset life Represents the weighted average, by value, of the remaining individual asset 22.2 19.3
life in years. Calculated by reference to the existing portfolio as at 31
December 2024, assuming no future portfolio additions.
(i) Calculated using the Morningstar methodology.
Principal Risks
BBGI's risk management and internal control systems are designed to address
the materiality and significance of potential risks, ensuring they are managed
effectively. The risk management function supports the Management Board's
responsibility to govern the Company's approach to risk, with oversight from
the Supervisory Board and the Audit Committee.
Governance and Risk Management Framework
Operating in an uncertain environment requires proactive identification and
management of risks and emerging risks to achieve BBGI's business and
investment objectives. Through a structured risk management framework, the
Company identifies, classifies, analyses, assesses, and manages all material
risks. This approach allows BBGI to determine which risks are more critical to
the Company at any point in time. Key risk indicators are used to measure risk
levels against the Company's pre-determined risk appetite for each identified
risk. The risk management function conducts assessments to determine the
likelihood of predefined events and their potential impacts. Inherent risks
are managed by application of appropriate mitigating factors, leaving residual
risks at levels deemed acceptable by the Management Board. Risks are
identified as early as possible to minimise their impact.
The principal risks identified, along with the controls and strategies to
mitigate them, remain consistent with those reported in the 2023 Annual
Report.
The accompanying chart provides an overview of the Company's assessment of its
overall residual risk levels, incorporating both principal and other
identified risks. It presents a comprehensive assessment of the overall risk
exposure. Material risks, identified as having the most significant potential
impact, are discussed in detail below.
The table below summarises BBGI's material risks as at 31 December 2024. While
comprehensive, it is not an exhaustive list of all potential risks the Company
may face. Unknown risks, or those currently deemed less significant could
emerge in the future and materially impact BBGI's performance, assets, or
capital resources.
Market risks
Risk description Risk mitigation
Volatility of discount rates Discount rates are a key determining factor in valuing the Company's BBGI applies a market-based valuation approach based on market observed
investments. Higher discount rates have a negative impact on valuation, while comparable transactions to determine a base discount rate for steady-state,
lower rates have a positive impact. operational investments in the different jurisdictions in which the Company
operates, and it uses its judgement in arriving at the appropriate discount
Changes in interest rates (in particular, government bond yields) may impact rates.
the discount rates used to value BBGI's future projected cash flows, and thus
the Company's valuation. BBGI complements its market-based approach by utilising the principles of the
CAPM approach, referencing government bond yields plus a risk premium to
During the reporting period, the government bond yields experienced some calibrate such discount rates.
fluctuations with an overall increase.
As discount rates, government bond yields, deposit rates, and inflation rates
tend to be interlinked, this acts as a natural mitigant for changes in
discount rates. Higher inflation rates and deposit rates offset, partially at
least, increased discount rates in BBGI's portfolio valuation and vice versa.
A sensitivity analysis to changes in discount rates is included in the
Valuation section of this Annual Report.
Foreign exchange A significant proportion of BBGI's underlying investments - 67% of the Currency-hedging arrangements for portfolio distributions denominated in
portfolio value at 31 December 2024 - is denominated in non-Sterling Australian Dollar, Canadian Dollar, Norwegian Krone and US Dollar are in place
currencies. for a rolling period of four years to mitigate some of the foreign exchange
risk.
Fluctuations in exchange rates are outside the Company's control and could
adversely affect the value of BBGI's underlying investments, distributions and In addition to cash flow hedging, the Company also hedges a portion of the
the ultimate rate of return realised by investors. non-Sterling, non-Euro portfolio value.
The Euro-denominated fund running costs also provide a natural hedge against
the forecast portfolio distributions in Euro.
The ability to draw on the RCF in the currency of the underlying asset
distributions provides an additional hedging alternative.
A sensitivity analysis to the movement in foreign exchange rates is provided
in the Valuation section of this Annual Report.
Inflation BBGI has observed varying levels of inflationary pressure, and the resulting The Company's investments are entitled to receive contracted revenue streams
valuation effects, across the portfolio. The net cash flows generated from the from public sector clients, which are adjusted for inflation at least
portfolio are positively linked to inflation. Therefore, the portfolio's annually.
valuation may be negatively or positively impacted by lower or higher than
expected inflation. BBGI seeks to mitigate inflation risk for Portfolio Companies by matching the
indexation of the revenues and the operational costs.
The degree of inflation linkage varies and is not consistent across BBGI's
Portfolio Companies. The impact of higher or lower levels of inflation than BBGI cash flows are positively linked to inflation at 0.5% across the
forecast depends on underlying indexation provisions at each Portfolio portfolio.
Company.
A sensitivity analysis to movements in inflation rates is provided in the
From a financial modelling perspective, it is typically assumed that inflation Valuation section of this Annual Report.
will increase at a predetermined rate (which may vary depending on the
country).
Interest and deposit rates BBGI has exposure to interest rates through borrowings under the RCF at Group At a Portfolio Company level, the Company seeks to hedge substantially all
level, negligible unhedged debt at the Portfolio Company level, and interest floating rate exposure with interest rate swaps. BBGI also currently has no
earned on cash deposits. Therefore, BBGI's NAV may be negatively or positively refinancing risk exposure across its portfolio.
impacted by lower or higher than expected interest rates.
At the Group level, the net cash position was £27.4 million with no
borrowings outstanding under the RCF.
Sensitivity analysis to movement in the senior debt rate and the deposit rate
is provided in the Valuation section of this Annual Report.
Tax Enacted changes in tax law, tax rates and global tax initiatives could Certain risks, such as changes to corporation tax rates, cannot be prevented
adversely affect BBGI's cash flows and impact investors' returns. or mitigated. BBGI values its investments based on enacted tax rates and
legislation, and works closely with its tax advisers to respond to relevant
tax developments.
BBGI's globally diversified portfolio of assets reduces the tax concentration
risk associated with any single country.
A sensitivity analysis to movement in corporate tax rates is provided in the
Valuation section of this Annual Report.
Lifecycle or operational cost risk During the life of an investment, components of BBGI's assets are likely to Of the 56 assets in BBGI's portfolio, 36 assets have lifecycle and hand-back
need replacement or to undergo a refurbishment. There is a risk that the obligations passed down to the subcontractor. The remaining 20 Portfolio
actual cost may be greater than the forecast cost, or the timing of the Companies retain these obligations and two of these Portfolio Companies also
intervention may be earlier than forecasted. self-deliver the operations.
Additionally, a potential risk arises if there is a disparity in the Each Portfolio Company forecasts and provides for the timing, scope of work
interpretation of hand-back obligations at the end of the concession period, and costs of such replacements or refurbishments, based on internal and/or
when the Portfolio Company transfers the project back to the public sector. external technical advice. Operation and maintenance activities are tailored
This could lead to a budgetary overrun in lifecycle or operational costs. to the ongoing needs of the asset with a view to performing in line with
contractual requirements, including hand-back requirements.
There is also the general risk that other operational costs may be higher than
budgeted. A robust review process is in place and in many cases is reviewed by the
lender's technical adviser to ensure that sufficient hand-back funds are
available to meet pre-defined contractual requirements.
Less than 1% of the BBGI Portfolio is subject to hand-back in the next three
years and less than 2% in the next five years. Preparations for hand-back of
those assets are underway and collaborative working groups have been
established, comprising representatives from the public sector, the
subcontractors, and the Portfolio Companies, involved in the projects.
As part of BBGI's standard acquisition due diligence process, it reviews
budgeted costs and assesses their adequacy.
A sensitivity analysis to movements in lifecycle costs is provided in the
Valuation section of this Annual Report.
Counterparty risks
Risk description Risk mitigation
Failure of subcontractor The risk of a subcontractor service failure, poor performance or subcontractor Any liability of subcontractors is typically capped at contractually agreed
insolvency could cause a Portfolio Company to terminate or to be required by amounts. BBGI performs a contractor replacement analysis as part of its
performance or credit risk the client or lenders to terminate a subcontract. standard initial investment due diligence and monitor its sub-contractors on a
regular basis. Most subcontractors on BBGI investments are well established,
There may be a loss of revenue during the time taken to find a replacement with several competing providers. Therefore, the Company expects that a pool
subcontractor, or increased service costs thereafter. of potential replacement supplier counterparties is available if a service
counterparty fails, although not necessarily at the same cost.
Subcontractors are also typically required by lenders to provide a robust
security package, often consisting of parent company guarantees and/or
performance bonding. Other mitigants during the operations phase include:
periodic benchmarking of defined soft facility services on some investments;
and
a diversified group of subcontractors, with no substantial concentration risk.
Operational risks
Risk description Risk mitigation
Geopolitical Risk There is a risk that geopolitical developments, in the jurisdictions of BBGI's The diversified geographical spread of portfolio assets, which are located
operations may have a detrimental financial effect (e.g. asset valuation, solely in highly-rated countries with strong legal frameworks, provides a
supply chain), reputational effect or regulatory effect on the Company. strong mitigation against this risk. Having a fully availability-based
portfolio and contractually binding revenue streams further protects incoming
cash flows. However, geopolitical developments are ultimately out of the
Company's control and cannot be forecasted or anticipated.
Succession planning Inadequate succession planning can, if not effectively mitigated, pose a Proactive succession plans are in place to contribute to smooth transitions
significant risk to an organisation's long-term stability and growth. and continuity in leadership roles. By regularly reviewing and assessing the
talent within the Company, the Management Board can identify and develop
pathways for key individuals and identify areas where there may be over
reliance on a single individual.
Adequate notice periods are in place for each of the Management Board members.
The Company offers benchmarked compensation packages to attract and retain top
talent.
The Company has also implemented a deferred remuneration strategy ensuring
that Management Board and key individuals have a vested interest in the
long-term success and stability of the Company.
Change in law or regulation Changes in laws and regulations may have an adverse effect on the regulated BBGI has a globally diversified portfolio of assets, thereby reducing the
Parent Company, on the BBGI Group, or on the performance of a Portfolio Group's exposure to changes in law in any single country.
Company, which could then affect the valuation of investments.
The Company seeks regular briefings from its legal advisers to stay abreast of
impending or possible changes to laws or regulations.
Change in law provisions are included in some contracts, thus providing
further mitigation at Portfolio Company level.
Failing IT systems or cyber-attacks A breach of data security could occur by accident or because of an external BBGI has taken several measures to reduce the risk of a cyber-attack. BBGI
cyber-attack, and could result in operational, financial or reputational uses industry experts to host Company IT platforms, perform annual
damage. cybersecurity tests and provide cyber-security training to the Company's
workforce. BBGI is also in the process of implementing the requirements as
outlined in EU regulation, the Digital Operational Resilience Act (DORA).
At Portfolio Company level, the IT risks are typically transferred to
subcontractors, though any liability of a third party is capped to
contractually agreed amounts, including risks relating to design and
construction, warranties for IT systems and cyber-attacks interrupting the
provision of services to an asset.
Voluntary termination There remains a risk that public sector clients could choose to exercise their BBGI has certain mitigants to the risk of voluntary termination of contracts:
right to voluntarily terminate contracts.
Delivering high levels of asset performance, and ensuring open and direct
Were this to occur, the public sector would typically be contractually obliged interaction with clients, are key levers to demonstrate the value provided by
to pay compensation on termination. While provisions for compensation vary the Portfolio Companies under the existing contractual framework.
between contracts, compensation amounts available for equity could be
materially less than current valuation levels. Any public body wishing to terminate would need to consider the cost of
unwinding Project Agreements, repaying senior debt and covering the cost of
possible swap breakage fees.
Depending on applicable contractual provisions, Portfolio Company equity
investors may need to be compensated, as well as the public sector being
required to budget for the ongoing provision of the service.
The terms of the contracts, including any termination for convenience
provisions are carefully negotiated in the initial due diligence phase.
Corporate strategy The chosen strategy may not align with organisational goals or market BBGI has taken several measures to reduce this risk. It:
dynamics, potentially leading to ineffective outcomes.
schedules periodic reviews of the strategy to ensure alignment with Company
objectives and market dynamics;
periodically engages with key stakeholders including shareholders to gather
feedback and insights on the strategy's effectiveness; and
conducts regular market analysis and competitive reviews to ensure the
strategy remains relevant in the environment in which the Company operates.
Discount An inability to raise new capital due to a prolonged period of trading at a To assist BBGI in addressing any temporary or permanent share price to NAV
to NAV discount to NAV, could hinder BBGI's ability to avail of value-accretive discount, such as that experienced since 2023, the Company employs a strategic
investment opportunities. capital allocation policy. This policy includes the option for BBGI to
purchase up to 14.99% of its ordinary shares in the market annually, approved
by shareholder resolution at the Annual General Meeting.
The Management Board, Supervisory Board, and Company brokers consistently
review the options available to the Company to ensure the effective execution
of the capital allocation policy.
BBGI offers a continuation vote to shareholders every two years.
Sustainability risks
Risk description Risk mitigation
Sustainability risk Sustainability risk encompasses physical disruptions due to factors such as Sustainability risk assessment is integrated into BBGI's decision-making
extreme weather, transition challenges in adapting to low-carbon technologies, process, and sustainability risks are considered and monitored during the due
biodiversity risks, social risks arising from labour practices, occupational diligence phase and throughout the holding period of investments. These risks
health and safety, human rights violations, and governance risks involving are primarily assessed, monitored, and managed at the investment level.
legal, financial, and reputational issues.
Factors influencing BBGI's sustainability risk assessment include the
investment sector and the location. For each type of sustainability risk, the
materiality of potential financial harm to the Company (outside-in), as well
as the potential likelihood and severity of damages caused by investments
(inside-out) are assessed.
BBGI monitors Portfolio Companies' sustainability practices by implementing
various policies relating to sustainability risks across all investments.
Further details on BBGI's sustainability practices, governance and
climate-risks are provided in the Sustainability and TCFD sections.
The Management Board continues to monitor and manage key business risks and
emerging risks proactively. BBGI's diversified portfolio, prudent financial
management, and robust risk mitigation strategies position the Company to
navigate challenges and maintain operational stability and resilience.
However, the framework is designed to manage, not eliminate, the risk of
failure to achieve business objectives and, as such provides reasonable rather
than absolute assurance against material misstatement or loss.
Sustainability
2024 Update
2024 has been another year of meaningful progress in maintaining and
strengthening BBGI's longstanding commitment to sustainability. As a key
pillar of our strategy, Environmental, Social and Governance ('ESG')
principles guide our operations, risk management and decision-making, ensuring
long-term value for all stakeholders.
Our portfolio continues to make meaningful contributions to society. Over four
million patients receive care in our healthcare facilities, 36,000 pupils
access education through our schools and 300 million vehicles rely on our
resilient transportation networks.
Reducing emissions remains a priority. As of 31 December 2024, 30% of our
portfolio (by value) has secured Portfolio Company board commitments to
develop decarbonisation plans in 2025, marking a key milestone in our efforts
to facilitate the net-zero transition. At the corporate level, we have reduced
emissions by 41% compared to our 2019 baseline, keeping us on track to achieve
a 50% reduction by 2030.
To enhance transparency, we have conducted an external review of our Financed
and Corporate GHG emissions. Additionally, we implemented a third-party ESG
and carbon data management software to enhance the accuracy of our reporting
and collaboration with management service providers who connect on the
platform and are consulted annually to improve data collection processes.
The dedication of our people is essential to the realisation of sustainability
initiatives. This year, our annual ESG training focused on emerging
technologies, prompting engaging discussions across our teams. Our matching
donation programme continues to be well received by our staff. We also marked
International Women's Day with a Company-wide event, recognising the
significant accomplishments of women at BBGI.
Diversity and strong governance continue to be central to our mission. We have
maintained 60% female representation on our Supervisory Board, 41% female
employees and improved the diversity of our Portfolio Company boards.
Looking ahead to 2025, we will continue advancing our decarbonisation plans,
enhancing biodiversity screening, and further aligning with sustainability
regulations and frameworks. Biodiversity screening represents the next phase
in our efforts to better understand the environmental risks and impacts of our
assets, particularly roads, whose construction can affect natural habitats.
Cécilia Vernhes
ESG/Sustainability Director
on behalf of the ESG Committee
ESG Standards & Frameworks
Our portfolio aligns with selected Sustainable Development Goals ('SDG')
Net zero targets approved by the IIGCC in accordance with the Net Zero
Investment Framework for Infrastructure Guidance
UN Principles for Responsible Investment signatory since 2020
Financed Emissions quantified in accordance with the Partnership for Carbon
Accounting Financials Guidance
UN Global Compact signatory since 2020
Supporter of the objectives of the Paris Agreement
Approach to carbon offsets aligns with principles for Net Zero Aligned Carbon
Offsetting (revised 2024)
Supporters of the goals of FTSE Women Leaders and the Parker Review on Ethnic
Diversity on Boards
TCFD supporter since 2020
Article 8 under the SFDR
Corporate emissions targets set in line
with the SBTi framework for SMEs
GHG emissions quantified in accordance
with the GHG Protocol standards
NZAM signatory since 2021
Member of the AIC and reporting aligned
with the AIC Code of Corporate Governance
Stakeholder engagement approach
consistent with AA1000 Stakeholder Engagement Standard (2015)©
Sustainability report prepared in accordance with GRI and SASB standards
SASB content index
GRI content index
External Ratings & Recognitions
AIC Next Generation Dividend
Hero 2024:
In March 2024, BBGI joined the AIC's next generation of dividend heroes in
recognition of 10 years of successive dividend growth.
Eight investment trusts join the
next generation of dividend heroes
UN PRI Assessment 2024:
Policy Governance and Strategy: ★★★★★
Direct Infrastructure: ★★★★★
Confidence Building Measures: ★★★★✩
UN PRI 2024 Assessment Report
UN PRI 2024 Public Transparency
Report
ISS E&S Disclosure Quality
Score 2023 xii (#_edn12) :
Environment (Decile Rank: 3)
Social (Decile Rank: 2)
ISS Corporate ESG Rating 2024 xiii (#_edn13) :
Prime B- (Decile Rank: 1)
Sustainalytics ESG Risk Rating 2021 xiv (#_edn14) :
Strong ESG performance with a risk rating of Negligible (8.3)
Approach to Sustainability
BBGI's purpose is to deliver long-term benefits for all stakeholders through
responsible investment in Social Infrastructure. Sustainability is central to
this purpose, guiding how the Company invests, manages, and engages with its
portfolio. BBGI is committed to integrating sustainability principles into its
investment decisions, asset management and stewardship, ensuring it meets its
social and environmental commitments both now and in the future.
The United Nations Sustainable Development Goals ('SDGs') provide a global
framework for addressing pressing challenges. BBGI actively contributes to six
key SDGs, leveraging Company investments to drive measurable environmental and
social impact. By aligning with these goals, BBGI ensures that its strategy
not only delivers resilient financial performance but also supports
improvements for the communities it serves.
Progress & Outlook
Making an essential social contribution - SDG 3 - SDG 4 - SDG 9
Contribution 4 million patients have access to healthcare through 40 healthcare facilities.
800,000 people receive protection against fire-related injuries and fatalities
through 26 fire stations.
36,000 pupils access education supported by 33 schools and colleges.
300 million vehicles travel across 2,800 single lane km of reliable and
resilient roads and bridges.
40 million passengers travel safely via electric public rail transit.
200 people have access to affordable housing.
2,000+ people are employed in
day-to-day operations supporting BBGI's investments.
2024 Highlights Health and Safety standards:
100% of Portfolio Companies and 100% of maintenance contractors (first-tier
supply chain) have a Health and Safety policy in place.
Community investments:
Each year donations are made to local community initiatives through Portfolio
Companies
2025 Outlook Diversity, Equality and Inclusion:
Launch an awareness campaign supporting diversity, equity and inclusion
('DEI') at both corporate and portfolio level.
Managing and mitigating environmental impacts - SDG 11 - SDG 13
Contribution Our investment in renewable energy generates enough electricity to power
80,000 homes each year.
100% of our assets have a biodiversity policy in place.
100% of our assets are screened for resilience and adaptive capacity to
climate-related hazards and natural disasters.
Scenario analysis: Conducted systematic climate-resilience assessments across
our portfolio, aligned with 1.5°C xv and 4°C xvi climate pathways.
2024 Highlights 41% Corporate Emissions reduction compared to 2019 baseline, targeting 50% by
2030.
53,574 tCO2e attributable emissions for BBGI's portfolio xvii in 2023.
As a result of BBGI's engagement, the Board has committed to develop
decarbonisation plans across the portfolio.
Maintained a medium or lower climate-risk score of the portfolio under a
'Paris-aligned' scenario in 2050.
KPIs are monitored annually to assess and mitigate potential significant harm
to the environment.
2025 Outlook Net-zero target:
At least 30% of BBGI assets are expected to have developed decarbonisation
plans by 2025.
Engagement:
Work with management service providers and clients to formalise
decarbonisation plans at Portfolio Companies board level.
Biodiversity:
Engage with Portfolio Companies' boards to conduct biodiversity risks and
impacts assessments.
Integrity and transparency - SDG 17
Contribution 1.5 million people benefit from the local proximity and safety of four police
stations.
500,000 people can have local access to public services across three municipal
administration buildings.
3,000 detainees are housed across four modern correctional facilities.
Executive compensation is tied to ESG & net zero targets, including both
Corporate Emissions reduction and implementation of net zero plans across the
portfolio.
60% female representation on BBGI's Supervisory Board, including ethnic
minority director.
Workforce is 41% female, and 27% come from diverse ethnic minority
backgrounds.
2024 Highlights Governance: Improved the diversity of Directors at BBGI Portfolio Companies'
boards and employees.
Stakeholder engagement: Completed an investor survey gathering feedback on
perspectives and expectations.
Transparency: Published first externally verified GHG Statement.
UN PRI Assessment 2024:
Policy Governance and Strategy: ★★★★★
Direct Infrastructure: ★★★★★
Confidence-Building Measures: ★★★★✩
Automation: Engaged with Portfolio Companies to implement third-party ESG and
carbon data management software.
Trusted partner: Demonstrated a highly trusted relationship and service
delivery to public sector clients, reflected in a strong NPS xviii .
Zero corruption incidents, related fines or penalties at both corporate and
Portfolio Company levels.
2025 Outlook Transparency:
Monitoring regulatory developments across BBGI jurisdictions (SFDR, IFRS S1-S2
and TCFD, SDR).
Sustainable Finance Disclosures Regulation (SFDR)
BBGI's fund has an SFDR Article 8 classification, as the Company focuses on
sustainable investments with a social objective. BBGI screens its investments
to avoid doing significant harm to other aspects of sustainability and follows
good governance practices. The periodic disclosure for SFDR specifically
addresses the Company's disclosure obligations under Article 11 of SFDR,
supplemented by Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022
and Commission Delegated Regulation (EU) 2023/363 of 31 October 2022.
SFDR Periodic disclosure
BBGI's SFDR Periodic disclosure for 1 January 2024 to 31 December 2024 is at
https://www.bb-gi.com/sfdr-periodic-disclosure-2024/
(https://www.bb-gi.com/sfdr-periodic-disclosure-2024/)
Find out more: SFDR PAI Statement
(https://www.bb-gi.com/media/2395/bbgi_sfdr-pai-statement_30062024.pdf)
Case study
A few bugs for many smiles at Tor Bank School
Location: Tor Bank School, UK Sector: Education
Description: Tor Bank School is a specialist educational facility serving 164
pupils aged 3-19 with severe learning difficulties. As an IQM Flagship School,
it is committed to inclusive education and sustainability.
As part of its Forest School initiative, the school promotes outdoor learning
to help students develop essential skills. BBGI's Portfolio Company supported
this initiative by funding two bug hotels, enriching biodiversity education
and reinforcing its commitment to environmental sustainability.
Approach:
• The bug hotels provide a hands-on learning experience, allowing pupils
to explore nature and ecosystems.
• This initiative was enthusiastically welcomed by the school's Eco
Committee, students and educators.
Impact:
• Hands-on learning: encouraging real-world exploration.
• Environmental awareness: Supporting a unique teaching approach through
direct interaction with nature.
• Community engagement: reinforcing public-private collaboration and
demonstrating the long-term value and dual benefits of PPPs in education.
"Outdoor learning inspires curiosity, creativity, and a deep connection with
nature, helping our pupils to develop essential life skills in a
hands-on-environment. Experiences like observing wildlife up close foster
responsibility, teamwork, and a sense of wonder that lasts a lifetime. We
are incredibly grateful for the kind donation of bug hotels from BBGI, which
will provide a safe haven for insects while giving our learners a unique
opportunity to explore biodiversity firsthand. Thank you for helping us
bring learning to life!"
Claire Breen, Principal, Tor Bank School
Read more:
https://www.bb-gi.com/our-portfolio/our-assets/europe/tor-bank-school/
(https://www.bb-gi.com/our-portfolio/our-assets/europe/tor-bank-school/)
Stakeholder Engagement
Section 172
As a member of the AIC, BBGI acknowledges Provision 5 of the AIC Code, which
requires all members to comply with the continuing requirement under Section
172(1) of the UK Companies Act 2006 (the 'CA2006') for boards to take
stakeholder interests into account and to report how they have done so when
performing their duties. The AIC Code reflects the main principles set out in
the UK Code on Corporate Governance and associated disclosure requirements of
the Listing Rules, as they apply to investment companies, including internally
managed investment companies.
Detailed insights into how BBGI embodies the spirit of those Section 172
provisions, considers key stakeholders, and upholds its commitment to
generating positive and sustainable outcomes for all stakeholders are outlined
to the right, including specific actions taken in 2024.
Key stakeholders Focus area of our engagement Types of engagement and metrics used to monitor and assess relationships Considerations in the Board decision-making process and key outcomes
People BBGI fosters an inclusive workplace with a relatively flat hierarchy, enabling Annual and mid-year assessments. Management Board regularly reviews employee feedback to enhance workplace
its people to contribute to the shared objectives meaningfully. It promotes an
practices.
BBGI's employees are the driving force behind what it does. They bring their inclusive work environment where all people are treated equally and are Direct liaison with the Management Board.
expertise to clients, subcontractors and partners to deliver the results supported to achieve their potential. The Company regularly engages with its
Two elected staff delegates in Luxembourg act as liaisons between employees
expected by BBGI investors and clients. teams and seeks feedback via multiple communications channels. Regular team meetings. and the Management Board, providing a structured channel for raising
individual or collective concerns regarding employment practices.
Well defined expectations and targets, including sustainability targets for
all executives 10% of LTIP is subject to reducing corporate emissions and a Improved the diversity of Portfolio Company boards and employees, reflecting
further 10% is subject to progress in the implementation of net zero plans. the Board's commitment to fair opportunities for recruitment and career
advancement.
Monitoring of turnover and retention rates.
Maintained high staff retention, reflecting a stable and engaged workforce.
Professional development: average of 28 hours of training per employee
annually.
Whistleblower hotline.
Communities BBGI maintains high-quality, resilient Social Infrastructure to facilitate Client satisfaction reviews at corporate and Portfolio Company levels. BBGI donated to over 20 charities as part of BBGI's workplace giving
access to essential services for everyone.
programme.
Ensuring a positive experience for those using BBGI's assets and for local
Sponsorships, donations, and community initiatives.
communities is essential to Company success and client satisfaction. When selecting community initiatives to support, BBGI prioritises those that Portfolio Companies donate each year to local charities.
benefit the local communities around its assets.
Investors BBGI aims to generate long-term, predictable and inflation-linked returns for Investor relations: meetings, webinars, roadshows, direct engagement and The Board integrates investor feedback into dividend policy and strategic
investors. responses to investor questionnaires. decisions.
BBGI investors provide the capital that supports its operations, offer
feedback on its business model and help shape future plans. ESG engagement: responses to investor questionnaires and interactions with ESG The CEO & CFOO regularly engage with investors through roadshows.
ratings providers.
The ESG Committee conducted an ESG practitioner survey to assess investor
Close interactions and ongoing dialogue with Corporate Brokers. priorities.
Annual General Meeting.
Investor Meet Company presentations.
Annual and Interim Reports, plus the Sustainability Report.
Website updates.
Supply chain BBGI upholds high standards of ethics, performance and integrity by fostering Contractor monitoring. All Portfolio Companies and key contractors onboarded onto new ESG and carbon
long-term, mutually-beneficial relationships between Portfolio Companies and
data management software, improving reporting and monitoring capabilities.
BBGI's long-term contractor partnerships are critical to delivering contractors to ensure asset quality and responsiveness. ESG metrics tracking.
operational and available assets to public sector clients.
Portfolio Companies work closely with maintenance and operations contractors Joint initiatives on ESG topics.
to maintain mutually-beneficial long-term relationships and ensure effective
responsiveness. BBGI's standard policies implemented across investments.
Public sector clients BBGI builds trust by delivering well-maintained, safe Social Infrastructure Regular client meetings. Participated in multiple hand-back workshops with UK clients to ensure smooth
for its public sector clients.
asset handovers.
Satisfied public sector clients are vital to BBGI's business model. Service quality feedback.
Client feedback directly informs asset management decisions and sustainability
NPS survey. initiatives.
Ongoing reporting. Lessons learned from one asset are adapted and applied across the portfolio.
Sharing results of our climate risk monitoring and GHG inventories. Engaged with public sector clients in discussions on decarbonisation
strategies.
Actively contributed to the UK IPA Net Zero Working Group to shape PPP net
zero strategies.
Task Force on Climate-related Financial Disclosures (TCFD) Summary Report
As a non-UK investment company, BBGI is not subject to the Financial Conduct
Authority's ('FCA') requirement for commercial companies with a premium
listing to make TCFD disclosures. Notwithstanding this exemption, the
Management Board recognises the importance of the TCFD and its related
disclosures and has voluntarily decided to report against the TCFD
recommendations. The full TCFD disclosure is included in BBGI's Sustainability
Report: www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf#page=49
TCFD Recommendation Summary Section
Governance
1. Describe the Board's oversight of climate-related risks and opportunities. The Supervisory and Management Boards, supported by an executive-led ESG Sustainability Report
Committee, ensure comprehensive governance over all climate and ESG-related (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
activities.
Section: 'TCFD Disclosures'
The Management Board considers climate-related issues when setting strategy,
considering new investment opportunities, approving annual budgets, monitoring
performance metrics and targets, and approving related disclosures.
Section: 'Remuneration Report'
The Remuneration Committee designs reward structures for the Management Board
to foster long-term value-creation and reinforce the organisation's ability to
achieve its climate change goals and targets.
2. Describe management's role in assessing and managing climate-related risks The Management Board has overall responsibility for ESG considerations and Sustainability Report
and opportunities. ensuring they are integrated into BBGI's investment strategy, including in (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
relation to climate change. This is achieved through the Investment Committee,
Risk Management, Corporate Governance and Compliance functions, and ESG Section: 'TCFD Disclosures'
Committee.
ESG Committee Terms of Reference (https://www.bb-gi.com/esg/policies/)
Strategy
3. Describe the climate-related risks and opportunities the organisation has Physical risks: Climate-related risks include physical disruptions such as Sustainability Report
identified over the short, medium and long-term. extreme weather, and transition challenges in adapting to low-carbon (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
technologies or biodiversity risks related to ecosystem disruptions.
Section: 'TCFD Disclosures'
Overall, scenario analysis has highlighted that the majority of BBGI's
portfolio is very resilient to climate hazards both today and under future
climate warming scenarios.
BBGI's assessment examines climate impacts over short (1-5 years), medium
(5-10 years) and long-term (10+ years) horizons, extending up to 2050. When
local mitigation measures are also considered, the exposure of Company assets
to climate change may reduce further.
Transition risks: The changes arising from a transition to a low-carbon
economy include changes to laws and regulations, reputational risks, adapting
to new low-carbon materials and technologies (this includes alternatives for
road surfaces, electric vehicle charging infrastructure, and energy-efficient
or motion sensor equipment) and increased electrification.
4. Describe the impact of climate-related risks and opportunities on the Physical climate-related risks are systematically assessed for each asset Sustainability Report
organisation's businesses, strategy and financial planning. during the due diligence and monitoring phases of BBGI's investment cycle. (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
The results of the quantitative climate change assessment have fed into Section: 'TCFD Disclosures'
Company strategy in several ways: they inform on the type of climate risks
each assets is exposed to, the magnitude of those risks (from low risk to high
risk, if any) and the corresponding reinstatement value (i.e. the potential
cost of damage from physical climate risks).
Company financial models do not currently incorporate climate-related costs,
though increased insurance premiums may lead to future adjustments.
Contractual protections mitigate some of these risks.
The cash flows of BBGI's availability-based assets remain largely unaffected
by physical and transition climate-related risks, as they are based on
pre-agreed criteria with the public sector.
5. Describe the resilience of the organisation's strategy, taking into Because BBGI's investment strategy focuses on infrastructure, these assets are Sustainability Report
consideration different climate-related scenarios, including a 2°C or lower typically built to the latest engineering standards, incorporating long-term (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
scenario. climate considerations into their design and construction. As a result, the
Company portfolio has a low exposure to climate risk, as supported by BBGI's Section: 'TCFD Disclosures'
climate modelling, which evaluates asset resilience under various
climate-related scenarios and time horizons. Net Zero Plan (https://www.bb-gi.com/media/2266/net-zero-plan-i-bbgi.pdf)
As an investor, BBGI is enhancing its portfolio's resilience by a combination
of portfolio decarbonisation initiatives, active engagement with key
stakeholders, and an integrated ESG monitoring.
The transition to a lower-carbon economy also presents opportunities for
client-supported change orders and new investments, provided the business case
supports them.
Risk
6. Describe the organisation's processes for identifying and assessing Climate risk assessment is integrated into decision-making process and Sustainability Report
climate-related risks. monitored from due diligence through the investment holding period at the (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
investment level.
Section: 'Climate-related risks'
In line with BBGI's commitment to executing due diligence on new acquisitions,
the Company conducts an initial assessment of physical risk exposure for
potential investments, followed by a climate-related risk exposure modelling
within six months of an asset integrating into the portfolio.
Physical climate-related risks are identified through due diligence, with
immediate exposure modelled under a 'Paris-aligned' (1.5°C) scenario and a
'high emissions' (4°C) scenario, followed by decadal time steps until 2100.
This quantitative scenario analysis has been conducted for all investments
against eight climate perils.
To ensure BBGI's portfolio remains resilient to climate risk, it continues to
assess physical climate risk impacts for all new investments. The output from
the screening is a bespoke climate factsheet.
7. Describe the organisation's processes for managing climate-related risks. Climate risks identified through BBGI's climate risk modelling are managed by Sustainability Report
the Company Risk Manager and the Management Board, who take steps to ensure (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
climate risk considerations are formally embedded within risk management
procedures. Section: 'Climate-related risks'
8. Describe how processes for identifying, assessing and managing Climate-related risks have been integrated into Company risk management Sustainability Report
climate-related risks are integrated into the organisation's overall risk procedures. (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
management.
Where BBGI identifies material climate risks, these are escalated where Section: 'Climate-related risks'
necessary to the Management Board, ensuring risks can then be appropriately
assessed, managed and monitored as per the Company risk management procedure.
For BBGI's portfolio to remain resilient to climate risk, the Company embed
findings into its investment screening process, ensuring it assesses physical
climate risk impacts for all new investments.
Metrics
9. Disclose the metrics used by the organisation to assess climate-related BBGI has quantified both physical severity risk scores and potential projected Sustainability Report
risks and opportunities in line with its strategy and risk management process. financial impacts from 2020 to 2100 for every asset under each warming (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
scenario assessed. For each time horizon and warming scenario, each asset is
assigned a climate risk score on a scale from very low to very high. Section: 'Climate-related risks'
For the 22 assets that have undergone a deep-dive assessment, BBGI conducted
further sensitivity analysis that considers all existing resilience measures
and the engineering of BBGI assets in the climate risk score.
10. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and GHG Emissions in tCO2e Sustainability Report
the related risks.
Corporate and Financed FY 2023 FY 2022 (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
Attributable Emissions
Scope 1 10 10 Section: 'GHG Protocol'
Scope 2 10 7
Scope 3 Sustainability Report
Scope 3 (Corporate activities) 229 226 (https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
Scope 3 (Assets in regular operations) 15,103 14,347
Scope 3 (Assets under construction, 38,515 28,465 Section: 'Independent Assurance Report'
expansion, major lifecycle works)
Scope 3 Total 53,846 43,038
Total 53,867 43,055
Carbon footprint (tCO2e/£m invested) 51 40
2024 emissions will be reported in BBGI's upcoming 2024 Sustainability Report.
The increase in 2023 emissions compared to 2022 is due to the construction
activities for Highway 104 (Canada), completed in 2023, and the ongoing
expansion of Victoria Correctional Facilities (Australia), as illustrated in
the table below.
Financed Attributable Emissions (in tCO2e) FY 2023 FY 2022
Scope 3 (Assets under construction, expansion)
Operational 15k 14k
Construction 17k 4k
Expansion 21k 14k
The values reported for 2022 and 2023 have been restated compared to those
disclosed in BBGI's 2023 Sustainability Report. These adjustments result from
the external assurance process and the transition from a manual to an
automated process in 2024.
11. Describe the targets used by the organisation to manage climate-related Physical risk targets: Sustainability Report
risks and opportunities and performance against targets.
(https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
For 22 assets, where BBGI produced a bespoke climate factsheet, the Company
used it when engaging with clients. BBGI will continue to perform a Section: 'Climate-related risks'
climate-risk screening for each new investment.
Corporate net-zero targets
Corporate Emissions reduction targets:
Section: 'Corporate Emissions'
BBGI has committed to reducing its Corporate Emissions (Scope 1, 2 and 3) 50%
by 2030 from a 2019 baseline and to reach net zero by 2040. At the corporate Portfolio net-zero targets
level, BBGI has reduced emissions by 41% compared to the 2019 baseline,
keeping the Company on track to achieve a 50% reduction by 2030. Section: 'Financed Emissions'
Financed Emissions reduction targets: Net Zero Plan (https://www.bb-gi.com/media/2266/net-zero-plan-i-bbgi.pdf)
BBGI aims for 70% of its Financed Emissions to be 'net zero', 'aligned', or
'aligning' to net zero by 2030. This means that by 2030, 70% of AUM (portfolio
companies by value) will have a long-term goal to be net zero by 2050 or
sooner. BBGI has a goal to have 100% of its Financed Emissions to be 'net
zero' or 'aligned', by 2040. As a result of Company engagement, 30% of BBGI's
assets have secured board commitment to develop decarbonisation plans in 2025.
2024 emissions will be reported in BBGI's upcoming 2024 Sustainability Report.
The increase in 2023 emissions compared to 2022 is due to the construction
activities for Highway 104 (Canada), completed in 2023, and the ongoing
expansion of Victoria Correctional Facilities (Australia), as illustrated in
the table below.
Financed Attributable Emissions (in tCO2e) FY 2023 FY 2022
Scope 3 (Assets under construction, expansion)
Operational 15k 14k
Construction 17k 4k
Expansion 21k 14k
The values reported for 2022 and 2023 have been restated compared to those
disclosed in BBGI's 2023 Sustainability Report. These adjustments result from
the external assurance process and the transition from a manual to an
automated process in 2024.
Sustainability Report
(https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
Section: 'GHG Protocol'
Sustainability Report
(https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
Section: 'Independent Assurance Report'
11. Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Physical risk targets:
For 22 assets, where BBGI produced a bespoke climate factsheet, the Company
used it when engaging with clients. BBGI will continue to perform a
climate-risk screening for each new investment.
Corporate Emissions reduction targets:
BBGI has committed to reducing its Corporate Emissions (Scope 1, 2 and 3) 50%
by 2030 from a 2019 baseline and to reach net zero by 2040. At the corporate
level, BBGI has reduced emissions by 41% compared to the 2019 baseline,
keeping the Company on track to achieve a 50% reduction by 2030.
Financed Emissions reduction targets:
BBGI aims for 70% of its Financed Emissions to be 'net zero', 'aligned', or
'aligning' to net zero by 2030. This means that by 2030, 70% of AUM (portfolio
companies by value) will have a long-term goal to be net zero by 2050 or
sooner. BBGI has a goal to have 100% of its Financed Emissions to be 'net
zero' or 'aligned', by 2040. As a result of Company engagement, 30% of BBGI's
assets have secured board commitment to develop decarbonisation plans in 2025.
Sustainability Report
(https://www.bb-gi.com/media/2421/bbgi-sustainability-report-2023.pdf)
Section: 'Climate-related risks'
Corporate net-zero targets
Section: 'Corporate Emissions'
Portfolio net-zero targets
Section: 'Financed Emissions'
Net Zero Plan (https://www.bb-gi.com/media/2266/net-zero-plan-i-bbgi.pdf)
Corporate governance
Relevant Application of European Union and Luxembourg Law
BBGI is regulated by the CSSF under Part II of the amended Luxembourg law of
17 December 2010 on undertakings for collective investment and is subject to
the Luxembourg amended law of 12 July 2013 on Alternative Investment Fund
Managers ('AIFM Law'), which implemented the EU Alternative Investment Fund
Managers Directive ('AIFMD') into national legislation.
AIFM
During the reporting period, Frank Schramm, former co-CEO, retired with effect
from 31 January 2024. Andreas Parzych, Executive Director ('Head of Business
Development'), joined the Management Board with effect from 31 January 2024.
There have been no other material changes during the year in respect of Art.
20 paragraph. 2(d) of the AIFM Law that warrant further disclosure to our
shareholders.
Material risk takers
All members of BBGI's Management Board are considered the material risk
takers, in accordance with the AIFM Law. Frank Schramm, as former co-CEO, was
a material risk taker until his retirement from the Management Board on 31
January 2024. Andreas Parzych has been deemed a material risk taker from the
date he joined the Management Board. Duncan Ball and Michael Denny are the
remaining two members of the Management Board and remain material risk takers.
Incorporation and administration
The ordinary shares were created in accordance with Luxembourg law and conform
to the regulations made thereunder, have all necessary statutory and other
consents, and are duly authorised according to, and operate in conformity
with, the Articles.
Articles of Association
The Articles were originally approved and formalised before a Luxembourg
notary public on 24 November 2011. The Articles are filed with the Luxembourg
Registre de Commerce et des Sociétés and are published in the Recueil
Électronique des Sociétés et Associations ('RESA'). The Articles may be
amended in accordance with the rules set out in article 32 of the Articles.
A copy of the latest Articles is available for inspection on our website.
Refer to www.bb-gi.com/investors/policies/articles-of-association/
Compliance statement
BBGI is a member of the Association of Investment Companies ('AIC') and aligns
its reporting with the AIC Corporate Governance Code (the 'AIC Code').
Our work activity and reporting align with the Principles and Provisions of
the AIC Code, which incorporates the UK Corporate Governance Code 2018 (the
'UK Code') and provisions relevant to BBGI as an investment company. We
believe that reporting under the AIC Code, which has been endorsed by the
Financial Reporting Council, offers valuable insights for our shareholders.
The AIC Code was updated in 2024 to reflect changes to the UK Code, with both
updates effective for accounting periods beginning on or after 1 January 2025.
While this Annual Report has been prepared in accordance with the AIC Code
applicable to the reporting period, we have also considered the updated AIC
Code and are committed to continued compliance in our next reporting cycle.
While we largely comply with the AIC Code, we provide explanations for any
deviations. Below, we detail specific Provisions where we differ, with
relevant section references for detailed explanations:
- AIC Provision 17 (establishing separate Management Engagement
Committee): See Committees of the Supervisory Board.
- AIC Provision 23 (annual re-election of all directors by the
shareholders): See Management Board - General section.
Our Boards
Executive and Non-Executive Directors split
Non-Executive Directors 5
Executive Directors 3
Board diversity*
Male 5
Female 3
*Comprises the Supervisory and Management Boards
37.5%
Female representation on the Boards
Read more about our Board diversity in the
Nomination Committee Report
Board independence*
Independent 62.5%
Non-independent 37.5%
*Comprises the Supervisory and Management Boards
62.5%
Independence on the Boards
Board tenure (number of years)
Sarah Whitney 5 years
Andrew Sykes 2 years
Jutta af Rosenborg 6 years
Chris Waples 3 years
June Aitken 2 years
For more information
Refer to the stakeholder engagement section for more information
Refer to our website to view key governance policies:
www.bb-gi.com/investors/policies/ (http://www.bb-gi.com/investors/policies/)
Board attendance
For the year ended 31 December 2024
Name Function Independence Age Original appointment Next renewal date Attendance at Meetings
(total meetings held in the year)
Supervisory Board Supervisory Board (5) Audit Committee (5) Nomination Committee (4) Remuneration Committee (5)
Sarah Whitney((i)) Chair of Supervisory Board and Chair of Nomination Committee Independent 61 01-May-19 30-Apr-25 5/5 - 4/4 5/5
Member of the Remuneration Committees
Andrew Sykes Senior Independent Director and Chair of the Remuneration Committee Independent 67 29-Apr-22 30-Apr-25 5/5 5/5 4/4 5/5
Member of the Audit and Nomination Committees
Jutta af Rosenborg Chair of Audit Committee Independent 66 01-Jul-18 30-Apr-25 5/5 5/5 4/4 5/5
Member of the Nomination and Remuneration Committees
Chris Director Independent 66 01-May-21 30-Apr-25 5/5 5/5 4/4 5/5
Waples
Member of the Audit, Nomination and Remuneration Committees
June Director Independent 65 29-Apr-22 30-Apr-25 5/5 5/5 4/4 5/5
Aitken Member of the Audit, Nomination and Remuneration Committees
(i)Ms Whitney is invited to attend the Audit Committee meetings as an
observer. She attended all Audit Committee meetings held in the year.
Name Function Independence Age Original appointment Next renewal date Attendance at Meetings
Management Board Management Board (17)
Duncan Ball CEO Non-independent 59 05-Oct-11 05-Oct-25 17/17
Michael Denny CFOO Non-independent 47 30-Apr-13 30-Apr-25 17/17
Andreas Parzych((i)) Executive Director Non-independent 52 31-Jan-24 31-Jan-26 16/16
Frank Schramm((ii)) Retired Non-independent 56 05-Oct-11 - 1/1
(i)Mr Parzych was appointed 31 January 2024. Prior to his appointment, he was
invited to attend the three preceding meetings of the Management Board as an
observer.
(ii)Mr Schramm retired from the Management Board on 31 January
2024.
( )
All appointments may be renewed in accordance with the provisions of the
Company's Articles.
Biographies of Directors
Supervisory Board
Sarah Whitney
Chair, Supervisory Board and Nomination Committee
Appointed: May 2019
(Chair and NC Chair since 31 July 2020)
Relevant prior experience / education
• Over 35 years' experience advising on strategy, corporate finance, real
estate, infrastructure, investment and economic matters.
• Corporate Finance Partner at PwC.
• Head of Consulting & Research at DTZ Holdings plc (now Cushman &
Wakefield).
• Led the Government & Infrastructure Team at CB Richard Ellis.
• Fellow of the Institute of Chartered Accountants of England and Wales.
• Member of the Council of University College London.
• BSc in Economics & Politics from the University of Bristol.
Additional current appointments
• Senior Independent Director of Bellway plc.
• Non-Executive Director and Chair of the Audit Committee of JPMorgan
Global Growth & Income plc.
Andrew Sykes
Chair, Remuneration Committee and Senior Independent Director
Appointed: April 2022
(SID and RC Chair since 29 April 2022)
Relevant prior experience / education
• Wealth of financial services and non-executive experience and spent 26
years of his executive career at Schroders plc.
• Experienced director of UK-listed companies and has deep knowledge of
the financial services sector and of corporate governance requirements.
• Chair of SVG Capital plc from 2012 until 2017, serving on the Board from
2010.
• Chair of Smith & Williamson from 2013 to 2020.
• Served as Interim Chair at Intermediate Capital Group plc.
• Master's degree in Modern Languages from Oxford University.
Additional current appointments
• Senior Independent Director of Intermediate Capital Group plc.
• Chair of Alder Investment Management Limited.
• Deputy Chair of the Governing Body of Winchester College.
Jutta af Rosenborg
Chair, Audit Committee
Appointed: July 2018
(AC Chair since 31 August 2018)
Relevant prior experience / education
• Extensive experience in management and strategy from her background as
an Executive and other senior operational roles at listed companies.
• Experienced non-executive director of listed companies.
• Served as CFO, Executive Vice President of Finance and IT and Member of
the Board of Management at ALK-Abelló A/S until 2010.
• Vice President of Group Accounting at Chr. Hansen Holding A/S from 2000
to 2003.
• Former Chair of the Audit Committee at JP Morgan European Growth &
Income plc.
• MSc in Business Economics and Auditing from Copenhagen Business School.
• Qualified as a state-authorised public accountant in 1992.
Additional current appointments
• Non-Executive Director and Chair of the Audit Committee at RIT Capital
Partners plc.
Chris Waples
Independent Director
Appointed: May 2021
Relevant prior experience / education
• Over 35 years' global experience managing the acquisition, construction
and divestment of infrastructure projects in progressive high-profile
companies.
• 12 years at John Laing Group plc where he was Executive Director Asset
Management, and led the international PPP asset portfolio across Europe, North
America, and Asia Pacific.
• Member of the Executive team that oversaw successful £1 billion market
capitalisation IPO of John Laing Group plc in 2015.
• Chair of the Investment and Investment Portfolio Committees and Trustee
of the John Laing Charitable Trust.
• Former Managing Director of Amey plc.
• Senior roles at Scottish Power plc and Blue Circle plc.
• Fellow and Chartered Director of the Institute of Directors.
• Postgraduate degrees in Management Studies and Agricultural Engineering
LICG.
Additional current appointments
• Mr Waples does not hold any Non-Executive Director positions at any
other listed company.
June Aitken
Independent Director
Appointed: April 2022
Relevant prior experience / education
• Over 30 years' experience in global equity markets as an institutional
stockbroker.
• Involved in establishing fund structures in multiple jurisdictions.
• Held senior roles at HSBC Bank plc including as Global Head of Emerging
Market Equity Distribution and Head of Strategy Management.
• Founding partner and investor of Osmosis Investment Management LLP, a
specialist investment manager focused on environmental and responsible
investment mandates.
• Member of the Chartered Banker Institute.
• Degree in Politics, Philosophy and Economics from Oxford University.
• Managing Director at UBS (AG), Head of Global Equity Product, and Global
Head of Asian Equities.
• Acts as a mentor to female entrepreneurs.
Additional current appointments
• Non-Executive Chair of CC Japan Income & Growth Trust plc.
• Non-Executive Director and Chair of the Audit Committee at JP Morgan
Asia Growth and Income plc.
• Non-Executive Director and Chair of the Nomination Committee at Schroder
Income Growth Fund plc.
Biographies of Directors
Management Board
Duncan Ball
CEO
Duncan Ball has worked in the infrastructure sector, investment banking and
advisory business for over 30 years. As CEO of BBGI, he is responsible for
BBGI's overall strategy and management. He has been a member of the Management
Board, the Group's Investment, Valuation and ESG Committees since their
inception. He is also a shareholder representative and holds directorships in
key investments of BBGI.
Mr Ball has led BBGI since IPO in 2011 and its subsequent growth from 19
assets to 56 assets.
Michael Denny
CFOO
Michael Denny has over 20 years' experience in corporate finance, with a focus
on the infrastructure and real estate sectors.
He joined BBGI in early 2012, shortly after its IPO. As CFOO (Chief Financial
and Operating Officer) of the Group, he is primarily responsible for all
corporate financial matters including financial oversight, capital management,
financial reporting, UK listing requirements, corporate tax strategy, foreign
exchange hedging and regulatory compliance. Mr Denny has been a member of the
Management Board and the Group's Investment and Valuation Committees since
2013 and the ESG Committee since its inception.
Mr Denny originally served as CFO and his role was subsequently expanded to
CFOO, effective from 1 February 2024.
Andreas Parzych
Executive Director
(from 31 January 2024)
Andreas Parzych has over 20 years' experience in infrastructure investment
across transport, Social Infrastructure, and renewables in Europe and North
America. Upon his appointment to the Management Board, Mr Parzych joined the
Group's Investment, Valuation and ESG Committees. He is also a shareholder
representative and holds directorships in key investments of BBGI.
Mr Parzych joined BBGI in 2016 as Director, Head of Business Development,
responsible for identifying, evaluating, and executing investment
opportunities for the fund, and has been actively involved in implementing
BBGI's growth strategy since joining the Company.
Board leadership and purpose
BBGI's governance structure
BBGI is internally managed and operates with a two-tier governance structure,
comprising a Management Board and a Supervisory Board. The respective
responsibilities of each Board are set out below.
Management Board
• Sets and implements the Group's overall strategy.
• Operational management, including discretionary investment management
of BBGI's investments.
• Implements risk management, monitoring operational risks and measures
related to risks.
• Oversees BBGI's administration, including preparing its semi-annual
valuations, statutory financial statements, management accounts and its
business plan.
• Primary interface for BBGI's investor relations.
• Manages BBGI and its representation vis-à-vis third parties (e.g.
entry into agreements on BBGI's behalf).
BBGI manages investments internally through its Management Board, without an
external adviser. Accordingly, its Executive Directors do not serve on the
Supervisory Board or its Committees.
Supervisory Board | Exercises powers attributed by the Articles,
including:
• Supervising and monitoring appointments of the Company's service
providers and its subsidiaries.
• Reviewing remuneration, compensation and other benefits of the
Management Board and BBGI employees.
• Considering issues, purchases, or redemptions of shares proposed by
the Management Board.
• Reviewing and monitoring compliance with the corporate governance
framework and financial reporting procedures.
• Reviewing and approving interim and annual financial statements.
• Providing general oversight to the Management Board and Group
operations without direct involvement in the day-to-day management.
• Appointing and, where relevant, dismissing members of the Management
Board.
The Supervisory Board consists solely of independent Non-Executive Directors
and the Chair, who was considered independent at the time of her appointment.
Directors on both the Management and Supervisory Boards are accountable under
the Listing Rules, as the Listing Rules do not distinguish between different
types of directors.
While BBGI's shares are listed on the Official List of the UK Listing
Authority, the Supervisory Board and the Management Board jointly approve any
circulars or corporate actions requiring a publicly-listed board's
recommendation under the Listing Rules. Any responsibility applied to
directors under the Listing Rules applies to all of BBGI Directors.
At all times and where necessary, the Management and Supervisory Boards, the
Committees, and each Director individually, have access to independent
professional advice at BBGI's expense.
Stakeholder engagement
Effective engagement with BBGI's stakeholders is integral to realising the
Company's vision and purpose. As a non-domiciled, publicly-listed entity on
the London Stock Exchange, the UK Companies Act 2006 (the 'CA2006') has
limited application. Nonetheless, BBGI acknowledges the significance of
stakeholder interests, and the continuing requirements under Section 172(1)
CA2006 for boards of UK large or publicly-listed companies to take stakeholder
interests into account and report on how they have done so when performing
their duties. As a member of the AIC, BBGI aligns with the AIC Code
requirement for the matters set out in Section 172 to be reported on by all
companies, irrespective of domicile and provided there is no conflict with
local company law.
Details on how BBGI upholds these principles, prioritises shareholder
interests, and delivers sustainable outcomes are outlined in the
Sustainability section and in the Sustainability Report.
In accordance with the AIC Code, BBGI's Management Board and Director of
Investor Relations engages regularly with its major shareholders. The Chairs
of the Supervisory Board and its Committees are also available for shareholder
engagement, including attending shareholder General Meetings.
General Meetings
2024
BBGI's AGM was held on 30 April 2024. There were no other shareholder meetings
held during the year.
2025
A General Meeting is proposed for 10 April 2025.
BBGI's next AGM will be held on Wednesday 30 April 2025. The Notice of
Meeting, proposed Resolutions and Explanatory Notes, will be circulated to
shareholders in accordance with the regulatory deadlines, and will be
available on BBGI's website.
Continuation vote:
Article 29 of the Articles requires that shareholders be offered a
continuation vote every two years. Notwithstanding the Offer, a continuation
vote will be held at the Company's upcoming 2025 AGM.
Share capital
The issued share capital of the Company is 714,876,634 ordinary shares of
no-par value. All of the issued ordinary shares rank pari passu. Treasury
shares do not count towards the total number of Ordinary Shares with voting
rights. The Company holds as Treasury shares 3 Ordinary Shares.
Voting rights
There are no special voting rights, restrictions, or other rights attached to
the ordinary shares, nor are there any restrictions on the voting rights they
carry.
Purchase of ordinary shares by the Company in the market
In order to assist in the narrowing of any discount to the NAV at which the
ordinary shares may trade from time to time and/or to reduce discount
volatility, the Company may, subject to shareholder approval:
- make market purchases of up to 14.99% annually of its issued ordinary
shares; and
- make tender offers for ordinary shares.
During the year, the Company purchased 1,107,386 shares into treasury, of
which 1,107,383 were re-allocated to satisfy share plan vestings which occured
during the year. The most recent authority to purchase ordinary shares, which
may be held in treasury or subsequently cancelled, was granted to the Company
on 30 April 2024. This authority expires on the date of the next Annual
General Meeting ('AGM') to be held on 30 April 2025, at which point the
Company will propose to renew its authority to buy back ordinary shares.
Board members and other interests
The members of the Management Board also serve as managers of BBGI Management
HoldCo S.à r.l, a wholly owned subsidiary of BBGI. Mr Ball, Mr Denny and Mr
Parzych hold service contracts with BBGI Management HoldCo S.à r.l.
The CEO and the CFOO have twelve-month notice periods, while Mr Parzych has a
six-month notice period. The Company has not provided loans or guarantees for
the benefit of any Director.
All members of the Supervisory Board are considered independent Board members,
as they:
- have not been employees of BBGI;
- have not had material business relationships with BBGI;
- have not received performance-based remuneration from BBGI;
- do not have family ties with any of BBGI's advisers, Directors, or senior
employees;
- do not hold cross-directorships or have links with other Directors through
involvement in other companies;
- do not represent a significant shareholder; and
- have not served on the Board for more than nine years.
Details of Directors' holdings in BBGI's shares are disclosed in the
Remuneration Report.
Internal controls
The Management Board maintains robust processes and internal controls to
manage risk, oversee the internal control framework and aligns the principal
risks with the long-term strategic objectives. Policies and procedures are
monitored continuously and reviewed annually. The Management Board oversees
the Compliance and Risk functions, which in turn continually assess the
compliance and risk frameworks. This includes delegate oversight and due
diligence processes, such as in-person meetings and on-site attendance at
delegate offices. While these controls enable BBGI to manage the risks, they
cannot fully eliminate the possibility of failure or provide absolute
assurance against material misstatement or loss. Refer to the Principal Risks
section and the Audit Committee Report in this Annual Report for further
information.
Substantial shareholdings
As at 31 December 2024, BBGI had 714,876,634 shares in issue, all with equal
voting and dividend entitlements. Additionally, the Company held three shares
in Treasury, which carry no voting or dividend entitlements. Pursuant to DTR 5
of the FCA's Disclosure Guidance and Transparency Rules, we had received
notice of substantial interests (5% or more) in the total voting rights of
BBGI as shown in the table below, in compliance with DTR 7.2.6R.
Name Held as at 31 Dec 2024 % of total share capital((i))
M&G plc((ii)) 59,502,903 9.42%
Schroders plc((iii)) 56,304,964 8.48%
Rathbones Group plc 31,569,569 5.01%
Evelyn Partners Limited((iv)) 28,885,124 5.00%
Morgan Stanley & Co. International plc((v)) - -
Millennium International Management - -
LP(vi)
(i) The percentage of voting rights detailed in the table above was
calculated at the time of the relevant disclosure made in accordance with Rule
5 of the Disclosure Guidance and Transparency Rules, and the shareholders'
percentage interests in BBGI may have changed since that date.
(ii) Subsequent to the end of the reporting period, the Company was
notified on 7 February 2025 that M&G plc had reduced its shareholding to
below 5%.
(iii) Subsequent to the end of the reporting period, the Company was
notified on 5 March 2025 that Schroders plc had reduced its shareholding to
below 5%.
(iv) Subsequent to the end of the reporting period, the Company was notified
on 14 March 2025 that Evelyn Partners Limited had reduced its shareholding to
below 5%.
(v) Subsequent to the end of the reporting period, the Company was
notified on 13 March 2025 that Morgan Stanley & Co. International plc had
reached a notifiable shareholding of 5.15%.
(vi) Subsequent to the end of the reporting period, the Company was notified
on 26 March 2025 that Millennium International Management LP had reached a
notifiable shareholding of 6.06%.
Division of Responsibilities
Management Board
General
The Management Board comprises three members, each contractually engaged by
BBGI Management HoldCo S.à r.l.. As a result, none of the members are deemed
independent under AIC Code Provision 10. However, the Management Board's
functions are overseen by the Supervisory Board, which meets the independence
criteria set out in Provision 10.
While BBGI's two-tier structure is not explicitly covered by the AIC Code, the
independent Supervisory Board ensures the Company is compliant with AIC Code
Provision 10. The Company's Articles require annual re-election of the
Management Board members by the Supervisory Board, not by shareholders, which
deviates from the AIC Code Provision 23. However, as the Management Board
carries out the role of Investment Manager, the Supervisory Board deems it
appropriate that it elects the members of the Management Board. The
Supervisory Board members, however, are subject to annual re-election and
dismissal by shareholders, thereby aligning with Provision 23.
ESG Committee
The ESG Committee oversees the management of material ESG activities and
reports to the Management Board on any recommendations. The ESG Committee
meets at least quarterly. In 2024, its members included the Management Board,
the Director ESG/Sustainability, the Head of Asset Management and the Company
Secretary. Through the ESG Committee, the Management Board remains informed
about the dual aspect of sustainability risks: the risk of financial,
operational, and any direct physical impacts on BBGI's portfolio.
Delegated functions
BBGI is required to have dedicated Risk Management, Compliance and Internal
Audit functions under AIFM Law; and each function must be functionally and
hierarchically separate from all other operating unit functions. Grant
Thornton Vectis remained as the Company's Internal Auditor for 2024.
BBGI's Head of Risk and Compliance is authorised by the CSSF to perform the
Risk Management and Compliance functions, and reports to the Management Board
and Supervisory Board, or one of its formally constituted Committees, as well
as to the Designated Board Members.
Our Management Board is responsible for the correct and effective operation of
the below delegated functions.
Other key delegates and providers:
Central Administrative Agent, Depositary, and Paying Agent: CACEIS Bank, Luxembourg Branch
(formerly known as CACEIS Investor Services Bank S.A.)
Depository (UK): MUFG Corporate Markets Trustees (UK) Limited ('MUFG') (formerly known as Link
Market Services Trusteees Limited)
Central Securities Depository (CSD): LuxCSD S.A. ('Lux CSD')
Principal Agent: Banque Internationale à Luxembourg S.A. ('BIL')
Information Technology: G.I.T.S. PSF
BBGI's shares trade on the main market of the London Stock Exchange and MUFG
is the depository, receiving agent and UK transfer agent. All shares are held
in dematerialised form, in accordance with the Luxembourg Dematerialisation
Law.
LuxCSD acts as the Company's European Economic Area ('EEA')-based CSD. BIL
acts as the required intermediary between the Company and LuxCSD. Both LuxCSD
and BIL are classified as delegates and are subject to BBGI's delegate
oversight framework.
G.I.T.S. PSF provides a fully outsourced IT solution to BBGI, including
private managed hosting, backups and IT security services.
BBGI is registered under the UK's National Private Placement Regime ('NPPR'),
allowing us to continue to market BBGI's shares in the UK.
Re-election of Management Board members
The Supervisory Board evaluates the performance of the Management Board and
its Directors annually to ensure they operate effectively and efficiently, and
that the appointment of the individual Directors is in the best interests of
BBGI and its shareholders. Following satisfactory evaluations carried out in
2024, the Supervisory Board renewed Mr Denny's appointment for a year with
effect from 30 April 2024, and Mr Ball's for a year with effect from 5 October
2024. Mr Parzych was initially appointed a member of the Management Board on
31 January 2024 for a year and during the reporting period the Supervisory
Board renewed his appointment for a further year with effect from 31 January
2025.
Supervisory Board
General
The Supervisory Board consists of five independent Non-Executive Directors,
elected annually at the AGM, where they may seek re-election.
The Supervisory Board meets at least four times a year and also have regular
contact with the Management Board and the Company's corporate brokers. The
Supervisory Board considers items in the Notices and Agendas of meetings.
These are formally circulated to its members before each meeting as part of
the Board papers. The Supervisory Board are updated on investment performance
on a quarterly basis to ensure adherence to BBGI's investment policy and
guidelines, including investment criteria and return targets. At each meeting,
the Management Board reports KPIs on operating performance, cash projections,
investment valuations and corporate governance matters. The Supervisory Board
also reviews the compliance framework and risk profile, the performance of key
service providers, investment and financial controls, marketing and investor
relations, peer group information, industry issues, general administration and
other matters relevant to fulfil its oversight remit. At each meeting, members
must advise of any potential or actual conflicts of interest before
discussion.
Re-election of Supervisory Board members
In accordance with the Articles, all members of the Supervisory Board will
offer themselves for re-appointment at BBGI's forthcoming AGM in 2025.
Following a successful performance evaluation, the Supervisory Board
recommends re-election of each of its members. If the Delisting Date does not
occur the Supervisory Board will be re-appointed until the conclusion of the
Company's 2026 AGM. If the Delisting Date occurs prior to this date, the
re-appointment of the members of the Supervisory Board will cease on the
Delisting Date.
Committees
The Supervisory Board has established Audit, Remuneration and Nomination
Committees. Each of these Committees operates within clearly defined terms of
reference, which are prepared in accordance with the relevant Disclosure
Guidance and Transparency Rules, AIC Code provisions and Luxembourg
regulations, as applicable. The roles and responsibilities of each Committee,
as set out in their Terms of Reference, are reviewed at least annually, and
consider relevant regulatory changes and recommended best practice. Any
proposed amendments are referred to the Supervisory Board for approval.
Committee members and their Chairs are appointed by the Supervisory Board, and
are confined at all times to consist solely of Non-Executive Directors.
Details of Committee membership is contained in the Supervisory Board
biography section. Committee Chairs attend the AGM and are available to
address shareholder queries. Details of the roles and responsibilities of each
Committee are outlined below, and their activities during 2024 are further
described in the individual Committee reports within this Annual Report.
Copies of the Terms of Reference for each Committee are available on BBGI's
website at www.bb-gi.com (http://www.bb-gi.com) .
Audit Committee
In accordance with Provision 29 of the AIC Code and the Disclosure Guidance
and Transparency Rules (DTR) rule 7.1, the Company has established an Audit
Committee responsible for overseeing compliance with accounting standards,
financial and regulatory controls, and ensuring the integrity, fairness,
balance, and clarity of the Group's Annual and Interim Reports, financial
statements, and formal announcements. The Committee also reviews the
semi-annual valuations of BBGI's investment portfolio, monitors internal
financial controls and risk management frameworks, and oversees the Internal
Audit function, including appointment and removal of the third-party service
provider and approval of the tri-annual audit plan. Additionally, it reports
to the Supervisory Board, recommending resolutions on the appointment,
re-appointment, removal, remuneration, and terms of the External Auditor while
assessing the auditor's independence, objectivity, and effectiveness in line
with Luxembourg and UK regulations. The Committee ensures compliance with the
Non-Assurance Services Policy and relevant legislation and reviews the
adequacy of whistleblower protections, enabling employees and stakeholders to
confidentially report misconduct, fraud, bribery, or discrimination. If there
is a conflict between the provisions of the AIC Code and the provisions of the
law on the Audit Profession, BBGI complies with the provisions of the law on
the Audit Profession and discloses any conflict.
As External Auditor, PwC attends specific Audit Committee meetings to consider
BBGI's Annual and Interim Financial Statements, where PwC presents the
conclusions of its work, and whenever the Audit Committee considers necessary.
As Internal Auditor, Grant Thornton Vectis is also invited to attend at least
annually to present on its internal audit work and to discuss the robustness
and suitability of the Company's internal controls framework and processes.
Additionally, there are occasions throughout the year when the External
Auditor and Internal Auditor may engage directly with Committee members,
independent of the presence of the Management Board.
The Audit Committee meets at least three times per year, and whenever the
Audit Committee Chair may require. Any member of the Audit Committee, or the
External Auditor, may request additional meetings. Other Directors, employees
and third parties may be invited by the Audit Committee to attend meetings
when appropriate. While Ms Whitney is not a Committee member, as Supervisory
Board Chair, she is invited to attend each of its scheduled meetings. The
Supervisory Board considers that at least one Committee member has recent and
relevant financial experience so that the Committee can discharge its
functions effectively.
Remuneration Committee
In accordance with AIC Code Provision 37, the Company has established a
Remuneration Committee, to which the Supervisory Board has delegated its
responsibilities for: establishing the general principles of the policy for
Directors' remuneration; setting remuneration for the Management Board;
determining the terms of the Remuneration Policy; and supervising remuneration
structure and levels for other employees' compensation and other benefits and
entitlements. The Remuneration Committee reports its findings and any
recommendations to the Supervisory Board.
The Remuneration Committee meets at least twice a year, and whenever the
Remuneration Committee Chair may require. Additional meetings may be requested
by any member of the Remuneration Committee, if necessary. Other Directors,
employees and third parties may be invited by the Remuneration Committee to
attend meetings as and when appropriate. The Chair of the Supervisory Board is
a member of the Remuneration Committee, but cannot be Chair of the
Remuneration Committee.
The Remuneration Committee's annual reporting is prepared in compliance with
reporting obligations outlined in the relevant Luxembourg legislation. To
provide greater transparency to shareholders and employees alike, BBGI
voluntarily discloses additional remuneration detail beyond the legal
reporting obligations. For further details, please refer to the Remuneration
Committee Report.
Management Engagement Committee
Given the Company's internally managed structure and the Management Board's
primary role in overseeing third party service providers, along with the size
of the Supervisory Board, the Supervisory Board performs the functions of a
Management Engagement Committee. Ms. Whitney serves as the Chair. As a result,
BBGI considers it unnecessary to have a separately constituted management
engagement committee, as prescribed under AIC Code Provision 17, as there
would be no material benefit to BBGI and the shareholders.
In its role as Management Engagement Committee, the Supervisory Board met four
times in 2024 to consider, together with the Management Board, the
performance, effectiveness and appropriateness of the ongoing appointments of
BBGI's third-party service providers under Principle H of the AIC Code.
Nomination Committee
In accordance with AIC Code Provision 22, the Company has established a
Nomination Committee, which has responsibility for overseeing appointments and
renewals to the Management Board, the composition of the Supervisory Board and
any new appointments to it (subject to shareholder and CSSF approval). The
Nomination Committee also reviews the succession plans for both the Management
and Supervisory Boards and oversees the annual performance evaluation of the
Supervisory Board and its formally constituted Committees.
In recruiting new directors, the Nomination Committee actively seeks diversity
by gender, ethnicity, nationality and other criteria, and selects members
based on merit, with relevant and complementary skills to maximise stakeholder
value.
The Nomination Committee meets at least twice a year, and at other times as
the Nomination Committee Chair requires, in accordance with its Terms of
Reference. If necessary, Nomination Committee members can request additional
meetings. Other Directors, employees and third parties may be invited by the
Nomination Committee to attend meetings when appropriate.
In accordance with AIC Code Provision 22, the Chair does not chair any
Committee meeting where her succession is discussed.
Composition, succession and evaluation
BBGI believes the Supervisory Board members have an appropriate combination of
skills, experience and knowledge to fulfil their obligations. They also have a
breadth and diversity of experience relevant to BBGI, and the Company believes
any future changes to the composition of the Supervisory Board can be managed
without undue disruption. The Company is unaware of any circumstances that are
likely to impair, or could appear to impair, the independence of any of the
Supervisory Board members.
Board composition, tenure and diversity
The Nomination Committee and the Management Board regularly review BBGI's
succession plans, but ultimate decision-making rests with the Supervisory
Board. To ensure continuity and stability, the Non-Executive Directors are
expected to retire on a staggered basis, as part of a structured succession
plan.
The Management and Supervisory Boards take gender and ethnic diversity into
consideration and fully support the goals of FTSE Women Leaders and the Parker
Review on Ethnic Diversity on boards. Both the Management Board and the
Supervisory Board, through the Nomination Committee, regularly review the
policies on diversity, equity and inclusion.
The Parker Review reporting is limited to UK-based employees, at which level
BBGI's ethnic minority representation would be 50% at the level reporting
directly to the Management Board. In accordance with the Parker Review's
recommendation for disclosure of a target for ethnic minority representation
below the Board level by 2027, BBGI has set a target of at least 15% of its
UK-based senior staff to be from an ethnic minority.
BBGI's low employee turnover rate remains a core strength, with only a single
departure in the year across the consolidated Group. As well as sourcing a
replacement, we strengthened the team with two additional hires.
Further details are available in the Nomination Committee Report.
Nomination Committee Report
Annual statement from Nomination Committee Chair
I am pleased to present the Nomination Committee (the 'Committee') Report for
the financial
year ended 31 December 2024 on behalf of the Supervisory Board.
Committee membership Meeting attendance
Sarah Whitney 4/4
Andrew Sykes 4/4
Jutta af Rosenborg 4/4
Chris Waples 4/4
June Aitken 4/4
Full details of the Committee's role and key responsibilities are contained in
the Corporate Governance section.
Key activities during the year
Annual performance review
In accordance with AIC Code Provision 26, an independent externally
facilitated review of the Supervisory Board was conducted during the year by
Trust Associates 2022 LLP ('Trust Associates'). The scope of the performance
evaluation included the Supervisory Board, its Committees, the Chair and
individual Directors. Trust Associates is independent of BBGI, with no
affiliations to the Company or its Directors.
Trust Associates' evaluation of the Company was done in accordance with the UK
Corporate Governance Institute's Code of Practice for board reviewers.
Individual interviews were held with each of the Supervisory Board members.
Additional meetings were also held with each member of the Management Board,
the Company Secretary and a representative from the Company's Corporate
Brokers. Trust Associates were provided with Committee and Board packs from
the Board meetings held in the preceding year and two Trust Associates
representatives were invited to attend and observe meetings held by the
Supervisory Board, the Audit Committee, the Remuneration Committee and the
Nomination Committee.
Trust Associates concluded that the Supervisory Board functions well as a
cohesive whole, with a strong mix of appropriate skills that enables them to
challenge the Management Board effectively, with positive engagement between
the Boards. Trust Associates further concluded that the Supervisory Board had
a strong focus on corporate governance and compliance, and was operating
effectively in performing its role of protecting shareholder value, and
further that each of the Committees were also operating effectively.
Steps have already been taken to implement the findings of Trust Associates'
review where they are considered relevant and in the interest of the Company
and its stakeholders.
In presenting the results of its review Trust Associates made a number of
recommendations regarding communications on strategy and portfolio evolution,
and some further minor improvements designed to smooth the governance process.
The Committee considers that appropriate steps are being taken to tackle each
of these recommendations, and for which in most cases improvements were
already in hand.
An externally-facilitated performance review of myself, as the Supervisory
Board Chair, was also undertaken through Trust Associates. This review took
place under the auspices of the Senior Independent Director. The review
concluded that I have been a strong Chair and have consistently performed
effectively since my appointment to the position in 2020, including during the
reporting period.
In the intervening years between externally-facilitated performance
evaluations, the Supervisory Board conducts formal self-evaluations of its
performance, including its Chair. The Committee additionally considers the
term and independence of each Supervisory Board member on an annual basis. The
evaluation process is conducted by way of a mixture of questionnaires and
individual conversations with the Chair, or the Senior Independent Director in
the case of the Chair's evaluation, and in accordance with AIC Code Provision
14.
The Committee, and the Supervisory Board as a whole, consider that these
reviews play an important part in ensuring a suitable mix of skills,
experience and knowledge are in place; that each body is functioning
effectively; and that the performance of each body and individual member
continues to be effective.
Supervisory Board composition, tenure, and diversity
As part of its annual review of the Supervisory Board's composition, the
Committee evaluated the relationship between the Supervisory and Management
Boards, along with the balance of skills and expertise among the Non-Executive
Directors. The collective experience of the Supervisory Board ensures a strong
relationship with the Management Board, promoting a culture of constructive
dialogue and rigorous inquiry, which enables thorough scrutiny and effective
oversight.
The Committee believes that the size, structure, and composition of the
Supervisory Board and its Committees are well-suited to meet the Company's
needs and to carry out their responsibilities effectively. We are grateful for
the continued support from shareholders, demonstrated by the reappointment of
all Directors at the April 2024 AGM, which reinforces our commitment to
serving shareholders' best interests through robust oversight of the Company
and Management Board.
Our continued commitment to equitable and diverse representation is
demonstrably clear. We place value in these goals as we consider that diverse
representation provides our Supervisory Board and our wider team of employees
with the best balance of skills and expertise to effectively carry out their
roles and serve the needs of all our stakeholders. Consequently, BBGI strongly
supports initiatives and regulatory efforts promoting gender and ethnic
diversity in publicly-listed companies, including the FTSE Women Leaders and
Parker Review. The Company operates under a two-tier Board system, which
separates the roles of its Supervisory Board and Management Board. As at
reporting date, the Supervisory Board has 60% female representation, including
a female Chair and Audit Committee Chair, ranking among the highest in the
FTSE 350 on that metric. Additionally, female representation among direct
reports to the Management Board currently stands at 42%, highlighting BBGI's
commitment to diversity and inclusion at senior levels.
As at 31 December 2024, our team of 25 colleagues comprised 13 different
nationalities. 20% of the Supervisory Board and 15% of direct reports to the
Management Board are considered to be from an ethnic minority background as
categorised by the Parker Review. When considering only our UK-based
employees, of which there are two, and as the Parker Review encourages, the
ethnic minority representation increases to half (50%) of our senior
personnel.
Gender and Ethnic Minority Diversity
Female representation on the Supervisory Board remains unchanged at 60%
Position / Level Male Female Ethnic Minority (Parker Review Categorisation)
Supervisory Board 40% 60% 20%
Management Board 100% - -
Direct Reports to Management Board 62% 38% 15%
For more information about our approach to diversity in general, please see
our separate Sustainability Report
Succession planning
During the year, the Committee assessed capacity within the organisation, key
person risks and continuous development of appropriate succession plans for
the Supervisory Board, its Committees and the Management Board.
The Supervisory Board members have an average tenure of 3.6 years, with the
longest serving Director, Jutta af Rosenborg, having served for six years.
This provides us with a mature and experienced Board of independent Directors
who are able to robustly challenge the Management Board on its decisions as
well as support them in the execution of the Company's long-term strategy.
Accordingly, the Committee has determined that no further appointments to the
Supervisory Board are currently necessary.
As in previous years, we have reviewed our policy on the Appointment and
Tenure of the Supervisory Board Directors, with no material amendments deemed
necessary. Notwithstanding the AIC's more permissive stance on the topic, our
policy retains the provision limiting the tenure of our Supervisory Board
Directors to nine years, save for an extension of the Chair in exceptional
circumstances, such as to facilitate an effective succession plan.
The Committee serves an important role in succession planning at both the
Supervisory and Management Board levels, which it undertakes with full
consideration given to BBGI's current positioning and future long-term
strategic direction. Key person risks, the existing skills and experience
within the business, along with those that could be gained by new hires, and
those that might be lost with any potential future departures, form a key part
of those considerations. The Management Board remains responsible for
recruitment of all senior positions below Board-level.
The process of appointing any new Directors to either Board is led by the
Nomination Committee. Our approach is to make appointments across all levels
based on merit, and the strengths, skills and experience that individual
candidates bring to the composition and balance of the Management and
Supervisory Boards.
Annual Committee planning and member development
As in previous years, the Committee reviewed its formalised annual work plan,
which was developed to ensure sufficient consideration is given to all
material matters, with regular and thorough discussions.
During the year, the induction process was reviewed, along with the
information provided to any new Directors, be they Non-Executive or Executive.
As a result, a number of additional useful topics and meetings with key
personnel and other stakeholders were added to the information-sharing
process. While no imminent hiring is currently planned, we believe that the
changes will serve any incoming Director well and ensure a smooth and fully
informed induction process.
We maintain an internal record of all training completed by staff and
Directors. Supervisory Board members were invited to participate in
Company-wide training sessions covering Anti-Money Laundering (AML),
Counter-Terrorism Financing (CTF) and cybersecurity. Additionally, during the
year, the Supervisory Board, alongside the Management Board, received training
on the Digital Operational Resilience Act, which came into force in January
2025.
Having assessed the ongoing commitment and suitability of each of the
Supervisory Board members as independent Non-Executive Directors of the
Company, the Committee and I are satisfied that each Supervisory Board member
has undertaken relevant training and furthermore each of them remains
well-informed about the latest regulatory and operational developments
pertinent to BBGI's business.
Renewal of Executive Director mandates
The Supervisory Board reviewed the performance of each Management Board
member. Each member is considered to have performed their duties effectively
and was reappointed for another year.
The Committee reviewed the plans for all senior positions for succession
planning. These plans are regularly updated by the Management Board and
reviewed by the Nomination Committee at least annually.
The year ahead
The Supervisory Board benefits from a mature, well-tenured membership, without
any concerns of over-familiarity that might arise from overly lengthy terms of
service. As such, the Committee's focus for the year ahead will be on the
continued alignment of BBGI's strategic direction with its core values and how
we can best serve them through the processes in place for any new
appointments, succession plans for both the Supervisory and Management Boards
and our oversight of the talent development for a diverse pipeline for
succession.
Approval
This Report was approved by the Board on 27 March 2025 and signed on its
behalf by:
Sarah Whitney
Nomination Committee Chair
Audit Committee Report
Annual statement from Audit Committee Chair
I am pleased to present the Audit Committee (the 'Committee') Report for the
financial year ended 31 December 2024 on behalf of the Supervisory Board.
Committee membership* Meeting attendance
Jutta af Rosenborg 5/5
June Aitken 5/5
Andrew Sykes 5/5
Chris Waples 5/5
*The Supervisory Board Chair attends Committee meetings at the invitation of
the Committee Chair
Full details of the Committee's role and key responsibilities are contained in
the Corporate Governance section.
Key activities during the year
During the reporting period, the Committee considered the following at its
meetings, among others:
Annual and semi-Annual Valuation Reports
Review of investment portfolio valuations, focusing on assumptions,
sensitivity scenarios, and market movements, with input from external auditors
and third-party specialists.
Impact of DORA (Digital Operational Resilience Act)
Review of DORA's impact on BBGI's business, critical processes, and control
frameworks, including presentations and external training.
Review of Internal Controls and Risk Profile
Annual review of internal controls, adoption of more detailed reporting
mechanisms, and analysis of key risk indicators.
Artificial Intelligence Risks
Assessment of AI-related risks, including cybersecurity and IT system
failures, and associated controls in place.
External Auditor's Independence and Reappointment
Review of the reappointment of PricewaterhouseCoopers as External Auditor,
with a focus on independence and non-audit services.
Review of the Effectiveness of the Internal Auditor
Review of the Internal Auditor's Annual Regulatory Report, including
favourable assessments of asset management processes and the 2023-2025
triennial audit plan.
Training and Compliance Oversight
Oversight of compliance training for staff and board members, with periodic
updates on regulatory matters and internal control frameworks.
ESG/Sustainability Workstreams
Presentation from the Director of ESG/Sustainability on the status of BBGI's
ESG workstreams and related topics.
Valuation of investments
As in previous years, the Committee engaged with the Management Board,
External Auditor, and Internal Auditor on a wide range of topics. The fair
valuation of the Company's underlying investments remains the most significant
risk of material misstatement in the financial statements. To mitigate this
risk, the Committee conducts pre-publication reviews of the Company's annual
and interim financial statements, allowing for in-depth discussions with the
Management Board. These reviews include examining the twice-yearly valuations
of underlying investments, accompanied by NAV sensitivity analyses, which are
independently reviewed by a third-party valuation expert.
The Committee challenged the investment valuations by seeking detailed
explanations from the Management Board, evaluating the rationale behind
applied assumptions, judgements, and methodologies. The External Auditor, who
attends Committee meetings at least twice annually, also contributes to this
process, including their valuation specialist's review of the adequacy of
investment valuations. Key areas of focus include fair valuation assumptions,
discount rates, and the macroeconomic environment.
The Committee received updates from the External Auditor on the results of
their controls testing and audit procedures, emphasising the risk of material
misstatement during the audits of the Annual and the review of the Interim
Financial Statements. Based on this rigorous process, the Committee concluded
that the valuation methodology applied to the Group's investments in 2024 was
appropriate and that the resulting investment values were reasonable.
External Auditor independence and effectiveness
In assessing the ongoing independence of the External Auditor, the Committee:
- reviewed the External Auditor's Report outlining the extent of non-audit
services provided to the Company and its subsidiaries, ensuring such services
were within permissible limits and did not impair independence;
- received confirmation from the External Auditor regarding compliance
with ethical independence requirements and the application of safeguards,
along with arrangements to identify, manage, and disclose potential conflicts
of interest. The External Auditor confirmed its continued independence from
the Group in line with Regulation (EU) No 537/2014 and the AIC Code; and
- evaluated engagements entered into before the Auditor's appointment,
including associated changes in personnel, to ensure independence was
maintained.
In evaluating the ongoing effectiveness of the External Auditor's work, the
Committee considered:
- the fulfilment of the agreed audit plan and any significant variations;
and
- feedback from the Management Board on the performance and responsiveness
on quality of the audit team.
The Committee also maintained direct communication, including face-to-face
meetings between the External Audit Partner and I, to ensure specific
expectations, particularly on topics of relevance to the Company, were
addressed within the audit plan.
During the year, the Committee observed a high level of professional
scepticism demonstrated by the External Auditor, especially regarding the
valuation process. The Auditor's probing questions on key areas such as
discount rates and macroeconomic assumptions were met with robust and detailed
responses from Management, reflecting a rigorous audit process.
The Committee has reviewed the overall audit process and confirms its
satisfaction with the adherence to established terms of engagement. The audit
was conducted in alignment with the principles of independence and
objectivity, demonstrating an effective and transparent approach. The
Committee further acknowledges the External Auditor's contribution to
safeguarding the integrity of the Company's financial reporting, which
ultimately supports shareholder confidence.
Non-assurance services
The Committee reviews any non-assurance services provided by the External
Auditor. In line with the Non-Assurance Services Policy, the Committee will
continue to assess and, where appropriate, approve such engagements for
controlled subsidiaries, provided they are not prohibited services.
As a general principle, the Committee does not approve the use of the External
Auditor for non-assurance services unless there is a clear and specific
justification. For the financial year ended 31 December 2024, the External
Auditor did not provide any non-assurance services to the Group, and no
non-audit-related fees were paid to the External Auditor during the year.
Internal controls and risk management
The Committee reviews the effectiveness of the Group's internal financial
control systems.
As an extension to the work carried out last year in respect of the framework
for assessing the effectiveness of BBGI's internal controls, I have instigated
regular one-to-one meetings with our Head of Compliance and Risk to ensure
that the framework remains appropriate to the present risks and operational
strategy. Moreover, as part of the Committee's regular review of the Internal
Auditor's work and audit plan, it was agreed that the Internal Auditor would
provide additional disclosure in its reporting to the Committee on the
assessments undertaken and conclusions drawn pertaining to the Company's
internal controls framework and associated policies and procedures.
As a Committee, we believe that the framework remains effective and continues
to operate within the three lines of defence:
- The first line of defence is the business units that take or acquire
risks under predefined policy and limits and carry out controls.
- The second line of defence is monitoring the effectiveness and
implementation of those controls on an ongoing basis by the Compliance and
Risk Management functions.
- The third line of defence is the internal audit function providing an
independent, objective and critical review of the first two lines of defence,
and which itself has been delegated to an external and independent third
party, providing further reassurance.
In addition to the (aforementioned) enhancement to the Committee's existing
engagement with the Head of Compliance and Risk and Internal Auditor, the
Committee continues to receive regular presentations throughout the year from
relevant members of staff and third parties in respect of the Risk Management,
Compliance and Internal Audit functions:
- Risk Management: The Head of Risk and Compliance, as Risk Manager,
presents the Annual Risk Report directly to the Committee, with Supervisory
Board members also present. These sessions provided opportunities for the
Committee to challenge the Risk Manager and Management Board, ensuring robust
oversight. The Committee also reviewed BBGI's risk profile and key risk
indicators, including updates prepared by the Risk Manager and overseen by the
Designated Management Board Member for Risk. During the year, work was
conducted between all parties to enhance the reporting of risks and I will
continue to meet with the Risk Manager and Designated Board Member for Risk to
further develop the informative disclosures already received by the Committee.
- Compliance: Quarterly compliance updates were provided by the Head of
Risk and Compliance, detailing key areas such as AML/CTF, delegate oversight,
conflicts of interest, regulatory watch, cyber-security, and ESG. The
Committee also reviewed the Annual Compliance Report for 2023, submitted to
the Luxembourg Regulator (CSSF). Committee members engaged in productive
debate with the Management Board and Head of Compliance to address queries and
clarify details and satisfy themselves as to the continuing high quality of
the Compliance function, processes and controls.
- Internal audit: The Committee assessed the Internal Auditor's
effectiveness, reviewed the 2023 Annual Regulatory Report, and the work
carried out in line with the 2023-2025 triennial audit plan. Presentations
from the Internal Auditor outlined their scope, objectives, and conclusions,
with modifications made to satisfy the Committee that the scope remains
relevant and suitable under new and upcoming legislation such as DORA. The
Internal Auditor carries out its review as part of our triennial audit plan,
as agreed by the Management Board and this Committee and communicated to the
CSSF. The nature, timing, and extent of the internal audit procedures are
determined by assessing risk related to specific activities, and the
complexity and sophistication of our operations and systems, including how we
control information processing. The Internal Audit Summary Report is presented
to the Audit Committee in March each year and then submitted to the CSSF.
For all three internal control functions - Risk Management, Compliance and
Internal Audit - the Committee and its members are presented with necessary
information to monitor their respective effectiveness. For 2024, the Committee
concluded that each of the Risk Management, Compliance, and Internal Audit
functions have performed effectively and continue to ensure the Company has
suitable processes and controls in place.
Annual Deep Dive: DORA
In alignment with its Annual Work Plan, the Committee allocates time to
explore specific topics preselected earlier in the year. In 2024, considerable
attention was given to the requirements of the DORA legislation. As such, it
was considered prudent for the Committee and Supervisory Board members to be
presented to on the topic at regular intervals, which was done by the Head of
Compliance and Risk and Operations Manager. Additionally, the Management Board
and the Supervisory Board were provided with training by external experts on
the topic, to ensure there was a clarity in understanding the impact of DORA
and suitable implementation plan development.
The combination of these presentations and training sessions satisfied the
Committee that the Management Board and wider team at BBGI have undertaken a
thorough gap analysis and implemented a comprehensive remediation plan. The
extensive work provides confidence in BBGI's ability to manage the evolving
requirements of DORA, along with any other potential incoming regulatory and
legislative changes.
Sustainability
During the year, the Director ESG/Sustainability, who chairs BBGI's ESG
Committee, presented to the members of the Committee and Supervisory Board the
status of the Company's various ESG workstreams and related topics, including;
- the complexities of managing multiple ESG ratings and standards to
ensure the diverse requirements of the Company's investor base was met;
- growing regulatory oversight in the EU and UK of greenwashing; and
- the ongoing compliance and disclosure requirements to address SFDR, for
which BBGI is in scope, as well as UK SDR regulations, for which the Company
is not in scope but are nonetheless recognised as important given our
predominantly UK investor base.
The Committee is satisfied that BBGI continues to give careful consideration
to its impact on the environment and the communities that we serve, further
evidenced by our high scoring across multiple ratings agencies. The Company
makes significant disclosures on its Sustainability credentials and activities
in its annual Sustainability Report, and I would draw attention to the clear
and comprehensive reporting contained therein.
Going concern and viability statements
Having regard to our assets and liabilities, the Committee considered the
Viability and Management Board Responsibilities Statements, and the processes
and assumptions underlying the statements, considering:
- BBGI's investment policy and investment pipeline;
- the long-term and contractual nature of BBGI's investments;
- investment reviews;
- BBGI's risk profile and key risk indicators (including principal risks
and uncertainties) and mitigating actions put in place;
- relevant financial and economic information and long-term assumptions;
- scenario testing;
- annual and semi-annual valuations of the investments; and
- whether the Management Board has diligently carried out its
responsibilities in:
- selecting suitable accounting policies and applying them consistently;
- making judgements and estimates that are reasonable and prudent;
- stating whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
- preparing the financial statements on a going concern basis, unless it
would be inappropriate to presume that the Group will continue in business;
- maintaining proper accounting records that disclose with reasonable
accuracy the Group's financial position, and enable it to ensure that the
financial statements comply with all relevant regulations; and
- safeguarding the Group's assets and taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Having considered all of the above, and the discussions held with the
Management Board, the Committee is satisfied the Viability Statement and the
Management Board Responsibilities Statement are prepared on an appropriate and
reasonable basis.
Regulatory environment
The Committee was regularly updated on regulatory changes during the course of
2024, including shifts in scope, regulatory interpretations, and potential
future developments. These updates were supported by the Regulatory Watch
maintained by the Compliance function and included in the routine compliance
reports presented to the Committee by the Head of Compliance and Risk and the
Designated Management Board Member for Compliance. During the year we received
additional assurance from the Head of Compliance, who presented to the
Committee on the sources relied upon, reviews undertaken and mitigation
measures in place to ensure the Regulatory Watch was as comprehensive,
broadly-scoped and up-to-date as possible.
Focus for 2025
In 2025, we will maintain our oversight of both the External Auditor and the
Internal Auditor and continue to evaluate their effectiveness. Our focus will
remain on monitoring the integrity of the Company's financial reporting and
disclosures, assessing the performance of the internal audit function, and
addressing material regulatory changes as they arise.
As part of our Annual Work Plan we will continue to have dedicated sessions to
deeper analysis of specific topics in 2025.
The Committee will also continue its broader efforts to monitor the
effectiveness of internal controls, financial reporting, and disclosures,
while assessing the impact of political, tax, and regulatory developments in
key regions, including the recent developments in audit and corporate
governance in the UK.
Together with all Committee members, I am available at the AGM to respond to
any shareholder questions regarding the Committee's activities.
Approval
This Report was approved by the Board on 27 March 2025 and signed on its
behalf by:
Jutta af Rosenborg
Audit Committee Chair
Remuneration Committee Report
Annual statement from Remuneration Committee Chair
I am pleased to present the Remuneration Committee (the 'Committee') Report
for the financial year ended 31 December 2024 on behalf of the Supervisory
Board.
Committee membership Meeting attendance
Andrew Sykes 5/5
June Aitken 5/5
Jutta af Rosenborg 5/5
Chris Waples 5/5
Sarah Whitney 5/5
Full details of the Committee's role and key responsibilities are contained in
the Corporate Governance section.
Performance in 2024
2024 was a year of resilient operational performance, underpinned by the
quality of BBGI's asset base, active asset management, and disciplined capital
allocation. Financial performance was muted with the Company delivering a NAV
total return of 2.1% on a per share basis with returns principally impacted by
adverse foreign exchange rate movements and elevated discount rates across
geographies.
The defensive and global nature of the portfolio again provided stable,
predictable and inflation-linked cash flows. We increased our FY 2024 dividend
by 6% to 8.40p, after a similar increase in FY 2023. Over the medium term, we
expect cash flows to continue to support a healthy dividend cover and provide
headroom to sustain a progressive dividend policy well into the future.
Despite consistently delivering strong operational performance, we continue to
recognise a disconnect between private market valuations of similar
high-quality core infrastructure assets, as evidenced by recent secondary
market transactions, and the valuations currently ascribed by public markets.
Transaction activity in the secondary market continues to reinforce our
confidence in the attractiveness of these asset classes. During the year, we
continued to closely monitor the Company's share price and the discount
compared to published NAV, with the Management Board remaining focussed on
asset optimisation and portfolio construction, in order to generate additional
value for shareholders over the long term.
Looking beyond financial performance, BBGI continues to recognise the
importance of positive sustainability practices at both corporate and
portfolio levels. Our long-standing commitment to responsible investment and
the integration of sustainability factors as a core pillar of our investment
strategy have allowed us to progress against our ESG targets.
Key decisions during the year
The Committee's work during 2024 included the following key decisions:
- approval of the annual Remuneration Committee cycle;
- assessing performance against the 2023 Short-Term Investment Plan
('STIP') targets and approving the outcome;
- formalising the assessment of the 2020 Long-Term Incentive Plan ('LTIP')
outcome;
- finalising termination arrangements for the former co-CEO and terms for
the appointment of Andreas Parzych, Head of Business Development, to the
Management Board;
- setting metrics and targets for 2024 STIP and LTIP awards; and
- reviewing and updating the Company's Remuneration Policy (the 'Policy')
and the Remuneration Committee Terms of Reference.
Detailed decisions of the Committee
Salary increases
The annual salary review is effective from 1 May each year. During the year,
the Committee carefully considered salary increases for 2024, taking into
account the approach for the Company's employees as a whole, changes in
responsibilities following Management Board changes at the start of the year,
and performance in role. No salary increases were awarded to the Management
Board in 2023.
Following careful consideration, the Committee awarded salary increases of 10%
to both the CEO and CFOO. For the CEO, this reflects the change in his role to
sole CEO from 31 January 2024. The increase for Michael Denny reflects the
expansion of his operational responsibilities as CFOO. The increase is below
the average increase awarded to our employees over the two years since the
last adjustment to Management Board salaries.
Andreas Parzych's base salary was €250,000 on appointment to the Management
Board on 31 January 2024. No changes were made to his salary during the year.
Annual bonus (FY 2024) outcome
For the financial year ended 31 December 2024, the CEO, CFOO and the former
co-CEO were each eligible for a maximum bonus of 150% of base salary, and the
Head of Business Development was eligible for a maximum bonus of 75% of base
salary. The Committee evaluated the award of the annual bonus based on a range
of challenging financial and strategic KPIs. While financial performance was
modest in terms of NAV total return, the Management Board demonstrated
resilient operational performance and made progress on several key targets. As
a result, the annual bonus outcome was 60% of the maximum opportunity for
2024, which is lower than the outcomes in previous years. Further information
is provided below. Under the Policy, one-third of the earned bonus is deferred
in shares for three years.
LTIP outcome (2021 award)
In December 2021, LTIP awards were granted to the then co-CEOs and CFO. These
equated to an award value of 200% of salary for the co-CEOs, and 150% of
salary for the CFO. Awards were based on a stretching NAV total return target
(90% weighting) and Scope 1, 2 and 3 Corporate GHG emissions reduction (10%)
targets.
NAV total return measures a combination of dividend growth and NAV per share
over a three-year period to 31 December 2024.
Performance conditions overall were satisfied to an extent of 47% of the
maximum for the CEO and the former Co-CEO and 50% for the CFOO. This outcome
reflects performance over the three-year performance period, during which the
Company achieved a three-year NAV total return of 18.0%. Corporate GHG
emissions were 59% against the 2019 baseline, achieving a strong performance.
Supervisory Board remuneration
The last review of Supervisory Board fees took place in 2022, and fees were
unchanged in 2023. A review of Chair and Non-Executive Director fees was
carried out with reference to market data and consideration of expanding time
commitments and responsibilities, in particular for the Chair and Committee
Chair roles. With effect from 1 January 2024, the Chair fee was increased to
£95,000, and Committee Chair fees were increased to £12,500. There was no
change to the Non-Executive Director base fee.
Management Board changes
Frank Schramm retired with effect from 31 January 2024. As detailed in last
year's Report, his notice period ran until the end of 2024. In accordance with
his service contract, he was entitled to the full FY 2024 annual bonus but was
not granted an LTIP in February 2024. He has been treated as a good leaver in
accordance with the incentive plan rules based on his stated intention to
retire from full-time executive and/or advisory roles.
Andreas Parzych was appointed to the Management Board with effect from 31
January 2024, in the role of Head of Business Development. As disclosed in
last year's Report, his base salary on appointment was set at €250,000 per
annum. In line with other Management Board members, Mr Parzych receives a
pension allowance of 15% of base salary and is eligible to participate in the
existing short-term and long-term incentive plans, with a maximum award
opportunity of 75% of salary under both plans.
Looking forward
In light of the recommended cash offer announcement on 6 February 2025, there
is currently no intention to grant 2025 LTIP awards. However, should the
recommended transaction not close, the Committee will review the proposed 2025
awards and performance conditions and appropriateness of these at the time of
grant. Any 2025 LTIP grant would be disclosed in an announcement to the
market. Further details regarding post-offer retention arrangements in
relation to the Management Board are provided in the Offer Document, available
on the Company's website: www.bb-gi.com/investors/offer/.
Andrew Sykes
Remuneration Committee Chair
27 March 2025
Remuneration at a glance
Key remuneration principles
BBGI's remuneration framework is based on the following key principles:
The objectives of the Policy are to:
- attract and retain highly qualified executives and employees with a
history of proven success;
- align the interests of BBGI's Management Board and employees with
shareholders' interests, executing our investment policy and fulfilling our
investment objectives;
- support strategy and promote our long-term sustainable success;
- establish performance goals that, if met, are accretive to long-term
shareholder value; and
- link compensation to performance goals and provide meaningful rewards
for achieving these goals. This incorporates both financial and non-financial
performance indicators, including key sustainability goals and health and
safety factors.
In considering Management Board remuneration during 2024, the Committee
acknowledged the principles of transparency, clarity, simplicity, risk
management, proportionality, and alignment to culture.
Risk and conduct
The Policy encourages sound and efficient management of risks and does not
encourage excessive risk-taking. The Remuneration Policy is consistent with
sound and effective risk management through:
- implementing a sound governance structure for establishing goals and for
communicating performance goals to colleagues to ensure transparency;
- including financial and non-financial objectives in performance and
result assessments; and
- ensuring an appropriate mix of fixed and variable compensation to
discourage inappropriate risk-taking.
Ex-post risk adjustment mechanisms, in the form of market standard malus and
clawback arrangements, are in place for the Management Board, who are all
identified as material risk takers, in accordance with Luxembourg's AIFM law
of 12 July 2013.
In evaluating the components of variable remuneration, we consider long-term
performance, and current and future risks associated with it, and the lifetime
of the assets under management.
During the year, the Committee reviewed the Policy and its implementation, and
concluded that the relevant remuneration processes and procedures were
implemented in accordance with the Policy. Furthermore, the Committee
concluded that the Policy remains consistent with and promotes sound and
effective risk management and does not encourage levels of risk-taking which
are inconsistent with the risk profile of BBGI.
Below we have set out total remuneration for the current Management Board
members for the year ended 31 December 2024.
Frank Schramm stepped down from the Management Board on 31 January 2024.
Details of payments made in line with his contractual entitlements are
provided below in the section 'Payments made to former Directors'.
Management Board remuneration framework summary for 2024
Element
Base salary Base salaries xix :
CEO: C$993,123 xx CFOO: €419,929(xx ) Head of Business Development:
€250,000
Pension and benefits Management Board: 15% of salary (cash allowance).
The CEO receives a monthly car allowance.
Annual bonus (STIP) CEO and CFOO: performance measures established entitling beneficiaries to 50%
of salary at threshold performance, 75% of salary at target and 150% at
maximum.
Head of Business Development: performance measures established entitling
beneficiary to 37.5% of salary at threshold performance, 56.25% of salary at
target and 75% at maximum.
Under the Policy, one-third of the earned bonus is deferred in shares for
three years.
STIP is based on a balance of strategic, financial, operational, compliance
and sustainability metrics, with robust quantitative and qualitative
performance requirements set for threshold, target, and maximum performance.
Long-Term Incentive Plan (LTIP) Normal annual maximum LTIP levels are set out below.
CEO: 50% of salary at threshold performance, 100% of salary at target and 200%
at maximum.
CFOO: 50% of salary at threshold, 75% of salary at target and 150% of salary
at maximum.
Head of Business Development: 18.75% of salary at threshold, 37.5% of salary
at target and: 75% of salary at maximum.
Awards subject to performance measured over three years.
In light of the recommended cash offer announcement on 6 February 2025, there
is currently no intention to grant 2025 LTIP awards (with a performance period
1 January 2025 to 31 December 2027). However, should the transaction not
complete, the Committee will review the proposed 2025 awards and performance
conditions and appropriateness of these at the time of grant. Any 2025 LTIP
grant would be disclosed in an announcement to the market.
Shareholding requirements The CEO and CFOO are required to build and maintain a minimum holding of BBGI
shares with a value of 200% of salary xxi (#_edn21) . The Head of Business
Development is required to build and maintain a minimum holding of BBGI shares
with a value of 100% of salary.
Post-employment shareholding requirements: Management Board members are
required to hold 100% of salary in shares for two years after leaving BBGI.
Single figure table - Management Board Duncan Ball Michael Denny Andreas Parzych
(CEO) (CFOO) (Head of Business Development)
In Sterling 2024 2023 2024 2023 2024
Base salary 550,292 538,189 344,778 332,058 211,674
Benefits 15,506 15,165 - - -
Annual bonus 510,740 563,376 319,997 347,598 95,253
Pension 85,123 80,728 53,333 49,809 31,751
LTIP 340,075 757,242 165,536 377,713 -
Total fixed 650,921 634,082 398,111 381,867 243,425
Total variable 850,815 1,320,618 485,533 725,311 95,253
Total remuneration 1,501,736 1,954,700 883,644 1,107,178 338,678
The figures in the table above are derived from the following:
a. Base salary Salary earned over the year, shown in the reporting currency of the Group
(Sterling). Mr Ball receives all cash entitlements in Canadian Dollars. Mr
Denny and Mr Parzych receive all cash entitlements in Euro. The Sterling
amounts are converted using the average exchange rate for the respective
financial year. For the year ended 31 December 2024, the relevant average
exchange rates were £1 = C$1.7500 and £1 = €1.1811.
b. Benefits The taxable value (gross) of benefits received in the year. These are
principally car allowances.
c. Annual bonus (STIP) The value of the bonus earned in respect of the financial year. Under the
Policy, one-third of the earned bonus is deferred in shares for three years.
Below we describe achievements against the performance measures for the latest
financial year.
d. Pension The pension figure represents the cash value of any pension contributions,
including any cash payments in lieu of pension contributions made in the year.
e. Long-term incentives The value of LTIP shares vesting, calculated by the estimated number of shares
that vest in respect of the 2021 LTIP award multiplied by the average share
price over the last quarter of the year ended 31 December 2024 (£1.2607).
Additional disclosures for
the single figure table
Management Board members receive an annual base salary, payable monthly in
arrears. Both Michael Denny and Andreas Parzych receive salaries in Euro
(€419,929 and €250,000 respectively). Mr Ball receives his salary in
Canadian Dollars (C$993,123). The table above presents figures in Sterling,
the Group's reporting currency. The changes in these figures, when compared,
comprise both the 10% increase to the CEO and CFOO's salaries in the year, as
well as movement as a result of exchange rate fluctuations.
The combined annual base salary received by the members of the Management
Board during the year ended 31 December 2024 was £1,106,744 (2023:
£1,388,691).
Base salary Base salary at 31 December 2024 Base salary at 31 December 2023
Duncan Ball £551k £535k
Michael Denny £348k £331k
Andreas Parzych £207k -
Taxable benefits and pension-related benefits
The CEO received a car allowance for 2024 amounting to £15,506 (2023:
£15,165). The Management Board also each received an annual cash payment for
pension, retirement, or similar benefits, equating to 15% of their annualised
base salary as at 31 December 2024.
BBGI has fewer than 30 employees within its consolidated group across six
different countries and individual pension arrangements across the team vary
by location. In Luxembourg, where most of the Group's employees are located,
normal pension contributions are made up of 8% of salary from the employer, 8%
of salary from the state and 8% from the employee.
STIP - annual bonus for year ended 31 December 2024
The table below summarises the STIP performance metrics and achievements in
respect of the financial year ended 31 December 2024. The maximum STIP
opportunity for the CEO and the CFOO is 150% of base salary. The maximum STIP
for the Head of Business Development is 75% of base salary.
The Remuneration Committee is responsible for determining both whether the
relevant financial and non-financial performance objectives have been
satisfied and the level of award under the STIP for the relevant year. The
Management Board delivered resilient performance against a number of
operational targets during the year. However, the reduction in NAV per share
and the absence of any acquisitions in the year resulted in certain targets
falling below the threshold criteria. Consequently, no payment under the STIP
is made if performance is below the threshold criteria.
For 2024, awards of 90% of base salary were achieved by the CEO and CFOO. An
award of 45% of base salary was achieved by the Head of Business Development.
Under the Policy, one-third of the earned bonus is deferred in shares for
three years. During the year ended 31 December 2024, the total amount accrued
in respect of the 2024 STIP amounted to £925,990 (2023: £1,453,683). Cash
payments under the STIP are made in Canadian Dollars and Euros.
As reported last year, in line with his service contract, the former co-CEO
was entitled to a full year bonus equal to 150% of base salary. The actual
out-turn was 60% of maximum, in line with the CEO, as disclosed above. More
information can be found in the 'Payments to former Directors' section of this
report.
Assessment and performance criteria and weighting
Performance measure Assessment and performance achievement Weighting Outturn
(% of maximum)
Threshold performance Target performance Maximum performance
(CEO/CFOO: 50% vesting Head of Business Development: 75% vesting)
(CEO/CFOO: 33% vesting (100% vesting)
Head of Business Development: 50% vesting)
Key financial targets - dividends A dividend of 8.4pps was declared for 2024, representing dividend growth of 6 30% 50%
per cent.
Key financial targets - NAV per share The Company's NAV per share decreased by 3.5% during the year, primarily
driven by an increase in the average discount rate applied and adverse foreign
exchange rate movements. As a result, the threshold performance requirement
was not met, and no payout will be made under this element.
Operational financial targets - ongoing charge, cash management and budgetary BBGI maintained a low comparative ongoing charge at 0.92%, attributed to its 15% 100%
controls efficient and cost-effective internal management, with above threshold
performance.
Effective cash management was consistently maintained, ensuring appropriate
cash balances, and robust dividend coverage in line with maximum performance.
Expenses were well controlled, with an outturn below budget in line with
maximum performance.
Portfolio evolution Throughout the year, the Management Board assessed various acquisition 25% 0%
opportunities seeking to extend the portfolio life and improve longer term
returns. However, adhering to the Company's disciplined capital allocation
strategy, it was decided not to proceed with these opportunities as they were
not deemed accretive to the overall portfolio key performance metrics.
This performance measure was to be assessed by the Remuneration Committee in
the light of market conditions in 2024. No payout will be made under this
element.
Portfolio management The Committee considered management performance against key metrics including 20% 100%
portfolio controls; organisational effectiveness; and project risk management.
The Committee considered that performance continued to be outstanding in the
following key areas:
High levels of asset availability at 99.9%;
No material lock-ups or defaults; and
Further de-risking of the portfolio was achieved, with no remaining
refinancing risk.
ESG The Committee considered the significant progress against the Company's ESG 10% 100%
objectives during the reporting period, including the following achievements:
All investments monitored for ESG performance in accordance with BBGI's ESG
KPI tracking tool.
Conducted external assurance of both financed and corporate emissions.
Maintained high ESG ratings from UN PRI, ISS and Sustainalytics.
Engaged with Portfolio Companies boards to conduct decarbonisation studies,
supporting our net-zero commitments.
Voluntary compliance with TCFD disclosure requirements.
Effective oversight, regulatory watch, and risk management The Committee considered the effectiveness of the control frameworks in place Underpin Achieved
to ensure continued regulatory compliance, the strategy for future regulatory
adaptability and the quality of the risk management and reporting.
Achievements include the following:
Regulatory Compliance: AIFMD compliance maintained.
No Regulatory Issues: No issues related to FATCA, IFRS, AIFMD, CSSF, UKLA,
etc.
Forward-Looking Approach: Proactive plan in place to address future regulatory
changes.
Robust Risk Management: Strong risk management framework with high-quality
reporting
Overall bonus out-turn (% of maximum) 60.0%
2021 LTIP award
In December 2021, LTIP awards were granted to the then co-CEOs and CFO. These
equated to an award value of 200% of salary for the co-CEOs, and 150% of
salary for the CFO. Awards were based on a stretching NAV total return
target (90% weighting) and Scope 1, 2 and 3 Corporate GHG emissions reduction
(10% weighting) targets.
NAV total return measures a combination of dividend growth and NAV per share
over a three-year period to 31 December 2024.
Performance conditions overall under the 2021 awards were satisfied to an
extent of 47% of the maximum for the CEO and the former Co-CEO and 50% for the
CFOO. This outcome reflects performance over the three-year performance
period, during which the Company achieved a three-year NAV total return of
18%. Corporate GHG emissions were 59% against the 2019 baseline, thereby
resulting in a maximum performance achievement.
LTIP award (2025 grant)
In light of the recommended cash offer announcement on 6 February 2025, there
is currently no intention to grant 2025 LTIP awards. However, should the
transaction not complete, the Committee will review the proposed 2025 awards
and performance conditions and appropriateness of these at the time of grant.
Any 2025 LTIP award would be disclosed in an announcement to the market.
Share settlements
During the year ended 31 December 2024, we settled our 2020 award obligation
by delivering the respective share entitlement to each Management Board member
from treasury shares. In total, 761,216 shares were transferred from treasury
to satisfy the net entitlement after taxes.
As at the date of this Report, there are no amounts set aside, needing to be
set aside or accrued by the Company to provide pension, retirement, or similar
benefits to any Management Board members.
Total basic and variable remuneration for the financial year
The total basic remuneration paid to all employees (including Management Board
and the former co-CEO) during 2024 was £3.7 million (2023: £3.6 million).
The total amount accrued for cash-settled variable remuneration at 31 December
2024 was £1.5 million. The total variable remuneration paid in cash in 2024
relating to the 2023 financial year was £1.4 million (2023: £1.9 million).
Restricted share plan
We operate a restricted share plan for most employees (excluding the
Management Board members) with ordinary BBGI shares awarded, subject to a
three-year vesting period. During 2024, we recorded an expense of £0.4
million (2023: £0.3 million) for these restricted share awards. The primary
vesting condition is continued employment at BBGI.
Payments made to former Directors and payments for loss of office during the
year
As announced on 24 November 2023, Frank Schramm informed the Board of his
intention to retire and stepped down from the Management Board on 31 January
2024. In accordance with his service contract, his notice period ran until the
end of 2024 during which time he remained available to assist the Company if
needed.
Payments during the year
During 2024, Frank Schramm received a total of £594,519 in fixed payments.
This comprised salary and benefits for January and salary and benefits during
gardening leave from February to December of £518,820, and pension payments
for the period £75,699.
Upcoming payments
In line with his service contract, Frank Schramm was eligible to participate
in the 2024 annual bonus (STIP), which will be settled in May 2025. Under
the Policy, one-third of the earned bonus is deferred in shares for three
years. The total value of the settlement will be the Euro equivalent
£454,194.
The Committee agreed to treat Frank Schramm as a good leaver based on his
stated intention to retire from full-time executive and/or advisory roles in
accordance with the provisions of the incentive plan rules in respect of his
outstanding incentive awards. His 2021 LTIP performance conditions were
satisfied in line with other Management Board members, as described above,
with a value of £326,945.
This results in total payments to Frank of £1,375,659 in respect of 2024.
Future in-flight LTIP awards will also be pro-rated for time and performance
in line with good leaver provisions.
Additional payment in relation to the one remaining award, the 2023-2025 LTIP
award, will be made following the performance period and disclosed in the
relevant Directors' Remuneration Report.
Single total figure table - Supervisory Board
The Supervisory Board members are our Independent Non-Executive Directors, and
they are paid a fixed quarterly fee in GBP. The Remuneration Committee
considers the Non-Executive Directors' fees annually within the approved
maximum aggregate remuneration cap, as approved by the Company's shareholders.
No member of the Supervisory Board is entitled to vote on his or her own
individual remuneration. Supervisory Board members are not entitled to any
other fees, pension payments, incentive plans, performance-related payments,
or any other form of compensation except for reasonable out-of-pocket expenses
and ex gratia fees, which would be considered for an exceptional or
substantial increase in the members' workload.
Single total figure of remuneration - Supervisory Board
During the year ended 31 December 2024, the Supervisory Board received fees
totalling £345,000 (2023: £315,000). The table below outlines the fees paid
in Sterling to each of the Supervisory Board members.
Single Total Figure Table Base fee Senior Non-Executive Director Committee Chair Total
- Supervisory Board
In Sterling 2024 2023 2024 2023 2024 2023 2024 2023
June Aitken 55,000 55,000 - - - - 55,000 55,000
Jutta af Rosenborg 55,000 55,000 - - 12,500 5,000 67,500 60,000
Andrew Sykes 55,000 55,000 5,000 5,000 12,500 5,000 72,500 65,000
Chris Waples 55,000 55,000 - - - - 55,000 55,000
Sarah Whitney 95,000 80,000 - - - - 95,000 80,000
Total 315,000 300,000 5,000 5,000 25,000 10,000 345,000 315,000
There were no appointments to or retirements from the Supervisory Board in the
year.
Supervisory Board fees
Details of Supervisory Board fees are below.
Supervisory Board fees 2024 2023
In Sterling
Chair 95,000 80,000
Non-Executive Director 55,000 55,000
Senior Independent Director1 5,000 5,000
Committee Chair1 12,500 5,000
1 These additional fees are paid to the Senior Independent Director,
Remuneration Committee Chair and the Audit Committee Chair.
The last review of Supervisory Board fees took place in 2022, and fees were
unchanged in 2023. A review of Chair and Non-Executive Director fees was
carried out by reference to market data and consideration of expanding time
commitments and responsibilities, in particular for the Chair and Committee
Chair roles. With effect from 1 January 2024, the Chair fee was increased to
£95,000, and Committee Chair fees were increased to £12,500. There was no
change to the Non-Executive Director base fee.
The fees paid to the Supervisory Board are subject to a shareholder approved
maximum aggregate remuneration cap of £400,000.
Share interests and statement of Directors' shareholdings
Total share interests as at 31 December 2024
The Directors' interests and those of their connected persons in BBGI's
ordinary shares as at 31 December 2024 are below.
Shares owned by Directors:
Management Board At At
31 December 2024
31 December 2023
Duncan Ball 1,447,788 1,071,358
Michael Denny 873,459 650,485
Andreas Parzych 63,008 n/a
Supervisory Board At At
31 December 2024
31 December 2023
June Aitken 70,325 56,000
Jutta af Rosenborg 8,000 8,000
Andrew Sykes 60,000 40,000
Chris Waples 28,802 17,321
Sarah Whitney 59,641 59,641
Awards under share plans: Award At Granted in Vested in Lapsed or At
Management Board
the year
31 December
31 December the year(ii) forfeited in
the year 2024
2023(i)
Duncan Ball LTIP 2,633,478 - 574,165 - 2,059,313
Michael Denny LTIP 1,235,411 - 286,394 - 949,017
Andreas Parzych LTIP 120,341 - - - 120,341
(i) Reflects maximum potential number of shares under all the awards granted,
including the 2020 award settled in May 2024.
(ii) In light of the recommended cash offer announcement on 6 February 2025,
there is currently no intention to grant 2025 LTIP awards. However, should the
transaction not complete, the Committee will review the proposed 2025 awards
and performance conditions and appropriateness of these at the time of grant.
Any 2025 LTIP award would be disclosed in an announcement to the market.
Shareholding guidelines:
The Committee has adopted a shareholding guideline for the Management Board,
which requires a shareholding equivalent to 200% of salary for the CEO and
CFOO and 100% of salary for the Head of Business Development. The respective
Management Board members' achievement of this guideline at 31 December 2024 is
summarised below:
Management Board Shares counting towards the guideline at Required shareholding to achieve(i) Percentage of shareholding requirement achieved
31 December 2024
Duncan Ball 1,447,788 699,903 207%
Michael Denny 873,459 440,930 198%
Andreas Parzych 63,008 163,293 39%
(i) In the case of the CEO and CFOO, two times the base salary with effect
from 1 May 2023 is divided by the Company share price on the same date. The
minimum holding requirement is fixed for a period of three years and will be
reset in 2026. In the case of the Head of Business Development, annual base
salary with effect from 31 January 2024 is divided by the Company share price
on the same date. The minimum holding requirement will be reset in 2026.
(ii) In accordance with the terms of his agreement, Mr Parzych has a period of
36 months from the date of his appointment to the Management Board to build a
shareholding in BBGI shares equivalent in value to 100% of his basic fee
entitlement.
Post-employment shareholding requirements: Management Board members are
required to hold shares to the value of 100% of salary for a period of two
years after leaving the Company.
Other information
Advisers
Deloitte LLP is engaged to provide independent advice to the Committee as
required. Deloitte is a member of the Remuneration Consultants Group and
voluntarily operates under the Code of Conduct in relation to executive
remuneration consulting in the UK. Deloitte LLP's fees for providing
remuneration advice to the Committee were £10.8k for 2024. The Committee
regularly assesses if Deloitte's appointment remains appropriate or should be
put out to tender, while considering the Remuneration Consultants' Group Code
of Conduct.
Consideration by the Directors of matters relating to Directors' remuneration
Committee responsibilities and composition
BBGI's Remuneration Committee comprises five members: Andrew Sykes, Sarah
Whitney, Jutta af Rosenborg, June Aitken and Chris Waples. Andrew Sykes was
appointed as Remuneration Committee Chair in April 2022. The Terms of
Reference for the Remuneration Committee are available here
www.bb-gi.com/investors/policies/remuneration-committee-terms-of-reference/
The Committee is responsible for establishing the general principles of the
policy for Directors' and staff remuneration and for setting the remuneration
for the Management Board and for the Supervisory Board. In doing so, the
Committee is responsible for ensuring that the remuneration of the Management
Board supports the delivery of BBGI's strategic and operational goals without
encouraging undesirable risk-taking behaviour. This is achieved through the
Committee overseeing and approving all aspects of Management Board
remuneration, including development of the remuneration policy, and monitoring
pay arrangements for the wider workforce.
There were five scheduled Committee meetings plus further ad-hoc meetings
during the year. During the year, all members of the Committee were and remain
independent, and represent a broad range of backgrounds and experience to
provide balance and diversity.
The following parties may attend Committee meetings by invitation in relation
to its consideration of matters relating to Directors' remuneration: CEO,
CFOO, Head of Business Development, Company Secretary and Deloitte LLP. No
Management Board member is involved in deciding their own remuneration outcome
and no attendee is present when their own remuneration is being discussed.
Remuneration and AIFM law
In 2013, the European Securities and Markets Authority ('ESMA') published its
final guidelines on sound remuneration policies under the AIFMD. These
guidelines indicate that remuneration disclosures may be made on a
'proportional' basis and acknowledge that the application of proportionality
may lead exceptionally to the 'disapplication' of some requirements, provided
this is reconcilable with the risk profile, risk appetite and strategy of the
AIFM and the AIFs it manages.
According to the guidelines, the different risk profiles, and characteristics
among AIFMs justify a proportionate implementation of the remuneration
principles and, where a company chooses to disapply requirements, it must be
able to explain the rationale to a competent authority. No such requirements
were disapplied by the Company during or for 2024.
Employee remuneration
BBGI provides development opportunities for employees to build their careers
and enhance their skills. We encourage and embrace employee diversity,
equality and inclusion. We support and invest in individuals to achieve their
potential across the business.
Our remuneration components combine to ensure an appropriate and balanced
remuneration package that reflects our business units, the job grade and
professional activity, as well as market practice.
Statement of implementation of Directors' Remuneration Policy for the
financial year commencing 1 January 2025
Base salary
Duncan Ball CEO £551k
Michael Denny CFOO £348k
Andreas Parzych Head of Business Development £207k
Following the increases to the CEO and CFOO's salaries during the year, the
Committee believe the remuneration packages offered across the Management
Board to be competitive in the context of the wider market. Nevertheless, the
Committee will continue to keep the remuneration packages under review
throughout the year to ensure that our compensation policies remain relevant
and effectively support our strategic objectives in a changing market
environment. As previously noted, Duncan Ball receives his salary in Canadian
Dollars C$993,123, Michael Denny and Andreas Parzych receive salaries in Euros
€419,929 and €250,000 respectively.
Full details of any salary changes made in 2025 will be disclosed in the 2025
Remuneration Committee Report.
Annual bonus (STIP)
The maximum bonus opportunity for 2025 will be 150% of salary for the CEO and
CFOO and 75% of salary for the Head of Business Development. Under the Policy,
one-third of the earned bonus is deferred in shares for three years.
Given the ongoing approach for the Company and the recommended cash offer, the
initial performance targets set for the 2025 annual bonus will relate to the
successful completion of the transaction.
If the transaction does not proceed, the Committee will establish a new set of
stretching financial and strategic targets later in the year, ensuring
alignment with the Company's ongoing objectives. The Committee will disclose
an overview of the finalised performance measures and bonus outcomes in the
2025 Directors' Remuneration Report.
LTIP
In light of the recommended cash offer announcement on 6 February 2025, there
is currently no intention to grant 2025 LTIP awards. However, should the deal
not close, the Committee will review the proposed 2025 awards and performance
conditions and appropriateness of these at the time of grant. Any 2025 LTIP
award would be disclosed in an announcement to the market.
Approval
This Report was approved by the Board on 27 March 2025 and signed on its
behalf by:
Andrew Sykes
Chair of the Remuneration Committee
Viability Statement
As part of the ongoing risk monitoring process, and in compliance with AIC
Code Principle N and Provision 36, the Management Board has conducted a
thorough evaluation of BBGI's viability and prospects for the next five years.
While the average remaining life of the portfolio of assets is 22.2 years,
BBGI believes that five years is an appropriate and acceptable length of time
to consider the risks to BBGI's continuing existence. This judgement involves
a comprehensive review of information at Board meetings, including:
- BBGI's investment policy and the investment pipeline;
- the long-term and contractual nature of BBGI's investments;
- investment reviews;
- BBGI's risk profile and key risk indicators (including the principal
risks and uncertainties);
- relevant financial and economic information and long-term economic
assumptions;
- scenario testing; and
- annual and semi-annual valuations.
This viability assessment is an integral part of BBGI's broader annual risk
review process, with further information on principal risks and uncertainties,
including detailed descriptions of the areas and factors of the risks, and the
processes by which the Management Board monitors, reviews, and assesses them,
outlined in the Risk section of this Annual Report.
BBGI maintains a robust risk and internal controls framework to mitigate the
likelihood and impact of poor decision making, risk-taking above agreed levels
and human error.
The Management Board regularly reviews and assesses principal risks faced by
the business, including those that could threaten the business model,
strategy, solvency, liquidity and future performance. All identified risks are
assessed based on their:
- probability or likelihood of occurrence;
- impact; and
- mitigation measures.
These risks are then scored and ranked in accordance with remaining residual
risk and monitored on an ongoing basis by the Management Board.
In addition to the risk management and the mitigation measures in place, a
valuation of each individual asset is carried out every six months at BBGI's
financial half-year and year-ends (30 June and 31 December). Such valuations
are based on long-term discounted future cash flows; themselves predominantly
based on long-term contracts and other assumptions. Together, these form a key
part of BBGI's overall viability assessment. Once complete, an independent
third-party valuer reviews each portfolio valuation, which is also subject to
audit and review by BBGI's External Auditor, and internal oversight by the
Company's Audit Committee.
A key part of the viability assessment is analysing how BBGI's NAV could be
impacted in stressed macroeconomic scenarios. This provides further insight
into how BBGI could perform if affected by variables and events outside the
control of the Management Board and risk management framework. A more detailed
description of the valuations, assumptions and stress-testing applied is in
the Valuation section of this Annual Report.
Having conducted its assessment, the Management Board has a reasonable
expectation that BBGI will be able to continue in operation and meet all its
liabilities as they fall due, up to March 2030. This assessment is subject to
the following conditions: the availability of sufficient capital and market
liquidity allowing for the refinancing/repayment of any short-term recourse
RCF obligations that may be due; and that BBGI's investments are not
materially affected by changes to government policy, laws, regulations, or
other risks that BBGI does not consider material or probable.
While the Company is currently subject to a takeover approach, the Management
Board has assessed the viability of the Company based on the assumption that
operations will continue in the absence of any definitive change to the
ownership structure.
BBGI is also subject to a biennial shareholder continuation vote, with the
next scheduled to take place this year.
Management Board Responsibilities Statement
The Management Board is responsible for ensuring proper preparation of BBGI's
Annual and Interim Reports and financial statements for each financial
reporting period, in accordance with applicable laws and regulations, which
require it to:
- give a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group as of and at the end of the financial period,
in accordance with International Financial Reporting Standards as adopted by
the European Union and the Listing Rules;
- give a true and fair view of the development and performance of the
business and the position of the Group; and
- give a true and fair description of the principal risks and
uncertainties the Group may encounter and put in place an appropriate control
framework designed to meet the Group's particular needs and the risks to which
it is exposed.
In addition, the Management Board is responsible for ensuring that BBGI
complies with applicable company law and other UK or Luxembourg applicable
laws and regulations.
In preparing these financial statements, the Management Board is responsible
for:
- selecting suitable accounting policies and applying them consistently;
- making judgements and estimates that are reasonable and prudently;
- stating whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
- preparing the financial statements on a going concern basis, unless it
is inappropriate to presume that the Group will continue in business;
- maintaining proper accounting records, which disclose with reasonable
accuracy the Group's financial position and enable it to ensure that the
financial statements comply with all relevant regulations; and
- safeguarding the Group's assets and taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Management Board Responsibilities Statement
We confirm that to the best of our knowledge:
- the financial statements have been prepared in accordance with the
applicable set of accounting standards and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
Group included in the consolidation.
- the Chair's Statement and the Report of the Management Board ('Strategic
Report') include a fair review of the development and performance of the
business, and the position of the Company and Group included in the
consolidation, together with a description of the principal risks and
uncertainties that it faces.
Luxembourg, 27 March 2025
Duncan Ball Michael
Denny Andreas Parzych
CEO
CFOO Executive
Director
Audit Report
To the Shareholders of BBGI Global Infrastructure S.A.
Our opinion
In our opinion, the accompanying consolidated financial statements give a true
and fair view of the consolidated financial position of BBGI Global
Infrastructure S.A. (the "Company") and its subsidiaries (the "Group") as at
31 December 2024, and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with IFRS
Accounting Standards as adopted by the European Union.
What we have audited
The Group's consolidated financial statements comprise:
• the consolidated statement of financial position as at 31 December
2024;
• the consolidated income statement for the year then ended;
• the consolidated statement of other comprehensive income for the year
then ended;
• the consolidated statement of changes in equity for the year then
ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, including material
accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with the Law of 23 July 2016 on the audit
profession (Law of 23 July 2016) and with International Standards on Auditing
(ISAs) as adopted for Luxembourg by the "Commission de Surveillance du Secteur
Financier" (CSSF). Our responsibilities under the Law of 23 July 2016 and ISAs
as adopted for Luxembourg by the CSSF are further described in the
"Responsibilities of the "Réviseur d'entreprises agréé" for the audit of
the consolidated financial statements" section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the International Code of
Ethics for Professional Accountants, including International Independence
Standards, issued by the International Ethics Standards Board for Accountants
(IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the consolidated financial
statements. We have fulfilled our other ethical responsibilities under those
ethical requirements
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the consolidated financial statements of
the current period. These matters were addressed in the context of our audit
of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Investments at fair value through profit or loss In assessing the valuation of investments at fair value through profit or
loss, we performed the procedures outlined below:
Refer to the consolidated financial statements (Note 3, summary of significant
accounting policies; Note 10, Investments at FVPL). We assessed that the investments valuation policy was in compliance with the
applicable accounting framework.
Investments at fair value through profit or loss, GBP 979 million, is the most
significant balance on the consolidated statement of financial position. It We understood and evaluated the design and implementation of key controls,
consisted of availability-style social infrastructure investments through including relevant information technology systems and controls, in place
public private partnership and/or public finance initiatives or similar around the valuation of investments at fair value through profit or loss.
procurement models ("investments") generating long-term predictable cash
flows. We tested key controls performed in the valuation process of investments in
relation to the financial data included in the valuation models, the "look
The valuation of the investments is determined using the discounted cash flow back" comparison of the forecast vs actual cash flows for the previous
methodology. It relies on significant unobservable inputs and requires financial year, as well as other investment model review controls.
significant judgments from the Management Board. A small change in these
assumptions could result in a significant impact on the fair value of the The key controls on which we placed reliance for the purposes of our audit
investments. As a consequence, there is an inherent risk that the fair value were appropriately designed and implemented and were operating effectively.
of these investments may not be appropriate.
In addition, we obtained substantive audit evidence over the valuation of
Taking this into account, coupled with the magnitude of the amounts involved, investments at fair value through profit or loss as follows:
we consider this area as a key audit matter.
- We inquired into the qualification of the Management Board and
its internal valuation team and concluded that they have sufficient experience
and expertise.
- We obtained the overall fair value reconciliation of opening to
closing fair value and corroborated significant fair value movements during
the year, thereby assessing the reasonableness and completeness of the
movement in fair value for the year.
- With the support of our own valuation experts, we assessed that
the Group's valuation methodology was in compliance with the International
Private Equity and Venture Capital Valuation Guidelines and market practice
based on our knowledge of the investments held by the Group and experience of
the industry in which the Group operates.
- For a sample of assets selected via risk and value-based
targeted sampling, we assessed that the key macroeconomic assumptions such as
inflation, deposit rates, corporate tax rates, base discount rate setting were
appropriate and/or within acceptable ranges based on market research. We also
checked that the selected asset specific discount rates were within acceptable
ranges.
- We obtained and read the valuation report prepared by
Management's external valuation expert which confirmed that the portfolio
value prepared by the Management Board was appropriate.
- Finally, for the entire portfolio, we obtained external
confirmation over the existence and percentage of ownership of the investments
held by the Group.
Other information
The Management Board is responsible for the other information. The other
information comprises the information stated in the annual report but does not
include the consolidated financial statements and our audit report thereon.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our
responsibility is to read the other information identified above and, in doing
so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Management Board and those charged with governance for
the consolidated financial statements
The Management Board is responsible for the preparation and fair presentation
of the consolidated financial statements in accordance with IFRS Accounting
Standards as adopted by the European Union, and for such internal control as
the Management Board determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the Management Board is
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Management Board either intends
to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Responsibilities of the "Réviseur d'entreprises agréé" for the audit of the
consolidated financial statements
The objectives of our audit are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an audit report that
includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with the Law of 23
July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with the Law of 23 July 2016 and with ISAs
as adopted for Luxembourg by the CSSF, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal
control;
• obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Group's internal control;
• evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
Management Board;
• conclude on the appropriateness of the Management Board's use of the
going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw
attention in our audit report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the
date of our audit report. However, future events or conditions may cause the
Group to cease to continue as a going concern;
• evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation;
• plan and perform the group audit to obtain sufficient appropriate
audit evidence regarding the financial information of the entities and
business units within the Group as a basis for forming an opinion on the
consolidated financial statements. We are responsible for the direction,
supervision and review of the audit work performed for our purposes of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and
communicate to them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit
matters. We describe these matters in our audit report unless law or
regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
The annual report is consistent with the consolidated financial statements and
has been prepared in accordance with applicable legal requirements.
PricewaterhouseCoopers, Société
coopérative
Luxembourg, 27 March 2025
Represented by
Emanuela Sardi
Consolidated Income Statement
For the year ended 31 December 2024
In thousands of Sterling Notes 2024 2023
Income from investments at fair value through profit or loss 10 29,529 38,865
Other operating income 9 7,539 10,659
Operating income 37,068 49,524
Administrative expenses 6 (13,511) (12,130)
Other operating expenses 7 (693) (686)
Operating expenses (14,204) (12,816)
Results from operating activities 22,864 36,708
Net finance costs 8 (1,671) (2,524)
Net gain on balance sheet hedging 20 6,969 8,874
Profit before tax 28,162 43,058
Tax expense - net 13 (1,962) (2,771)
Profit for the year 26,200 40,287
Earnings per share
Basic earnings per share (pence) 16 3.67 5.64
Diluted earnings per share (pence) 16 3.66 5.62
The accompanying notes form an integral part of the consolidated financial
statements.
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2024
In thousands of Sterling Notes 2024 2023
Profit for the year 26,200 40,287
Items that may be reclassified to profit or loss, net of tax
Exchange difference on translation of foreign operations 15 (4,619) (351)
Items that will not be reclassified to profit or loss, net of tax
Net loss on a previously consolidated subsidiary - (453)
Other comprehensive loss for the year, net of tax (4,619) (804)
Total comprehensive income for the year 21,581 39,483
The accompanying notes form an integral part of the consolidated financial
statements.
Consolidated Statement of Financial Position
As at 31 December 2024
In thousands of Sterling Notes 2024 2023
Assets
Property and equipment 12 1,209 93
Investments at fair value through profit or loss 10,20 979,350 1,047,244
Deferred tax assets 13 - 983
Derivative financial assets 20 6,543 2,663
Other non-current assets 17 1,656 994
Non-current assets 988,758 1,051,977
Trade and other receivables 22 1,103 865
Other current assets 14 1,839 1,329
Derivative financial assets 20 6,575 -
Cash and cash equivalents 11 27,440 9,672
Current assets 36,957 11,866
Total assets 1,025,715 1,063,843
Equity
Share capital 15 852,386 852,386
Additional paid-in capital 23 3,139 3,113
Translation and other capital reserves 15 (24,022) (1,635)
Retained earnings 188,398 202,764
Equity attributable to the owners of the Company 1,019,901 1,056,628
Liabilities
Lease liabilities 12 991 -
Non-current liabilities 991 -
Loans and borrowings 12,17 330 233
Trade and other payables 18 2,863 2,697
Derivative financial liabilities 20 - 2,823
Tax liabilities 13 1,630 1,462
Current liabilities 4,823 7,215
Total liabilities 5,814 7,215
Total equity and liabilities 1,025,715 1,063,843
Net asset value attributable to the owners of the Company 15 1,019,901 1,056,628
Net asset value per ordinary share (pence) 15 142.7 147.8
The accompanying notes form an integral part of the consolidated financial
statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
In thousands of Sterling Notes Share Additional Translation Retained Total
capital paid-in and other earnings equity
capital capital
reserve
Balance as at 1 January 2024 852,386 3,113 (1,635) 202,764 1,056,628
Total comprehensive income for the year ended
31 December 2024
Profit for the year - - - 26,200 26,200
Exchange difference on translation of foreign operation 15 - - (22,417) 17,798 (4,619)
Total comprehensive income for year - - (22,417) 43,998 21,581
Transactions with the owners of the Company,
recognised directly in equity
Cash dividends 15 - - - (58,364) (58,364)
Purchase of treasury shares 15 - - (1,564) - (1,564)
Equity settlement of share-based compensation 15,23 - (2,887) 1,594 - (1,293)
Share-based payment 23 - 2,913 - - 2,913
Balance as at 31 December 2024 852,386 3,139 (24,022) 188,398 1,019,901
In thousands of Sterling Notes Share Additional Translation Retained Total
capital paid-in and other earnings equity
capital capital
reserve
Balance as at 1 January 2023 850,007 2,502 14,371 202,298 1,069,178
Total comprehensive income for the year ended
31 December 2023
Profit for the year - - - 40,287 40,287
Other movements in other comprehensive income - - 3 (456) (453)
Exchange difference on translation of foreign operation 15 - - (16,009) 15,658 (351)
Total comprehensive income for year - - (16,006) 55,489 39,483
Transactions with the owners of the Company,
recognised directly in equity
Scrip dividends 15 1,536 - - (1,536) -
Cash dividends 15 - - - (53,487) (53,487)
Equity settlement of share-based compensation 15,23 888 (1,427) - - (539)
Share-based payment 23 - 2,038 - - 2,038
Share issuance costs 15 (45) - - - (45)
Balance as at 31 December 2023 852,386 3,113 (1,635) 202,764 1,056,628
The accompanying notes form an integral part of the consolidated financial
statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
In thousands of Sterling Notes 2024 2023
Operating activities
Profit for the year 26,200 40,287
Adjustments for:
Depreciation expense 6 188 44
Net finance costs 8 1,671 2,524
Income from investments at fair value through profit or loss 10 (29,529) (38,865)
Gain on derivative financial instruments - net 20 (13,957) (18,107)
Foreign currency exchange gain - net 9 (430) (1,319)
Share-based compensation 23 2,913 2,038
Intercompany restructuring realised at other comprehensive income 15 (4,551) -
Income tax expense - net 13 1,962 2,771
Working capital adjustments:
Trade and other receivables (406) (114)
Other assets (958) (435)
Trade and other payables 135 (780)
Cash used in operating activities (16,762) (11,956)
Interest paid and other borrowing costs (1,466) (2,735)
Interest received 8 554 537
Realised gain/(loss) on derivative financial instruments - net 20 1,380 (913)
Taxes paid (940) (4,285)
Net cash flows used in operating activities (17,234) (19,352)
Investing activities
Distributions received from investments at fair value through profit or loss 10 97,349 94,465
Realised gain/(loss) on derivative financial instruments - net 20 (701) 13,371
Others 45 (14)
Net cash flows from investing activities 96,693 107,822
Financing activities
Dividends paid 15 (58,364) (53,487)
Repayment of loans and borrowings 17 (5,000) (71,404)
Proceeds from the issuance of loans and borrowings 17 5,000 15,000
Purchase of treasury shares (1,564) --
Debt and equity instrument issue cost (1,460) (45)
Net cash flows used in financing activities (61,388) (109,936)
Net increase/(decrease) in cash and cash equivalents 18,071 (21,466)
Impact of foreign exchange on cash and cash equivalents (303) (19)
Cash and cash equivalents as at 1 January 9,672 31,157
Cash and cash equivalents as at 31 December 11 27,440 9,672
The accompanying notes form an integral part of the consolidated financial
statements.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. Corporate information
BBGI Global Infrastructure S.A.,("BBGI", or the "Company" or, together with
its consolidated subsidiaries, the "Group") is an investment company
incorporated in Luxembourg in the form of a public limited liability company
(société anonyme) with variable share capital (société d'investissement à
capital variable, or 'SICAV') and regulated by the Commission de Surveillance
du Secteur Financier ("CSSF") under Part II of the amended Luxembourg law of
17 December 2010 on undertakings for collective investments with an indefinite
life. The Company qualifies as an alternative investment fund within the
meaning of Article 1 (39) of the amended law of 12 July 2013 on alternative
investment fund managers ("2013 Law") implementing Directive 2011/61/EU of the
European Parliament and of the Council of 8 June 2011 on Alternative
Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and
Regulations (EC) No 1060/2009 and (EU) No 1095/2010 and is authorised as an
internal alternative investment fund manager ('AIFM') in accordance with
Chapter 2 of the 2013 Law. The Company was admitted to the official list of
the UK Listing Authority (premium listing, closed-ended investment company)
and to trading on the main market of the London Stock Exchange on 21 December
2011.
As of 1 January 2021, the main market of the London Stock Exchange is not
considered as an EU regulated market (as defined by the Markets in Financial
Institutes Directive ('MiFID') II). As a result, Directive 2004/109/EC of the
European Parliament and of the Council of 15 December 2004, on the
harmonisation of transparency requirements in relation to information about
issuers whose securities are admitted to trading on a regulated market, and
amending Directive 2001/34/EC (the Transparency Directive) as implemented in
the Luxembourg law by the Act dated 11 January 2008 on transparency
requirements for issuers (the Transparency Act 2008), among other texts, do
not apply to the Company.
The Company's registered office is 6E route de Trèves, L-2633 Senningerberg,
Luxembourg and is registered with the Registre de Commerce et des Sociétés
Luxembourg under the number B163879.
The Company is a closed-ended investment company that invests, through its
subsidiaries, predominantly in a globally diversified portfolio of Public
Private Partnership ("PPP")/Private Finance Initiative ("PFI") infrastructure
or similar style assets ('Investment portfolio'). As at 31 December 2024, the
Group has no investment where the asset is under construction (31 December
2023: nil).
As at 31 December 2024, the Group employed 25 staff (31 December 2023: 26
staff).
Reporting period
The Company's reporting period runs from 1 January to 31 December each year.
The Company's consolidated income statement, consolidated statement of other
comprehensive income, consolidated statement of financial position,
consolidated statement of changes in equity and consolidated statement of cash
flows include comparative figures as at 31 December 2023.
The amounts presented as 'non-current' in the consolidated statement of
financial position are those expected to be recovered or settled after more
than one year. The amounts presented as 'current' are those expected to be
recovered or settled within one year.
These consolidated financial statements were approved by the Management Board
on 27 March 2025.
2. Basis of preparation
Statement of compliance
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards accounting
standards ("IFRS") as adopted by the European Union ('EU').
The Group follows, to the fullest extent possible, the provisions of the
Standard of Recommended Practices issued by the Association of Investment
Companies ("AIC SORP"). If a provision of the AIC SORP is in direct conflict
with IFRS as adopted by the EU, the standards of the latter shall prevail.
The consolidated financial statements have been prepared using the going
concern principle, under the historical cost basis, except for investments at
fair value through profit or loss ("Investments at FVPL") and derivative
financial instruments that have been measured at fair value.
Changes in accounting policies and disclosures
New and amended standards applicable to the Group are as follows:
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
The amendments specify the requirements for classifying liabilities as current
or non-current and clarify:
- what is meant by a right to defer settlement;
- that a right to defer must exist at the end of the reporting period;
- that classification is unaffected by the likelihood that an entity will
exercise its deferral right; and
- that only if an embedded derivative in a convertible liability is itself
an equity instrument would the terms of a liability not impact its
classification.
These amendments have no significant impact on the consolidated financial
statements of the Group.
Functional and presentation currency
These consolidated financial statements are presented in Sterling, the
Company's functional currency. All amounts presented in tables throughout the
report have been rounded to the nearest thousand, unless otherwise stated.
The Company as an Investment Entity
The Management Board has assessed that the Company is an Investment Entity in
accordance with the provisions of IFRS 10. The Company meets the following
criteria to qualify as an Investment Entity:
a) Obtains funds from one or more investors for the purpose of providing
those investors with investment management services - The Group is internally
managed with management focused solely on managing those funds received from
its shareholders in order to maximise investment income/returns.
b) Commits to its investors that its business purpose is to invest funds
solely for returns from capital appreciation, investment income, or both - The
investment objectives of the Company are to:
- Provide investors with secure and highly predictable long-term cash flows
while actively managing the Investment portfolio with the intention of
maximising return over the long-term.
- Target an annual dividend payment with the aim of increasing this
distribution progressively over the longer term.
- Target an internal rate of return ('IRR') which is to be achieved over the
longer-term via active management and to enhance the value of existing
investments.
The above-mentioned objectives support the fact that the main business purpose
of the Company is to seek to maximise investment income for the benefit of its
shareholders.
c) Measures and evaluates performance of substantially all of its
investments on a fair value basis - The investment policy of the Company is to
invest in equity, subordinated debt or similar interests issued in respect of
infrastructure assets that have been developed predominantly under the
Investment portfolio procurement models. Each of these assets is valued at
fair value. The valuation is carried out on a six-monthly basis as at 30 June
and 31 December each year.
Based on the Management Board's assessment, the Company also meets the typical
characteristics of an Investment Entity as follows:
a) it has more than one investment - as at 31 December 2024, the Company has
56 investments;
b) it has more than one investor - the Company is listed on the London Stock
Exchange with its shares held by a broad pool of investors;
c) it has investors that are not related parties of the entity - other than
those shares held by the Supervisory Board and Management Board Directors, and
certain other employees, all remaining shares in issue (more than 99%) are
held by non-related parties of the Company; and
d) it has ownership interests in the form of equity or similar interests -
ownership in the Company is through equity interest.
3. Summary of material accounting policies
a) Basis of consolidation
Subsidiaries
Subsidiaries are investees controlled by the Company (directly or indirectly).
The Company controls an investee if it is exposed to, or has rights to,
variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee.
The Company is an Investment Entity and measures investments in certain
subsidiaries at fair value through profit or loss. In determining whether the
Company meets the definition of an Investment Entity, the management
considered the Group structure as a whole (see also Note 2).
The Company, which qualifies as an Investment Entity and is required to value
certain subsidiaries at fair value, also holds, directly or indirectly,
subsidiaries which provide services that support the Company's investment
activities. These subsidiaries are consolidated on a line-by-line basis (see
Note 21).
The shares in some of these consolidated subsidiaries have been pledged as a
security under the Company's multi-currency Revolving Credit Facility ("RCF")
(see note 17 for the RCF terms). As such, the financial covenants of the RCF
includes the financial position and net results of the consolidated
subsidiaries. Furthermore, the assets and liabilities of the consolidated
subsidiaries used in the preparation of these consolidated financial
statements, closely approximates its fair value due either to: (i) the
short-term nature of their assets and liabilities or; (ii) their underlying
investments of these consolidated subsidiaries which are already measured at
fair value through profit and loss.
Transactions eliminated on consolidation (consolidated subsidiaries)
Intra-group receivables, liabilities, revenue and expenses are eliminated in
their entirety when preparing the consolidated financial statements. Gains
that arise from intra-group transactions and that are unrealised from the
standpoint of the Group, at the date of the consolidated statement of
financial position, are eliminated in their entirety. Unrealised losses on
intra-group transactions are also eliminated in the same way as unrealised
gains, to the extent that the loss does not correspond to an impairment loss.
b) Foreign currency transactions
Transactions in foreign currencies are translated into Sterling on the
exchange rate at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are
translated into Sterling at the exchange rate on that date.
Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are translated into Sterling at the exchange rate on
the date that the fair value was determined. Foreign currency differences
arising on translation are recognised in the consolidated income statement as
a gain or loss on currency translation.
c) Foreign currency translations
The assets and liabilities of foreign operations are translated to Sterling at
the exchange rates on the reporting date. The income and expenses of foreign
operations are translated to Sterling at the average exchange rates during the
year, if such does not significantly deviate from the exchange rates at the
date on which the transaction is entered into. If significant deviations
arise, then the exchange rate at the date of the transaction is used.
Foreign currency differences are recognised in the consolidated statement of
other comprehensive income, and presented in 'translation and other capital
reserves' in equity, except for exchange differences from intra-Group monetary
items which are reflected in the consolidated income statement. Foreign
currency movements during the reporting period relating to investments are
included as part of the 'Income from investments at fair value through profit
or loss' (income from Investments at FVPL).
When a foreign operation is disposed of such that control, significant
influence or joint control is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to consolidated
income statement as part of the gain or loss on disposal.
When the settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign
currency gains and losses arising from such an item are considered to form
part of a net investment in the foreign operation and are recognised in other
comprehensive income, and presented in translation and other capital reserves
in equity.
d) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition as either: (i)
amortised cost; (ii) fair value through other comprehensive income - debt
instruments; (iii) fair value through other comprehensive income - equity
instruments; or (iv) fair value through profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. The Group's financial
assets classified and measured at amortised cost are held within a business
model with the objective to hold financial assets in order to collect
contractual cash flows which represents solely payments of principal and
interests.
Financial assets and liabilities are offset, and the net amount is presented
in the statement of financial position when, and only when, the Group has a
legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
At the date of the consolidated statement of financial position, except for
Investments at FVPL and derivative financial assets, all non-derivative
financial assets of the Group have been classified as financial assets at
amortised cost.
Investments at FVPL
The Company is an Investment Entity and therefore values its investment in
subsidiaries at fair value through profit or loss, except where a subsidiary
provides investment related services or activities. The fair value of an
investment in subsidiary includes the fair value of the equity, loans and
interest receivable and any other amounts which are included in the discounted
estimated cash flow (which is used to compute the fair value) from such
subsidiary. The Company subsequently measures its investment in certain
subsidiaries at fair value in accordance with IFRS 13, with changes in fair
value recognised in the consolidated income statement in the period of change.
The fair value estimation of investments in subsidiaries is described in Note
20.
Financial assets at amortised cost (debt instruments)
The Group classifies its financial assets at amortised cost only if both of
the following criteria are met:
- the asset is held within a business model whose objective is to collect
the contractual cash flows, and
- the contractual terms give rise to cash flows that are solely payments
of principal and interest.
Financial assets at amortised cost are subsequently measured using the
effective interest rate ("EIR") method and are subject to impairment. Gains
and losses are recognised in the consolidated income statement when the asset
is derecognised, modified, or impaired.
The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original EIR.
The Group applies a simplified approach in calculating ECLs so it does not
track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised when:
- The rights to receive cash flows from the asset have expired; or
- The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Non-derivative financial liabilities
The Company classifies non-derivative financial liabilities as liabilities at
amortised cost. Such financial liabilities are recognised initially at fair
value less any direct attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using
the EIR method.
The Company derecognises a financial liability (or part of a financial
liability) from the consolidated statement of financial position when, and
only when, it is extinguished or when the obligation specified in the contract
or agreement is discharged or cancelled or has expired. The difference between
the carrying amount of a financial liability (or part of a financial
liability) extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is
considered in the consolidated income statement.
e) Fair value measurement
The Group accounts for its investments in Portfolio Companies as Investments
at FVPL. The valuation is determined using the discounted cash flow
methodology. The cash flows forecasted to be received by the Company or its
consolidated subsidiaries, generated by each of the underlying assets, and
adjusted as appropriate to reflect the risk and opportunities, have been
discounted using asset-specific discount rates. The valuation methodology is
unchanged from previous reporting periods.
The fair value of other financial assets and liabilities, other than current
assets and liabilities, is determined by discounting future cash flows at an
appropriate discount rate and with reference to recent market transactions,
where appropriate. Further information on assumptions and estimation
uncertainties is disclosed in Note 20.
Fair values are categorised into different levels in a fair value hierarchy
based on the inputs in the valuation methodology, as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical
assets and liabilities.
- Level 2: inputs other than quoted prices included in Level 1, that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on
observable market data ('unobservable inputs').
If the inputs to measure fair value of an asset or a liability fall into
different levels of the fair value hierarchy, then the fair value measurement
is categorised in its entirety at the same level of the fair value hierarchy
as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of fair value hierarchy at the
end of the reporting period in which the change has occurred.
f) Provisions
A provision is recognised if, as a result of a past event, the Group has a
present legal or constructive obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to a liability. The unwinding of
such discount is recognised as a finance cost.
g) Cash and cash equivalents
Cash and cash equivalents are cash balances and term deposits with maturities
of three months or less from the date when the deposits were made and that are
subject to an insignificant risk of change in their fair value. They are
used by the Group in the management of its short-term commitments.
h) Share capital
Ordinary shares are classified as equity. Costs directly attributable to the
issue of ordinary shares, or which are associated with the establishment of
the Company, and that would otherwise have been avoided are recognised as a
deduction from equity, net of any tax effects.
i) Segment reporting
Segment results that are reported to the Management Board include items
directly attributable to segments as well as those that can be allocated on a
reasonable basis.
j) Employee benefits and share-based payment arrangements
Short-term and other long-term employee benefits are expensed as the related
services are provided. A liability is recognised for the amount expected to be
paid, and discounted at present value if necessary, if the Group has present
legal or constructive obligation to pay this amount as a result of a past
service provided by the employee and the obligation can be estimated reliably.
For share-based payment arrangements, the grant-date fair value of the equity
settled share-based payment arrangement is recognised as an expense, with a
corresponding increase in additional paid in capital over the vesting period
of the awards. The amount recognised as an expense is adjusted to reflect
related service and non-market performance conditions.
k) Finance income and finance costs
Interest income and expenses are recognised in the consolidated income
statement using the EIR method.
The EIR is the rate that exactly discounts the estimated future cash payments
and receipts through the expected life of the financial instrument (or, where
appropriate, a shorter period) to the carrying amount of the financial
instrument. When calculating the EIR rate, the Group estimates future cash
flows considering all contractual terms of the financial instrument, but not
future credit losses.
Interest received or receivable and interest paid or payable are recognised in
the consolidated income statement as finance income and finance costs,
respectively.
l) Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease, i.e. if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and
the estimated useful lives of the assets.
m) Tax
i) Subscription tax
According to the Luxembourg regulations regarding SICAV companies, the Company
itself, as an undertaking for collective investment, is exempt from paying
income and/or capital gains taxes in Luxembourg. It is, however, liable to
annual subscription tax of 0.05% on its consolidated net asset value ("NAV"),
payable quarterly and assessed on the last day of each quarter. Subscription
tax is recognised as a tax expense in the consolidated income statement for
the period in which it is incurred.
ii) Income tax
Income tax on the consolidated subsidiaries' profits for the year comprises
current and deferred tax. Current and deferred tax is recognised in the
consolidated income statement except to the extent that it relates to a
business combination, or items recognised directly in equity or in the
consolidated statement of other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
periods.
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised
for:
- temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss;
- temporary differences related to investments in subsidiaries to the
extent that the Company is able to control the timing of the reversal of the
temporary difference and it is probable that they will not reverse in the
foreseeable future; and
- taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they
relate to taxes levied by the same tax authority on the same taxable entity,
or on different taxable entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and
deductible temporary differences to the extent that it is probable that future
taxable profits will be available against which they can be utilised. Deferred
tax assets are reviewed each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
n) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial
position based on current/non-current classification. An asset is current when
it is:
- expected to be realised or intended to be sold or consumed in the normal
operating cycle;
- held primarily for the purpose of trading;
- expected to be realised within 12 months after the reporting period; or
- cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period.
- all other assets are classified as non-current.
A liability is current when:
- it is expected to be settled in the normal operating cycle;
- it is held primarily for the purpose of trading;
- it is due to be settled within 12 months after the reporting period; or
- there is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period.
The terms of the liability that could, at the option of the counterparty,
result in its settlement by the issue of equity instruments do not affect its
classification.
The Group classifies all other liabilities as non-current.
o) Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at
cost and deducted from equity. No gain or loss is recognised in the
consolidated income statement on the purchase, sale, issue or cancellation of
the Company's own equity instruments.
4. Material accounting judgements, estimates and assumptions
The preparation of consolidated financial statements in conformity with IFRS
requires the Management Board to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of
assets, liabilities, income, and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
In the process of applying the Group's accounting policies, the Management
Board has made the following judgements that would have the most significant
effect on the amounts recognised in the consolidated financial statements.
4.1 Assessment as an investment entity
Refer to Note 2 for the discussion on this topic.
4.2 Fair value determination
Refer to Note 3 e) for the discussion on this topic.
4.3 Share-based payments
Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which depends on the
terms and conditions of the grant. This estimate also requires determination
of the most appropriate inputs to the valuation model including the expected
life of the share option or appreciation right, volatility and dividend yield
and making assumptions about them.
The fair value of equity-settled transactions under the Long-Term Incentive
Plan ("LTIP") is measured based on prevailing stock market prices at the grant
date, as the LTIP does not include market condition criteria. Non-market based
performance conditions are not taken into account in the valuation of the unit
fair value per share of the LTIP. Instead, the number of shares is adjusted at
each reporting date to take into account the actual level of non market-based
performance condition.
For the measurement of the fair value of equity-settled transactions for the
Deferred Short-Term Incentive Plan ('Deferred STIP'), the Group recognises a
portion of the annual estimated bonus of the Management Board.
The assumptions and models used for estimating fair value for share-based
payment transactions are disclosed in Note 23.
4.4 Going concern basis of accounting
The Group's portfolio is currently 100% operational and relies on
availability-style revenues. At the time of producing these consolidated
financial statements, there was no evidence of material disruption to the
operations of the Group and financial performance is not expected to be
materially affected.
The Management Board has satisfied itself that the Group has adequate
resources to continue in operational existence for at least 12 months from the
date of approval of the consolidated financial statements. After due
consideration, the Management Board believes it is appropriate to adopt the
going concern basis of accounting in preparing the consolidated financial
statements.
5. Segment reporting
IFRS 8 - Operating Segments adopts a 'through the eyes of the management'
approach to an entity's reporting of information relating to its operating
segments, and also requires an entity to report financial and descriptive
information about its reportable segments.
Based on a review of information provided to the Management Board (determined
to be the chief operating decision makers or CODM), the Group has identified
five reportable segments based on the geographical concentration risk. The
main factor used to identify the Group's reportable segments is the
geographical location of the asset. The Management Board has concluded that
the Group's reportable segments are:
(1) UK; (2) North America; (3) Australia; (4) Continental Europe; and (5)
Holding Activities. These reportable segments are the basis on which the Group
reports information to the Management Board.
Segment information is presented below:
For the year ended 31 December 2024 UK North Australia Continental Holding Total
America
Europe
In thousands of Sterling Activities Group
Income/(loss) from Investments at FVPL (Note 10) 24,333 6,651 (918) (537) - 29,529
Administrative expenses - - - - (13,511) (13,511)
Other operating income - net - - - - 6,846 6,846
Results from operating activities 24,333 6,651 (918) (537) (6,665) 22,864
Net finance costs - - - - (1,671) (1,671)
Net gain on balance sheet hedging - - - - 6,969 6,969
Tax expense - net - - - - (1,962) (1,962)
Profit/(loss) for the year 24,333 6,651 (918) (537) (3,329) 26,200
For the year ended 31 December 2023 UK North Australia Continental Holding Total
America
Europe
In thousands of Sterling Activities Group
Income/loss from Investments at FVPL (Note 10) 18,803 17,030 (4,022) 7,054 - 38,865
Administration expenses - - - - (12,130) (12,130)
Other operating income - net - - - - 9,973 9,973
Results from operating activities 18,803 17,030 (4,022) 7,054 (2,157) 36,708
Net finance costs - - - - (2,524) (2,524)
Net gain on balance sheet hedging - - - - 8,874 8,874
Tax expense - net - - - - (2,771) (2,771)
Profit/(loss) for the year 18,803 17,030 (4,022) 7,054 1,422 40,287
Statement of financial position per segment information as at 31 December 2024
and 31 December 2023 are presented below:
As at 31 December 2024 UK North Australia Continental Holding Total
America
Europe
In thousands of Sterling Activities Group
Assets
Property and equipment - - - - 1,209 1,209
Investments at FVPL 328,160 441,091 91,777 118,322 - 979,350
Other non-current assets - - - - 8,199 8,199
Current assets - - - - 36,957 36,957
Total assets 328,160 441,091 91,777 118,322 46,365 1,025,715
Liabilities
Non-current - - - - 991 991
Current - - - - 4,823 4,823
Total liabilities - - - - 5,814 5,814
As at 31 December 2023 UK North Australia Continental Holding Total
America
Europe
In thousands of Sterling Activities Group
Assets
Property and equipment - - - - 93 93
Investments at FVPL 341,635 477,734 97,181 130,694 - 1,047,244
Other non-current assets - - - - 4,640 4,640
Current assets - - - - 11,866 11,866
Total assets 341,635 477,734 97,181 130,694 16,599 1,063,843
Liabilities
Non-current - - - - - -
Current - - - - 7,215 7,215
Total liabilities - - - - 7,215 7,215
The Holding Activities of the Group include the activities which are not
specifically related to a particular asset or region, but to those companies
which provide services to the Group. The total current assets classified under
Holding Activities mainly represent cash and cash equivalents.
Transactions between reportable segments are conducted at arm's length and are
accounted for in a similar way to the basis of accounting used for third
parties. The accounting methods used for all the segments are similar and
comparable with those of the Company.
The Group maintains a well-diversified portfolio with no major single asset
exposure.
6. Administrative expenses
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Personnel expenses
Short-term benefits 5,563 5,639
Share-based compensation expenses (Note 23) 2,913 2,038
Supervisory Board fees 345 315
8,821 7,992
Legal and professional fees 3,298 2,716
Office and other expenses 1,204 1,378
Depreciation expense 188 44
13,511 12,130
Short-term benefits relate to the Management Board and staff, and include
basic salaries, the Short-Term Incentive Plan ("STIP"), staff bonuses, social
security contributions and other related expenses.
The Group has engaged certain third parties to provide legal, depositary,
custodian, audit, tax, and other services. The expenses incurred in relation
to such services are treated as legal and professional fees. Depositary and
custodian related charges during the year amounted to £342,000 (31 December
2023: £395,000).
During the year, the Company and its consolidated subsidiaries obtained the
following services from the external auditors.
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Group auditor remuneration:
Statutory audit fees 255 290
Interim review and other permitted assurance services 135 104
Non-assurance fees - -
390 394
Audit and audit-related fees from non-Group auditor 42 43
432 437
7. Other operating expenses
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Subscription tax (Note 13) 528 532
Others 165 154
693 686
The 2023 subscription tax has been reclassified from 'Taxes' to 'Other
operating expenses' for consistency with the current year's presentation. This
reclassification did not impact the reported profit for the prior year.
8. Net finance costs
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Finance costs on loans and borrowings (Note 17) 2,225 3,061
Interest income on bank deposits (554) (537)
1,671 2,524
9. Other operating income
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Gain on derivative financial instruments - net (Note 20) 6,988 9,233
Foreign currency exchange gain - net 430 1,319
Others 121 107
7,539 10,659
10. Investments at FVPL
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Balance as at 1 January 1,047,244 1,102,844
Income from Investments at FVPL 29,529 38,865
Distributions received from Investments at FVPL (97,349) (94,465)
Others (74) -
Balance as at 31 December 979,350 1,047,244
Income from Investments at FVPL reflects the net unrealised gain on valuation
of investments and includes portfolio return, change in market discount rate,
change in macroeconomic assumptions and net foreign exchange movements. Refer
to Note 20 of the consolidated financial statements for further information on
Investments at FVPL.
Distributions from Investments at FVPL are received after either: (a)
financial models have been tested for compliance with certain ratios; or (b)
financial models have been submitted to the external lenders of the Portfolio
Companies; or (c) approvals of the external lenders on the financial models
have been obtained.
As at 31 December 2024 and 31 December 2023, loan and interest receivable
amounts from unconsolidated subsidiaries is embedded within Investments at
FVPL. The valuation of Investments at FVPL considers all future cash flows
related to each individual underlying asset including but not limited to
interest income, dividend income, asset-related management fee income and
other income.
Details of various asset investments in the Group's portfolio and their
respective acquisition dates are as follows:
Company((i)) Asset Country of Ownership Year
incorporation interest% acquired
RW Health Partnership Holdings Pty Limited Royal Women's Hospital Australia 100 2012
Victorian Correctional Infrastructure Partnership Pty Limited Victorian Correctional Facilities Australia 100 2012
BBPI Sentinel Holdings Pty Limited, BBGI Sentinel Holdings 2 Pty Limited, Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Financing Holdings Pty Limited
Golden Crossing Holdings Inc. Golden Ears Bridge Canada 100 2012 and 2013
Trans-Park Highway Holding Inc. Kicking Horse Canyon Highway Canada 50 2012
NorthwestConnect Holdings Inc. Northwest Anthony Henday Drive Canada 50 2012
BBGI KVH Holdings Inc., BBGI KVH Holdings 2 Inc. Kelowna & Vernon Hospitals Canada 100 2013 and 2020
WCP Holdings Inc. Women's College Hospital Canada 100 2013
Stoney Trail Group Holdings Inc. North East Stoney Trail Canada 100 2013
BBGI NCP Holdings Inc. North Commuter Parkway Canada 50 2015
BBGI Can LP Inc. ((ii)) William R. Bennett Bridge Canada 80 2017
South East Stoney Trail Canada 40 2017
Canada Line Canada 26.7 2017
Restigouche Hospital Centre Canada 80 2017
McGill University Health Centre Canada 40 2018
John Hart Generating Station Canada 80 2022
BBGI Stanton Holdings Inc. Stanton Territorial Hospital Canada 100 2018 and 2020
BBGI 104 GP Inc. Highway 104 Canada 50 2020
BBGI Champlain Holding Inc. Champlain Bridge Canada 25 2020
Kreishaus Unna Holding GmbH Unna Administrative Centre Germany 90 2012 and 2020
PJB Beteiligungs-GmbH Burg Correctional Facilities Germany 90 2012
Hochtief PPP 1 Holding GmbH & Co. KG Cologne Schools Germany 50 2014
Rodenkirchen Schools Germany
Frankfurt Schools Germany
Fürst Wrede Barracks Germany
BBGI PPP Investment S. à r.l. A7 Motorway Luxembourg 49 2022
Noaber18 Holding B.V. N18 Motorway Netherlands 52 2018, 2019 and 2020
De Groene Schakel Holding B.V. Westland Town Hall Netherlands 100 2018 and 2019
SAAone Holding B.V. A1/A6 Motorway Netherlands 37.1 2018 and 2019
Agder OPS Vegselskap AS E18 Motorway Norway 100 2013 and 2014
Folera TH Holdings Limited Poplar Affordable Housing & Recreational Centres Jersey 100 2021
Kent Education Partnership (Holdings) Limited Kent Schools UK 50 2012
Healthcare Providers (Gloucester) Limited Gloucester Royal Hospital UK 50 2012
Highway Management M80 Topco Limited M80 Motorway UK 50 2012
Bedford Education Partnership Holdings Limited Bedford Schools UK 100 2012
Lisburn Education Partnership (Holdings) Limited Lisburn College UK 100 2012
Clackmannanshire Schools Education Partnership (Holdings) Limited Clackmannanshire Schools UK 100 2012
Primaria (Barking Dagenham & Havering) Limited Barking Dagenham & Havering (LIFT) UK 60 2012
East Down Education Partnership (Holdings) Limited East Down Colleges UK 100 2012 and 2018
Scottish Borders Education Partnership (Holdings) Limited Scottish Borders Schools UK 100 2012
Coventry Education Partnership Holdings Limited Coventry Schools UK 100 2012
Fire Support (SSFR) Holdings Limited Stoke & Staffs Rescue Service UK 85 2012
GB Consortium 1 Limited North London Estates Partnership (LIFT) UK 60 (both) 2012, 2014 and 2018
Liverpool & Sefton Clinics (LIFT)
Mersey Care Development Company 1 Limited Mersey Care Hospital UK 79.6 2013 and 2014
MG Bridge Investments Limited Mersey Gateway Bridge UK 37.5 2014
Tor Bank School Education Partnership (Holdings) Limited Tor Bank School UK 100 2013
Lagan College Education Partnership (Holdings) Limited Lagan College UK 100 2014
Highway Management (City) Holding Limited M1 Westlink UK 100 2014
Blue Light Partnership (ASP) Holdings Limited Avon & Somerset Police HQ UK 100 2014, 2015 and 2016
Northwin Limited North West Regional College UK 100 2015
Northwin (Intermediate) (Belfast) Limited Belfast Metropolitan College UK 100 2016
Fire and Rescue NW Holdings Limited North West Fire and Rescue UK 100 2021
Woodland View Holdings Co Limited Ayrshire and Arran Hospital UK 100 2021
Aberdeen Roads Holdings Limited Aberdeen Western Peripheral Route UK 33.3 2021
BBGI East End Holdings Inc. Ohio River Bridges US 66.7 2014 and 2019
( )
((i)) and its subsidiary companies.
((ii)) this company was incorporated during 2024.
11. Cash and cash equivalents
In thousands of Sterling 31 December 31 December
2024 2023
Cash at banks 23,361 9,672
Short-term deposits 4,079 -
27,440 9,672
Cash and cash equivalents include cash at banks and short-term deposits held
on demand and are recognised at cost which approximates fair values. The
majority of the Group's cash and cash equivalents are held at interest-bearing
accounts, earning interest at the prevailing overnight rates less the
applicable margin. The applicable rates vary depending on the financial
institution and jurisdictions.
12. Property and equipment
Property and equipment relates mostly to right-of-use assets amounting to
£1,169,000 (31 December 2023: £nil).
Group as a lessee
The Company maintains a lease for its registered office space in Luxembourg,
which is recognised as a right-of-use asset. Depreciation on the right-of-use
asset for the year ended 31 December 2024 amounted to £105,000 (31 December
2023: £nil). The Group also has certain leases certain office space with
lease terms of 12 months or less and leases of office equipment with low
value. The Group applies the 'short-term lease' and 'lease of low-value
assets' recognition exemptions for these leases.
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
In thousands of Sterling 31 December 31 December
2024 2023
As at 1 January - -
Additions 1,275 -
Accretion of interest 52 -
Payments (159) -
As at 31 December 1,168 -
Current (included under loans and borrowings) 177 -
Non-current 991 -
13. Taxes
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Current tax:
Income tax and other taxes 978 3,755
Deferred tax:
Relating to origination and reversal of temporary differences 984 (984)
1,962 2,771
The Company, as an undertaking for collective investment, is exempt from
corporate income tax in Luxembourg and instead pays an annual subscription tax
of 0.05% on the value of its total net assets. Moreover, the Company as a
SICAV is not subject to taxes on capital gains or income. All other
consolidated subsidiaries are subject to taxation at the applicable rate in
their respective jurisdictions.
The 2023 subscription tax has been reclassified from 'Taxes' to 'Other
operating expenses' for consistency with the current year's presentation. This
reclassification did not impact the reported profit for the prior year.
Reconciliation of tax expense and the accounting profit multiplied by the
Company's effective corporate tax rate for the year is as follows:
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Profit before tax 28,162 43,058
Income tax using the Luxembourg domestic tax rate of 24.94% 7,024 10,739
Adjustments to deferred tax in respect of prior years 983 (1)
Recognition of previously unrecognised tax losses - (983)
Reconciling difference mainly due to fair valuation of assets (6,045) (6,984)
Tax charge for the year 1,962 2,771
A significant portion of the profit before tax results from fair valuation of
Investments at FVPL. The net income of the unconsolidated subsidiaries is
taxed in their respective jurisdictions.
As a consequence of the adoption of IFRS 10, the Company is classified as an
Investment Entity (see Note 2), meaning the tax expenses of the unconsolidated
subsidiaries are not included within these consolidated financial statements.
Therefore, the consolidated tax expense and tax assets/ liabilities, if any,
do not include those of the Portfolio Companies. The tax liabilities of the
Portfolio Companies are embedded in the fair value calculation of Investments
at FVPL.
Deferred tax relates to the following:
Consolidated statement of financial position Consolidated
31 December income statement
31 December
In thousands of Sterling 2024 2023 2024 2023
Losses available for offsetting against future taxable income - 983 (983) 984
The Group has additional tax losses carried forward amounting to £22,313,000
(2023: £12,257,000) for which no deferred tax asset was recognised.
Tax liability as at 31 December 2024 amounted to £1,630,000 (31 December
2023: £1,462,000).
In October 2021, the OECD introduced a 15% global minimum tax under the Pillar
Two Global Anti-Base Erosion ('GloBE') model rules. Key provisions are being
phased in during 2024 and 2025. Several OECD member countries have enacted tax
legislation effective 1 January 2024, and others have announced plans to
implement similar laws. While the Company does not expect Pillar Two to have a
material impact on its provision for income taxes for 2024, the rules are
subject to negotiation and change. The Company will monitor developments as
more countries enact legislation and new guidance is released.
14. Other current assets
In thousands of Sterling 31 December 31 December
2024 2023
Prepaid taxes 1,347 833
Prepaid expenses 269 230
Others 223 266
1,839 1,329
15. Capital and reserves
Share capital
Changes in the Company´s share capital are as follows:
In thousands of Sterling 31 December 31 December
2024 2023
Share capital as at 1 January 852,386 850,007
Share capital issued through scrip dividends - 1,536
Equity settlement of share-based compensation (Note 23) - 888
Shares issuance costs - (45)
852,386 852,386
The changes in the number of ordinary shares of no-par value issued by the
Company are as follows:
In thousands of shares 31 December 31 December
2024 2023
In issue at beginning of the year 714,877 713,331
Purchase of treasury shares (1,107) --
Shares issued through scrip dividends - 1,017
Shares issued as share based compensation - net(i) 1,107 529
714,877 714,877
(i) Being the net share entitlement after adjustments to settle taxes.
Gross number of ordinary shares entitlement, before the settlement of taxes,
as share-based compensation amounted to the following:
In thousands of shares 31 December 31 December
2024 2023
LTIP 1,457 330
STIP 366 463
1,823 793
All of the ordinary shares issued rank pari passu. The holders of ordinary
shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at general meetings of the Company.
The Company meets the minimum share capital requirement as imposed under the
applicable Luxembourg regulation.
Translation and other capital reserve
Foreign currency differences are recognised in other comprehensive income and
presented in the foreign currency translation reserve in equity except for
exchange differences from short-term intragroup monetary items which are
reflected in the consolidated income statement. The translation and other
capital reserve amounting to a debit balance of £24,022,000 (31 December
2023: debit balance of £1,635,000) comprises mainly of foreign currency
differences arising from the translation of the financial statements of
foreign operations. For the year ended 31 December 2024, an intercompany
restructuring of the Group's long-term shareholder loan and equity investments
at the stand-alone level resulted to foreign exchange loss of £4,551,000,
which was recognised in the consolidated statement of other comprehensive
income. The remaining balance of other capital reserve relates to statutory
amounts which are required to be allocated to this reserve account and which
may not be distributed.
Dividends
The dividends declared and paid by the Company during the year ended 31
December 2024 are as follows:
In thousands of Sterling except as otherwise stated 31 December
2024
2023 2(nd) interim dividend of 3.965 pence per qualifying ordinary share - for 28,345
the period
1 July 2023 to 31 December 2023
2024 1(st) interim dividend of 4.200 pence per qualifying ordinary share - for 30,019
the period
1 January 2024 to 30 June 2024
Total dividends declared and paid during the year 58,364
The 31 December 2023 2(nd) interim dividend was paid in April 2024. Cash
dividend was £28,345,000. The scrip alternative was not available with this
dividend payment.
The 30 June 2024 1(st) interim dividend was paid in October 2024. Cash
dividend was £30,019,000. The scrip alternative was not available with this
dividend payment.
The dividends declared and paid by the Company during the year ended 31
December 2023 are as follows:
In thousands of Sterling except as otherwise stated 31 December
2023
2022 2(nd) interim dividend of 3.740 pence per qualifying ordinary share - for 26,679
the period
1 July 2022 to 31 December 2022
2023 1(st) interim dividend of 3.965 pence per qualifying ordinary share - for 28,345
the period
1 January 2023 to 30 June 2023
Total dividends declared and paid during the year 55,024
The 31 December 2022 2(nd) interim dividend was paid in April 2023. The value
of the scrip election was £1,536,000, with the remaining amount of
£25,143,000 paid in cash to those investors that did not elect for the scrip.
The 30 June 2023 1(st) interim dividend was paid in October 2023. The scrip
alternative was not available with this dividend payment.
Net Asset Value ("NAV")
The consolidated NAV and NAV per share as at 31 December 2024, 31 December
2023 and 31 December 2022 were as follows:
In thousands of Sterling/pence 2024 2023 2022
NAV attributable to the owners of the Company 1,019,901 1,056,628 1,069,178
NAV per ordinary share (pence) 142.7 147.8 149.9
16. Earnings per share
a) Basic earnings per share
The basic earnings per share is calculated by dividing the profit for the year
by the weighted average number of ordinary shares outstanding.
In thousands of Sterling/in thousands of shares Year ended Year ended
31 December 31 December
2024 2023
Profit for the year 26,200 40,287
Weighted average number of ordinary shares in issue 714,811 714,387
Basic earnings per share (in pence) 3.67 5.64
The weighted average number of ordinary shares outstanding for the purpose of
calculating the basic earnings per share is computed as follows:
In thousands of shares Year ended Year ended
31 December 31 December
2024 2023
Shares outstanding as at 1 January 714,877 713,331
Purchase of treasury shares (692) --
Effect of scrip dividends issued - 763
Shares issued as share-based compensation 626 293
Weighted average - outstanding shares 714,811 714,387
b) Diluted earnings per share
The diluted earnings per share is calculated by dividing the profit for the
year by the weighted average number of ordinary shares outstanding, after
adjusting for the effects of all potential dilutive ordinary shares. There
were no items in the consolidated income statement accounts which have a
dilutive effect on the profit for the year.
The weighted average number of potential diluted ordinary shares for the
purpose of calculating the diluted earnings per share is computed as follows:
In thousands of shares Year ended Year ended
31 December 31 December
2024 2023
Weighted average number of ordinary shares for basic earnings per share 714,811 714,387
Effect of potential dilution from share-based payment 1,403 2,412
Weighted average - outstanding shares 716,214 716,799
The price of the Company's shares for the purpose of calculating the potential
dilutive effect of award letters (see Note 23) was based on the average market
price for the year ended 2024 and 2023, during which period the awards were
outstanding.
17. Loans and borrowings
On 31 October 2024, the Group entered into an Amendment, Restatement and
Accession Agreement ('RCF Amendment') relating to the Revolving Credit
Facility agreement originally dated 26 January 2015. The RCF Amendment
includes, among other things, the accession of a new arranger and issuing bank
and the extension of the final maturity date until 26 May 2028, with a further
extension option until 25 May 2029 and second extension option until 24 May
2030. The RCF Amendment resulted in a new facility amount of £150 million and
adjusted the borrowing margin to 1.70 basis per annum over the reference bank
rate.
Outstanding borrowings under the RCF as at 31 December 2024 amounted to £nil
(31 December 2023: £nil). As at 31 December 2024, the Group has utilised
£1.5 million (31 December 2023: £1.4 million) of the £150 million RCF, to
cover letters of credit.
The interest and other related fees payables under the RCF as at 31 December
2024 amounted to £153,000 (31 December 2023: £233,000).
The RCF unamortised debt issuance cost amounted to £1,392,000 as at 31
December 2024 (31 December 2023: £771,000). The unamortised debt issuance
cost is presented as part of 'Other non-current assets' in the consolidated
statement of financial position.
The total finance cost incurred under the RCF for the year ended 31 December
2024 amounted to £2,173,000 (31 December 2023: £3,061,000) which includes
amortisation of debt issuance costs of £839,000 (31 December 2023:
£323,000).
Changes in liabilities arising from financing activities
In thousands of Sterling 1 January Proceeds Repayment Foreign Others 31 December
2024 exchange 2024
Loans and borrowings non-current - 5,000 (5,000) - - -
In thousands of Sterling 1 January Proceeds Repayment Foreign Others 31 December
2023 exchange 2023
Loans and borrowings non-current 56,390 15,000 (71,404) (1,080) 1,094 -
Pledges and collaterals
As of 31 December 2024 and 31 December 2023, the Group has provided a pledge
over shares issued by consolidated subsidiaries, pledge over receivables
between consolidated subsidiaries and a pledge over the bank accounts of the
consolidated subsidiaries.
Based on the provisions of the RCF, where there is a continuing event of
default, the lender, among other things, will have the right to:
- cancel all commitments and declare all or part of utilisations to be due
and payable, including all related outstanding amounts; and
- exercise or direct the security agent to exercise any or all of its
rights, remedies, powers or discretions under the RCF.
The Group operated comfortably within covenant limits of the RCF during the
year.
18. Trade and other payables
Trade and other payables are non-interest bearing and are usually settled
within six months.
19. Financial risk review and management
Risk management framework
The Management Board has overall responsibility for the establishment and
control of the Group's risk management framework.
The Group has exposure to credit risk, liquidity risk and market risk. This
note presents information about the Group's exposure to each of these risks,
the Group's objectives, policies, and processes for measuring and managing
risk and the Group's management of capital. This note also presents the result
of the review performed by management on these risk areas.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with
the Group, resulting in:
1) impairment or reduction in the amounts recoverable from receivables and
other current and non-current assets; and
2) non-recoverability, in part or in whole, of cash and cash equivalents
deposited with banks.
Exposures to credit risks
The Group is exposed to credit risks on the following items in the
consolidated statement of financial position:
In thousands of Sterling 31 December 31 December
2024 2023
Derivative financial assets 13,118 2,663
Trade and other receivables 1,103 865
Cash and cash equivalents 27,440 9,672
41,661 13,200
The maximum exposure to credit risk on receivables that are neither overdue
nor impaired as of 31 December 2024, amounts to £1,103,000 (31 December 2023:
£865,000).
As of 31 December 2024, the Group is also exposed to credit risk on the loan
receivable, interest, and other receivable components of Investments at FVPL
(loans provided to Portfolio Companies) totalling to £223,361,000 (31
December 2023: £275,833,000).
Cash and cash equivalents and foreign currency forwards
The cash and cash equivalents and foreign currency forward contracts (recorded
either as 'derivative financial assets' or 'derivative financial liabilities')
are maintained with reputable banks with ratings that are acceptable based on
the established internal policy of the Group. Based on the assessment of the
Management Board, there are no significant credit risks related to the cash
and cash equivalents and foreign currency forward contracts maintained. The
main counterparty banks of the Group have an S&P/Moody's credit rating of
A+/A1.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial assets.
The Group's policy over liquidity risk is that it will seek to have sufficient
liquidity to meet its liabilities and obligations when they fall due.
The Group manages liquidity risk by maintaining adequate cash and cash
equivalents and access to borrowing facilities to finance day-to-day
operations and medium to long-term capital needs. The Group also regularly
monitors the forecast and actual cash requirements and matches the maturity
profiles of the Group's financial assets and financial liabilities.
The following are the undiscounted contractual maturities of the financial
liabilities of the Group, including estimated interest payments:
Contractual cash flows
31 December 2024 Carrying Total Within 1-5 > 5 years
In thousands of Sterling amount 1 year years
Loans and borrowings (Note 17) 330 4,569 1,090 2,903 576
Trade and other payables 2,863 2,863 2,863 - -
3,193 7,432 3,953 2,903 576
Contractual cash flows
31 December 2023 Carrying Total Within 1-5 > 5 years
In thousands of Sterling amount 1 year years
Loans and borrowings (Note 17) 233 3,318 1,377 1,941 -
Trade and other payables 2,697 2,697 2,697 - -
Net derivative liability 2,823 2,823 2,823 - -
5,753 8,838 6,897 1,941 -
The Group needs to maintain certain financial covenants under the RCF.
Non-compliance with such covenants may trigger an event of default (see Note
17). As at 31 December 2024 and 31 December 2023, the Group was not in breach
of any of the covenants under the RCF.
Depending on capital market conditions, the Company has the possibility of
raising capital through the issuance of shares, or it can also use free cash
flows generated by the Investments at FVPL in order to finance further
acquisitions or to repay debt.
All external financial liabilities of the Group have maturities of less than
one year except for loans and borrowings, which have a maturity of more than
one year. The Group has sufficient cash and cash equivalents and sufficient
funding sources to pay and/or refinance currently maturing obligations.
Market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices, will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the returns.
Currency risk
The Group buys derivative financial instruments, and also incurs financial
liabilities, in order to manage market risks. All such transactions are
carried out within certain internal guidelines. The Group, via its hedge
counterparty, reports all trades under these hedging instruments, for European
Market Infrastructure Regulations purposes, to an EU branch of the derivative
repository.
The Group is exposed to currency risk as a result of the cash flows from
underlying Investments at FVPL and cash and cash equivalents being denominated
in currencies other than Sterling. The currencies in which these items are
primarily denominated are Australian dollars (A$), Canadian dollars (C$),
Euros (€), Norwegian kroner (NOK) and US dollars (US$).
The Group actively seeks to manage geographical concentration and mitigate
foreign exchange risk by balance sheet hedging through foreign exchange
forward contracts, hedging of forecast portfolio distributions, and borrowing
in non-Sterling currencies. Furthermore, Euro-denominated running costs
provide a natural hedge against the Euro-denominated portfolio distributions.
In respect of other monetary assets and liabilities denominated in currencies
other than Sterling, the Group's policy is to ensure that its net exposure is
kept at an acceptable level. The Company accepts that risk from foreign
exchange exposure is an inherent aspect of holding an international portfolio
of investments. However, the Management Board believes that, in addition to
the hedging program in place, this risk is further mitigated by having
exposure to a number of different currencies including the Australian dollar,
Canadian dollar, US dollar, Euro and Norwegian krone, all of which can provide
diversification benefits. The Management Board spends considerable time
reviewing its hedging strategy and believes it remains both appropriate and
cost effective to continue with its four-year rolling hedge policy.
The summary of the quantitative data about the Group's exposure to foreign
currency risk is as follows:
31 December 2024 A$ C$ € NOK US$
In thousands of Sterling
Financial assets measured at fair value
Investments at FVPL 91,777 343,322 99,753 18,569 97,769
Financial assets measured at amortised cost
Cash and cash equivalents 78 16,610 2,245 1 65
Trade and other receivables 1,052 - 51 - -
1,130 16,610 2,296 1 65
Financial liabilities measured at amortised cost
Trade and other payables - (837) (824) - (7)
Loans and borrowings - - (1,169) - -
- (837) (1,993) - (7)
31 December 2023 A$ C$ € NOK US$
In thousands of Sterling
Financial assets measured at fair value
Investments at FVPL 97,181 373,986 109,323 21,371 103,749
Financial assets measured at amortised cost
Cash and cash equivalents 1,177 4,084 782 2 96
Trade and other receivables 90 761 - - -
1,267 4,845 782 2 96
Financial liabilities measured at amortised cost
Trade and other payables - (581) (844) - -
The significant exchange rates applied during the year ended 31 December 2024
and 31 December 2023 are as follows:
31 December 2024
Average £ Spot rate £
A$ 1 0.516 0.495
C$1 0.571 0.555
€1 0.847 0.829
NOK 1 0.073 0.070
US$ 1 0.783 0.798
31 December 2023
Average £ Spot rate £
A$ 1 0.535 0.535
C$1 0.596 0.593
€1 0.870 0.867
NOK 1 0.076 0.077
US$ 1 0.804 0.785
The sensitivity of the NAV to a 10% positive and adverse movement in foreign
exchange rates is disclosed in Note 20 to the consolidated financial
statements. This scenario assumes that all other macroeconomic assumptions
remain constant.
Interest rate risk
Except for the loans and other receivables from Portfolio Companies which are
included as part of Investments at FVPL, the Group does not account for other
fixed-rate financial assets and liabilities at fair value through profit or
loss. For the years ended 31 December 2024 and 31 December 2023, the main
variable interest rate exposure of the Group is on the interest rates applied
to the Group's cash and cash equivalents, including deposit rates used in
valuing the Investments at FVPL and the loans and borrowings of the Group. A
change in the deposit rates used in valuing Investments at FVPL would have an
impact on the value of such and a corresponding impact on the Group's NAV.
Refer to Note 20 for a sensitivity analysis of the impact of a change on
deposit rates on the Group's NAV.
Investment risk
The valuation of Investments at FVPL depends on the ability of the Group to
realise cash distributions from Portfolio Companies. The distributions to be
received from the Portfolio Companies are dependent on cash received by a
particular Portfolio Company under the service concession agreements. The
service concession agreements are predominantly granted to the Portfolio
Companies by a variety of public sector clients including, but not limited to,
central government departments and local, provincial, and state government and
corporations set up by the public sector.
The Group predominantly makes investments in countries where the Management
Board considers that asset structures are reliable and, where (to the extent
applicable) public sector counterparties carry what the Management Board
consider to be an appropriate credit risk; or alternatively where insurance or
guarantees are available for the sovereign credit risk; where financial
markets are relatively mature; and where a reliable judicial system exists to
facilitate the enforcement of rights and obligations under the contracts.
The Management Board continuously monitors the ability of a particular
Portfolio Company to make distributions to the Group. During the year, there
have been no material concerns raised in relation to current and future
distributions to be received from any of the Portfolio Companies.
Capital risk management
The Company's objective when managing capital is to ensure the Group's ability
to continue as a going concern in order to provide returns to shareholders and
benefits for further stakeholders and to maintain an optimal capital
structure. The Company, at a Group level, views the share capital (see Note
15) and the RCF (see Note 17) as capital.
In order to maintain or adjust the capital structure, the Company may adjust
the amount of dividend paid to shareholders, return capital to shareholders,
avail itself of additional debt financing, pay down debt or issue new shares.
The Group regularly reviews compliance with Luxembourg regulations regarding
restrictions on minimum capital. During the year, the Group complied with all
externally imposed capital requirements and made no changes in its approach to
capital management.
Derivative financial assets and liabilities for which hedge accounting is not
applied
The Group has entered into foreign currency forwards to fix the foreign
exchange rates on certain investment distributions that are expected to be
received ('cash flow hedges') and on a portion of the non-Sterling and
non-Euro denominated portfolio value ('balance sheet hedges'). The derivative
financial instruments (asset/liability) in the consolidated statement of
financial position represent the fair value of foreign currency forwards which
were not designated as hedges. The movements in their fair value are directly
charged/credited in the consolidated income statement within other operating
expenses and net gain/(loss) on balance sheet hedging.
Derivative financial assets and liabilities are offset and the net amount is
reported in the consolidated statement of financial position as the Group has
a legally enforceable right to offset the recognised amounts, and there is an
intention to settle on a net basis. Cash flows from the settlement of cash
flow hedges and balance sheet hedges are presented as part of the net cash
flows in operating and investing activities, respectively.
20. Fair value measurements and sensitivity analysis
The fair values of financial assets and liabilities, together with the
carrying amounts shown in the consolidated statement of financial position are
presented below. This does not include fair value information for financial
assets and financial liabilities not measured at fair value if the carrying
amount is a reasonable approximation of fair value (i.e. cash and cash
equivalents; trade and other receivables; trade payables, accruals and other
payables, loans, and borrowings).
The table below analyses financial instruments carried at fair value, by
valuation method.
31 December 2024 Fair value
In thousands of Sterling
Level 1 Level 2 Level 3 Total
Financial assets measured at fair value
Investments at FVPL - - 979,350 979,350
Derivative financial assets - 13,118 - 13,118
31 December 2023 Fair value
In thousands of Sterling
Level 1 Level 2 Level 3 Total
Financial assets measured at fair value
Investments at FVPL - - 1,047,244 1,047,244
Derivative financial assets - 2,663 - 2,663
Financial liabilities measured at fair value
Derivative financial liabilities - (2,823) - (2,823)
Refer to the table presented in Note 10 for the reconciliation of the
movements in the fair value measurements in level 3 of the fair value
hierarchy for Investments at FVPL. There were no transfers between any levels
during the year.
Investments at FVPL
The Management Board is responsible for carrying out the fair market valuation
of the Company's investments, which it then presents to the Supervisory Board.
The portfolio valuation is carried out on a six-monthly basis as at 30 June
and 31 December each year. The portfolio valuation is reviewed by an
independent third-party professional.
The valuation is determined using the discounted cash flow methodology. The
cash flow forecasts, generated by each of the underlying assets, are received
by the Company or its subsidiaries, adjusted as appropriate to reflect risks
and opportunities, and discounted using asset-specific discount rates. The
portfolio valuation methodology remains unchanged from previous reporting
periods.
Key Portfolio Company and Portfolio cash flow assumptions underlying NAV
calculations include:
- The discount rates and the assumptions, as set out below, continue to be
applicable.
- The updated financial models used for the valuation accurately reflect
the terms of all agreements relating to the portfolio companies and represent
a fair and reasonable estimation of future cash flows accruing to the
Portfolio Companies.
- Cash flows from and to the Portfolio Companies are received and made at
the times anticipated.
- Non-UK investments are valued in local currency and converted to
Sterling at either the period-end spot foreign exchange rates or the
contracted foreign exchange rates.
- Where the operating costs of the Portfolio Companies are contractually
fixed, such contracts are performed, and where such costs are not fixed, they
remain within the current forecasts in the valuation models.
- Where lifecycle costs/risks are borne by the Portfolio Companies, they
remain in line with the current forecasts in the valuation models.
- Contractual payments to the Portfolio Companies remain on track and
contracts with public sector or public sector backed counterparties are not
terminated before their contractual expiry date.
- Any deductions or abatements during the operations period of Portfolio
Companies are passed down to subcontractors under contractual arrangements or
are part of the planned (lifecycle) forecasts.
- Changes to the concession period for certain investments are realised.
- In cases where the Portfolio Companies have contracts which are in the
construction phase, they are either completed on time or any delay costs are
borne by the construction contractors.
- Enacted tax or regulatory changes, or forecast changes with a high
probability, on or prior to this reporting period-end with a future effect
materially impacting cash flow forecasts, are reflected in the financial
models.
In forming the above assessments, BBGI uses its judgement and works with
Portfolio Company management teams, as well as using due diligence information
from, or working with, suitably qualified third parties such as technical,
legal, tax and insurance advisers.
Macroeconomic assumptions
31 December 2024 31 December 2023
Inflation UK(i) RPI/CPIH 3.50% (actual) for 2024 then 3.00% (RPI) / 2.25% (CPIH) 3.80% for 2024 then 3.00% (RPI) / 2.25% (CPIH)
Canada 2.40% (actual) for 2024 then 2.00% 2.50% for 2024; 2.10% for 2025 then 2.00%
Australia 2.50% for 2024 then 2.50% 3.50% for 2024; 3.00% for 2025 then 2.50%
Germany((ii)) 2.60% (actual) for 2024 then 2.00% 2.70% for 2024; 2.10% for 2025 then 2.00%
Netherlands(ii) 3.30% (actual) for 2024 then 2.00% 2.70% for 2024; 2.10% for 2025 then 2.00%
Norway(ii) 2.20% (actual) for 2024 then 2.25% 4.50% for 2024; 2.50% for 2025 then 2.25%
US 2.90% (actual) for 2024 then 2.50% 2.50%
Deposit rates (p.a.) UK 4.00% to December 2025 then 2.75% 4.50% to December 2024 then 2.50%
Canada 3.00% to December 2025 then 2.50% 4.75% to December 2024 then 2.50%
Australia 4.00% to December 2025 then 3.50% 4.75% to December 2024 then 3.50%
Germany/ Netherlands 2.25% to December 2025 then 2.00% 3.25% to December 2024 then 2.00%
Norway 4.25% to December 2025 then 2.75% 4.75% to December 2024 then 2.75%
US 4.00% to December 2025 then 2.50% 4.50% to December 2024 then 2.50%
Corporate tax rates (p.a.) UK 25.00% 25.00%
Canada(iii) 23.00%/26.50%/27.00%/29.00% 23.00%/26.50%/27.00%/29.00%
Australia 30.00% 30.00%
Germany(iv) 15.83% 15.83%
Netherlands 25.80% 25.80%
Norway 22.00% 22.00%
US 21.00% 21.00%
(i) On 25 November 2020, the UK Government announced the phasing out of
the RPI after 2030 to be replaced with the Consumer Prices Index ("CPI")
including owner occupiers Housing costs ('CPIH'). The Company's UK portfolio
indexation factor changes from RPI to CPIH beginning on 1 January 2031.
(ii) CPI indexation only. Where investments are subject to a basket of
indices, a projection for non-CPI indices is used.
(iii) Individual tax rates vary among Canadian Provinces and Territories:
Alberta; Ontario, Quebec, Northwest Territories; Saskatchewan, British
Columbia; New Brunswick, Nova Scotia.
(iv) Including solidarity charge; individual local trade tax rates are
considered in addition to the tax rate above.
Based on data from transactional activity, benchmark analysis with comparable
companies and sectors, discussions with advisers in the relevant markets,
publicly available information gathered over the year and equity risk premium
over government bond yields, the Group has increased the weighted average
discount rate to 7.6% (31 December 2023: 7.3%). This methodology calculates
the weighted average based on the value of each investment in proportion to
the total portfolio value i.e. based on the net present value of their
respective future cash flows. Furthermore, the Group, with the advice of
external experts, has considered the impact of climate change on the value of
the Investments at FVPL and has concluded that no valuation adjustment was
required.
Discount rate sensitivity
The weighted average discount rate applied to the Company's portfolio of
investments is the single most important judgement and variable.
The following table shows the sensitivity of the NAV to a change in the
discount rate:
+1% to 8.6% in 2024((i)) -1% to 6.6% in 2024((i))
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 (68,662) (68,662) 78,328 78,328
31 December 2023 (76,995) (76,995) 88,329 88,329
(i) Based on the weighted average rate of 7.6% (31 December 2023: 7.3%).
Inflation has increased in all jurisdictions across BBGI's geographies, and
interest rates have risen from historical lows in recent years, although in
some jurisdictions these trends have reversed over the period. Should
long-term interest rates change substantially, this may affect discount rates,
and as a result, impact portfolio valuation.
Inflation sensitivity
The Portfolio Companies are contractually entitled to receive contracted
revenue streams from public sector clients, which are typically adjusted every
year for inflation (e.g. RPI, CPI or a basket of indices). Facilities
management subcontractors for accommodation investments and operating and
maintenance subcontractors for transport investments have similar indexation
arrangements.
The table below shows the sensitivity of the NAV to a change in inflation
rates compared to the assumptions in the table above:
+1% -1%
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 40,895 40,895 (36,786) (36,786)
31 December 2023 45,370 45,370 (40,852) (40,852)
Deposit rate sensitivity
Portfolio companies typically have cash deposits that are required to be
maintained as part of the senior debt funding requirements (e.g. six-month
debt service reserve accounts and maintenance reserve accounts). The asset
cash flows are positively correlated with the deposit rates.
The table below shows the sensitivity of the NAV to a percentage-point change
in long-term deposit rates compared to the long-term assumptions in the table
above:
+1 % -1%
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 19,811 19,811 (19,757) (19,757)
31 December 2023 21,029 21,029 (21,674) (21,674)
Combined sensitivity: inflation, deposit rates and discount rates
It is reasonable to assume that macroeconomic movements would affect discount
rates, deposit rates and inflation rates, and not be isolated to one variable.
To illustrate the effect of this combined movement on the Company's NAV, two
scenarios were created assuming a one percentage point change in the weighted
average discount rate, and a one percentage point change in both deposit and
inflation rates above the macroeconomic assumptions.
Increase by 1% Decrease by 1%
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 (13,061) (13,061) 16,108 16,108
31 December 2023 (16,344) (16,344) 19,915 19,915
Foreign exchange sensitivity
As described above, a significant proportion of the Company's underlying
investments are denominated in currencies other than Sterling.
The following table shows the sensitivity of the NAV, to a change in foreign
exchange rates:
Increase by 10%((i)) Decrease by 10%((i))
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 (29,411) (29,411) 27,905 27,905
31 December 2023 (30,875) (30,875) 31,161 31,161
(i) Sensitivity in comparison to the spot foreign exchange rates as at
31 December 2024 and considering the contractual and natural hedges in place,
derived by applying a 10% increase or decrease to the Sterling/foreign
currency rate.
Lifecycle costs sensitivity
Lifecycle costs are the cost of planned interventions or replacing material
parts of an asset to maintain it over the concession term. They involve larger
items that are not covered by routine maintenance and, for roads, it includes
items such as replacement of asphalt, rehabilitation of surfaces, or
replacement of electromechanical equipment. Lifecycle obligations are
generally passed down to the facility maintenance provider, with the exception
of transportation investments, where these obligations are typically retained
by the Portfolio Company.
Of the 56 investments in the Company portfolio, 20 investments retain the
lifecycle obligations. The remaining 36 investments have this obligation
passed down to the subcontractor.
The table below shows the sensitivity of the NAV to a change in lifecycle
costs:
Increase by 10%((i)) Decrease by 10%((i))
Effects in thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 (23,877) (23,877) 20,788 20,788
31 December 2023 (24,865) (24,865) 22,801 22,801
(i) Sensitivity applied to the 20 investments in the portfolio that
retain the lifecycle obligation i.e. the obligation is not passed down to the
subcontractor.
Corporate tax rate sensitivity
The profits of each Portfolio Company are subject to corporation tax in the
country where the Portfolio Company is located.
The table below shows the sensitivity of the NAV to a change in corporate tax
rates compared to the assumptions in the table above:
+1% -1%
In thousands of Sterling Equity Profit or loss Equity Profit or loss
31 December 2024 (11,811) (11,811) 11,661 11,661
31 December 2023 (12,189) (12,189) 12,045 12,045
Refinancing: senior debt rate sensitivity
The Company's portfolio is not exposed to refinancing risk.
In December 2024, the Company successfully completed a refinancing of Northern
Territory Secure Facilities putting in place full term senior debt and
removing any future refinancing risk from its portfolio.
Derivative financial instruments
The fair value of derivative financial instruments ('foreign exchange
forwards') is calculated using the difference between the contractual forward
rate and the estimated forward exchange rates at the maturity of the forward
contract. The foreign exchange forwards are fair valued periodically by the
counterparty bank. The fair value of derivative financial instruments as of 31
December 2024 amounted to a net asset of £13,118,000 (31 December 2023:
£160,000 - net liability). The counterparty bank has an S&P/Moody's
long-term credit rating of A+/A1.
During the year, the Group recognised the following net gains/(losses) on
derivatives financial instruments at FVPL:
Year ended Year ended
31 December 2024 31 December 2023
In thousands of Sterling Realised Unrealised Realised Unrealised
Cash flow hedging 1,380 5,608 (913) 10,146
Balance sheet hedging (701) 7,670 13,371 (4,497)
679 13,278 12,458 5,649
21. Subsidiaries
During the year ended 31 December 2024, the Company had the following
consolidated subsidiaries ('Holding Companies' if referred to individually)
which are included in the consolidated financial statements:
Company Country of incorporation % effective Year acquired/ established
ownership interest
BBGI Global Infrastructure S.A. Luxembourg Ultimate Parent 2011
BBGI Management HoldCo S.à r.l. ('MHC') Luxembourg 100 2011
BBGI Inv, S.à r. l. Luxembourg 100 2012
BBGI Investments S.C.A. Luxembourg 100 2012
BBGI Holding Limited UK 100 2012
BBGI (NI) Limited UK 100 2013
BBGI (NI) 2 Limited UK 100 2015
BBGI CanHoldco Inc. Canada 100 2013
BBGI Ireland Limited Ireland 100 2017
The Company's subsidiaries not consolidated by virtue of the Company being an
Investment Entity, and which are accounted for as Investments at FVPL, are as
follows:
Company Asset name Country of % effective Date
acquired/ controlled
incorporation ownership
RW Health Partnership Holdings Pty Limited Royal Women's Hospital Australia 100 2012
RWH Health Partnership Pty Limited Royal Women's Hospital Australia 100 2012
RWH Finance Pty Limited Royal Women's Hospital Australia 100 2012
Victorian Correctional Infrastructure Partnership Pty Limited Victorian Correctional Facilities Australia 100 2012
BBPI Sentinel Holdings Pty Limited Northern Territory Secure Facilities Australia 100 2014
BBPI Sentinel Holding Trust Northern Territory Secure Facilities Australia 100 2014
BBPI Sentinel Pty Limited Northern Territory Secure Facilities Australia 100 2014
BBPI Member Trust Northern Territory Secure Facilities Australia 100 2014
Sentinel Partnership Pty Limited Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel UJV Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Financing Holdings Pty Limited Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Financing Pty Limited Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Finance Holding Trust Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Finance Trust Northern Territory Secure Facilities Australia 100 2014 and 2015
Sentinel Financing Company Pty Limited Northern Territory Secure Facilities Australia 100 2024
BBGI Sentinel Holdings 2 Pty Limited Northern Territory Secure Facilities Australia 100 2015
BBGI Sentinel Holding Trust 2 Northern Territory Secure Facilities Australia 100 2015
BBGI Sentinel 2 Pty Limited Northern Territory Secure Facilities Australia 100 2015
BBGI Sentinel Trust 2 Northern Territory Secure Facilities Australia 100 2015
BBGI Champlain Holding Inc. Champlain Bridge Canada 100 2020
BBGI SSLG Partner Inc. Champlain Bridge Canada 100 2020
Golden Crossing Holdings Inc. Golden Ears Bridge Canada 100 2012 and 2013
Golden Crossing Finance Inc. Golden Ears Bridge Canada 100 2012 and 2013
Golden Crossing Inc. Golden Ears Bridge Canada 100 2012 and 2013
Global Infrastructure Limited Partnership Golden Ears Bridge Canada 100 2012 and 2013
Golden Crossing General Partnership Golden Ears Bridge Canada 100 2012 and 2013
BBGI KVH Holdings Inc. Kelowna & Vernon Hospitals Canada 100 2013
BBGI KVH Inc. Kelowna & Vernon Hospitals Canada 100 2013
BBGI KVH Holdings 2 Inc. Kelowna & Vernon Hospitals Canada 100 2020
BBGI KVH 2 Inc. Kelowna & Vernon Hospitals Canada 100 2020
Infusion Health KVH General Partnership Kelowna & Vernon Hospitals Canada 100 2013 and 2020
BBGI 104 GP Inc. Highway 104 Canada 100 2020
WCP Holdings Inc. Women's College Hospital Canada 100 2013
WCP Inc. Women's College Hospital Canada 100 2013
WCP Investments Inc. Women's College Hospital Canada 100 2013
Women's College Partnership Women's College Hospital Canada 100 2013
Stoney Trail Group Holdings Inc. North East Stoney Trail Canada 100 2013
Stoney Trail LP Inc. North East Stoney Trail Canada 100 2013
Stoney Trail Investments Inc. North East Stoney Trail Canada 100 2013
Stoney Trail Inc. North East Stoney Trail Canada 100 2013
Stoney Trail Global Limited Partnership North East Stoney Trail Canada 100 2013
Stoney Trail General Partnership North East Stoney Trail Canada 100 2013
BBGI NCP Holdings Inc. North Commuter Parkway Canada 100 2015
BBGI Stanton Holdings Inc. Stanton Territorial Hospital Canada 100 2018 and 2020
BBGI Stanton Partner 1 Inc. Stanton Territorial Hospital Canada 100 2018 and 2020
BBGI Stanton Partner 2 Inc. Stanton Territorial Hospital Canada 100 2020
Boreal Health Partnership Stanton Territorial Hospital Canada 100 2018 and 2020
PJB Beteiligungs GmbH Burg Correctional Facilities Germany 100 2012
Projektgesellschaft Justizvollzug Burg GmbH & Co. KG Burg Correctional Facilities Germany 90 2012
PJB Management GmbH Burg Correctional Facilities Germany 100 2012
Kreishaus Unna Holding GmbH Unna Administrative Centre Germany 100 2012 and 2020
Projekt und Betriebsgesellschaft Kreishaus Unna GmbH Unna Administrative Centre Germany 90 2012 and 2020
BBGI Guernsey Holding Limited((i)) Northern Territory Secure Facilities Guernsey 100 2013
Folera TH Holdings Limited Poplar Affordable Housing & Recreational Centres Jersey 100 2021
Folera Limited Poplar Affordable Housing & Recreational Centres Jersey 100 2021
BBGI PPP Investment S.à r.l. A7 Motorway Luxembourg 100 2018
De Groene Schakel Holding B.V. Westland Town Hall Netherlands 100 2018 and 2019
De Groene Schakel B.V. Westland Town Hall Netherlands 100 2018 and 2019
Noaber18 Holding B.V. N18 Motorway Netherlands 52 2018, 2019 and 2020
Noaber18 B.V. N18 Motorway Netherlands 52 2018, 2019 and 2020
Agder OPS Vegselskap AS E18 Motorway Norway 100 2013 and 2014
Bedford Education Partnership Holdings Limited Bedford Schools UK 100 2012
Bedford Education Partnership Limited Bedford Schools UK 100 2012
Lisburn Education Partnership (Holdings) Limited Lisburn College UK 100 2012
Lisburn Education Partnership Limited Lisburn College UK 100 2012
Clackmannanshire Schools Education Partnership (Holdings) Limited Clackmannanshire Schools UK 100 2012
Clackmannanshire Schools Education Partnership Limited Clackmannanshire Schools UK 100 2012
Primaria (Barking & Havering) Limited Barking Dagenham & Havering (LIFT) UK 100 2012
Barking Dagenham Havering Community Ventures Limited Barking Dagenham & Havering (LIFT) UK 60 2012
Barking & Havering LIFT (Midco) Limited Barking Dagenham & Havering (LIFT) UK 60 2012
Barking & Havering LIFT Company (No.1) Limited Barking Dagenham & Havering (LIFT) UK 60 2012
Scottish Borders Education Partnership (Holdings) Limited Scottish Borders Schools UK 100 2012
Scottish Borders Education Partnership Limited Scottish Borders Schools UK 100 2012
Coventry Education Partnership Holdings Limited Coventry Schools UK 100 2012
Coventry Education Partnership Limited Coventry Schools UK 100 2012
Fire Support (SSFR) Holdings Limited Stoke & Staffs Rescue Service UK 85 2012
Fire Support (SSFR) Limited Stoke & Staffs Rescue Service UK 85 2012
Highway Management M80 Topco Limited M80 Motorway UK 100 2012
Tor Bank School Education Partnership (Holdings) Limited Tor Bank School UK 100 2013
Tor Bank School Education Partnership Limited Tor Bank School UK 100 2013
Mersey Care Development Company 1 Limited Mersey Care Hospital UK 100 2013 and 2014
MG Bridge Investments Limited Mersey Gateway Bridge UK 100 2014
Lagan College Education Partnership (Holdings) Limited Lagan College UK 100 2014
Lagan College Education Partnership Limited Lagan College UK 100 2014
Highway Management (City) Holding Limited M1 Westlink UK 100 2014
Highway Management (City) Finance Plc M1 Westlink UK 100 2014
Highway Management (City) Limited M1 Westlink UK 100 2014
GB Consortium 1 Limited North London Estates Partnership (LIFT) UK 100 2012, 2014 and 2018
Liverpool & Sefton Clinics (LIFT)
East Down Education Partnership (Holdings) Limited East Down Colleges UK 100 2012 and 2018
East Down Education Partnership Limited East Down Colleges UK 100 2012 and 2018
Blue Light Partnership (ASP) Holdings Limited Avon & Somerset Police HQ UK 100 2014, 2015 and 2016
Blue Light Partnership (ASP) Limited Avon & Somerset Police HQ UK 100 2014, 2015 and 2016
Northwin Limited North West Regional College UK 100 2015
Northwin (Intermediate) (Belfast) Limited Belfast Metropolitan College UK 100 2016
Northwin (Belfast) Limited Belfast Metropolitan College UK 100 2016
Woodland View Holdings Co Limited Ayrshire and Arran Hospital UK 100 2021
Woodland View Intermediate Co Limited Ayrshire and Arran Hospital UK 100 2021
Woodland View Project Co Limited Ayrshire and Arran Hospital UK 99 2021
Fire and Rescue NW Holdings Limited North West Fire and Rescue UK 100 2021
Fire and Rescue NW Intermediate Limited North West Fire and Rescue UK 100 2021
Fire and Rescue NW Limited North West Fire and Rescue UK 100 2021
BBGI East End Holdings Inc. Ohio River Bridges US 100 2014
(i) Accounted as part of Investment at FVPL starting at 1 July 2023
22. Related parties and key contracts
All transactions with related parties were undertaken on an arm's length
basis.
Trade and other receivables
As at 31 December 2024, trade and other receivables include short-term
receivables from non-consolidated subsidiaries amounting to £1,103,000 (31
December 2023: £865,000).
Supervisory Board fees
The members of the Supervisory Board of the Company were entitled to total
fees of £345,000 for the year ended 31 December 2024 (31 December 2023:
£315,000).
Directors' shareholding in the Company
In thousands of shares 31 December 31 December
2024 2023
Management Board
Duncan Ball 1,448 1,071
Michael Denny 873 650
Andreas Parzych((i)) 63 n/a
Frank Schramm((ii)) n/a 1,001
Supervisory Board
Sarah Whitney 60 60
June Aitken 70 56
Andrew Sykes 60 40
Christopher Waples 29 17
Jutta af Rosenborg 8 8
2,611 2,903
(i) Andreas Parzych received a 2023 LTIP award upon joining the Management
Board in January 2024.
(ii) Retired on 31 January 2024. Frank Schramm received a 2021 LTIP Award and
a 2022 LTIP Award prior to retiring from the Management Board in January 2024.
Remuneration of the Management Board
Management Board members are entitled to a fixed remuneration under their
contract and to participate in an STIP and an LTIP. Compensation under their
contracts is reviewed annually by the Remuneration Committee.
The total short-term and other long-term benefits recorded in the consolidated
income statement for the Management Board, as the key management personnel in
place as of the reporting date, are as follows:
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Short-term benefits 1,805 2,676
Share-based payments 1,619 1,750
3,424 4,426
23. Share-based compensation
Members of the Management Board received award letters ('2023 Award', '2022
Award', and '2021 Award', respectively and referred collectively as 'Awards')
under the Group's LTIP(.). These Awards are to be settled by MHC in the
Company's own shares. The Awards vest by reference to a combination of
performance measures including the increase in the Company's Investment Basis
NAV per share ('NAV condition') and, key climate-related environmental
metrics, such as a reduction in corporate greenhouse gas ('GHG') emissions
(Scopes 1, 2 & 3) (against a 2019 baseline) and progress in implementing
of net zero targets related to BBGI Portfolio Companies (Financed Emissions)
by value. This is in accordance with published targets (related to BBGI's
commitments as a signatory of the Net Zero Asset Managers Initiative) to
reduce GHG emissions over the return periods.
2021 Award
For 2021 awards, 90% of the performance target will be subject to stretching
NAV Total Return targets over a three-year period.
10% of the award will be linked to a reduction in corporate GHG emissions
(Scope 1, 2 & 3) (against a 2019 baseline), a key climate-related ESG
metric linked to BBGI's Net Zero Plan.
Performance metric Threshold performance Target performance Maximum performance
NAV total return Dividend of 7.33p per annum to 2024, and NAV per share maintained from 31 Dividend growth of 2% per annum to 2024; and 1% per annum NAV per share growth Dividend growth of 2% per annum to 2024; and 2% per annum NAV per share growth
December 2021 to 31 December 2024. to 31 December 2024. to 31 December 2024.
(90% weighting)
ESG - percentage of GHG emissions as a percentage of 2019 baseline (as at 31 December 2024)
Corporate GHG emissions
(Scope 1, 2 & 3)
(10% weighting)
77% 75% 72%
2022 and 2023 Award
For the 2022 and 2023 award, 80% of the performance target will be subject to
stretching NAV Total Return targets over a three-year period.
20% of the award will be linked to key climate-related ESG metrics, comprising
(i) 10% linked to a reduction in corporate GHG emissions (Scopes 1, 2 & 3)
(against a 2019 baseline) and (ii) 10% linked to progress in the
implementation of net zero targets related to BBGI Portfolio Companies
(Financed Emissions) by value, in accordance with published targets related to
BBGI's commitments as a signatory of the Net Zero Asset Managers Initiative.
2022 LTIP Performance metric Threshold performance Target performance Maximum performance
NAV growth per share + dividends paid 15% 17% 22%
(expressed as a percentage of opening NAV)
(80% of weighting)
ESG - percentage of GHG emissions as a percentage of 2019 baseline (as at 31 December 2025)
Corporate GHG emissions
(Scope 1, 2 & 3)
(10% weighting)
73% 70% 67%
ESG - the implementation of net zero plans across BBGI assets (by value) The percentage of asset by value meeting the criteria for 'net zero',
'aligned' or 'aligning'
(10% weighting)
23% 26% 30%
2023 LTIP Performance metric Threshold performance Target performance Maximum performance
NAV growth per share + dividends paid 17% 19% 23%
(expressed as a percentage of opening NAV)
(80% of weighting)
ESG - percentage of GHG emissions as a percentage of 2019 baseline (as at 31 December 2026)
Corporate GHG emissions
(Scope 1, 2 & 3)
(10% weighting)
68% 65% 61%
ESG - the implementation of net zero plans across BBGI assets (by value) The percentage of asset by value meeting the criteria for 'net zero',
'aligned' or 'aligning'
(10% weighting)
31% 35% 40%
LTIP Awards assumptions
The fair value of the equity instruments awarded to the Management Board was
determined using the following key parameters:
2023 Award 2022 Award 2021 Award
Share price at grant date £1.220 £1.550 £1.760
Maturity 3 years 3 years 3 years
Annual target dividend (2026) £0.0866 - -
Annual target dividend (2025) £0.0849 £0.0857 -
Annual target dividend (2024) £0.0817 £0.0840 £0.0771
Annual target dividend (2023) - £0.0793 £0.0755
Annual target dividend (2022) - - £0.0741
The Group also has issued restricted share awards to selected employees. The
restricted share award entitles the employee to a right to receive shares in
the Company upon meeting a service condition.
The fair value of the awards and amounts recognised as additional paid in
capital in the Group's consolidated statement of financial position is as
follows:
In thousands of Sterling 31 December 31 December
2024 2023
2023 Award 199 -
2022 Award 872 407
2021 Award 1,063 707
2020 Award - 1,036
Deferred STIP 449 519
Restricted Shares Plan 556 444
Amount recognised in additional paid-in capital 3,139 3,113
During the year ended 31 December 2024, the 2020 Award vested, resulting in a
gross entitlement before tax, of 1,456,759 shares. A portion of the 2020 Award
was settled in cash in order to realise sufficient funds to settle resulting
tax liabilities arising from the vesting, with only the net number of shares
being issued to each individual. The total accrued amount under the 2020 Award
as at 31 December 2023 was £1,036,000. This amount was transferred from
additional paid in capital to share capital at the settlement date plus an
adjustment of £1,120,000 for the non-market based performance condition.
The share-based compensation expenses amount recognised as part of
'administrative expenses' in the Group's consolidated income statement is
as follows:
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
2023 Award 199 -
2022 Award 465 407
2021 Award 356 353
2020 Award 1,120 345
2019 Award - 123
Deferred STIP 407 522
Restricted Shares Plan 366 288
Amount recognised in administrative expenses 2,913 2,038
Deferred STIP
One-third of any bonus earned under the STIP is being deferred into shares for
a three-year holding period. The deferral component of the STIP differs from
the Company's share-based compensation in that there are no further vesting
conditions on this earned bonus.
The Deferred STIP is valued at one-third of the anticipated outcome of the
annual bonus for the Management Board. The total value of the Deferred STIP as
at 31 December 2024 was £449,000 (31 December 2023: £519,000).
24. Commitments and contingencies
The Group has engaged, in the ordinary course of business, the services of
certain entities to provide legal, custodian, audit, tax and other services to
the Company. The expenses incurred in relation to these are treated as legal
and professional fees under the administrative expenses grouping in the
consolidated income statement.
As at 31 December 2024, the Group had utilised £1.5 million (31 December
2023: £1.4 million) of the £150 million RCF to cover letters of credit.
Refer to Note 17 for further details on the RCF.
25. Service concession agreements
As at 31 December 2024, the Group has a portfolio of 56 assets (see Note 10),
with a weighted average portfolio life of 22.2 years. The Group has a diverse
asset mix from which the service concession receivables are derived. All
assets are availability-style. The rights of both the concession provider and
concession operator are stated within the specific asset agreement.
The following table summarises the main information about the Group's
outstanding service concession agreements, which are all classified as
availability-style social infrastructure:
% equity owned Period of concession (operational phase)
Asset name Short description of concession arrangement Phase Start date end date
Kicking Horse Canyon 50 Design, build, finance and operate a 26 km stretch of the Trans- Canada Operational September 2007 October 2030
Highway, a vital gateway to British Columbia.
Golden Ears Bridge 100 Design, build, finance and operate the Golden Ears Bridge that spans the Operational June 2009 June 2041
Fraser River and connects Maple Ridge and Pitt Meadows to Langley and Surrey,
near Vancouver, British Columbia.
Northwest Anthony Henday Drive 50 Partly design, build, finance and operate a major transport infrastructure Operational November 2011 October 2041
asset in Canada, a ring road through Edmonton, capital of the province of
Alberta.
M80 Motorway 50 Design, build, finance and operate 18 km of dual two/three lane motorway with Operational July 2011 September 2041
associated slip roads and infrastructure from Stepps in North Lanarkshire to
Haggs in Falkirk (Scotland).
E18 Motorway 100 Design, build, finance, operate and maintain a 38 km dual carriageway in Operational August 2009 August 2034
Norway, including 75 bridges and structures and 75 km of secondary roads,
carving through a rugged and beautiful landscape between Grimstad and
Kristiansand.
North East Stoney Trail 100 Design, build, finance, operate and maintain a 21 km section of highway, Operational November 2009 October 2039
forming part of a larger ring road developed in Calgary, Alberta, Canada.
Ohio River Bridges 67 Design, build, finance, operate and maintain the East End Bridge asset which Operational December 2016 December 2051
includes a cable-stay bridge, a tunnel, and the connecting highway with a
total length of 8 miles crossing the Ohio river in the greater
Louisville-Southern Indiana region.
Mersey Gateway Bridge 38 Design, build, finance, operate and maintain a new c. 1 km long six-lane toll Operational October 2017 March 2044
cable-stay bridge (three towers) over the Mersey River to relieve the
congested and ageing Silver Jubilee Bridge and upgrading works for 9.5 km of
existing roads and associated structures.
M1 Westlink 100 Design, build, finance, operate and maintain with a significant amount of Operational February 2006 October 2036
construction work completed in 2009 to upgrade key sections of approx. 60 km
of motorway through Belfast and its vicinity, including O&M of the
complete motorway.
North Commuter Parkway 50 Design, build, finance, operate and maintain two new arterial roadways and a Operational October 2018 September 2048
new river crossing located in the north area of Saskatoon, Saskatchewan,
Canada, and design, construct, finance, operate and maintain a replacement
river crossing located in Saskatoon's downtown core.
Canada Line 27 Design, build, finance, operate and maintain a 19 km rapid transit line Operational August 2009 July 2040
connecting the cities of Vancouver and Richmond with Vancouver International
Airport in British Columbia, Canada.
South East Stoney Trail 40 Design, build, finance, operate and maintain a 25 km section of highway, Operational November 2013 September 2043
forming part of a larger ring road developed in Calgary, Alberta, Canada.
William R. Bennett Bridge 80 Design, build, finance, operate and maintain a 1.1 km long floating bridge in Operational May 2008 June 2035
Kelowna, British Columbia, Canada.
A1/A6 Motorway 37 Design, build finance operate and maintain the enlargement of the A1/A6 in the Operational July 2017 June 2042
Netherlands, which involves the reconstruction and widening of this 2x5 lanes
motorway plus 2 reversible direction lanes. The asset involves some 90
engineering structures.
N18 Motorway 52 Design, build, finance operate and maintain the extension of the N18 motorway Operational April 2018 April 2043
between Varsseveld and Enschede in the eastern part of the Netherlands. It
comprises of 15 km of existing and 27 km of a new 2x2-lane motorway with more
than 30 ecological passages, aiming at a reduction in traffic in certain
villages and safety improvement.
Highway 104 50 Design, build, finance, operate and maintain PPP following completion of Operational May 2020 August 2043
construction of a four-lane divided highway corridor. This begins at the
divided highway east of New Glasgow near Exit 27 at Sutherlands River and runs
for a distance of approximately 38 km to the existing divided highway just
west of the Addington Fork Interchange (Exit 31) at Antigonish.
Champlain Bridge 25 Design, construct, finance, operate, maintain, and rehabilitate a new bridge Operational December 2020 October 2049
spanning the St. Lawrence River between Montreal and Brossard, Quebec.
Victorian Correctional Facilities 100 Design, build, finance, operate, and maintain for a period of 25 years, two Operational March 2006 (MRC)/ February 2006 (MCC) May 2031
new correctional facilities for the State of Victoria, Australia (MCC and
MRC).
Burg Correctional Facilities 90 Design, build, finance, operate, and maintain for a concession period of 25 Operational May 2009 April 2034
years, a new correctional facility for the state of Saxony-Anhalt, Germany.
Avon and Somerset Police HQ 100 Design, build, finance, operate and maintain four new build police and custody Operational July 2014/ July 2015 March 2039
facilities in the Avon and Somerset region (UK).
Northern Territory Secure Facilities 100 Design, build, finance, operate and maintain a new correctional facility, Operational November 2014 June 2044
located near Darwin, including three separate centres of the 1,048 bed
multi-classification men's and women's correctional centre and 24-bed Complex
Behaviour Unit.
Bedford Schools 100 Design, build, finance, operate and maintain the redevelopment of two Operational June 2006 December 2035
secondary schools in the County of Bedfordshire.
Coventry Schools 100 Design, build, finance, operate and maintain one new school and community Operational In stages from March 2006 to June 2009 December 2034
facilities for the Coventry City Council.
Kent Schools 50 Design, build, finance, operate and maintain the redevelopment, which includes Operational June 2007 September 2035
the construction of new build elements for each academy as well as extensive
reconfiguration and refurbishment of six academies.
Scottish Borders Schools 100 Design, build, finance, operate and maintain three new secondary schools for Operational July 2009 November 2038
Scottish Borders Council.
Clackmannanshire Schools 100 Design, build, finance, operate and maintain the redevelopment of three Operational In stages from January to May 2009 March 2039
secondary schools in Clackmannanshire, Scotland.
East Down Colleges 100 Design, build, finance, operate and maintain the three East Down Colleges Operational June 2009 May 2036
campuses in Northern Ireland.
Lisburn College 100 Design, build, finance, operate and maintain Lisburn College in Northern Operational April 2010 May 2036
Ireland.
Tor Bank School 100 Design, build, finance, operate and maintain a new school for pupils with Operational October 2012 October 2037
special education needs in Northern Ireland.
Lagan College 100 Design, build, finance operate and maintain the redevelopment of Lagan College Operational August 2013 June 2038
in Northern Ireland.
Cologne Schools 50 Design, build, finance operate and maintain the redevelopment of five schools Operational April 2005 December 2029
in Cologne.
Rodenkirchen Schools 50 Design, build, finance operate and maintain a school for approx. 1200 pupils Operational November 2007 November 2034
in Cologne.
Frankfurt Schools 50 Design, build, finance operate and maintain the redevelopment of four schools Operational August 2007 July 2029
in Frankfurt.
North West Regional College 100 Design, build, finance, operate and maintain the North West Regional College Operational February 2001 January 2026
educational campus in Northern Ireland.
Belfast Metropolitan College 100 Design, build, finance, operate and maintain the Belfast Metropolitan Operational September 2002 August 2027
educational campus in Northern Ireland.
Westland Town Hall 100 Design, build, finance, operate and maintain Westland Town Hall, a PPP Operational August 2017 August 2042
accommodation asset consisting of a new approximately 11,000 m² town hall for
the Dutch Municipality of Westland.
Gloucester Royal Hospital 50 Design, build, finance, operate and maintain a hospital scheme in Gloucester, Operational April 2005 February 2034
UK.
Liverpool and Sefton Clinics (LIFT) 60 Design, build, finance, operate and maintain the primary healthcare facilities Operational In 7 tranches starting April 2005 and ending February 2013 In 7 tranches starting April 2033 and ending February 2043
in Liverpool and Sefton, UK.
North London Estates Partnership (LIFT) 60 Design, build, finance, operate and maintain the primary healthcare facilities Operational In 4 tranches starting February 2006 and ending June 2013 In 4 tranches starting October 2030 and ending June 2043
of the Barnet, Enfield and Haringey LIFT programme, UK.
Barking Dagenham & Havering (LIFT) 60 Design, build, finance, operate and maintain 10 facilities/clinics in East Operational In 3 tranches starting October 2005 and ending October 2008 In 3 tranches starting September 2030 and ending September 2033
London, UK with asset construction completions between 2005 and 2009.
Royal Women's Hospital 100 Design, build, finance, operate and maintain a new nine-storey Royal Women's Operational June 2008 June 2033
Hospital in Melbourne.
Mersey Care Hospital (part of Liverpool Sefton Clinics (LIFT) above) 80 Design, build, finance, operate and maintain a new mental health in-patient Operational December 2014 December 2044
facility on the former Walton hospital site in Liverpool, UK.
Kelowna and Vernon Hospitals 100 Design, build, finance, operate and maintain a new Patient Care Tower, a new Operational January 2012 August 2042
University of British Columbia Okanagan Clinical Academic Campus and car park
at Kelowna General Hospital, and a new Patient Care Tower at Vernon Jubilee
Hospital.
Women's College Hospital 100 Design, build, finance, operate and maintain the new Women's College Hospital Operational May 2013 (Phase 1), September 2015 (Phase 2), March 2016 (final completion). May 2043
in Toronto, Ontario, Canada.
Restigouche Hospital Centre 80 Design, build, finance, operate and maintain the new Psychiatric Care Centre Operational June 2015 October 2044
in Restigouche, New Brunswick, Canada.
McGill University Health Centre 40 Design, build, finance, operate and maintain the new McGill University Health Operational October 2014 September 2044
Centre, Montreal, Canada.
Stanton Territorial Hospital 100 Design, build, finance, operate and maintain the new Stanton Territorial Operational December 2018 October 2048
Hospital, Yellowknife, Northwest Territories, Canada.
Stoke & Staffs Rescue Service 85 Design, build, finance, operate and maintain ten new community fire stations Operational November 2011 October 2036
in Stoke-on-Trent and Staffordshire, UK.
Unna Administrative Centre 90 Design, build, finance, operate and maintain the administration building of Operational July 2006 July 2031
the Unna District in Rhine-Westphalia, Germany.
Fürst Wrede Barracks 50 Design, build, finance, operate and maintain the refurbishment and new Operational March 2008 March 2028
construction of a 32-hectare army barracks in Munich, Germany.
Poplar Affordable Housing & Recreational Centres 100 Design, construct, finance, operate, maintain, and Operational October 2015 July 2051
rehabilitate separate buildings in Poplar, London, UK.
Aberdeen Western Peripheral Route 33 Design, construct, finance, operate and maintain 12 km of the existing roadway Operational May 2018 November 2047
(upgraded) and 47 km of new dual carriageway including two significant river
crossings near Aberdeen, Scotland.
Ayrshire and Arran Hospital 100 Design, construct, finance and maintain a 206-bed acute mental health facility Operational March 2016 March 2041
and community hospital in Irvine, North Ayrshire, Scotland..
North West Fire and Rescue 100 Design, construct, finance, maintain and rehabilitate 16 new community fire Operational June 2013 July 2038
stations in the North West of England.
John Hart Generating Station 80 Design, construct, finance, maintain and rehabilitate a new three-turbine, Operational June 2019 October 2033
132-MW hydroelectric power generation station on the Campbell River, British
Columbia, including a three generating unit underground powerhouse, 2.1 km of
water passage tunnels and a water bypass system to protect a downstream fish
habitat.
A7 Motorway 49 Design, construct, finance, operate, maintain and rehabilitate the A7 Motorway Operational December 2019 August 2044
between Bordesholm and Hamburg. This includes expansions and upgrades to
certain critical sections, and widening 65 kms from four to six lanes. The
project includes 11 interchanges, six parking facilities, four rest areas, 79
civil engineering structures, c.100,000 m² noise barriers and a c.550 m noise
enclosure tunnel.
26. Standards issued but not yet effective
A number of new standards and amendments to standards are effective for annual
periods beginning after 1 January 2025 and earlier application is permitted;
however, the Group has not early adopted any of the forthcoming new or amended
standards in preparing these financial statements. The Group intends to adopt
these new and amended standards, if applicable, when they become effective.
The adoption of the below new standard is not expected to have a significant
impact on the Group's financial statements.
Lack of exchangeability - Amendments to IAS 21
The International Accounting Standards Board ('IASB') issued amendments to IAS
21, The Effects of Changes in Foreign Exchange Rates, to specify how an entity
should assess whether a currency is exchangeable and how it should determine a
spot exchange rate when exchangeability is lacking. The amendments also
require disclosure of information that enables users of an entity's financial
statements to understand how the currency not being exchangeable into the
other currency affects, or is expected to affect, the entity's financial
performance, financial position and cash flows.
27.Events after the reporting period
Offer to acquire the Company (the 'Offer')
On 6 February 2025, the Company and Boswell Holdings 3 S.C.Sp ('Bidco')
announced a Board-recommended all cash offer for the entire issued and to be
issued share capital of the Company by Bidco, which is a newly formed special
limited partnership indirectly controlled by British Columbia Investment
Management Corporation ('BCI') for 147.5 pence per share ('pps').
On 27 February 2025, the Company declared a second interim cash dividend of
4.20pps for the period 1 July - 31 December 2024, to be paid on 16 April 2025.
Payment of the second interim dividend is consistent with the Company's target
dividend payment of 8.40pps in respect of the financial year ending 31
December 2024. As a result of the declaration and payment of the second
interim dividend, and as set out in the Offer document published on 6 March
2025, the Offer price was reduced to 143.3pps. Eligible BBGI shareholders on
the register on the dividend record date will be entitled to retain the second
interim dividend.
On 6 March 2025, the Company published a Circular convening a General Meeting
to consider and, if thought fit, approve resolutions authorising;
(i) the sale by BBGI, directly or indirectly, of all or any of its assets and
undertakings to Bidco (or an affiliate of Bidco), subject to the Offer
becoming unconditional and the occurrence of the Delisting Date; and (ii) the
appointment of Bidco's nominees to the Supervisory Board with effect from the
later of the Delisting Date and the date on which such appointments are
approved by the CSSF. This General Meeting will take place on 10 April 2025
at the Company's head office.
The Offer document sets out the full terms of the Offer and the timetable of
the Offer. The Offer document and circular have been published and sent to
BBGI shareholders and are also available on the Company's website
www.bb-gi.com/investors/offer/
If the Offer is declared unconditional, BBGI is expected to delist from the
London Stock Exchange within 20 business days of the date on which the Offer
is declared or becomes unconditional. However, at present the Offer remains
conditional and consequently this Annual Report has been prepared in a manner
consistent with past practice with prior reporting documents including in
respect of the annual audit.
Audit Report
To the Shareholders of BBGI Global Infrastructure S.A.
Our opinion
In our opinion, the accompanying financial statements give a true and fair
view of the financial position of BBGI Global Infrastructure S.A. (the
"Company") as at 31 December 2024, and of its financial performance and its
cash flows for the year then ended in accordance with IFRS Accounting
Standards as adopted by the European Union.
What we have audited
The Company's financial statements comprise:
• the statement of financial position as at 31 December 2024;
• the statement of comprehensive income for the year then ended;
• the statement of changes in equity for the year then ended;
• the statement of cash flows for the year then ended; and
• the notes to the financial statements, including material accounting
policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with the Law of 23 July 2016 on the audit
profession (Law of 23 July 2016) and with International Standards on Auditing
(ISAs) as adopted for Luxembourg by the "Commission de Surveillance du Secteur
Financier" (CSSF). Our responsibilities under the Law of 23 July 2016 and ISAs
as adopted for Luxembourg by the CSSF are further described in the
"Responsibilities of the "Réviseur d'entreprises agréé" for the audit of
the financial statements" section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
We are independent of the Company in accordance with the International Code of
Ethics for Professional Accountants, including International Independence
Standards, issued by the International Ethics Standards Board for Accountants
(IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical
requirements that are relevant to our audit of the financial statements. We
have fulfilled our other ethical responsibilities under those ethical
requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Impairment of Investment in subsidiary and loans receivable from subsidiary In assessing the impairment of investment in subsidiary and loans receivable
from subsidiary, we performed the procedures outlined below.
Refer to the financial statements (Note 3.d), impairment testing for
investments and loans and receivables from subsidiary; Note 13). We assessed that the accounting policy in relation with the impairment of the
investment in subsidiary and loans receivable from subsidiary was in
Investment in subsidiary and loan receivables from subsidiary are measured at compliance with the applicable accounting framework.
cost less accumulated impairment losses. Their carrying amounts are GBP 354
million and GBP 248 million, respectively, and they are the most significant We understood and evaluated the design and implementation of key controls in
balances on the statement of financial position. place around the impairment of the investment in subsidiary and loans
receivable from subsidiary.
The impairment assessment of the investment in the subsidiary and the
determination of expected credit loss (ECL) for loans receivable from We obtained the management's impairment assessment of the investment in
subsidiary is linked to the fair value of the underlying investments which are subsidiary and loans receivable from subsidiary and performed an overall
mainly made of social infrastructure investments through public private assessment to challenge the criteria and inputs used in the impairment
partnership and/or public finance initiatives or similar procurement models analysis, as well as the assumptions and models used to calculate the ECL.
("investments") generating long-term predictable cash flows.
In addition, considering that the impairment of the investment in subsidiary
The valuation of the investments is determined using the discounted cash flow and loans receivable from subsidiary is linked to the fair value of the
methodology. It relies on significant unobservable inputs and requires underlying investments, we obtained substantive audit evidence over the
significant judgments from the Management Board. A small change in these valuation of the underlying investments as follows:
assumptions could result in a significant impact on the fair value of the
investments. As a consequence, there is an inherent risk that the fair value - We tested key controls performed in the valuation process of
of these investments may not be appropriate. investments in relation to the financial data included in the valuation
models, the "look back" comparison of the forecast vs actual cash flows for
Taking this into account, coupled with the magnitude of the amounts involved, the previous financial year, as well as other investment model review
we consider this area as a key audit matter. controls.
- We inquired into the qualification of Management Board and its
internal valuation team and concluded that they have sufficient experience and
expertise.
- We obtained the overall fair value reconciliation of opening to
closing fair value of the underlying investments and corroborated significant
fair value movements during the year, thereby assessing the reasonableness and
completeness of the movement for the year.
- With the support of our own valuation experts, we assessed that
the Group's valuation methodology was in compliance with the International
Private Equity and Venture Capital Valuation Guidelines and market practice
based on our knowledge of the investments held by the Group and experience of
the industry in which the Group operates.
- For a sample of assets selected via risk and value-based
targeted sampling of the investments by value, we assessed that the key
macroeconomic assumptions such as inflation, deposit rates, corporate tax
rates, base discount rate setting were appropriate and/or within acceptable
ranges based on market search. We also checked that the selected asset
specific discount rates were within acceptable ranges.
- We obtained and read the valuation report prepared by
Management's external valuation experts which confirmed that the portfolio
value prepared by the Management Board was appropriate.
- Finally, for the entire portfolio, we obtained external
confirmation over the existence and percentage of ownership of the investments
held by the Group.
Other information
The Management Board is responsible for the other information. The other
information comprises the information stated in the annual report but does not
include the financial statements and our audit report thereon.
Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information identified above and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Management Board and those charged with governance for
the financial statements
The Management Board is responsible for the preparation and fair presentation
of the financial statements in accordance with IFRS Accounting Standards as
adopted by the European Union, and for such internal control as the Management
Board determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Management Board is responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the Management Board either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
Responsibilities of the "Réviseur d'entreprises agréé" for the audit of the
financial statements
The objectives of our audit are to obtain reasonable assurance about whether
the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an audit report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Law of 23 July 2016
and with ISAs as adopted for Luxembourg by the CSSF will always detect a
material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with the Law of 23 July 2016 and with ISAs
as adopted for Luxembourg by the CSSF, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control;
• obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control;
• evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
Management Board;
• conclude on the appropriateness of the Management Board's use of the
going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our audit report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
audit report. However, future events or conditions may cause the Company to
cease to continue as a going concern;
• evaluate the overall presentation, structure, and content of the
financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and
communicate to them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our audit report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Report on other legal and regulatory requirements
The annual report is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
PricewaterhouseCoopers, Société
coopérative
Luxembourg, 27 March 2025
Represented by
Emanuela Sardi
Company Statement of Comprehensive Income
For the year ended 31 December 2024
In thousands of Sterling Notes 2024 2023
Administrative expenses 5 (12,268) (10,525)
Other operating expenses 6 (7,144) (3,517)
Other operating income 7 203,727 19,761
Results from operating activities 184,315 5,719
Net finance income 8 20,484 20,563
Profit before tax 204,799 26,282
Tax expense 9 (528) (532)
Profit for the year 204,271 25,750
Other comprehensive income for the year - -
Total comprehensive income for the year 204,271 25,750
The accompanying notes form an integral part of the Company's financial
statements.
Company Statement of Financial Position
As at 31 December 2024
In thousands of Sterling Notes 2024 2023
Assets
Property and equipment 6 61
Loans receivable from subsidiary 13 248,162 233,673
Investment in subsidiary 13 354,213 354,233
Non-current assets 602,381 587,967
Loans receivable from subsidiary 13 123,988 -
Interest and other receivables from subsidiary 13 11,949 10,750
Other current assets 1,103 895
Cash and cash equivalents 10 11,322 4,710
Current assets 148,362 16,355
Total assets 750,743 604,322
Equity
Share capital 11 854,642 854,669
Retained earnings (105,766) (251,673)
Equity attributable to the owners of the Company 748,876 602,996
Liabilities
Trade and other payables 1,634 1,326
Advances from subsidiary 101 -
Tax liabilities 9 132 -
Current liabilities 1,867 1,326
Total liabilities 1,867 1,326
Total equity and liabilities 750,743 604,322
Net asset value attributable to the owners of the Company 11 748,876 602,996
Net asset value per ordinary share (pence) 11 104.8 84.4
The accompanying notes form an integral part of the Company's financial
statements.
Company Statement of Changes in Equity
For the year ended 31 December 2024
In thousands of Sterling Notes Share Retained Total
capital earnings equity
Balance as at 31 December 2023 854,669 (251,673) 602,996
Total comprehensive income for the year - 204,271 204,271
Transactions with the owners of the Company recognised directly in equity
Cash dividends 11 - (58,364) (58,364)
Purchase of treasury shares 11 (1,564) - (1,564)
Shares issued on behalf of a subsidiary 11 1,537 - 1,537
Balance as at 31 December 2024 854,642 (105,766) 748,876
In thousands of Sterling Notes Share Retained Total
capital earnings equity
Balance as at 1 January 2023 852,391 (222,400) 629,991
Total comprehensive income for the year - 25,750 25,750
Transactions with the owners of the Company recognised directly in equity
Cash dividends 11 - (53,487) (53,487)
Scrip dividends 11 1,536 (1,536) -
Shares issued on behalf of a subsidiary 11 787 - 787
Share issuance costs 11 (45) - (45)
Balance as at 31 December 2023 854,669 (251,673) 602,996
The accompanying notes form an integral part of the Company's financial
statements.
Company Statement of Cash Flows
For the year ended 31 December 2024
In thousands of Sterling Notes 2024 2023
Operating activities
Profit for the year 204,271 25,750
Adjustments for:
Gain on return of capital from subsidiary 7,13 (203,727) -
Net finance income 8 (20,484) (20,563)
Foreign currency exchange loss - net 6 5,253 3,352
Tax expense 9 528 532
Depreciation 61 16
Working capital adjustments:
Advances/other receivables from subsidiary 55,102 (10,825)
Other current assets (208) (162)
Trade and other payables 215 273
Cash from/(used) in operating activities 41,011 (1,627)
Interest received 280 365
Taxes paid (396) (661)
Net cash flows from/(used) in operating activities 40,895 (1,923)
Investing activities
Loan repayment from subsidiary 9,710 21,148
Loans provided to subsidiary (2,498) (200)
Interest received 18,573 20,502
Acquisition of property and equipment (5) (9)
Net cash flows from investing activities 25,780 41,441
Financing activities
Equity instruments issue costs 11 - (45)
Purchase of treasury shares 11 (1,564) -
Dividends paid 11 (58,364) (53,487)
Net cash flows used in financing activities (59,928) (53,532)
Net increase/(decrease) in cash and cash equivalents 6,747 (14,014)
Impact of foreign exchange on cash and cash equivalents (135) (14)
Cash and cash equivalents as at 1 January 10 4,710 18,738
Cash and cash equivalents as at 31 December 10 11,322 4,710
The accompanying notes form an integral part of the Company's financial
statements.
Notes to the Company Financial Statements
For the year ended 31 December 2024
1. Corporate information
BBGI Global Infrastructure S.A., ("BBGI", or the "Company") is an investment
company incorporated in Luxembourg in the form of a public limited liability
company (société anonyme) with variable share capital (société
d'investissement à capital variable, or 'SICAV') and regulated by the
Commission de Surveillance du Secteur Financier ("CSSF") under Part II of the
amended Luxembourg law of 17 December 2010 on undertakings for collective
investments with an indefinite life. The Company qualifies as an alternative
investment fund within the meaning of Article 1 (39) of the amended law of 12
July 2013 on alternative investment fund managers ("2013 Law") implementing
Directive 2011/61/EU of the European Parliament and of the Council of 8 June
2011 on Alternative Investment Fund Managers and amending Directives
2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No
1095/2010 and is authorised as an internal alternative investment fund manager
in accordance with Chapter 2 of the 2013 Law. The Company was admitted to the
official list of the UK Listing Authority (premium listing, closed-ended
investment fund) and to trading on the main market of the London Stock
Exchange on 21 December 2011.
As of 1 January 2021, the main market of the London Stock Exchange is not
considered as an EU regulated market (as defined by the MiFID II). As a
result, Directive 2004/109/EC of the European Parliament and of the Council of
15 December 2004 on the harmonisation of transparency requirements in relation
to information about issuers whose securities are admitted to trading on a
regulated market and amending Directive 2001/34/EC (the Transparency
Directive) as implemented in the Luxembourg law by the act dated 11 January
2008 on transparency requirements for issuers (the Transparency Act 2008),
among other texts, does not apply to the Company.
The Company's registered office is 6E, route de Treves, L-2633 Senningerberg,
Luxembourg and is registered with the Registre de Commerce et des Sociétés
Luxembourg under the number B163 879.
The Company is a closed-ended investment company that invests, through its
subsidiaries, principally in a diversified portfolio of operational Public-
Private Partnership ("PPP")/Private Finance Initiative ("PFI") infrastructure
or similar style assets ('Investment portfolio'). As at 31 December 2024, the
Company has no indirectly held investment that is under construction (31
December 2023: nil).
The Company had no employees as at 31 December 2024 and 31 December 2023,
respectively.
Reporting period
The Company´s reporting period runs from 1 January to 31 December each year.
The Company´s statement of comprehensive income, statement of financial
position, statement of changes in equity and statement of cash flows include
comparative figures as at 31 December 2023.
The amounts presented as 'non-current' in the Company´s statement of
financial position are those expected to be recovered or settled after more
than one year. The amounts presented as 'current' are expected to be recovered
or settled within one year. These financial statements were approved by the
Management Board on 27 March 2025.
2. Basis of preparation
Statement of compliance
The separate financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards accounting
standards ("IFRS") as adopted by the European Union ('EU'). Please refer to
Note 3d) for the accounting policy with respect to the investment in
subsidiary.
The Company also prepares consolidated financial statements in accordance with
IFRS as adopted by the EU.
The Company follows, to the fullest extent possible, the provisions of the
Standard of Recommended Practices issued by the Association of Investment
Companies ("AIC SORP"). If the provisions of the AIC SORP are in direct
conflict with IFRS as adopted by the EU, the standards of the latter shall
prevail.
The separate financial statements have been prepared using the going concern
principle under the historical cost basis.
Functional and presentation currency
These financial statements are presented in Sterling, the Company's functional
currency. All amounts presented in tables throughout the report have been
rounded to the nearest thousand, unless otherwise stated.
Changes in accounting policy
New and amended standards applicable to the Company are as follows:
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
The amendments specify the requirements for classifying liabilities as current
or non-current and clarify:
- what is meant by a right to defer settlement;
- that a right to defer must exist at the end of the reporting period;
- that classification is unaffected by the likelihood that an entity will
exercise its deferral right; and
- that only if an embedded derivative in a convertible liability is itself
an equity instrument would the terms of a liability not impact its
classification;
These amendments have no significant impact on the financial statements of the
Company.
3. Summary of material accounting policies
a) Foreign currency transactions
Transactions in foreign currencies are translated into Sterling at the
exchange rate on the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are
translated into Sterling at the exchange rate on that date.
Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are translated into Sterling at the exchange rate on
the date that the fair value was determined. Foreign currency differences
arising on translation are recognised in the statement of comprehensive income
as a gain or loss on currency translation.
b) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition at either: (i)
amortised cost; (ii) fair value through other comprehensive income - debt
instruments; (iii) fair value through other comprehensive income - equity
instruments; or (iv) fair value through profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Company's
business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Company has
applied the practical expedient, the Company initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.
The Company's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. The Company's financial
assets classified and measured at amortised cost are held within a business
model with the objective to hold financial assets in order to collect
contractual cash flows which represents solely payments of principal and
interests.
In general, the Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction in which substantially all
the risks and rewards of ownership of the financial asset are transferred. Any
interest in such transferred financial assets that is created or retained by
the Company is recognised as a separate financial asset or liability.
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when, and only when, the Company has a
legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
At the date of the statement of financial position, all financial assets of
the Company have been classified as financial assets at amortised cost.
Financial assets of the Company consist of investment in subsidiary, loan
receivables from subsidiary, interest and other receivables from subsidiary
and cash and cash equivalents.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised when:
- The rights to receive cash flows from the asset have expired; or
- The Company has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in the statement of comprehensive income when the asset
is derecognised, modified, or impaired.
Financial liabilities
The Company classifies financial liabilities at amortised cost. Such financial
liabilities are recognised initially at fair value less any direct
attributable transaction costs. Subsequent to initial recognition, these
financial liabilities are measured at amortised cost using the EIR method.
The Company derecognises a financial liability (or part of a financial
liability) from the statement of financial position when, and only when, it is
extinguished or when the obligation specified in the contract or agreement is
discharged or cancelled or has expired. The difference between the carrying
amount of a financial liability (or part of a financial liability)
extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
considered in the statement of comprehensive income.
c) Investments in subsidiary
The investment in subsidiary is held at cost less any impairment.
d) Impairment testing for investments and loans and receivables from
subsidiary
The investment in subsidiary and loan receivables from subsidiary are measured
at cost less accumulated impairment losses. The impairment losses are based on
expected credit loss ("ECL") on such receivables. The loans and receivables of
the Company from its subsidiary are directly linked to the PPP/ PFI portfolio
financed by this subsidiary either through loans and/or equity investments.
The ECL, if any, of the Company from its loans and receivables from subsidiary
has a direct link with the fair value of the Company´s Investment portfolio.
The Company performs a fair valuation of the underlying Investment portfolio
every six months and considers any ECL on the loans and receivables, among
others based on the results of the valuation. The fair valuation of the
underlying Investment portfolio is done by calculating the net present value
of the cash flows from these assets, based on internally generated models. The
net present value of each asset is determined using future cash flows,
applying certain macroeconomic assumptions for the cash flows which include
indexation rates, deposit interest rates, corporate tax rates and foreign
currency exchange rates. The cash flows are discounted at the applicable
discount rate for companies involved in service concession assets. A material
change in the macroeconomic assumptions and discount rates used for such
valuation could have a significant impact on the net present value of the
future cash flows. The determined fair value will be considered as the
recoverable amount to be compared to the carrying amount of investment in
subsidiary to determine possible impairment. Excess of the carrying amount of
the investment in subsidiary over the recoverable amount is recognised as an
impairment loss. As of 31 December 2024, the Company identified no ECL to be
recorded on its loans and receivables from subsidiary (2023: nil) nor any
impairment on its investment in subsidiary.
e) Provisions
A provision is recognised if, as a result of a past event, the Company has a
present legal or constructive obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to a liability. The unwinding of
such discount is recognised as a finance cost.
f) Cash and cash equivalents
Cash and cash equivalents are cash balances and term deposits with maturities
of three months or less from the date when the deposits were made and that are
subject to an insignificant risk of change in their fair value, and are used
by the Company in the management of its short-term commitments.
g) Share capital
Ordinary shares are classified as equity. Costs directly attributable to the
issue of ordinary shares, or which are associated with the establishment of
the Company, and that would otherwise have been avoided are recognised as a
deduction from equity, net of any tax effects.
h) Finance income and finance costs
Interest income and expenses are recognised in the statement of comprehensive
income using the EIR method.
The EIR is the rate that exactly discounts the estimated future cash payments
and receipts through the expected life of the financial instrument (or, where
appropriate, a shorter period) to the carrying amount of the financial
instrument. When calculating the EIR, the Company estimates future cash flows
considering all contractual terms of the financial instrument, but not future
credit losses.
Interest received or receivable and interest paid or payable are recognised in
the statement of comprehensive income as finance income and finance costs,
respectively.
i) Tax
According to the Luxembourg regulations regarding SICAV companies, the Company
itself, as an undertaking for collective investment, is exempt from paying
income and/or capital gains taxes in Luxembourg. It is, however, liable to
annual subscription tax of 0.05% on its consolidated net asset value ("NAV")
payable quarterly and assessed on the last day of each quarter. Subscription
tax is recognised as a tax expense in the Company statement of comprehensive
income for the period in which it is incurred.
j) Current versus non-current classification
The Company presents assets and liabilities in the statement of financial
position based on current/non-current classification. An asset is current when
it is:
- expected to be realised or intended to be sold or consumed in the normal
operating cycle;
- held primarily for the purpose of trading;
- expected to be realised within 12 months after the reporting period; or
- cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in the normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within 12 months after the reporting period or
- There is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period
The terms of the liability that could, at the option of the counterparty,
result in its settlement by the issue of equity instruments do not affect its
classification.
The Company classifies all other liabilities as non-current.
4. Material accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS requires the
Management Board to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income, and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
In the process of applying the Company´s accounting policies, the Management
Board has made the following judgements that would have the most significant
effect on the amounts recognised in the Company's financial statements.
4.1 Impairment testing for investments
Refer to Note 3d) for the discussion of this topic.
4.2 Going concern basis of accounting
The Management Board has examined significant areas of possible financial risk
including cash and cash requirements. It has not identified any material
uncertainties which would cast significant doubt on the Company's ability to
continue as a going concern for a period of 12 months from the end of this
reporting period. The Management Board has satisfied itself that the Company
has adequate resources to continue in operational existence for the
foreseeable future. After due consideration, the Management Board believes it
is appropriate to adopt the going concern basis of accounting in preparing the
financial statements.
5. Administrative expenses
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Support agreement fees (Note 13) 8,805 7,593
Legal and professional fees 2,555 2,201
Supervisory Board fees 385 315
Others 523 416
12,268 10,525
Included in the legal and professional fees expensed during the year are those
amounts charged by the Company's external auditor which include audit fees of
£212,000 (2023: £248,000) and audit related fees of £120,000 (2023:
£89,000). Non-assurance services charged by the Company's external auditors
during the year amounted to £nil (2023: £nil). Also included in the legal
and professional fees are depositary and custodian related charges which
amounted to £342,000 (2023: £395,000)
6. Other operating expenses
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Foreign currency exchange loss - net 5,255 3,352
Foreign exchange indemnity agreement expense (Note 13) 1,889 -
Acquisition-related costs and others (including unsuccessful bid costs) - 165
7,144 3,517
7. Other operating income
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Gain on return of capital from subsidiary (Note 13) 203,727 -
Foreign exchange indemnity agreement income (Note 13) - 19,761
203,727 19,761
The net foreign currency exchange gains are mainly attributable to the
unrealised gains on the translation of foreign currency denominated loans
receivable from the Company's subsidiary.
8. Net finance income
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Finance income from multi-currency facility (Note 13) 20,204 20,198
Interest income from deposits 280 365
20,484 20,563
9. Taxes
As at 31 December 2024, tax payable with respect to subscription tax amounted
to £132,000 (2023: £nil).
A reconciliation of the tax expense and the tax at the applicable tax rate is
as follows:
In thousands of Sterling Year ended Year ended
31 December 31 December
2024 2023
Profit before tax 204,799 26,282
Income tax using the Luxembourg domestic tax rate of 24.94% 51,077 6,555
Effect of tax-exempt income and deductions (51,077) (6,555)
Subscription tax expense 528 532
Tax charge for the year 528 532
The Company, as an undertaking for collective investment, pays an annual
subscription tax of 0.05% on its consolidated NAV.
10. Cash and cash equivalents
Cash and cash equivalents relate to bank deposits amounting to £11,322,000
(2023: £4,710,000).
11. Share capital
Changes in the Company´s share capital are as follows:
In thousands of Sterling 31 December 31 December
2024 2023
Share capital as at 1 January 854,669 852,391
Share capital issued through scrip dividends - 1,536
Purchase of treasury shares (1,564) -
Shares issued as share based compensation 1,537 787
Shares issuance cost - (45)
854,642 854,669
BBGI Management HoldCo S.à r.l. ('MHC'), a wholly owned direct subsidiary of
the Company, provides share-based compensation to senior executives whereby it
issues a certain number of shares of the Company to entitled executives,
calculated based on the conditions of the Long-Term Incentive Plan ("LTIP")
rules and the respective LTIP Award letters. During the year, the Company
issued 761,216 treasury shares, in connection with the 2020 LTIP award at
130.3 pence per share for a total amount of £1,072,000 (2023: £264,000). The
amount of £1,072,000 was recorded as an advance made by the Company to MHC
during the year (2023: £264,000).
Deferred STIP
The STIP provided to senior executives at MHC include a deferred component
with one-third of any bonus earned under the STIP is being deferred into
shares of the Company for three year holding period. The deferral component of
the STIP differs from the Company's share-based compensation as there are no
further vesting conditions on this earned bonus. The amount of £286,000 was
recorded as an advance made by the Company to MHC during the year (2023:
£398,000).
The changes in the number of ordinary shares of no-par value issued by the
Company are as follows:
In thousands of shares 31 December 31 December
2024 2023
In issue at beginning of the year 714,877 713,331
Purchase of treasury shares (1,107) -
Shares issued through scrip dividends - 1,017
Shares issued as share based compensation 1,107 529
714,877 714,877
All the ordinary shares issued rank pari passu. The holders of ordinary shares
are entitled to receive dividends as declared from time to time, and are
entitled to one vote per share at general meetings of the Company.
The Company meets the minimum share capital requirement as imposed under the
applicable Luxembourg regulation.
Dividends
The dividends declared and paid by the Company during the year ended 31
December 2024 are as follows:
In thousands of Sterling except as otherwise stated 31 December
2024
2023 2(nd) interim dividend of 3.965 pence per qualifying ordinary share - for 28,345
the period 1 July 2023 to 31 December 2023
2024 1(st) interim dividend of 4.200 pence per qualifying ordinary share - for 30,019
the period 1 January 2024 to 30 June 2024
Total dividends declared and paid during the year 58,364
The 31 December 2023 2(nd) interim dividend was paid in April 2024. Cash
dividend was £28,345,000. The scrip alternative was not available with this
dividend payment.
The 30 June 2024 1(st) interim dividend was paid in October 2024. Cash
dividend was £30,019,000. The scrip alternative was not available with this
dividend payment.
The dividends declared and paid by the Company during the year ended 31
December 2023 are as follows:
In thousands of Sterling except as otherwise stated 31 December
2023
2022 2(nd) interim dividend of 3.740 pence per qualifying ordinary share - for 26,679
the period 1 July 2022 to 31 December 2022
2023 1(st) interim dividend of 3.965 pence per qualifying ordinary share - for 28,345
the period 1 January 2023 to 30 June 2023
Total dividends declared and paid during the year 55,024
The 31 December 2022 2(nd) interim dividend was paid in April 2023. The value
of the scrip election was £1,536,000, with the remaining amount of
£25,143,000 paid in cash to those investors who did not elect for the scrip.
The 30 June 2023 1(st) interim dividend was paid in October 2023. Cash
dividend was £28,345,000. The scrip alternative was not available with this
dividend payment.
Net asset value ("NAV")
The Company NAV and NAV per share as of 31 December 2024, 31 December 2023 and
31 December 2022 were as follows:
In thousands of Sterling/pence 2024 2023 2022
NAV attributable to the owners of the Company 748,876 602,996 629,991
NAV per ordinary share (pence) 104.8 84.4 88.3
12. Financial risk and capital risk management
Risk management framework
The Management Board has overall responsibility for the establishment and
control of the Company's risk management framework.
The Company has exposure to credit risk, liquidity risk and market risk. This
note presents information about the Company's exposure to each of these risks,
the Company's objectives, policies, and processes for measuring and managing
risk and the Company's management of capital. This note also presents the
result of the review performed by management on these risk areas.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with
the Company, resulting in:
1) impairment or reduction in the amounts recoverable from receivables and
other current and non-current assets; and
2) non-recoverability, in part or in whole, of cash and cash equivalents
deposited with banks.
A significant part of receivables of the Company are receivables from a
subsidiary. This subsidiary has the ability to pay based on the projected cash
flows to be received by such subsidiary from their respective investments.
Exposures to credit risks
The Company is exposed to credit risks on the following items in the Company's
statement of financial position:
In thousands of Sterling 31 December 31 December
2024 2023
Loans and other receivable to subsidiary (including accrued interest) 384,099 244,423
Cash and cash equivalents 11,322 4,710
395,421 249,133
The maximum exposure to credit risk on receivables that are neither overdue
nor impaired as of 31 December 2024, amounts to £384,099,000 (2023:
£244,423,000).
Recoverable amounts of receivables and other current and non-current assets
The Company establishes when necessary an allowance for impairment, based on
ECL specific to the asset. Currently there are no recorded allowances for
impairment. All the Company's receivables are recoverable and no significant
amounts are considered as overdue, impaired, or subject to ECL.
Cash and cash equivalents
The cash and cash equivalents are maintained with reputable banks with ratings
that are acceptable based on the established internal policy of the Company.
Based on the assessment of the Management Board, there are no significant
credit risks related to the cash and cash equivalents. The main counterparty
banks of the Company have S&P/Moody's credit rating between A+/A1.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset.
The Company's policy over liquidity risk is that it will seek to have
sufficient liquidity to meet its liabilities and obligations when they fall
due.
The Company manages liquidity risk by maintaining adequate cash and cash
equivalents and access to borrowing facilities to finance day-to-day
operations and medium to long-term capital needs. The Company also regularly
monitors the forecast and actual cash requirements and matches the maturity
profiles of the Company's financial assets and financial liabilities.
The Company has the possibility of raising capital through the issuance of
shares in order to finance further acquisitions. The following are the
undiscounted contractual maturities of the financial liabilities of the
Company:
Contractual cash flows
31 December 2024 Carrying Total Within 1-5
In thousands of Sterling
amount 1 year years
Trade and other payables 1,634 1,634 1,634 -
Contractual cash flows
31 December 2023 Carrying Total Within 1-5
In thousands of Sterling
amount 1 year years
Trade and other payables 1,326 1,326 1,326 -
Market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices, will affect the Company's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the returns.
Currency risk
The Company is exposed to currency risk as a result of its cash and cash
equivalents being denominated in currencies other than Sterling.
The currencies in which these items are primarily denominated are the
Australian Dollar (A$), Canadian Dollar (C$), Euro (€), Norwegian Krone
(NOK) and US Dollar (US$).
In respect of other monetary assets and liabilities denominated in currencies
other than Sterling, the Company's policy is to ensure that its net exposure
is kept at an acceptable level. The Management Board believes that there is no
significant concentration of currency risk in the Company.
The summary of the quantitative data about the Company's exposure to foreign
currency risk provided to the Management Board is as follows:
31 December 2024 A$ C$ € NOK US$
In thousands of Sterling
Cash and cash equivalents 5 2,142 1,222 - -
Trade and other payables - (28) (978) - -
5 2,114 244 - -
31 December 2023 A$ C$ € NOK US$
In thousands of Sterling
Cash and cash equivalents 1,177 9 473 2 2
Trade and other payables - (7) (839) - -
1,177 2 (366) 2 2
The Company has loans and receivables from MHC denominated in foreign currency
but the Company is not exposed to fluctuations in foreign exchange rates in
relation to these receivables due to the foreign exchange indemnity agreement
entered into between the Company and MHC (see Note 13).
The significant exchange rates applied during the year ended 31 December 2024
and 31 December 2023 are as follows:
31 December 2024
Average £ Spot rate £
A$ 1 0.516 0.495
C$ 1 0.571 0.555
€1 0.847 0.829
NOK 1 0.073 0.070
US$ 1 0.783 0.798
31 December 2023
Average £ Spot rate £
A$ 1 0.535 0.535
C$ 1 0.596 0.593
€1 0.870 0.867
NOK 1 0.076 0.077
US$ 1 0.804 0.785
The impact of a strengthening or weakening of Sterling against the A$, C$, NOK
and US$, as applicable, by 5% as at 31 December 2024 and 31 December 2023
would not have a significant impact on the Company's statement of
comprehensive income and net equity. This assumes that all other variables, in
particular, interest rates, remain constant and ignores any impact of forecast
revenues, hedging instruments and other related costs.
Fair values versus carrying amounts
The below analyses financial instruments carried at fair value, by valuation
method. The different levels have been defined as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical
assets and liabilities.
- Level 2: inputs other than quoted prices included in Level 1, that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The carrying amounts of cash and cash equivalents, receivables and payables
approximates their fair value due to their short-term nature with maturity of
one year or less, or on demand.
The fair value of loans and other receivables from subsidiary and investment
in subsidiary, with a total carrying value of £726,363,000 (2023:
£587,906,000), amounts to £979,350,000 (2023: £1,047,000,000). The fair
value of these loans receivable and investment in subsidiary is determined by
discounting the future cash flows to be received from such assets using
applicable market rates (Level 3).
Capital risk management
The Company's objective when managing capital is to ensure the Company's
ability to continue as a going concern in order to provide returns to
shareholders and benefits for further stakeholders and to maintain an optimal
capital structure. The Company views the share capital (see Note 11) as
capital.
In order to maintain or adjust the capital structure, the Company may adjust
the amount of dividend paid to shareholders, return capital to shareholders,
avail of additional debt financing, pay down debt, or issue new shares.
The Company regularly reviews compliance with Luxembourg regulations regarding
restrictions on minimum capital. During the year, the Company complied with
all externally imposed capital requirements and made no changes in its
approach to capital management.
The portfolio continued its strong performance over the reporting period with
no material adverse effect on valuation. This strong performance is primarily
as a result of the Company holding a low-risk, 100% availability-style
underlying portfolio, coupled with strong stakeholder collaboration during the
reporting period.
13. Related parties and key contracts
Supervisory Board fees
During the year 31 December 2024, the aggregate remuneration paid to the
Supervisory Board was £345,000 (2023: £315,000).
Loans and receivables from subsidiary - multicurrency facility agreement
On 1 January 2017, the Company as a lender and MHC as a borrower, entered into
a multicurrency credit facility agreement ('MCF'). Pursuant to this agreement
the Company has and will continue to make available an interest-bearing loan
to MHC for the purposes of funding its initial and subsequent acquisitions of
interests in Investment portfolio. The maximum amount that can be withdrawn
from the MCF is £680,000,000. The Company engages a third-party transfer
pricing specialist to determine the reasonable ranges of interest rates to be
applied on borrowings under the MCF.
Movements in the MCF during the year are as follows:
In thousands of Sterling 31 December 31 December
2024 2023
1 January 233,673 243,212
Additions 27,486 -
Capitalisation of interest under MCF 93 90
Principal payments received (7,659) (6,408)
Foreign exchange movements (5,431) (3,221)
248,162 233,673
During the year, the finance income from the MCF amounted to £20,204,000
(2023: £20,198,000).
Loans receivable from subsidiary - interest free loan agreements
The Company has entered into various interest free loan agreements ('IFL')
with MHC, a direct 100% owned subsidiary. These IFLs have a term of one year
with the possibility to extend and to introduce an arm's length interest rate.
The details of the interest free loans receivable from MHC are as follows:
In thousands of Sterling 31 December 31 December
2024 2023
IFL receivable from MHC 123,988 -
Interest and other receivables from subsidiary
The details of the interest and other receivables from subsidiary are as
follows:
In thousands of Sterling 31 December 31 December
2024 2023
Interest receivable from MCF 11,907 10,564
Other advances 42 -
Other advances to MHC - 186
11,949 10,750
Foreign exchange indemnity agreement
The Company and MHC have entered into a foreign exchange indemnity agreement
('Indemnity Agreement') whereby the Company will indemnify MHC for any net
losses incurred by MHC in relation to foreign exchange movements, including
losses incurred on foreign exchange forward contracts. The agreement also
stipulates that where MHC makes a net gain on foreign exchange movements, then
it shall pay an equivalent amount to the Company. As at 31 December 2024, the
Company recorded an Indemnity Agreement expense amounting to £1,889,000
(2023: £19,761,000 income).
Support agreement with MHC
The Company and MHC have entered into a support agreement ('Support
Agreement') whereby MHC provides support and assistance to the Company with
respect to the day-to-day operations. As at 31 December 2024, the Company
recorded Support Agreement expenses amounting to £8,805,000 (2023:
£7,593,000).
Investment in subsidiary
The movements in the Company's investment in MHC are as follows:
In thousands of Sterling 31 December 31 December
2024 2023
1 January 354,233 354,233
Return of capital (20) -
354,213 354,233
On 29 November 2024, MHC executed a redemption of its outstanding class I
shares (the 'Redemption'). The Redemption involved 200 class I shares, each
with a par value of £100. The Redemption price was calculated based on MHC's
interim accounts as of 30 September 2024, taking into account the retained
earnings as of 31 December 2023, the net results of MHC for the nine-month
period ending 30 September 2024, and the nominal value of the Class I shares.
In accordance with MHC's Articles of Association, the entire Redemption price
is allocated to the Class I shares, resulting in the Company recognizing a
gain of £203,727,000 from the return of capital from its subsidiary.
The Company's investments portfolio, were made and will continue to be made
through MHC.
14. Commitments and contingencies
The Company is an obligor under the Group's Revolving Credit Facility ("RCF"),
and as a result has pledged all its current and future financial assets and
shares in its investments in subsidiary.
Based on the provisions of the RCF, where there is a continuing event of
default by MHC as borrower, the lenders will, among other things, have the
right to cancel all commitments and declare all or part of utilisations to be
due and payable, including all related outstanding amounts, and exercise or
direct the security agent to exercise any or all of its rights, remedies,
powers or discretions under the RCF. There was £nil outstanding principal
from the RCF as at the 31 December 2024.
15. Standards issued but not yet effective
A number of new standards and amendments to standards are effective for annual
periods beginning after 1 January 2025 and earlier application is permitted;
however, the Company has not early adopted any of the forthcoming new or
amended standards in preparing these financial statements. The Company intends
to adopt these new and amended standards, if applicable, when they become
effective. The adoption of the below new standard is not expected to have a
significant impact on the Company's financial statements.
Lack of exchangeability - Amendments to IAS 21
The International Accounting Standards Board ('IASB') issued amendments to IAS
21, The Effects of Changes in Foreign Exchange Rates, to specify how an entity
should assess whether a currency is exchangeable and how it should determine a
spot exchange rate when exchangeability is lacking. The amendments also
require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable into the
other currency affects, or is expected to affect, the entity's financial
performance, financial position and cash flows.
16. Events after the reporting period
Offer to acquire the Company (the 'Offer')
On 6 February 2025, the Company and Boswell Holdings 3 S.C.Sp ('Bidco')
announced a Board-recommended all cash offer for the entire issued and to be
issued share capital of the Company by Bidco, which is a newly formed special
limited partnership indirectly controlled by British Columbia Investment
Management Corporation ('BCI') for 147.5 pence per share ('pps').
On 27 February 2025, the Company declared a second interim cash dividend of
4.20pps for the period 1 July - 31 December 2024, to be paid on 16 April 2025.
Payment of the second interim dividend is consistent with the Company's target
dividend payment of 8.40pps in respect of the financial year ending 31
December 2024. As a result of the declaration and payment of the second
interim dividend, and as set out in the Offer document
published on 6 March 2025, the Offer price was reduced to 143.3pps. Eligible
BBGI shareholders on the register on the dividend record date will be entitled
to retain the second interim dividend.
On 6 March 2025, the Company published a Circular convening a General Meeting
to consider and, if thought fit, approve resolutions authorising;
(i) the sale by BBGI, directly or indirectly, of all or any of its assets and
undertakings to Bidco (or an affiliate of Bidco), subject to the Offer
becoming unconditional and the occurrence of the Delisting Date; and (ii) the
appointment of Bidco's nominees to the Supervisory Board with effect from the
later of the Delisting Date and the date on which such appointments are
approved by the CSSF. This General Meeting will take place on 10 April 2025
at the Company's head office.
The Offer document sets out the full terms of the Offer and the timetable of
the Offer. The Offer document and circular have been published and sent to
BBGI shareholders and are also available on the Company's website:
www.bb-gi.com/investors/offer/
If the Offer is declared unconditional, BBGI is expected to delist from the
London Stock Exchange within 20 business days of the date on which the Offer
is declared or becomes unconditional. However, at present the Offer remains
conditional and consequently this Annual Report has been prepared in a manner
consistent with past practice with prior reporting documents including in
respect of the annual audit.
Board Members,
Agents and Advisers
Supervisory Board
- Sarah Whitney (Chair)
- Andrew Sykes (Senior Independent Director)
- June Aitken
- Jutta af Rosenborg
- Christopher Waples
Management Board
- Duncan Ball (Chief Executive Officer)
- Michael Denny (Chief Financial and Operations Officer)
- Andreas Parzych (appointed as of 31 January 2024) (Executive Director)
- Frank Schramm (retired on 31 January 2024)
Registered Office
6E route de Trèves
L-2633 Senningerberg
Grand Duchy of Luxembourg
Central Administrative Agent,
Depositary and Principal Paying Agent
CACEIS Bank, Luxembourg Branch
(formerly known as CACEIS Investor Services Bank S.A.)
5 Allée Scheffer
L-2520 Luxembourg
Grand-Duchy of Luxembourg
RCS B209310
Corporate Brokers
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
United Kingdom
Corporate Brokers
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London EC4R 3GA
United Kingdom
EEA based Centralised Securities Depository
LuxCSD S.A.
42 Avenue John F. Kennedy
L-1855 Luxembourg
Grand Duchy of Luxembourg
Auditors
PricewaterhouseCoopers, Société cooperative
2 rue Gerhard Mercator
B.P. 1443
L-1014 Luxembourg
Grand Duchy of Luxembourg
Depository, Receiving Agent and UK Transfer Agent
MUFG Corporate Markets Trustees (UK) Limited ('MUFG') (formerly known as Link
Market Services Trusteees Limited) 10(th) Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
LuxCSD Principal Agent
Banque Internationale à Luxembourg S.A.
69 route d'Esch
Office PLM 018A
L-2953 Luxembourg
Grand Duchy of Luxembourg
Registre de Commerce et des Sociétés Luxembourg B163879
Listing
Chapter 15 premium listing, closed-ended investment company
Trading Main Market
ISIN LU0686550053
SEDOL B6QWXM4
Ticker BBGI
Indices FTSE 250, FTSE 350, FTSE 350 High Yield and FTSE
All-Share
Glossary
AIC
The UK Association of Investment Companies, the trade association for
closed-ended investment companies in the UK
AGM
Annual General Meeting of the Company's shareholders
AIC Code
The 2019 AIC Code of Corporate Governance
AIC SORP
Standard of Recommended Practices issued by the AIC
AIF
Alternative Investment Fund
AIFM Law/2013 Law
The Luxembourg amended law of 12 July 2013 on Alternative Investment Fund
Managers
AIFMD
EU Alternative Investment Fund Managers Directive
APM
Alternative Performance Measures, are understood as a financial measure of
historical or future financial performance, financial position, or cash flows,
other than a financial measure defined or specified under IFRS
Availability-style
Availability-style, unlike 'demand-based' means that revenues are paid
provided the asset is available for use
BBGI/Company
BBGI Global Infrastructure S.A.
BCI
British Columbia Investment Management Corporation
CAPM
Capital Asset Pricing Model
Carbon neutral
A state where the residual GHG emissions have been balanced out by financing
activities that remove atmospheric CO₂ ('offsets')
Circular 18/698
CSSF circular 18/698, published 23 August 2018, concerning Authorisation and
organisation of investment fund managers incorporated under Luxembourg law;
Specific provisions on the fight against money laundering and terrorist
financing applicable to investment fund managers and entities carrying out the
activity of registrar agent
Concession asset
Concession assets are assets where the asset returns to the public client at
the end of the contract
Corporate Emissions
GHG emissions that pertain to our business activities
CSSF
Commission de Surveillance du Secteur Financier, the public institution that
supervises the professionals and products of the Luxembourg financial sector,
including the Company
CPI
Consumer Price Index
Delisting Date
The date on which the listing of the BBGI shares on the Official List
maintained by the FCA and trading of the BBGI shares on the Main Market of the
London Stock Exchange is cancelled
DORA
The EU Digital Operational Resilience Act
DTR
The UK Disclosure Guidance and Transparency Rules
ECL
Expected Credit Losses
EIR
Effective Interest Rate
ESA
The three European Supervisory Authorities, comprising the European Banking
Authority; the European Insurance and Occupational Pensions Authority; and the
European Securities and Markets Authority
ESG
Environmental, Social and Governance
ESMA
European Securities and Markets Authority
FCA
The UK Financial Conduct Authority
Financed Emissions
GHG emissions from our investments
FRC
Financial Reporting Council, the UK's regulator of auditors, accountants and
actuaries, and responsible for setting the UK's Corporate Governance and
Stewardship Codes
FRC Code
The UK Corporate Governance Code 2018
GDP
Gross Domestic Product
GHG
Greenhouse Gas
Group
The Company and its subsidiaries
ICT
Information and Communication Technologies
IFRS
International Financial Reporting Standards as adopted by the European Union
Investments at FVPL
Investments at fair value through profit or loss
IPO
Initial Public Offering
KPI
Key Performance Indicator
LIBOR
London Interbank Offered Rate
LIFT
The UK's Local Improvement Finance Trust
Lock-up
In a PPP project, a lock-up period refers to a contractual restriction that
prevents equity holders from distributing profits or dividends to ensure
financial stability and reinvestment in the project during its critical phases
LTIP
Long-Term Incentive Plan
Management Board
The Executive Directors of the Company
NAV
Net Asset Value
NED
Independent Non-Executive Director, a member of the Supervisory Board
NPPR
The UK's National Private Placement Regime
NZAM
The Net Zero Asset Managers Initiative
O&M
Operation and Maintenance
Offsets
Removing CO(2) from the atmosphere, by financing projects which are either
creating natural carbon dioxide sinks or technology that captures carbon
dioxide from the air. The long-term removals must be measurable, verifiable,
permanent and additional. Offsets cannot be done in isolation to combat
climate change, they must be supported by science-based targets and GHG
reduction pathways
OGC
Ongoing Charges
Pathways
Net zero pathways show how much and how quickly companies need to reduce their
GHG emissions to reach their science-based GHG reduction targets
PFI
Private Finance Initiative
PPP
Public Private Partnership
PwC
PricewaterhouseCoopers société cooperative, the Company's External Auditor
RCF
Revolving Credit Facility for up to £150 million, with the possibility of
increasing the quantum to £250 million by means of an accordion provision,
and matures in May 2028
RPI
Retail Price Index
Science-based targets
Targets adopted by companies to reduce
GHG emissions are considered 'science-based' if they follow a pathway that is
consistent with the latest climate science and keeping warming to below 1.5°C
SDG, SDGs
The UN Sustainable Development Goals
SFDR
Sustainable Finance Disclosure Regulation
Social Infrastructure
Social infrastructure refers to public infrastructure assets and services. It
includes education, healthcare, civic infrastructure (fire, police, modern
correctional facilities, municipal and administrative buildings), affordable
housing, clean energy and transport infrastructure assets. In exchange for
providing these assets and services, BBGI receives a revenue stream that is
paid directly by the public sector.
SONIA
Sterling Overnight Index Average
STIP
Short-Term Incentive Plan
Supervisory Board
The independent Non-Executive Directors
of the Company
TCFD
Task Force on Climate-Related Financial Disclosures
TSR
Total Shareholder Return
UNGC
UN Global Compact
Cautionary Statement
Certain sections of this Annual Report, including, but not limited to, the
Chair's Statement and the Strategic Report of the Management Board, have been
prepared solely to provide additional information to shareholders to assess
the Group's strategies and the potential for those strategies to succeed. This
additional information should not be relied on by any other party or for any
other purpose.
These sections may include statements that are, or may be deemed to be,
'forward-looking statements'. These forward-looking statements can be
identified using forward-looking terminology, including the terms: 'believes',
'estimates', 'anticipates', 'forecasts', 'projects', 'expects', 'intends',
'may', 'will' or 'should' or, in each case, their negative or other variations
or comparable terminology.
These forward-looking statements include matters that are not historical
facts. They appear throughout this document and include statements regarding
the intentions, beliefs or current expectations of the Management and
Supervisory Boards concerning, among other things, the investment objectives
and investment policy, financing strategies, investment performance, results
of operations, financial condition, liquidity, prospects and distribution
policy of the Group, and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Forward-looking statements are not a guarantee of future
performance. The Group's actual investment performance, results of operations,
financial condition, liquidity, distribution policy and the development of its
financing strategies may differ materially from the impression created by the
forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Management and
Supervisory Boards expressly disclaim any obligations to update or revise any
forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions, or
circumstances on which any statement is based.
In addition, these sections may include target figures and guidance for future
financial periods. Any such figures are targets only and are not forecasts.
This Report has been prepared for the Group, and therefore gives greater
emphasis to those matters that are significant to BBGI Global Infrastructure
S.A. and its subsidiaries when viewed as a whole.
www.bb-gi.com
Registered Office:
6E route de Trèves
L-2633 Senningerberg
Grand Duchy of Luxembourg
i Please refer to the glossary for all defined terms
ii Refer to the Alternative Performance Measures section of this Annual
Report for further details.
iii Pence per share.
iv Availability-style means revenues are paid provided the assets are
available for use.
v https://outlook.gihub.org/
vi
https://housing-infrastructure.canada.ca/plan/about-invest-apropos-eng.html
vii
https://housing-infrastructure.canada.ca/cptf-ftcc/index-eng.html#about
viii
https://cdn.cib-bic.ca/files/documents/reports/en/2023-24-Annual-Report.pdf
ix
https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en#paragraph_47059
x
https://www.gov.uk/government/publications/national-infrastructure-and-construction-pipeline-2023/analysis-of-the-national-infrastructure-and-construction-pipeline-2023-html
xi As the portfolio moves closer to forecast investment distribution
dates, the time value of those cash flows increases on a net present value
basis and this effect is called unwinding.
xii ISS Environment & Social Disclosure Quality Score is based on
company disclosure and transparency practices. It ranges from 1 (highest
quality disclosure) to 10 (lowest quality disclosures).
xiii ISS ESG Corporate Rating is based on company's performance regarding
ESG issues, compared to the industry average. It ranges from A+ (highest
score) to D- (lowest score). The Prime threshold reflects the overall
magnitude of an industry's risk exposure.
xiv Sustainalytics' ESG Risk Ratings, range from 0 to 100, with lower
scores indicating lower levels of ESG risk.
xv '1°C climate pathway' is a climate warming scenario where rapid
global action occurs to limit mean temperature increase to ~+1°C by 2100
('Paris-aligned' or RCP2.6).
xvi '4°C climate pathway' is a climate warming scenario with likely
temperature increases ranging from +2.6°C to +4.8°C by 2100 (RCP8.5).
xvii 2024 Financed Emissions will be reported in our 2024 Sustainability
Report.
xviii Net Promoter Score ('NPS') is a widely used metric measuring
the likelihood of customers recommending a company's product or service to
others. The score can range from -100 to +100, with a higher NPS indicating a
higher level of customer loyalty and satisfaction. BBGI derives its NPS from
an annual client engagement survey.
xix The CEO, Duncan Ball is paid in Canadian Dollars. The CFOO
and the Head of Business Development are paid in Euro.
xx Base salaries effective from 1 May 2024.
xxi This minimum holding is calculated based on the Director's salary at 1
May 2023 and is fixed for three years.
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