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

Cordiant Digital InfrastructureAnnouncement

20/06/2025 16:15

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RNS Number : 8367N  Cordiant Digital Infrastructure Ltd  20 June 2025

Cordiant Digital Infrastructure (CORD)

20/05/2025

Results analysis from Kepler Trust Intelligence

Cordiant Digital Infrastructure (CORD) has released its financial results for
the year ending 31/03/2025. In this period, the NAV per share rose 7.9%, and
the NAV total return was 11.6%, based on the ex-dividend opening NAV. The
share price total return was 43.1%.

The NAV per share has now annualised at 11.6% since launch, with dividends
reinvested, ahead of the 9% target set at IPO in 2021.

Performance was driven by strong earnings growth, as demonstrated by an EBITDA
increase of 9.3%, with this largely attributable to two of the longest
standing holdings. Emitel saw EBITDA growth of 13.3% largely as a result of
new contract wins, and CRA saw growth of 10.2% with strong growth in the data
centre business a notable contributor.

The increase in revenue has supported a hike in the dividend to 4.35p, up 3.6%
on the previous year. This is the third dividend increase since IPO, and
implies a yield of 4.5% based on the price before the results announcement.
Dividend cover has increased from 1.6x to 1.7x on the managers' preferred
adjusted funds from operations (AFFO) figure.

Kepler View

Cordiant Digital Infrastructure (CORD) has again delivered a strong set of
numbers, demonstrating the strengths of the underlying portfolio and their
structural drivers. Performance has primarily come from the portfolio's two
key assets, Emitel and CRA, which have shown double-digit earnings growth,
contributing to a valuation uplift. This has been supported by new business
wins and the growth in the data centre business. This not only demonstrates
the benefits of having a high-quality customer base, with a high percentage of
inflation-linked contracts, but also the benefits of seeking further
diversification into the likes of data centres as they see increased demand
such as from AI. We believe this result is a testament to the managers buy,
build and grow approach, as they have continued to develop the portfolio
despite the constraints the past couple of years have put on them as the
higher interest rate environment limited some routes to expansion.

Performance is now substantially ahead of the trust's 9% IPO goal, with an
annualised return of 11.6% with dividends reinvested. Over the long-term, this
would be more typical of an equity-like return, therefore by achieving this
with a portfolio of real assets, we believe the management team have
demonstrated their own skill and the attractions of an investment in this
space.

However, this success is arguably not being reflected in the current discount
which stands at over 22%, just before the publication of the results. Whilst
this has narrowed notably since the beginning of the financial year, following
excellent share price returns over the period, we still believe the current
discount is more a reflection of weak investor sentiment towards the market
more generally, rather than any specific issue with the operational
performance of CORD. As such, the current discount could still prove a
compelling entry point for long-term investors, in our opinion.

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