RCS - Cordiant Digital Inf - Results analysis from Kepler Trust Intelligence

Cordiant Digital InfrastructureAnnouncement

02/12/2024 14:30

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241202:nRSB4655Oa&default-theme=true

RNS Number : 4655O  Cordiant Digital Infrastructure Ltd  02 December 2024

Cordiant Digital Infrastructure (CORD)

02/12/2024

Results analysis from Kepler Trust Intelligence

Cordiant Digital Infrastructure (CORD) has released its interim results for
the six months ending 30/09/2024. Over the period, CORD saw its NAV per share
increase by 3.6%, and a total return of 5.4% based on the ex-dividend opening
NAV. The share price total return was 38.9%.

The NAV uplift was primarily driven by operational performance and a reduction
in discount rates. Emitel saw a 6.4% value uplift, due to increased revenue
inflation-linked contracts, whilst CRA rose by 4.5% due to discount rates, a
pickup in revenue from a recent bolt on acquisition, and its inflation-linked
contracts. Speed Fibre rose by 34.2% following the repayment of a debt
facility and a reduction in the discount rate. The company also saw revenue
increase of 4.3%.

Currency was a headwind, with sterling strength detracting from NAV over the
period.

The 'Buy, Build, Grow' approach continues, the trust having outlayed growth
capex on NAV accretive projects such as the expansion of DAB radio in both
Poland and the Czech Republic, new customer connections for Speed Fibre and
additional cloud and data centre investment for CRA.

The board proposed an interim dividend of 2.1p per share which is in line with
the recently upgraded target. Dividend cover increased to 1.8x primarily due
to an increase in earnings.

Post-results, the trust announced the intention to acquire a stake in DCU,
alongside a local investor and another Cordiant vehicle. This will take the
portfolio to six companies, subject to completion.

The discount narrowed in the period though remains wide versus the historic
average. Share buybacks have continued, and individuals within the team have
also made sizeable purchases.

During the period, as previously announced, the managers refinanced their debt
facilities, allowing for consolidation at a company level and additional
liquidity.  There is now undrawn cash available at both the fund and the
portfolio level. Gearing is now at 38.1% on GAV basis, 71% of which is fixed.

Chair Shonaid Jemmett-Page reflected on "the excellent performance of our
portfolio companies, which offer robust cashflows and strong earnings growth"
whilst also highlighting the "focus on efficient investment in the existing
portfolio, through disciplined capex spend, coupled with bolt on acquisitions
where appropriate".

Kepler View

In our opinion, these results represent another solid step forward for
Cordiant Digital Infrastructure (CORD). Not only has the underlying portfolio
continued to develop, in line with the managers' 'buy, build, grow' approach,
but the trust's liquidity profile has improved through the debt refinancing,
which has removed the near-term refinancing risk, providing a strong base to
operate from.

The strong returns have been driven by underlying operational performance. The
two largest positions contributed to strong aggregate portfolio EBITDA growth.
This has led to NAV growth ahead of target. We believe this operational
performance is testament to the managers' full ownership approach.

Post period end, the acquisition of DCU was announced, subject to completion.
This will help diversify the portfolio, whilst also increasing the allocation
to high growth potential area of data centres.

The discount narrowing significantly in the period, giving strong share price
gains, but remains wide versus historic levels. As such, we believe it could
prove an opportunity for long-term investors.

Finally, the trust announced a comfortably covered dividend of 2.1p.
Considering the strong underlying performance, we believe the board is in a
good position going forward.

CLICK HERE TO READ THE FULL REPORT
(https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-cordiant-digital-infrastructure-retail-dec-2024?utm_source=RNS&utm_medium=news)

Visit Kepler Trust Intelligence
(http://www.trustintelligence.co.uk/investor?utm_source=RNS&utm_medium=news)
for more high quality independent investment trust research.

 

Important information

This report has been issued by Kepler Partners LLP.  The analyst who has
prepared this report is aware that Kepler Partners LLP has a relationship with
the company covered in this report and/or a conflict of interest which may
impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of
investments can fall as well as rise and you may get back less than you
invested when you decide to sell your investments. It is strongly recommended
that if you are a private investor independent financial advice should be
taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients.
This report has been issued by Kepler Partners LLP, is based on factual
information only, is solely for information purposes only and any views
contained in it must not be construed as investment or tax advice or a
recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to,
or use by, any person or entity in any jurisdiction or country where such
distribution or use would be contrary to law or regulation or which would
subject Kepler Partners LLP to any registration requirement within such
jurisdiction or country. In particular, this website is exclusively for non-US
Persons. Persons who access this information are required to inform themselves
and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and
should not be construed as, investment advice. No representation or warranty,
express or implied, is given by any person as to the accuracy or completeness
of the information and no responsibility or liability is accepted for the
accuracy or sufficiency of any of the information, for any errors, omissions
or misstatements, negligent or otherwise. Any views and opinions, whilst given
in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation,
offer or solicitation to buy or sell or take any action in relation to any
investment mentioned herein. Any prices or quotations contained herein are
indicative only.

Kepler Partners LLP (including its partners, employees and representatives) or
a connected person may have positions in or options on the securities detailed
in this report, and may buy, sell or offer to purchase or sell such securities
from time to time, but will at all times be subject to restrictions imposed by
the firm's internal rules. A copy of the firm's Conflict of Interest policy is
available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS
(http://www.trustintelligence.co.uk/investor/terms?utm_source=RNS&utm_medium=news)

Kepler Partners LLP is authorised and regulated by the Financial Conduct
Authority (FRN 480590), registered in England and Wales at 70 Conduit Street,
London W1S 2GF with registered number OC334771.

 

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRAZZMGZDZDGDZM