REG - Cordiant Digital Inf - Full year results for the year ended 31 March 2023
22/06/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230622:nRSV5133Da&default-theme=true
RNS Number : 5133D Cordiant Digital Infrastructure Ltd 22 June 2023
22 June 2023
LEI: 213800T8RBBWZQ7FTF84
Cordiant Digital Infrastructure Limited
Full year results for the year ended 31 March 2023
A strong overall performance underpinned by double digit NAV growth and robust
dividend cover
Cordiant Digital Infrastructure Limited (the Company), the sector-focused
specialist owner and operator of Digital Infrastructure that enables modern
communications and the internet, is pleased to announce its full year results
for the year to 31 March 2023.
Financial highlights:
- NAV per share increased by 10.0%(1) or 10.5p on a total return basis to 113.4p
- Net assets increased to £875.7 million
- NAV total return since inception of 21.1% (2022: 10.0%), exceeding IPO
expectations
- Gross return from investments in the year2 of 12.3% achieved notwithstanding
increase in average discount rate by 81bps during the year
- Total dividend for the period increased to 4.0p, in line with guidance; 3.4x
covered by earnings and 1.5x covered by adjusted funds from operations (AFFO)
- Acquisition of Emitel completed at effective EV purchase multiple of 8.8x FY22
EBITDA
- Equity raised at IPO and in subsequent capital raises now fully invested at an
average EV/EBITDA multiple of 10.6x
Operational highlights:
- Continued strong overall performance by portfolio companies which generated
aggregate EBITDA growth of 10.0% year on year3 to £104 million
- Emitel delivered strong performance with revenue up 13% and EBITDA up 8% year
on year.
- CRA is meeting performance expectations and winning new broadcast and telecoms
customer contracts.
- Hudson has won several new contracts and now seeks to convert its substantial
pipeline of opportunities.
Commenting, Shonaid Jemmett-Page, Chairman of Cordiant Digital Infrastructure
Limited, said:
"I am pleased to report a strong overall performance by the Company, despite a
challenging year for the listed investment trust sector and global markets
generally. The Company made a total NAV return for the year of 10.0% and the
aggregate pro forma(1) normalised EBITDA of the portfolio companies for the
year to 31 March 2023 increased from £94 million to £104 million.
Significant milestones were achieved included the completion of the
acquisition of Emitel, the Company's largest acquisition to date, as well as
substantial strategic progress at CRA and the raising of a €200 million
Eurobond facility.
"The portfolio we have constructed is high quality with strong potential for
growth, with predominantly blue-chip clients, and it is generating strong cash
flows through long-term, largely inflation-linked contracts. This, combined
with a strong deal pipeline, access to funds and more realistic pricing for
mid-market Digital Infrastructure assets, gives us confidence for the coming
year and beyond."
1. Based on opening ex-dividend NAV at 1 April 2022 of 104.8p.
2. Based on investment cost, time-weighted for any follow-on
investments made.
3. On a pro forma, normalised, constant currency basis.
For further information, please visit www.cordiantdigitaltrust.com or contact:
Cordiant Capital, Inc. +44 (0) 20 7201 7546
Investment Manager
Stephen Foss, Managing Director
Aztec Financial Services (Guernsey) Limited +44 (0) 1481 748831
Company Secretary and Administrator
Chris Copperwaite / Laura Dunning
Investec Bank plc +44 (0) 20 7597 4000
Joint Corporate Broker
Tom Skinner (Corporate Broking)
Lucy Lewis / Denis Flanagan (Corporate Finance)
Jefferies International Limited +44 (0) 20 7029 8000
Joint Corporate Broker
Stuart Klein / Gaudi Le Roux
Celicourt +44 (0)20 7770 6424
Financial Communications Advisor
Philip Dennis / Felicity Winkles / Ali AlQahtani
Annual report and results webcast for analysts
The 2023 Annual Report will be available to download at
cordiantdigitaltrust.com/investors/results-centre/ from 26 June 2023 and will
be posted to shareholders on 28 June 2023.
The Company will be hosting an analyst meeting at 10.00am BST at the offices
of Investec, 30 Gresham Street, London, EC2V 7QN. For those wishing to attend,
please contact Ali AlQahtani at Celicourt via CDI@celicourt.uk.
Notes to editors:
Cordiant Digital Infrastructure Limited primarily invests in the core
infrastructure of the digital economy - data centres, fibre-optic networks and
telecommunication and broadcast towers in Europe and North America. Further
details about the Company can be found on its website at
www.cordiantdigitaltrust.com (http://www.cordiantdigitaltrust.com/) .
The Company is a sector-focused specialist owner and operator of Digital
Infrastructure listed on the London Stock Exchange under the ticker CORD. In
total the Company has successfully raised £795 million in equity, deploying
the proceeds into three acquisitions: Emitel; CRA; and Hudson, which offer
stable, often index-linked income, and the opportunity for growth, in line
with the Company's Buy, Build & Grow model. In June 2022, the Company
signed a €200 million Eurobond facility with four European financial
institutions, providing fresh committed capital to invest in the existing
portfolio and finance new acquisitions.
Cordiant Capital Inc. (the Investment Manager), the Company's investment
manager, is a sector-specialist investor with particular expertise and
experience in Digital Infrastructure. It invests in global infrastructure and
real assets, running infrastructure private equity and infrastructure private
credit strategies through limited partnership funds and managed accounts. Its
current client base consists of global insurance companies, pension plans and
family offices.
Basis of preparation:
The information below is an extract from the Company's 2023 Annual Report. The
2023 Annual Report will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . It can also be
obtained from the Administrator or from the Results Centre section of the
Company's website, at https://www.cordiantdigitaltrust.com/
(https://www.cordiantdigitaltrust.com/) .
Chairman's statement
I am pleased to present the Annual Report for Cordiant Digital Infrastructure
Limited (the Company) for the year ended 31 March 2023.
Introduction
The Company has achieved a strong overall performance despite a challenging
year for the listed investment trust sector and global markets generally. The
Company's NAV has increased from £822.3 million to £875.7 million and
aggregate pro forma(1) normalised EBITDA of the portfolio companies for the
year to 31 March 2023 has increased from £94 million to £104 million. Among
the year's significant milestones were: the completion of the acquisition of
Emitel, the Company's largest acquisition to date; substantial strategic
progress at CRA; and the raising of a €200 million Eurobond facility.
Portfolio strategy
The Investment Manager has a Core Plus strategy that aims to generate an
annual dividend while also continuing to invest in the asset base of the
portfolio companies to drive higher revenues and increase net asset values.
The Company is implementing this approach through its Buy, Build & Grow
model.
We are also a long-term investor with a focus on sustainability. We work with
our portfolio companies to improve their ESG performance.
The Company began investing during a period of intense corporate activity
which saw transaction prices reaching a peak in the Digital Infrastructure
market, and consequently sought out high-quality, cash-generating assets that
were, in the view of both the Board and the Investment Manager, attractive
investment opportunities in that market. As a result of this disciplined
approach a portfolio delivering £104 million of EBITDA has been acquired at
an EV/EBITDA multiple of approximately 10.6x, based on the most recent
reported EBITDA - substantially below comparable acquisitions in the market.
The portfolio we have constructed is high quality, with predominantly
blue-chip clients and generating strong cash flows through long-term
contracts. Hudson is a growth opportunity where the management team is gaining
traction, albeit with further work still to do.
Our three acquisitions to date give us a broad portfolio diversification by
asset type with:
- 1,260 mobile and broadcast towers;
- Seven data centres;
- 4,368km of fibre-optic network;
- Two national broadcast networks; and
- Nationwide networks of active IoT sensors.
The Company continues to target investment in our existing portfolio companies
and the acquisition of new businesses that reflect the new and more favourable
pricing environment, while continuing to seek further diversification both
geographically and by asset class across Europe and North America.
Funds not earmarked for dividends or future acquisitions are being used to
maintain existing assets and to expand revenue potential by building
additional capacity in the form of new communications towers, enhanced
broadcast capacity and new data centre space.
Our strategy remains focused on buying, building and growing our portfolio.
Operational performance
The strength of the overall performance of our portfolio companies underpinned
the Company's results for the year.
The acquisition of Emitel, which we announced in January 2022, closed on 15
November 2022. Emitel exceeded our expectations during the year, with
contractual escalators offsetting an increase in energy prices. This
better-than-expected performance lowered our effective purchase multiple to
8.8x LTM (last twelve months) EBITDA at close. Alongside this strong financial
performance, Emitel completed its upgrade to its broadcast infrastructure for
digital terrestrial TV and continues to roll out new products to leave it well
positioned for future growth.
CRA also performed well during the year. It posted an increase in revenues and
EBITDA during the period, partly reflecting continued strong demand for data
centre capacity. CRA benefited from upgrading its broadcast network, resulting
in a 30% increase in capacity. In addition, it increased by 7% the capacity of
its tower and rooftop portfolio, which now consists of 658 towers. Commercial
initiatives during the year resulted in entering into contracts for four new
broadcast channels during the year or shortly afterwards.
Hudson added some marquee customers to its business, including two major US
telecommunications carriers. Hudson is a strategically located interconnect
data centre which offers a significant opportunity for growth at minimal risk,
with further capital expenditure linked to customer acquisition. Our
investment in the business during the year has bolstered the sales and
marketing teams, which have, in turn, generated an increase in pipeline
opportunities.
Inflation
The year to 31 March 2023 saw rates of inflation increase across many
economies to levels not seen for some years. Overall, the revenue of the
Company's portfolio platforms benefited from a high level of inflation
protection. This was through a combination of contractual revenue escalators,
pass-through costs and active hedging policies, in particular in relation to
energy prices. The Investment Manager works closely with the management teams
of its portfolio companies to support them in managing their input costs.
Approximately three-quarters of portfolio company contracts are multi-year in
nature and offer full or partial inflation protection, with the remainder
being annual in nature, often renewed automatically, and therefore capable of
being repriced to reflect the renewal year's inflation.
1. Assuming the three portfolio companies were owned for the whole
prior-year comparative period, comparison on a constant currency basis and
including Emitel's audited 31 December 2022 results.
Gearing
In June 2022, the Company raised a €200 million Eurobond facility from a
group of blue-chip financial institutions, further bolstering its liquidity
position and giving it additional flexibility to invest in the existing
portfolio and make further acquisitions. The Eurobond was issued at subsidiary
company level and at 31 March 2023, €50 million was drawn down. The balance
of €150 million was drawn down during June 2023.
As at 31 March 2023, the Company and its subsidiaries had total debt on a
look-through basis equivalent to £466 million, representing a conservative
net gearing of 30% of gross assets, substantially below the level of 50%
permitted under the gearing policy disclosed in the Company's prospectus. A
majority of the debt is held at the portfolio platform level on a non-recourse
basis, with the remainder being the partial drawdown of the Eurobond facility
during the year.
Of this gearing, 78% of the Company and its subsidiaries' total debt is on a
fixed-interest basis, with the rest at floating rates, none of which is
inflation linked. The Investment Manager is actively engaged in a planned
refinancing of Emitel's existing debt facilities alongside the company's
management team, which is expected to be finalised in Q3 2023.
Returns and dividend
In November 2022, the Board declared an interim dividend of 2.0p per share and
confirmed the Company's dividend target of 4.0p per share for the year ended
31 March 2023. In line with this guidance, the Company will pay a further
interim dividend of 2.0p per share on 21 July 2023. The dividend is well
covered by earnings and by adjusted funds from operations (net cash flows from
the portfolio businesses) and represents a significant increase over the
indicative level set out at the time of the IPO in 2021.
This bringing forward of the planned dividend increases reflects the strong
cash flows generated by the portfolio.
The NAV per share as at 31 March 2023 was 113.4p (as at 31 March 2022:
106.3p), an increase of 6.6% over the year.
The increase in NAV reflects the strong overall performance of the underlying
portfolio companies and favourable foreign exchange movements, offset by an
increase in the discount rates used to value our investments to reflect higher
market interest rates.
Combined, the NAV total return to investors during the year was 10.0%. The
Company continues to target an annual NAV total return of at least 9%.
Along with many other companies in the investment trust sector, the Company's
shares traded at a discount to NAV during much of the period, largely as a
result of macroeconomic factors and dislocations in the market. Both the Board
and Investment Manager remain confident in the Company's strategy and the
reported NAV. As a consequence, the primary focus has been, and remains,
deploying available capital in support of the Company's Buy, Build & Grow
model.
However, in addition, in February 2023 the Board approved a discretionary
programme of share buybacks of up to £20 million, of which £0.9 million had
been executed by 31 March 2023. The buyback programme is not subject to a set
cut-off date.
Principal risks and uncertainties
During the year we updated the principal risks previously identified by the
Company. These changes have largely been driven by widely publicised emerging
macroeconomic factors such as energy price rises, the impacts of inflation,
increases in interest rates and market volatility. For example, while Digital
Infrastructure industry revenues tend to benefit from inflation, this is often
offset by a delay as contracts are repriced reflecting the prior year's
inflationary environment. A number of these factors have adversely impacted
the Company's share price as well as those of many other investment trusts
listed on the London Stock Exchange, which has in turn restricted the ability
of such companies to raise additional equity capital.
Sustainability
Both the Board and the Investment Manager continue to focus on sustainability
and reducing the impact of the Company and its portfolio companies on our
environment. In this regard it is pleasing to highlight progress on a number
of initiatives across the portfolio: Emitel's procurement of 85% of its
electricity from renewable sources; CRA's progress towards its own target of
100% of its electricity being from renewable sources with an increase to 46%;
and Hudson's use of technology to deliver its operations at a better power
utilisation efficiency level than others operating in the same location. As
part of this focus, this year the Company decided to commence reporting in
line with the TCFD recommendations.
Board and governance
The Company benefits from a skilled and committed Board combining
telecommunications sector, private equity and investment trust experience.
That experience allows the Board to provide insight and guidance to the
Investment Manager's team in its delivery of value to the Company and its
shareholders.
The Board views a strong working relationship with the Investment Manager as
fundamental to the success of the Company. The Management Engagement Committee
considers the performance of the Investment Manager annually, along with that
of the Company's other key advisors, and reports to the Board on that
performance. The Board has noted that the Investment Manager's strong hands-on
operational capabilities are clearly being deployed in support of both
pipeline generation and portfolio company operations and that it has further
strengthened its experienced team as the portfolio has grown.
Outlook
The Company is well placed to see continued progress in the next financial
year. The performance of the underlying portfolio companies remains strong
overall, and the Company is well placed to benefit further from returns on
investments already made and to make new investments in the next financial
year. The Investment Manager is actively engaged in applying its operational
expertise in each of the portfolio platforms, which the Board sees as a key
driver for their future performance. We are also seeing engagement between
portfolio companies on best practice and innovation which the Board expects
will also contribute to that future performance.
In addition to the strong pipeline of organic and acquisition-led investment
opportunities, the Company benefits from a relatively strong liquidity
position. This leaves it well placed to act on opportunities without the need
to raise additional equity.
The importance of Digital Infrastructure to the functioning of our economy and
our society continues to grow year on year. In turn, this translates to
ongoing growth in demand for the sector in which the Company operates. While
evolving financial conditions and a complex economic environment will
inevitably create challenges, the underlying strength of the Company and the
attractiveness of its core markets lead the Board to look forward to the year
ahead with confidence.
Shonaid Jemmett-Page
Chairman
Investment Manager's report
Introduction
The Company delivered a strong performance in the year to 31 March 2023
despite continued headwinds throughout the year from rising energy costs and
interest rates. NAV per share increased to 113.4p over the course of the year,
reflecting positive performance from the Company's portfolio, and the dividend
progressed to 4.0p per share for the year, three years ahead of the schedule
outlined in the Company's prospectus. The Company's dividend is well covered,
both by earnings and on a cash basis. Aggregate debt levels in the Company's
financing subsidiary and at the portfolio level are prudent and below industry
averages for the Digital Infrastructure sector.
Portfolio construction and portfolio strategy
In constructing the portfolio, the Investment Manager has focused on providing
investors with exposure to platforms offering scale, growth, cashflows and
diversification, through different asset types and geographies, with the aim
of protecting and enhancing income streams.
At year end, these assets included:
- 1,260 mobile and broadcast towers;
- Seven data centres, including one of the largest interconnect facilities in
New York;
- 4,368km of fibre-optic network;
- Two national broadcast networks; and
- Two national networks of active IoT sensors.
The Company began investing during a period of very high relative multiples
for Digital Infrastructure assets. At the time, the best relative value for a
Core Plus strategy lay in seeking high-quality assets that had, in the view of
the Investment Manager, been underpriced by the market. CRA and Emitel are
both multi-asset platforms that were attracting lower pricing than single
asset class enterprises might have attracted. They both operate in attractive
markets with strong economic growth and comparatively strong public finances.
The Czech Republic and Poland are countries in the core of the European Union,
as well as being members of NATO and the OECD. They have many broadly
comparable economic statistics to other EU members such as Spain or Portugal.
Hudson in New York represented a different opportunity: a strategic asset that
was operating at low capacity utilisation, purchased below construction cost.
The Company's portfolio has been acquired at prices substantially below those
prevailing in both public and private Digital Infrastructure markets. The
acquisition multiple of EV/EBITDA for the whole portfolio was 10.6x based on
the most recent reported EBITDA for each portfolio company.
The Company's Buy, Build & Grow model is designed to be implemented across
North America and Europe. Over time, additional capital will be invested in
expanding the existing cash flow generating base.
Activity in the year
In June 2022, through its financing subsidiary, Cordiant Digital Holdings Two
Limited, the Company successfully raised a €200 million Eurobond facility to
provide extra capital to deploy in building the Company's portfolio. The
Eurobond was oversubscribed and was supported by a group of blue-chip lending
institutions. The Company secured attractive pricing, with 82.5% of the
interest at fixed rate, and a margin of 4.5% to 4.75%, the rate calibrated to
the overall level of gearing.
The Eurobond facility has no annual clean-down requirement and is repayable in
a single payment in September 2026. In accordance with its terms, €50
million was drawn during the financial year and the remaining unutilised
balance of €150 million of the Eurobond facility was drawn by the Company in
early June 2023, just before the final date for drawdown.
In November 2022, the Company completed the acquisition of Emitel, the Polish
Digital Infrastructure platform, its largest investment to date. Completion
followed the granting of regulatory approvals by the responsible Polish
government bodies. The acquisition was agreed in January 2022 and between the
signing of the acquisition and its closing in November 2022, the Company
undertook a forward purchasing programme to acquire Polish zloty (PLN),
converting £353 million to PLN. This realised a foreign exchange gain of £18
million (reported in Net gain on investments at fair value through profit or
loss in the Statement of Comprehensive Income) and bank interest of £9
million (reported as Finance income in the Statement of Comprehensive Income),
largely mitigating the cash drag effect on returns of the unanticipated delay
in receiving the final regulatory approval. At closing, the purchase price
represented an EV/EBITDA multiple of 8.8x FY22 EBITDA.
With the acquisition of Emitel, the equity raised at IPO and in subsequent
capital raises is now fully invested at an average EV/EBITDA multiple of
10.6x. This contrasts favourably with other transaction multiples in the
sector, which frequently reached much higher levels during this period.
At Hudson, the investment in sales and marketing made by the Company during
the year resulted in the signing of two well-known US telecommunications firms
as customers, and an increased level of interest from potential customers.
In February 2023 the Company announced that, in light of the discount at which
the Company's shares were then trading, and in consultation with the Company's
brokers, the Board had approved a discretionary share buyback programme of up
to £20 million. Shares acquired under the programme will either be held in
treasury by the Company or cancelled. The buyback programme will not be
subject to a set cut-off date.
To the date of this report, 1.05 million shares had been acquired by the
Company at an average price of 90p and held in treasury. The Board and
Investment Manager are carefully monitoring market conditions in relation to
the buyback programme.
During 2023, Board members, partners and employees of the Investment Manager
and senior management of the Company's portfolio companies, increased their
respective shareholdings in the Company, resulting in an aggregate holding of
approximately six million shares. This included Steven Marshall, Chairman of
Cordiant Digital, who acquired a further 900,000 shares, bringing his total
personal holding to 4.3 million shares.
Financial highlights
During the year to 31 March 2023, the Company achieved a NAV total return of
10.0% or 10.5p per share. The NAV per share increased from 106.3p over the
year to 113.4p. This is a strong result in a year of high energy prices and
market volatility. It reflects a positive operating performance across the
portfolio and favourable foreign exchange movements, offset by a meaningful
increase in discount rates to reflect increases in market interest rates and
higher risk premia.
The Company recorded a 58.3% increase in profit in the year to £81.2 million
(period to 31 March 2022: £51.3 million). This increase reflects, following
the IFRS classification: movement in the fair value of investments of £73.1
million (period to 31 March 2022: £40.3 million); unrealised foreign exchange
gains of £6.1 million (period to 31 March 2022: £13.9 million); a realised
loss on restructure of £3.9 million (period to 31 March 2022: nil); interest
income of £2.7 million (period to 31 March 2022: £2.9 million); net finance
income of £9.3 million (period to 31 March 2022: £0.2 million); and net
foreign exchange gains of £11.7 million (period to 31 March 2022: £6.2
million) offset by: transaction costs of £6.6 million (period to 31 March
2022: £4.6 million); and other operating costs of £11.3 million (period to
31 March 2022: £7.4 million). The profit of £81.2 million represents
earnings per share of 10.5p.
The portfolio, whether held directly or through Cordiant Digital Holdings UK
Limited, and at 31 March 2023 consisting of Emitel, CRA and Hudson, together
with the Eurobond facility, was valued at the reporting date at £872.3
million (31 March 2022: £409.9 million). The Company had cash balances of
£10.5 million (31 March 2022: £353.7 million) and net other financial
liabilities of £7.1 million (31 March 2022: other net assets of £58.8
million). Net assets were £875.7 million (31 March 2022: £822.3 million),
representing a NAV per share of 113.4p (31 March 2022: 106.34p, 104.84p
ex-dividend).
Application of IFRS
As disclosed in the Company's Interim Report published on 29 November 2022,
the Company holds Hudson directly whereas Emitel and CRA are both held through
its wholly-owned subsidiary, Cordiant Digital Holdings UK Limited. The
Eurobond was issued by Cordiant Digital Holdings Two Limited, which is a
wholly-owned subsidiary of Cordiant Digital Holdings UK Limited.
Consequently, under the application of IFRS 10 and the classification of the
Company as an investment entity, the Company's investment in Cordiant Digital
Holdings UK Limited is recorded as a single investment that encompasses
underlying exposure to Emitel, CRA and the Eurobond. In order to facilitate
shareholders' understanding of the breakdown and performance of the Company's
portfolio, the elements of the overall value movement attributable to foreign
exchange movements and value movement and income from each portfolio company
are identified in Table 3. The Company's profit and NAV under this approach
are exactly the same as in the audited IFRS Statement of Comprehensive Income
and the Statement of Financial Position.
Table 1 shows the reconciliation of Table 3 to the IFRS Statement of
Comprehensive Income.
Table 1: Reconciliation of Statement of Comprehensive Income to Table 3
Total
Accrued unrealised Net FX movement Fund IFRS
income value movement expenses P&L
Movement in fair value of investments - 46.0 30.1 (3.0) 73.1
Unrealised foreign exchange gains - - 6.1 - 6.1
Realised loss on restructure - - (3.9) - (3.9)
Interest income* 2.8 - - - 2.8
Investment acquisition costs - - - (6.6) (6.6)
Other expenses - - - (11.3) (11.3)
Foreign exchange movements on working - - 11.1 - 11.1
capital
Gain on foreign exchange forwards - - 0.6 - 0.6
Finance income 9.7 - - - 9.7
Finance expense - - - (0.4) (0.4)
12.5 46.0 44.0 (21.3) 81.2
*subject to rounding
Table 2 shows the reconciliation of the closing NAV in Table 3 to the IFRS
Statement of Financial Position.
Table 2: Underlying components of Statement of Financial Position
Emitel CRA Hudson Cash Intercompany balances Other Eurobond IFRS
assets and liabilities Total
Investments at fair value through profit or loss 429.0 389.1 57.0 20.7 20.7 (0.2) (44.0) 872.3
Receivables - - - - - 14.7 - 14.7
Cash and cash equivalents - - - 10.5 - - - 10.5
Payables - - - - (20.7) (1.1) - (21.8)
429.0 389.1 57.0 31.2 - 13.4 (44.0) 875.7
Financial performance in the year
Table 3 shows the Company's NAV progression for the year to 31 March 2023,
with underlying value growth, foreign exchange movements and costs split out
from the audited IFRS classification presented in the Statement of
Comprehensive Income and Statement of Financial Position.
Table 3: NAV progression for the year to 31 March 2023
£m
Opening ex-dividend NAV 810.7
Accrued income 12.5
Value movement 46.0
Foreign exchange movement 44.0
Fund expenses (21.3)
Net change in share capital (0.7)
Interim dividend paid in December 2022 (15.5)
Closing NAV as at 31 March 2023 875.7
Underlying value growth was £46.0 million in the year (period to 31 March
2022: £40.3 million), comprised of £47.9 million gain in respect of Emitel,
£8.2 million gain in respect of CRA (period to 31 March 2022: gain of £40.3
million) and a £10.1 million decrease in respect of Hudson (period to 31
March 2022: £nil gain or loss).
Underlying foreign exchange gain for the Company was £44.0 million for the
year (period to 31 March 2022: £13.9 million), comprising a £13.2 million
gain in respect of Emitel and Polish zloty, £26.6 million gain in respect of
CRA and Czech koruna (period to 31 March 2022: gain of £11.5 million), £4.2
million gain in respect of Hudson and the US dollar (period to 31 March 2022:
gain of £2.4 million).
The Investment Manager and Board have kept the Company's hedging strategy
under regular review in light of the volatility in foreign exchange rates
since the Company began operations, and given the substantial unrealised
foreign exchange gain which the Company recognised at 31 March 2023. To date,
the Company has not undertaken any hedging of balance sheet foreign exchange
exposure.
Total Company costs of £21.3 million for the year reflected: management fees
paid to the Investment Manager; costs attributable to the Eurobond facility
raised by Cordiant Digital Holdings Two Limited in the year; operating costs
and discontinued deal costs of the Company; and acquisition costs relating to
the acquisition of Emitel. The ongoing charges ratio for the year to 31 March
2023, calculated as annualised management fee and operating expenses
(excluding acquisition costs and non-recurring items) divided by the average
NAV during the year, was 1.1%. This has been calculated in line with the
guidelines published by the AIC.
Table 4 shows the Company's NAV progression from the reported ex-dividend NAV
at 30 September 2022 to the audited NAV at 31 March 2023. The increase in NAV
in the second half of the year has been driven by a reduction in net debt in
the portfolio companies and strong operating performance, somewhat offset by
increased discount rates, Eurobond finance costs and other expenses.
Table 4: NAV bridge for the six months from 1 October 2022 to 31 March 2023
£m
Opening ex-dividend NAV 816.5
Accrued income 4.8
Value movement 50.0
Foreign exchange movement 18.2
Fund expenses (12.8)
Net change in share capital (1.0)
Closing NAV as at 31 March 2023 875.7
The gain on foreign exchange translation in the second half of the year
relates to the investments in Emitel (£10.0 million), CRA (£15.2 million)
and Hudson (loss of £7.0 million).
The underlying valuation gain of £50.0 million in the second half of the year
is split between Emitel (£47.9 million) and CRA (£7.3 million), with an
offsetting value decrease at Hudson (£(5.2) million).
Valuations
At Emitel, the value increase during the year to 31 March 2023 was primarily
driven by cash flow generation since the acquisition was agreed and the fact
that the Company acquired Emitel at a comparatively low multiple to reported
EBITDA, with the equity consideration fixed in January 2022.
At CRA, the value movement in the year is driven by cash flow generation
reducing net debt. This is offset by an increase in the discount rate applied
since March 2022 and September 2022.
Hudson is in a growth phase as it seeks to take on new customers and build out
revenues. During the year, the Company invested a further £4.7 million to
support cash flow. At 31 March 2023, the Investment Manager valued the
business at £57.0 million, a reduction of £3.5 million from aggregate cost.
This was driven by an increase in the discount rate, later than planned
ramp-up in revenues and EBITDA, and delays in fitting out the data halls for
new customers due to global supply chain issues.
The valuations of the portfolio companies were prepared by the Investment
Manager according to the IPEV Valuation Guidelines and IFRS 13. The Company
has also appointed an independent valuation expert, who performed a full
independent valuation prior to the audit.
The Company responded to market volatility during the year by increasing the
discount rates applicable to its valuations of its portfolio platforms. The
increase in overall value reported by the Company therefore reflects generally
strong operating performance and robust cash flow generation, partially offset
by the mathematical effect of volatile markets, as captured through increases
in discount rates. On this basis, the Investment Manager is highly confident
that the reported portfolio value is a fair reflection of value that has
accrued to shareholders at 31 March 2023.
The primary valuation methodology of the Company's three portfolio platforms
is a discounted cash flow approach. The Investment Manager has discounted the
near-term forecast cash flows of each platform and a terminal value using a
weighted average cost of capital (WACC) as the discount rate. This process
yields an enterprise value from which the net debt of the platform is deducted
to arrive at the equity value attributable to the Company. At 31 March 2023,
the Company owned 100% of each platform either directly or indirectly through
intermediate holding companies.
The WACC for each valuation comprises a weighted average of the cost of equity
attributable to the platform and the cost of debt attributed.
The cost of equity comprises an appropriate risk-free rate plus a premium for
specific risk relating to the platform, its size and its geographical
location. Table 5 shows the range of cost of equity and cost of debt used at
31 March 2023 in the audited valuations of the three platforms. The weighted
average mid-point cost of equity was 11.0% and the weighted average cost of
debt mid-point was 6.5%.
Table 5: Weighted average cost of capital
Range low point Range high point Weighted average
mid point
Cost of equity 9.6% 12.9% 11.0%
Cost of debt 5.0% 7.0% 6.5%
WACC 8.2% 11.0% 9.6%
The weighted average discount rate (WACC) used across the portfolio at 31
March 2023 was 9.6%. From 30 September 2022 to 31 March 2023, the weighted
average discount rate for the portfolio (CRA and Hudson which were each held
by the Company at 30 September 2022) increased by 36 basis points. The
weighted average discount rate increase across the whole year for these two
investments was 81 basis points. This increase was applied by the Company in
response to global market volatility which saw increasing risk free rates and
risk premia during the year and which has had the mathematical effect of
exerting downward pressure on valuations during the year. Increases in
discount rates during the year for CRA and Hudson caused a £78 million
reduction in value.
Dividend coverage
The Company's prudent approach to portfolio construction has created a cash
generative, conservatively geared and strongly diversified pool of assets with
scale and the potential for future growth.
The Company will pay a further interim dividend of 2.0p per share, bringing
the total for the year to 31 March 2023 to 4.0p. This represents a significant
increase over the dividend for the year planned at the time of the IPO in
February 2021. The 4.0p dividend is approximately 3.4x covered by EBITDA and
1.5x covered by adjusted funds from operations (AFFO) defined as free cash
flow after Company level costs, net finance costs, taxation and maintenance
capital expenditure. Table 6 shows the calculation of AFFO for the year to 31
March 2023.
Table 6: Calculation of adjusted funds from operations (AFFO)
Twelve months to 31 March 2023(1) (unaudited)
£m
Portfolio company revenues 200.4
Portfolio company normalised EBITDA 105.0
Dividend coverage, EBITDA basis 3.4x
Net Company-specific costs(2) (11.6)
Net finance costs (18.8)
Net taxation, other (14.9)
Free cash flow before all capital expenditure(3) 59.7
Maintenance capital expenditure (12.9)
Adjusted funds from operations 46.8
Dividend at 4.0p per share (30.9)
Dividend cover 1.5x
1. At average foreign exchange rates for the period. Includes Emitel's
LTM revenue and EBITDA to 31 March 2023 and FY23 unaudited results for CRA and
Hudson, both of which have a 31 March year end.
2. Fund expenses of £21.3 million net of cash interest received of
£9.7 million as shown in Table 1.
3. Aggregate growth capital expenditure of £14.9 million was invested
in the 12 months to 31 March 2023 across the portfolio.
Investee company performance
For the year to 31 March 2023, the portfolio companies generated combined
revenue of £197.1 million, representing a 7.8% increase over the prior year,
on a like-for-like proforma, constant currency basis. Portfolio EBITDA
increased 10.0% over the year, on a like-for-like proforma, constant currency
basis, to £103.8 million(1).
These increases in revenue and EBITDA reflect a number of factors such as new
contracts being entered into, including in the broadcasting and telecoms
business units, and the selling of additional space at data centres at CRA and
Hudson. Higher revenues were earned from existing customers, by the
application of inflation indexation and the cross-selling of complementary
services. The Investment Manager worked with each of the platform companies to
bring its experience in industry best practice to these mid-sized platforms in
the areas of broadcast, telecoms infrastructure and data centres. Finally, the
platforms made investments in new capacity, technologies and services, such as
the DVB-T2 broadcast upgrade and new multiplexers (MUXes), which led to
increased revenues and EBITDA.
During the year to 31 March 2023, across the portfolio companies £12.9
million was invested in maintenance capital expenditure and £14.9 million in
growth capital expenditure. Maintenance capital expenditure included
investment in IT systems and security, the backbone network at CRA and
infrastructure modernisation at Emitel.
Growth capital expenditure included upgrades to the latest generation of
digital broadcast technology (DVB-T2) at Emitel, expansion of the number of
tower sites, expansion of data centre capacity at CRA and Hudson and continued
investment in utility sensor networks. This growth capex was funded by surplus
adjusted funds from operations after the payment of the dividend.
Total gross debt at the Company, subsidiary and platform level was equivalent
to £466 million, and aggregate cash balances at the Company, subsidiary and
platform level were equivalent to £122 million. Aggregate net gearing was 30%
on a look-through basis, well below the 50% maximum permitted under the
Company's investment policy. 78% of all debt is on a fixed-interest basis,
with the remainder floating, none of which is inflation linked.
At 31 March 2023, the Company had a total potential liquidity position of
£254 million, consisting of aggregate cash at the Company and platform level
of £122 million and undrawn balances of £132 million within the Eurobond
facility, all of which has been drawn subsequent to the year end. As and when
appropriate, the Company will continue to deploy cash in internal growth
projects at platform companies and in new investments.
Digital Infrastructure market outlook
Growth in data traffic continues to accelerate globally due to growing
adoption and demand from multiple sectors. This trend is agnostic to any one
sector's behaviour because it is fuelled by growing demand from many industry
segments.
Interconnect data centres act as crossroads for digital data traffic movement
and edge data centres bring the digital traffic closer to the end customer.
Improved end-user experience and a growing need for data traffic optimisation
are resulting in growth in both these markets.
Generative AI has the potential to drive a surge in demand for higher capacity
data centre space and traffic on fibre networks. In addition, for data
centres, increasing use of AI is expected to translate to higher kilowatt
requirements from customers and increases in revenues.
The Investment Manager also believes that AI is likely to be a positive
influence for the broadcast market. Broadcasters can use AI analytics to gain
granular insight into their audience faster and more effectively than was the
case historically. Better understanding of viewer demographics will come from
probabilistic data modelling which will be used for targeting advertising,
leading to an improved return on investment for rand owners and higher
revenues for the broadcasters. In turn this strengthens the market for TV
channels on digital terrestrial TV, which benefits the Company's platforms.
It seems likely that AI serves ultimately to enhance the end viewer
connections and stickiness for media content companies, either in broadcast or
broadband media. The Company, as an owner of Digital Infrastructure, is well
positioned to benefit from this evolution.
The Investment Manager's team
During the year, the digital team at the Investment Manager was further
strengthened with the appointment of Mark Tiner as Chief Financial Officer.
Mark brings extensive knowledge and experience, having previously held senior
positions within two investment trust managers and as CFO of a €1 billion
private equity firm.
The Investment Manager also appointed Meekal Hashmi as Chief Operating
Officer. His focus on back and mid office and information technology will be
of significant value to the digital team. The Investment Manager also expanded
its environmental, social and governance team, joining the Partnership for
Carbon Accounting Financials and developing Task Force on Climate-related
Financial Disclosures (TCFD) capabilities. Additional appointments were made
to provide further capability to the transactions, finance and legal teams as
the portfolio has grown.
Building on the significant strength of the existing digital team reflects the
Investment Manager's continued commitment to supporting platform companies in
achieving their growth ambitions, along with being able to source and deliver
investment opportunities that are in line with target returns.
1. Including Emitel's revenues and EBITDA from audited financial
statements to 31 December 2022.
Unlike its peers in this market, the digital team at the Investment Manager
possesses deep, senior experience of managing and operating world-class
Digital Infrastructure businesses. This is combined with private equity
executives having decades of experience advising and investing in the sector,
making for a unique marriage of capabilities.
Outlook
The Investment Manager is pleased with the overall quality of assets and
underlying cash flows in the portfolio. These have been assembled at what the
Investment Manager believes to be a highly attractive price without
sacrificing growth potential.
Internally generated cash flows and the proceeds of the Eurobond facility will
allow the Company to cover the dividend, engage in appropriate maintenance
capital expenditures, expand existing platforms and invest in new assets to
further diversify the portfolio, both geographically and by asset type.
The Investment Manager remains closely focused on the Company's target of 9%
return to shareholders, comprising dividend and capital growth. The pricing
environment for digital assets in the middle market has somewhat improved and
the Investment Manager has recruited a large and capable team of digital
specialists with the skills and experience required to manage the Company's
assets and to succeed in maximising total return from Core Plus assets.
Based on the solid performance in 2022, which has continued into 2023, the
Investment Manager believes the Company remains well placed to deliver as
planned in the year ending 31 March 2024.
The Investment Manager looks forward to the year ahead with confidence.
Emitel
£m
Original cost(1) 353.0
Unrealised foreign exchange movement in the year(2) 13.2
Realised gain on foreign exchange forward 8.6
Income generated in the year(3) 9.3
Unrealised value movement in the year 47.9
Cash not used in transaction (3.0)
Value at 31 March 2023 429.0
1. On a cash basis. The Company converted £353 million into PLN
between March and June 2022. By the time of the acquisition closing in
November 2022, the value of the PLN acquired had increased to over £380
million, reflecting the bank interest earned, and the appreciation of PLN
against pounds sterling over the period. £3.0 million of PLN was not utilised
for the transaction and was converted back into pounds sterling.
2. Includes foreign exchange movement recorded in the year on PLN
cash.
3. Bank interest earned on PLN balances held during 2022 between
signing of the deal in January 2022 and closing of the deal in November 2022.
Financial performance in the year
For Emitel's audited financial year ending 31 December 2022, revenue increased
13% to PLN 548 million (£99.8 million at average exchange rates for the year)
and EBITDA increased by 7.7% to PLN 368 million (£67.0 million at average
exchange rates for the year). This performance reflected strong growth in TV
broadcast revenues, offset by an increase in energy costs and a contractual
lag in inflation-adjusted revenues.
The increase in broadcast revenues was primarily driven by additional capacity
available from investment in the latest DVB-T2 technology - notably, the
annualised impact of a new MUX 4 contract signed in 2021, and higher testing
revenues prior to commercial launch of MUX 6 (which took place in February
2023). In addition, DVB-T2 technology investment freed up bandwidth for sale,
enabling Emitel to offer additional digital services to its broadcast
customers and viewers, which further improved the Company's competitive
position.
Revenue growth was driven by inflation-linked price increases (approximately
75% of Emitel's revenues have full or partial CPI-linked contracts) and
incremental telecom infrastructure revenues. 2022 inflation will principally
be reflected in indexed revenue contracts from January 2023 onwards. Inflation
in Poland for 2022 was 16.6%. Increased telecom infrastructure revenues arose
from an additional 40 build-to-suit (BTS) sites and an increase in the tower
tenancy ratio to 1.4x, which demonstrated Emitel's success in driving
additional revenue from existing infrastructure.
Cash balances increased to PLN 224 million (£42 million). The principal
amount of third-party bank debt was PLN 1,470 million (£276 million) at year
end. Of the interest payable on the third-party bank debt at 31 March 2023,
67% was fixed and 33% floating; none was inflation linked.
At acquisition in November 2022, the Company also recognised a foreign
exchange gain of £18 million and accumulated cash interest of £9 million,
having acquired the Polish zloty required to meet the purchase consideration
through a series of forward contracts.
Operations
Emitel's contracted orderbook saw further growth in the last financial year
and now stands at more than PLN 3 billion (more than £566 million), with
contracts extending out as far as 2035. The weighted average contract length
in TV broadcasting is seven years, three years in radio broadcasting and 13
years(4) in telecom infrastructure services.
Emitel's incumbent customer base presents an opportunity to evolve its
technical capabilities and service offering, including an 'over the top'
implementation for a major mobile operator for ca.140 channels, more than 100
of which are HD. Further contract wins are expected during 2023.
During 2022, Emitel completed the last stage of digital terrestrial TV
frequency switching (refarming), thus completely freeing up the 700MHz band,
which is to be allocated to 5G. This was a four-year programme undertaken by
the company which moved terrestrial multiplexers from 694-790MHz to
470-694MHz, and in doing so, increased available TV broadcasting capacity.
Emitel won the prestigious Top Employer in Poland award again in Q1 2023,
reflecting the underlying strength of the business and the high standards to
which it is managed and operated on a day-to-day basis. This is the fourth
consecutive win for the company.
Outlook
Emitel continues to invest in the development of new products such as IPTV,
hybrid TV (HbbTV), and DAI platforms which allow among other things, the
placement of specific advertisement spots in advertising blocks based on a
predefined criterion. The Company recently partnered with the Warsaw Stock
Exchange to conduct a pilot for DAI. The pilot will aim to test the
functionality and effectiveness of DAI in all types of digital TV platforms in
Poland. As part of the project, Emitel is responsible for the installation and
configuration of the system, which will be connected to the infrastructure
provided by the Warsaw Stock Exchange.
Starting in 2020, Emitel began to develop Poland's sixth digital television
multiplexer (MUX 6) around the DVB-T2 technology standard to expand capacity
and augment its service and distribution offerings for broadcasters. Following
the completion and testing of MUX 6 in 2022, in Q1 2023 Emitel was able to
secure a new contract win with Polish public broadcaster TVP, for an expansion
of its channels' transmissions. TVP is a state media corporation in Poland and
is the oldest and largest Polish television network. MUX 6 will be the second
digital TV multiplex operated by Emitel exclusively for TVP, the other being
MUX 3.
4. 13 years for the anchor tenant.
The extra broadcast capacity provided by MUX 6 enables TVP to increase the
number of channels it offers and allows the media market to use Emitel's
existing MUX 1 and MUX 8 capacity for additional new channels in Poland. Both
of these developments increase Emitel's revenue potential. The agreement,
which came into effect on 1 February 2023, will allow for 96% population
coverage in Poland for the MUX 6 channels.
After the year end, Emitel acquired 65 telecommunication towers in Poland from
American Tower. The towers are less than three years old and come with robust
contracts with long tenures (14 years average) with inflation-linked
escalators for tenants. These are high-quality lattice towers and have
high-quality contracts with blue-chip customers, Orange and Play, who are
already clients of Emitel. The acquisition was funded from Emitel's own cash
resources.
Emitel is working to refinance its third-party bank debt in advance of the
June 2024 maturity date. The Company expect this process to be finalised in Q3
2023.
Demand for data and Digital Infrastructure in Poland remains strong and was
supported by continued growth in GDP during the year. Emitel remains well
positioned to benefit from these trends in Poland.
CRA
£m
Original cost (May 2021) 305.9
Value at 31 March 2022 351.6
Further investment in the year* 2.7
Unrealised value movement in the year 8.2
Unrealised foreign exchange movement in the year 26.6
Value at 31 March 2023 389.1
Income generated in the year* 2.7
* Interest on shareholder loan capitalised during the year
Financial performance
Revenues for the 12 months to 31 March 2023 increased by 2.0% to CZK 2.264
billion (£80.3 million at average exchange rates for the year) and adjusted
EBITDA increased 16.9% to CZK 1.2 billion (£41.2 million at average exchange
rates for the year).
The revenue performance was driven by double-digit growth in the data centre
(DC), cloud and IoT business lines coupled with single-digit growth in the
telecoms business line. This was somewhat offset by a decline in radio
broadcasting revenue due to the shutdown of AM broadcasting, as was scheduled
for this year. Revenue growth from TV broadcasting was flat year on year. TV
broadcasting recently won several new contracts including signing a five-year
agreement in March 2023 with blue-chip pay TV broadcaster, AMC Networks
International (AMC), a global provider of well-known content such as AMC,
Film+ and Sport1. These new contracts, together with inflation linkage in
revenues from the broadcast business, position CRA well for broadcast growth
in the coming year.
EBITDA performance was driven by an increase in revenues, slight improvement
in gross margin and a reduction in operating expenditure as a percentage of
revenue compared with the year to 31 March 2022.
The renewal of existing contracts and the winning of new ones were supported
by investments made in the expansion and upgrading of CRA's assets. During the
year CRA invested CZK 51 million to build more public protection and disaster
relief (PPDR) sites for the Czech government and develop IoT networks in
partnership with a number of customers. It also made further investments into
the existing tower portfolio to support growing the number of antennas on
those towers. These investments directly led to CRA earning extra revenues and
EBITDA as a result of the capital deployed. In addition, CRA is benefiting
from previous investments made to complete the roll-out of the latest
broadcast technology, DVB-T2, resulting in a 30% increase in broadcast
capacity that it can offer to customers and potential customers. In the last
quarter of the financial year, CRA made good progress in selling broadcast
capacity to a number of new entrants into the Czech market, as mentioned
above.
CRA also saw continued demand for data centre capacity, as measured in racks
occupied (+12.2%) and power (+21.4%). This reflects robust demand dynamics
from new and existing customers.
Cash balances increased to CZK 1.3 billion (£48.1 million) at 31 March 2023.
Third-party bank debt remained unchanged at CZK 3.9 billion (£146.0 million).
Interest on the bank debt is 100% hedged until the second half of 2025 when
the loan falls due.
Operations
CRA benefited from stability in its energy costs during the year and incurred
lower energy costs compared to many of its competitors due to its hedging
policy. This in turn benefited CRA's existing data centre customers who are
charged for energy based on a pass-through mechanism. In addition, it helped
CRA win some new customers who were facing far higher energy charges by their
previous data centre service providers.
During the year, CRA also benefited from new senior management appointments.
The refreshed management team, working with the Investment Manager's team, has
sought to implement innovative commercial arrangements with customers to
support and improve the balance of near- and longer-term revenue and earnings
visibility. These arrangements include a new revenue-sharing model, to drive
take-up of broadcast capacity, and balancing pass-through costs with
longer-term contractual agreements.
In line with power planning for the new data centre, CRA has committed to 100%
of its power requirement coming from renewable sources within the next five
years; as at 31 March 2023 46% of the company's electricity use came from
renewable sources.
Outlook
After the year end, CRA signed a 15-year lease agreement with a leading
European mobile network operator. This also resulted in extra space being
freed up on CRA's towers despite an increase in revenue per tower.
The Czech economy benefited from strong investment activity during the year,
and real GDP increased by 2.5% in 2022, according to official data. CRA's
business lines benefit from either full inflation protection or fixed
escalators which help protect the company's margins. Inflation linked
contracts will typically incorporate 2022 inflation, which in the Czech
Republic was 15.1%, from January 2023 onwards.
Continued demand for data centre capacity is a key driver for CRA's plans to
invest in a new 26MW data centre on a former AM radio transmission site
outside Prague. The new centre is expected to be a state-of-the-art facility,
with market-leading power utilisation efficiency and on-site solar power. The
execution for the fibre ring of this data centre has now started. With current
plans for the new data centre to be completed in 2025, CRA is also looking at
bolt-on acquisition opportunities to boost data centre capacity in the
interim.
Hudson
£m
Original cost 55.8
Value at 31 March 2022 58.2
Further investment in the year 4.7
Unrealised value movement in the year (10.1)
Unrealised foreign exchange movement in the year 4.2
Value at 31 March 2023 57.0
Income generated in the year -
Financial performance
During the period, Hudson saw revenue increase by 9.2% to $20.5 million
(£17.0 million at average exchange rates for the year) and EBITDA loss
increase by 43% to $(5.3) million (loss of £4.4 million at average exchange
rates for the year). The increase in EBITDA loss was a result of the
recruitment of sales and marketing personnel and the impact of sales
commission, which is paid up front when a new contract is starting to generate
revenue.
Hudson saw solid operational progress through the year, although the pace of
new sales has been slower than the Investment Manager had hoped, with Hudson's
management also dealing with global supply chain issues affecting the
availability and lead times of data hall construction materials. Capacity
utilisation of the sixth floor has increased to 321KW resulting from a number
of contract wins. These included blue-chip customers such as a major US mobile
operator and a leading provider of advance network communications. We expect
the pace of pipeline conversion to sales to increase in the coming financial
year.
The overall sales pipeline has continued to grow and now stands at 7.2MW; the
value of sales opportunities which management judge a 50% probability or more
increased by 250% between March 2022 and March 2023.
Operations
During the year, Hudson benefited from the investment made in its sales and
marketing teams, including the appointment of new heads of sales and marketing
with extensive recent experience in selling and marketing data centre space
and services. The team is now increasingly active in the market, with a
campaign to target customers in the financial sector where low-latency
interconnection and colocation are required.
These initiatives are also being actively supported by the Investment
Manager's operational team, with individuals on the ground in New York
assisting the management team in converting the substantial pipeline into
sales.
Outlook
Hudson continues to offer a significant opportunity for growth, with current
utilisation below 30%, and no requirement for additional upfront investment,
essentially de-risking capital expenditure by linking it directly to revenue
contracts.
Principal risks and uncertainties
Under the FCA's Disclosure Guidance and Transparency Rules, the Directors are
required to identify those material risks to which the Company is exposed and
take appropriate steps to mitigate those risks.
The Company's assets consist primarily of investments in Digital
Infrastructure assets, with a predominant focus on data centres, mobile
telecommunications/broadcast towers and fibre-optic network assets. Its
principal risks are therefore related to market conditions in the Digital
Infrastructure sector in general, but also the particular circumstances of the
businesses in which it is invested. The Investment Manager seeks to mitigate
these risks through active asset management initiatives and carrying out due
diligence work on potential targets before entering into any investments.
The Board thoroughly considers the process for identifying, evaluating and
managing any significant risks faced by the Company, including emerging risks,
on an ongoing basis and these are reported and discussed at Board meetings.
The Board ensures that effective controls are in place to mitigate these risks
and that a satisfactory compliance regime exists to ensure all applicable
local and international laws and regulations are upheld.
Every risk that is identified is considered by the Investment Manager and by
the Directors, with specialist third party advice where necessary. That
assessment is both qualitative and quantitative, considering the nature of the
risk and the likelihood of it crystallising, together with the financial,
legal and/or operational consequences if it does. For each risk, a two-part
score is assigned: low, medium or high likelihood; and low, medium or high
impact.
The key areas of risk faced by the Company are summarised below:
1 The Company may lose investment opportunities if it does not match investment
prices, structures and terms offered by competing bidders. Conversely, the
Company may experience decreased rates of return and increased risk of loss if
it matches investment prices, structures and terms offered by competitors. To
mitigate this risk, the Investment Manager operates a prudent and disciplined
investment strategy, participating in transaction processes only where it can
be competitive without compromising its investment objectives. The Investment
Manager has been able to identify and pursue bilateral opportunities rather
than auction processes, where competition for these assets has been a less
significant factor. However, there can be no guarantee that suitable further
bilateral opportunities will arise. In addition, current market volatility and
the consequent limitations on the Company's ability to access capital markets
may mean that it is not able to pursue certain investment opportunities. Risk:
Increased
2 There can be no guarantee or assurance the Company will achieve its investment
objectives, which are indicative targets only. Investments may fail to deliver
the projected earnings, cash flows and/or capital growth expected at the time
of acquisition. To mitigate this risk, the Investment Manager performs a
rigorous due diligence process with internal specialists and expert
professional advisers in fields relevant to the proposed investment, prior to
that investment being executed. The operational performance of our
investments to date is in line with our expectations, demonstrating that the
due diligence process undertaken at the time of acquisition was appropriately
rigorous to mitigate this risk. The same level of rigour must be maintained
for future investments. Risk: Unchanged
3 The actual rate of return may be materially lower than the targeted rate of
return. To mitigate this risk, the Investment Manager performs a rigorous due
diligence process before any investment is made. Post-acquisition, investment
valuations are performed by the Investment Manager in line with IPEV
guidelines and the Company's valuation policy. The Company has also appointed
an independent valuation expert, who provides a reasonableness check of the
Investment Manager's valuations at each interim financial reporting date, and
performs a full independent valuation at each year end. The Investment Manager
also carries out a regular review of the investment environment and benchmarks
target and actual returns against the industry and competitors. The NAV total
return since inception of 21.1% has grown period on period, supported by
investment performance in line with expectations and a dividend programme
ahead of IPO target. Volatility in key market indicators over the period has
had a negative impact on valuations for investments across the market, and the
Company is no exception. Risk: Unchanged
4 The Company may invest in Digital Infrastructure assets which are in
construction or construction-ready or otherwise require significant future
capital expenditure. Digital Infrastructure assets which have significant
capital expenditure requirements may be exposed to cost overruns, construction
delay, failure to meet technical requirements or construction defects. The
Investment Manager has significant experience of managing construction risks
arising from Digital Infrastructure assets and will also engage third parties
where appropriate to oversee such construction. The Company's investments to
date have not undertaken significant capital construction projects. This risk
has therefore been relatively low to date but may increase as capital
investment increases under our Buy, Build & Grow model. Risk: Increased
5 The operation, maintenance and performance of Digital Infrastructure assets in
which the Company may invest, or acquire in the future, may be affected by the
impacts of material geo-political events such as the war in Ukraine, the
continuing impact of COVID-19 or another pandemic or epidemic, climate change,
or other wide-scale disruption to the global economy and business. Such
disruption may materially adversely affect the Company's suppliers, tenants
and customers. To mitigate this risk, the Company seeks to acquire a
diversified range of investments over the medium term, so that the exposure to
conditions in any one market and to individual suppliers, customers and
tenants, is limited. The war in Ukraine has had a material impact on the
availability and cost of energy and has contributed to a significant increase
in inflation in markets around the world. The war itself is not expected to
affect the Company's investments directly, but it will have an impact on
supply chains in the short to medium term, in respect of both pricing and
delivery times. COVID-19 has had limited impact on the Company and indications
are that risks from the pandemic are fading. Risk: Decreased
6 Actual results of portfolio investments may vary from the projections, which
may have a material adverse effect on NAV. To mitigate this risk, the
Investment Manager provides the Board with at least quarterly updates of
portfolio investment performance and detail around material variation from
budget and forecast returns. The results of our investments to date are
materially in line with our projections at the time of their acquisition and
their aggregate fair value has increased, contributing to NAV total return of
21.1% since IPO. This demonstrates the quality of the Investment Manager's
projections and its ability to manage the investments for growth. Risk:
Unchanged
7 The capital markets may remain effectively closed to the Company for a
significant period. As a consequence, the Company may be unable to raise new
capital and it may therefore be unable to progress investment opportunities.
To mitigate this risk, the Company has acquired a portfolio of cash-generating
assets with significant organic growth prospects, which together are capable
of providing returns meeting the investment objective without further
acquisitions. The Investment Manager also continues to consider and, as
appropriate, investigate potential alternative sources of capital, including
further debt issuance and co-investment. We have an ongoing investor relations
programme with shareholders, new investors and research analysts, combined
with an active PR process to increase the Company's profile. Significant
discounts to NAV are evident in the current share prices of many investment
trust companies listed on the London Stock Exchange, including the Company,
and have been for a substantial part of the financial year ending 31 March
2023. Investment trusts do not usually seek to raise equity capital at a
discount to their NAV and may not do so without shareholder approval. It is
not possible to predict when market conditions might improve. Risk: NEW
8 Inflation may cause costs to rise faster than revenues, causing a reduction in
margins and profits. The earnings of the Company's portfolio companies have a
substantial level of resilience to the effects of inflation. Revenue contracts
include full or partial protection from inflation, or cost pass-throughs, and
generally comprise long-term contracts with strong counterparties. Energy cost
hedging strategies have greatly mitigated the effects on earnings of energy
costs that are not pass-through. The Company will seek to put similar
protections in place in future contracts and in future investments wherever
possible. The Investment Manager will continue to take board positions on
investee companies and use its influence to maintain rigorous cost controls.
Globally, levels of inflation have risen substantially, largely as a result of
the war in Ukraine. While the effect of inflation is net positive in the case
of the Company's portfolio, there can be no guarantee that future investments
will be able to obtain or maintain similar contractual protections. Risk:
Decreased
9 Increasing interest rates cause the cost of existing debt service to rise and
increases the cost of new debt. A higher interest rate environment may also
reduce the aggregate level of demand in the global economy, and so reduce
economic growth. To mitigate this risk, the Company and its investee companies
seek to fix or hedge the majority of interest costs of existing debt to
mitigate the effect of increases in interest rates. The Investment Manager
operates competitive processes with trusted parties to seek best value from
lenders to the Company and its investee companies. The Company maintains what
it considers to be a prudent level of overall gearing. In response to
increasing inflation and volatility in global exchange rates, monetary
authorities around the world are increasing the cost of borrowing. This will
make new debt more expensive to the Company and its competitors and increase
risk around refinancing of existing debt. Risk: Unchanged
These principal risks and uncertainties remain the most likely to affect the
Company in 2023/24.
Statement of Financial Position
As at 31 March 2023
Note As at As at
31 March 2023
31 March 2022
£'000
£'000
Non-current assets
Investments at fair value through profit or loss 6 872,315 409,856
872,315 409,856
Current assets
Receivables 8 14,680 51,705
Derivatives 9 - 8,072
Cash and cash equivalents 10,498 353,734
25,178 413,511
Current liabilities
Payables (21,782) (1,021)
(21,782) (1,021)
Net current assets 3,396 412,490
Net assets 875,711 822,346
Equity
Equity share capital 10 779,157 779,896
Retained earnings - Revenue (196) (2,724)
Retained earnings - Capital 96,750 45,174
Total equity 875,711 822,346
Number of shares in issue
Ordinary shares 10 772,509,707 773,288,394
772,509,707 773,288,394
Net asset value per ordinary share (pence) 14 113.36 106.34
The financial statements were approved and authorised for issue by the Board
of Directors on 21 June 2023 and signed on their behalf by:
Shonaid
Jemmett-Page
Sian Hill
Chairman
Director
The accompanying notes form an integral part of these financial statements.
Statement of Comprehensive Income
Year ended 31 March 2023
Year ended 31 March 2023 Period ended 31 March 2022
Note Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Movement in fair value of investments 6 - 73,079 73,079 - 40,346 40,346
Unrealised foreign exchange gains on investment 6 - 6,143 6,143 - 13,852 13,852
Realised loss on restructure 6 - (3,927) (3,927) - - -
Interest income 6 2,749 - 2,749 2,932 - 2,932
2,749 75,295 78,044 2,932 54,198 57,130
Operating expenses
Investment acquisition costs - (6,553) (6,553) - (4,564) (4,564)
Other expenses 4 (9,553) (1,793) (11,346) (5,836) (1,612) (7,448)
(9,553) (8,346) (17,899) (5,836) (6,176) (12,012)
Operating profit (6,804) 66,949 60,145 (2,904) 48,022 45,118
Foreign exchange movements on working capital - 11,119 11,119 - (1,876) (1,876)
Gain on expired foreign exchange forwards - 580 580 - 8,072 8,072
Finance income 5 9,706 - 9,706 180 - 180
Finance expense (374) - (374) - (124) (124)
Profit for the year/period before tax 2,528 78,648 81,176 (2,724) 54,094 51,370
Tax charge 12 - - - - - -
Profit for the year/period after tax 2,528 78,648 81,176 (2,724) 54,094 51,370
Total comprehensive income for the year/period 2,528 78,648 81,176 (2,724) 54,094 51,370
Weighted average number of shares
Basic 14 773,442,556 773,442,556 773,442,556 411,129,146 411,129,146 411,129,146
Diluted 14 773,442,556 773,442,556 773,442,556 411,644,654 411,644,654 411,644,654
Earnings per share
Basic earnings from continuing operations in the 14 0.33 10.17 10.50 (0.66) 13.15 12.49
year/period (pence)
Diluted earnings from continuing operations in the 14 0.33 10.17 10.50 (0.66) 13.14 12.48
year/period (pence)
The accompanying notes form an integral part of these financial statements.
Statement of Changes in Equity
Year ended 31 March 2023
Note Share capital Retained earnings - Revenue Retained earnings - Capital Total equity
£'000
£'000
£'000
£'000
Opening net assets attributable to shareholders at 4 January 2021 - - - -
Issue of share capital 794,997 - - 794,997
Share issue costs (15,101) - - (15,101)
Dividends paid during the period 15 - - (8,920) (8,920)
Total comprehensive income for the period - (2,724) 54,094 51,370
Closing net assets attributable to shareholders as at 31 March 2022 779,896 (2,724) 45,174 822,346
Note Share capital Retained earnings - Revenue Retained earnings - Capital Total equity
£'000
£'000
£'000
£'000
Opening net assets attributable to shareholders at 1 April 2022 779,896 (2,724) 45,174 822,346
Issue of share capital 295 - - 295
Share issue costs (91) - - (91)
Shares repurchased in the year (943) - - (943)
Dividends paid during the year 15 - - (27,072) (27,072)
Total comprehensive income for the year - 2,528 78,648 81,176
Closing net assets attributable to shareholders as at 31 March 2023 779,157 (196) 96,750 875,711
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flows
Year ended 31 March 2023
Note Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Operating activities
Operating profit for the year/period 60,145 45,118
Adjustments to operating activities
Movement in fair value of investments 6 (73,079) (40,346)
Unrealised foreign exchange gain on investments 6 (6,143) (13,852)
Realised loss on restructure 6 3,927 -
Interest capitalised and receivable on shareholder loan investments 6 (2,749) (2,932)
Increase in receivables (4,444) (1,038)
Increase in payables 474 1,021
Cash received on settled foreign currency contract 361,652 -
Cash paid on foreign currency contract (353,000) -
Net cash flows used in operating activities (13,217) (12,029)
Cash flows used in investing activities
Investment additions 6 (384,415) (361,481)
Cash collateral held for investing purposes 41,469 (50,599)
Repayment of shareholder loan received - 8,620
Finance income 9,549 -
Loan interest received - 397
Net cash flows used in investing activities (333,397) (403,063)
Cash flows (used in)/generated from financing activities
Issue of share capital 10 295 794,997
Payment of issue costs 10 (91) (15,101)
Shares repurchased 10 (943) -
Loan drawn down 20,287 286,980
Loan repaid - (286,980)
Finance costs paid (374) (124)
Bank interest received 157 150
Dividends paid 15 (27,072) (8,920)
Net cash flows (used in)/generated from financing activities (7,741) 771,002
(Decrease)/Increase in cash and cash equivalents during the year/period (354,355) 355,910
Cash and cash equivalents at the beginning of the year/period 353,734 -
Exchange translation movement 11,119 (2,176)
Cash and cash equivalents at the end of the year/period 10,498 353,734
The accompanying notes form an integral part of these financial statements.
Notes to the Financial Statements
1. General information
Cordiant Digital Infrastructure Limited (the Company; LSE ticker: CORD) was
incorporated and registered in Guernsey on 4 January 2021 with registered
number 68630 as a non-cellular company limited by shares and is governed in
accordance with the provisions of the Companies (Guernsey) Law 2008 (as
amended). The registered office address is East Wing, Trafalgar Court, Les
Banques, St Peter Port, Guernsey, GY1 3PP. The Company's ordinary shares were
admitted to trading on the Specialist Fund Segment of the London Stock
Exchange on 16 February 2021 and its C Shares on 10 June 2021. On 20 January
2022, all C Shares were converted to ordinary shares. A second issuance of
ordinary shares took place on 25 January 2022. Note 10 gives more
information on share capital.
2. Significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with IFRS as issued
by the IASB, the Statement of Recommended Practice issued by the Association
of Investment Companies (the AIC SORP) and the Companies (Guernsey) Law 2008
(as amended).
The financial statements have been prepared on an historical cost basis as
modified for the measurement of certain financial instruments at fair value
through profit or loss. They are presented in pounds sterling, which is the
currency of the primary economic environment in which the Company operates,
and are rounded to the nearest thousand, unless otherwise stated. The AIC SORP
has been applied retrospectively and has resulted in presentational changes to
the Statement of Financial Position, Statement of Comprehensive Income and
Statement of Changes in Equity in order to present revenue and capital items
separately.
The principal accounting policies are set out below.
Going concern
The financial statements have been prepared on a going concern basis as the
Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future.
While the conflict in Ukraine and market volatility during the year have
affected the way in which the Company's investee companies are conducted, this
did not have a material direct effect on the results of the business. The
Directors are satisfied that the resulting macroeconomic environment is not
likely to significantly restrict business activity.
The Directors and Investment Manager are actively monitoring these risks and
their potential effect on the Company and its underlying investments. In
particular, they have considered the following specific key potential impacts:
― increased volatility in the fair value of investments;
― disruptions to business activities of the underlying investments; and
― recoverability of income and principal and allowance for expected credit
losses.
In considering the above key potential impacts of the conflict in Ukraine and
market volatility on the Company and its underlying investments, the
Investment Manager has assessed these with reference to the mitigation
measures in place. Based on this assessment, the Directors do not consider
that the effects of the conflict in Ukraine and market volatility have created
a material uncertainty over the assessment of the Company as a going concern.
As further detailed in note 6 to the financial statements, the Investment
Manager uses a third-party valuation provider to perform a reasonableness
assessment of the Investment Manager's valuation of the underlying
investments. Additionally, the Investment Manager and Directors have
considered the cash flow forecast to determine the term over which the Company
can remain viable given its current resources.
On the basis of this review, and after making due enquiries, the Directors
have a reasonable expectation that the Company has adequate resources to
continue in operational existence for at least the period from 21 June 2023
to 30 June 2024, being the period of assessment considered by the Directors.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
Accounting for subsidiaries
The Directors have concluded that the Company has all the elements of control
as prescribed by IFRS 10 'Consolidated Financial Statements' in relation to
all its subsidiaries and that the Company satisfies the three essential
criteria to be regarded as an Investment Entity as defined in IFRS 10. The
three essential criteria are that the entity must:
― obtain funds from one or more investors for the purpose of providing these
investors with professional investment management services;
― commit to its investors that its business purpose is to invest its funds
solely for returns from capital appreciation, investment income or both; and
― measure and evaluate the performance of substantially all of its
investments on a fair value basis.
In satisfying the second essential criterion, the notion of an investment time
frame is critical and an Investment Entity should have an exit strategy for
the realisation of its investments. The Board has approved a divestment
strategy under which the Investment Manager will, within two years from
acquisition of an investment and at least annually thereafter, undertake a
review of the current condition and future prospects of the investment. If the
Investment Manager concludes that:
― the future prospects for an investment are insufficiently strong to meet
the Company's rate of return targets; or
― the value that could be realised by an immediate disposal would outweigh
the value of retaining the investment; or
― it would be more advantageous to realise capital for investment elsewhere
than to continue to hold the investment
― then the Investment Manager will take appropriate steps to dispose of the
investment.
Also as set out in IFRS 10, further consideration should be given to the
typical characteristics of an Investment Entity, which are that:
― it should have more than one investment, to diversify the risk portfolio
and maximise returns;
― it should have multiple investors, who pool their funds to maximise
investment opportunities;
― it should have investors that are not related parties of the entity; and
― it should have ownership interests in the form of equity or similar
interests.
The Directors are of the opinion that the Company meets the essential criteria
and typical characteristics of an Investment Entity. Therefore, subsidiaries
are measured at fair value through profit or loss, in accordance with IFRS 9
'Financial Instruments'. Fair value is measured in accordance with IFRS 13
'Fair Value Measurement'.
Financial instruments
In accordance with IFRS 9, financial assets and financial liabilities are
recognised in the Statement of Financial Position when the Company becomes a
party to the contractual provisions of the instrument. Financial assets and
financial liabilities are only offset, and the net amount reported in the
Statement of Financial Position, when there is a currently enforceable legal
right to offset the recognised amounts and the Company intends to settle on a
net basis or realise the asset and liability simultaneously.
Financial assets
The classification of financial assets at initial recognition depends on the
purpose for which the financial asset was acquired and its characteristics.
All purchases of financial assets are recorded at the date on which the
Company became party to the contractual requirements of the financial asset.
The Company's financial assets principally comprise investments held at fair
value through profit or loss, derivative financial instruments, cash and cash
equivalents, and trade receivables.
Financial assets are recognised at the date of purchase or the date on which
the Company became party to the contractual requirements of the asset.
Financial assets are initially recognised at cost, being the fair value of
consideration given. Transaction costs of financial assets at fair value
through profit or loss are recognised in the Statement of Comprehensive Income
as incurred.
A financial asset is derecognised (in whole or in part) either:
― when the Company has transferred substantially all the risks and rewards
of ownership; or
― when it has neither transferred nor retained substantially all the risks
and rewards and when it no longer has control over the assets or a portion of
the asset; or
― when the contractual right to receive cash flow has expired.
Investments held at fair value through profit or loss
Investments are measured at fair value through profit or loss. Gains or losses
resulting from the movement in fair value are recognised in the Statement of
Comprehensive Income at each valuation point.
The loans provided to subsidiaries are held at fair value through profit or
loss as they form part of a managed portfolio of assets whose performance is
evaluated on a fair value basis. These loans are recognised at the loan
principal value plus outstanding interest. Any gain or loss on the loan
investment is recognised in profit or loss.
Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value is calculated on an
unlevered, discounted cash flow basis in accordance with IFRS 13.
When available, the Company measures fair value using the quoted price in an
active market. A market is regarded as 'active' if transactions for the asset
or liability take place with sufficient frequency and volume to provide
pricing information on an ongoing basis. If there is no quoted price in an
active market, then the Company uses valuation techniques that maximise the
use of relevant observable inputs and minimise the use of unobservable inputs.
The chosen valuation technique incorporates all of the factors that market
participants would take into account when pricing a transaction.
Valuation process
The Investment Manager is responsible for proposing the valuation of the
assets held by the Company, and the Directors are responsible for reviewing
the Company's valuation policy and approving the valuations.
Derivatives held for trading
When considered appropriate the Company will enter into derivative contracts
to manage its foreign-exchange risk and provide protection against the
volatility of the market. Unquoted foreign exchange derivatives are valued at
the price that would be paid or received by closing out the contract on the
reporting date by entering into an equal and opposite contract at that date.
Gains and losses arising from changes in fair value are presented in the
Statement of Comprehensive Income in the period in which they arise.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments with an original maturity of three months
or less that are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value.
Trade receivables
Trade receivables are classified as financial assets at amortised cost. They
are measured at amortised cost less impairment assessed using the simplified
approach of the expected credit loss (ECL) model based on experience of
previous losses and expectations of future losses. Trade and other receivables
are recorded based on agreements entered into with entities with no notable
history of default causing the ECL of these receivables to be immaterial and
therefore no ECL has been recorded.
Financial liabilities
Financial liabilities are classified according to the substance of the
contractual agreements entered into and are recorded on the date on which the
Company becomes party to the contractual requirements of the financial
liability.
The Company's financial liabilities measured at amortised cost include trade
and other payables, intercompany loans and other short-term monetary
liabilities which are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest rate method.
A financial liability (in whole or in part) is derecognised when the Company
has extinguished its contractual obligations, it expires or is cancelled. Any
gain or loss on derecognition is taken to the Statement of Comprehensive
Income.
Equity
Financial instruments issued by the Company are treated as equity if the
holder has only a residual interest in the assets of the Company after the
deduction of all liabilities. The Company's ordinary shares and Subscription
Shares are classified as equity.
Share issue costs directly attributable to the issue of ordinary shares are
shown in equity as a deduction from share capital.
When shares recognised as equity are repurchased, the amount of the
consideration paid, which includes directly attributable costs, is recognised
as a deduction from equity.
Dividends
Dividends payable are recognised as distributions in the financial statements
when the Company's obligation to make payment has been established.
Revenue recognition
Dividend income is recognised when the Company's entitlement to receive
payment is established. Other income is accounted for on an accruals basis
using the effective interest rate method.
Expenses
Expenses include legal, accounting, auditing, and other operating expenses.
They are recognised on an accruals basis in the Statement of Comprehensive
Income in the period in which they are incurred.
Taxation
It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions in section 1158 Corporation Tax Act 2010 and
the Investment Trust (Approved Company) (Tax) Regulations 2011 for it to
continue to be approved by HMRC as an investment trust.
In respect of each accounting period for which the Company is approved by HMRC
as an investment trust, the Company will be exempt from UK corporation tax on
its chargeable gains and its capital profits from creditor loan relationships.
The Company will, however, be subject to UK corporation tax on its income
(currently at a rate of 19%, rising to 25% from 1 April 2023).
In principle, the Company will be liable to UK corporation tax on its dividend
income. However, there are broad-ranging exemptions from this charge which
would be expected to be applicable in respect of most of the dividends the
Company may receive.
A company that is an approved investment trust in respect of an accounting
period is able to take advantage of modified UK tax treatment in respect of
its 'qualifying interest income' for an accounting period. It is expected that
the Company will have material amounts of qualifying interest income and that
it may, therefore, decide to designate some or all of the dividends paid in
respect of a given accounting period as interest distributions.
To the extent that the Company receives income from, or realises amounts on
the disposal of, investments in foreign countries it may be subject to foreign
withholding or other taxation in those jurisdictions. To the extent it relates
to income, this foreign tax may, to the extent not relievable under a double
tax treaty, be able to be treated as an expense for UK corporation tax
purposes, or it may be treated as a credit against UK corporation tax up to
certain limits and subject to certain conditions.
Current tax is the expected tax payable on the taxable income for the period,
using tax rates that have been enacted or substantively enacted at the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on temporary
differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
Deferred tax assets and liabilities are not recognised if the temporary
differences arise from goodwill or from the initial recognition of other
assets and liabilities in a transaction that that is not a business
combination and that affects neither the taxable profit nor the accounting
profit. Deferred tax assets and liabilities are recognised for taxable
temporary differences arising on investments, except where the Company is able
to control the timing of the reversal of the difference and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited to the Statement of Comprehensive Income except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with directly in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off tax assets against tax liabilities and when they
relate to income taxes levied by the same taxation authority and the Company
intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets and liabilities are not discounted.
Foreign currencies
The functional currency of the Company is the pound sterling, reflecting the
primary economic environment in which it operates. The Company has chosen
pounds sterling as its presentation currency for financial reporting purposes.
Transactions during the year, including purchases and sales of investments,
income and expenses are translated into pounds sterling at the rate of
exchange prevailing on the date of the transaction.
Monetary assets and liabilities denominated in currencies other than pounds
sterling are retranslated at the rate of exchange ruling at the reporting
date. Non-monetary items that are measured in terms of historical cost in a
currency other than pounds sterling are translated using the exchange rates at
the dates of the initial transactions.
Non-monetary items measured at fair value in a currency other than pounds
sterling are translated using the exchange rates at the date when the fair
value was determined. Foreign currency transaction gains and losses on
financial instruments classified as at fair value through profit or loss are
included in profit or loss in the Statement of Comprehensive Income as part of
the change in fair value of investments.
Foreign currency transaction gains and losses on financial instruments are
included in profit or loss in the Statement of Comprehensive Income as a
finance income or expense.
Segmental reporting
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board of Directors as a whole. The key measure of
performance used by the Directors to assess the Company's performance and to
allocate resources is the Company's NAV, as calculated under IFRS as issued by
the IASB, and therefore no reconciliation is required between the measure of
profit or loss used by the Board and that contained in the Annual Report.
For management purposes, the Company is organised into one main operating
segment, which invests in Digital Infrastructure Assets.
Due to the Company's nature, it has no customers.
New standards, amendments and interpretations issued and effective for the
financial period beginning 1 April 2022
The Board of Directors has considered new standards and amendments that are
mandatorily effective from 1 April 2022 and determined that these do not have
material impact on the Company and are not expected to significantly affect
the current or future periods.
New standards, amendments and interpretations issued but not yet effective
There are a number of new standards, amendments to standards and
interpretations which are not yet mandatory for the 31 March 2023 reporting
period and have not been adopted early by the Company. These standards are not
expected to have a material impact on the financial statements of the Company
in the current or future reporting periods and on foreseeable
future transactions.
3. Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income,
and expenses.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The resulting accounting estimates will, by definition, seldom equal the
related actual results. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any future periods
affected.
Judgements
In the process of applying the Company's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the financial statements:
Assessment as an Investment Entity
In the judgement of the Directors, the Company qualifies as an Investment
Entity under IFRS 10 and therefore its subsidiary entities have not been
consolidated in the preparation of the financial statements. Further details
of the impact of this accounting policy are included in note 7.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the year ended 31 March 2023 is included in
note 6 and relates to the determination of fair value of investments with
significant unobservable inputs.
Climate change
In preparing the financial statements, the Directors have considered the
impact of climate change, particularly in the context of the climate change
risks identified in the ESG report section of the Strategic Report.
In preparing the financial statements, the Directors have considered the
medium- and longer-term cash flow impacts of climate change on a number of key
estimates within the financial statements, including:
― the estimates of future cash flows used in assessments of the fair value
of investments; and
― the estimates of future profitability used in the assessment of
distributable income.
These considerations did not have a material impact on the financial reporting
judgements and estimates in the current year. This reflects the conclusion
that climate change is not expected to have a significant impact on the
Company's short- or medium-term cash flows including those considered in the
going concern and viability assessments.
4. Other expenses
Other expenses in the Statement of Comprehensive Income comprises:
Note Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Management fees 13 7,271 4,690
Legal and professional fees* 1,281 776
Discontinued deal fees 1,793 1,612
Directors' fees 185 218
Fees payable to the statutory auditor 11 195 130
Other expenses 621 22
11,346 7,448
*Legal and professional fees have been reclassified from the other expenses
line in the prior year to make the presentation consistent with the current
year.
5. Finance income
Finance income in the Statement of Comprehensive Income comprises:
Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Bank interest received 157 180
Interest on fixed term deposits 9,549 -
9,706 180
6. Investments at fair value through profit or loss
As at 31 March 2023 As at 31 March 2022
Loans Equity Total Loans Equity Total
£'000
£'000
£'000
£'000
£'000
£'000
Opening balance 27,671 382,185 409,856 - - -
Additions 4,691 379,724 384,415 32,249 329,232 361,481
Shareholder interest capitalised 521 - 521 2,797 - 2,797
Interest on promissory loan notes 2,228 - 2,228 - - -
Shareholder loan repayment - - - (8,620) - (8,620)
Net gains on investments at fair value through profit or loss 2,239 73,056 75,295 1,245 52,953 54,198
37,350 834,965 872,315 27,671 382,185 409,856
During the year ended 31 March 2023, the Company restructured its loan and
equity investments in Communication Investments Holdings s.r.o. (CIH), an
entity incorporated in the Czech Republic and the parent company of České
Radiokomunikace a.s. (CRA), to hold them indirectly through Cordiant Digital
Holdings UK Limited (CDHUK) and Cordiant Digital Holdings Two Limited (CDH2),
two wholly-owned subsidiaries of the Company. CDH2 issued shares and
promissory notes to the Company in consideration for the transfer of the loan
and equity investments in CIH. CDHUK then issued shares and promissory notes
to the Company in consideration for the transfer of the shares and promissory
notes of CDH2. The exchange loss realised on the restructure of investment by
the Company is £3.9 million. The fair value of the shares and promissory
notes issued by CDHUK are included in the table above and represent the fair
values of the underlying investments together with other assets and
liabilities of its subsidiaries. The fair value of the Company's equity
investment in CDHUK amounted to £782.8 million at 31 March 2023 (31 March
2022: nil) and the loan investment amounted to £32.5 million (31 March 2022:
nil).
The value of the Company's indirect investment in CRA as at 31 March 2023 was
£389.1 million, comprising an equity investment valued at £362.9 million and
a loan investment of £26.2 million.
The Company made loan investments of £4.7 million in CDIL Data Centre USA
LLC, the legal entity operating as Hudson Interxchange (previously operating
under the name DataGryd) during the year ended 31 March 2023. As at 31 March
2023, the equity investment was valued at £52.3 million (31 March 2022:
£58.2 million) and the loan investment at £4.7 million (31 March 2022: nil).
The unrealised foreign exchange gain on the loan investment is £0.1 million
and £3.6 million on the equity investment. The investments are held at fair
value. The unrealised fair value loss on the equity investment at 31 March
2023 is £9.6 million.
The Company, through its indirect subsidiary Cordiant Digital Holdings One
Limited (CDH1), acquired Emitel S.A. during the year ended 31 March 2023. The
Company subscribed for additional shares in CDHUK for cash consideration of
£379.7 million in order to provide the funds for CDH1 to complete the
acquisition of Emitel. The value of the Company's indirect investment in
Emitel at 31 March 2023 was £429.0 million.
The table below details all gains on investments through profit or loss.
Year ended 31 March 2023 Period ended 31 March 2022
Loans Equity Total Loans Equity Total
£'000
£'000
£'000
£'000
£'000
£'000
Shareholder loan interest income 2,749 - 2,749 2,932 - 2,932
Unrealised movement in fair value of investments - 73,079 73,079 - 40,346 40,346
Realised movement in fair value of investments on restructure (307) (3,620) (3,927) - - -
Foreign exchange movement on valuation of investments 2,546 3,597 6,143 1,245 12,607 13,852
Total investment income recognised in the year/period 4,988 73,056 78,044 4,177 52,953 57,130
Fair value measurements
IFRS 13 requires disclosure of fair value measurement by level. The level of
fair value hierarchy within the financial assets or financial liabilities is
determined on the basis of the lowest level input that is significant to the
fair value measurement. Financial assets and financial liabilities are
classified in their entirety into only one of the following three levels:
― Level 1 - quoted prices (unadjusted) in active markets for identical
assets or liabilities;
― Level 2 - inputs other than quoted prices included within Level 1 that are
observable for the assets or liabilities, either directly (i.e., as prices) or
indirectly (i.e. derived from prices); and
― Level 3 - inputs for assets or liabilities that are not based on
observable market data (unobservable inputs).
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Directors consider observable data to be market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
The Company's investments have been classified within Level 3 as the
investments are not traded and contain unobservable inputs. The valuations
have been carried out by the Investment Manager. In order to obtain assurance
in respect of the valuations calculated by the Investment Manager, the Company
has engaged a third-party valuations expert to carry out an independent
assessment of the unobservable inputs and of the forecast cash flows of the
Company's investments.
During the year ended 31 March 2023, there were no transfers of investments at
fair value through profit or loss from or to Level 3.
The Company's investments in CRA, Hudson Interxchange and Emitel have been
valued using a DCF methodology. This involves forecasting the entity's future
cash flows, taking into account the terms of existing contracts, expected
rates of contract renewal and targeted new contracts, and the economic and
geopolitical environment. These cash flows are discounted at the entity's
estimated weighted average cost of capital (WACC). This method also requires
estimating a terminal value, being the value of the investment at the end of
the period for which cash flows can be forecast with reasonable accuracy,
which is March 2030 for CRA, December 2030 for Emitel and March 2037 for
Hudson Interxchange. The terminal value is calculated using an assumed
terminal growth rate (TGR) into perpetuity based on anticipated industry
trends and long-term inflation rates.
The DCF valuation methodology requires estimation of unobservable inputs. The
following table summarises the effect on the valuation of the Company's
portfolio of reasonably possible alternative investment assumptions with
regards to those estimates; these are calculated using the DCF valuation
models referred to above.
31 March 2023
Unobservable input Range Valuation if rate increases by Movement in valuation (£m) Valuation if rate decreases by Movement in valuation (£m)
1% (£m)
1% (£m)
WACC 8.20%-11.00% 729 (146) 1,063 188
TGR 1.25%-2.25% 993 118 783 (92)
31 March 2022
Unobservable input Range Valuation if rate increases by Movement in valuation (£m) Valuation if rate decreases by Movement in valuation (£m)
1% (£m)
1% (£m)
WACC 7.88%-9.14% 330 (80) 518 108
TGR 1.0%-2.25% 482 73 356 (54)
Both the Investment Manager and the third-party valuation expert use a
combination of other valuation techniques to verify the reasonableness of the
DCF valuations, as recommended in the International Private Equity and Venture
Capital (IPEV) Valuation Guidelines:
― earnings multiple: applying a multiple, derived largely from comparable
listed entities in the market, to the forecast EBITDA of the entity to
calculate an enterprise value, and then deducting the fair value of any debt
in the entity;
― DCF with multiple: calculating a DCF valuation of the cash flows of the
entity to the end of the period for which cash flows can be forecast with
reasonable accuracy, and then applying a multiple to EBITDA at the end of that
period to estimate a terminal value; and
― dividend yield: forecasting the entity's capacity to pay dividends in the
future and applying an equity yield to that forecast dividend, based on
comparable listed entities in the market.
The DCF valuations derived by the Investment Manager and those derived by the
third-party valuation expert were not materially different from each other,
and the other valuation techniques used provided assurance that the DCF
valuations are reasonable.
7. Unconsolidated subsidiaries
The following table shows subsidiaries of the Company. As the Company
qualifies as an Investment Entity as referred to in note 6, these subsidiaries
have not been consolidated in the preparation of the financial statements:
Investment Place of business Ownership interest at 31 March 2023 Ownership interest at 31 March 2022
Held directly
Cordiant Digital Holdings UK Limited United Kingdom 100% 100%
CDIL Data Centre USA LLC USA 100% 100%
Held indirectly
Cordiant Digital Holdings One Limited(1) United Kingdom 100% 100%(1)
Cordiant Digital Holdings Two Limited(1) United Kingdom 100% 100%(1)
Communications Investments Holdings s.r.o.(1) Czech Republic 100% 100%(1)
České Radiokomunikace a.s. (Czechia) Czech Republic 100% 100%
Czech Digital Group, a.s Czech Republic 100% 100%
Emitel S.A. Poland 100% -
Allford Investments S.A. Poland 100% -
EM Properties sp. z o.o. Poland 100% -
EM Projects sp. z o.o. Poland 100% -
Hub Investments sp. z o.o. Poland 100% -
(1)These subsidiaries were held directly by the Company at 31 March 2022.
Following an intragroup reorganisation described below, they are now held
indirectly.
The following additional information is provided in relation to unquoted
investments as recommended by the AIC SORP.
Turnover Pre-tax profit/(loss) Net assets/(liabilities)
Emitel(2) £103.89 million £16.88 million £233.53 million
CRA(3) £76.47 million £6.39 million (£69.89 million)
Hudson Interxchange(4) £3.34 million (£3.62 million) £63.86 million
(2)Figures from Emitel's audited IFRS accounts for the year ended 31 December
2022
(3)Figures from CRA's audited IFRS accounts for the year ended 31 March 2022
(4)Figures from Hudson's audited US GAAP accounts for the period from 13
January 2022 to 31 March 2022
During the year ended 31 March 2023, a reorganisation of the group was
undertaken. At 31 March 2023, the Company holds its 100% investment in
Cordiant Digital Holdings UK Limited (CDHUK) directly. CDHUK holds a 100%
shareholding in Cordiant Digital Holdings Two Limited (CDH2), and CDH2
in turn holds a 100% shareholding in Cordiant Digital Holdings Limited One
Limited (CDH1). Previously, each of CDHUK, CDH2 and CDH1 was held directly by
the Company. At 31 March 2023, Communications Investments Holdings s.r.o.
(CIH) was held as an investment by CDH2; at 31 March 2022, CIH was held
directly by the Company. CDIL Data Centre USA LLC is held directly by the
Company and this was not affected by the reorganisation. CDH1 holds the
Company's investment in Emitel.
The registered office of the subsidiaries located in the Czech Republic is
Skokanska 2117/1, 169 00, Prague 6. The registered office of the subsidiaries
located in the UK is 63 St James's Street, London, SW1A 1LY. The registered
office of the subsidiary located in the US is 60 Hudson Street suite 116B, New
York, NY 10013. The registered office of the subsidiaries located in Poland is
ul.Franciszka Klimczakal, 02-297 Warsaw.
The amounts invested in the Company's unconsolidated subsidiaries during the
year and their carrying value at 31 March 2023 are as outlined in note 6.
There are certain restrictions on the ability of the Company's unconsolidated
subsidiaries in the Czech Republic to transfer funds to the Company in the
form of cash dividends or repayment of loans. In accordance with the
documentation relating to loans made by various banks to CRA, such cash
movements are subject to limitations on amounts and timing, and satisfaction
of certain conditions relating to leverage and interest cover ratio. The
Directors do not consider that these restrictions are likely to have a
significant effect on the ability of the Company's subsidiaries to transfer
funds to the Company.
Subsidiaries held in the Czech Republic and in Poland are profitable and cash
generative, and do not need the financial support of the Company. The
subsidiary based in the US will receive the financial support of the Company
for a period of at least 12 months from the publication of this report.
8. Receivables
As at As at
31 March 2023
31 March 2022
£'000
£'000
Cash collateral 9,130 50,599
Other debtors 2,573 1,020
Expenses paid on behalf of related parties 2,866 -
Prepayments 77 56
Interest receivable 34 30
14,680 51,705
Cash collateral relates to one security deposit held in money market accounts
(31 March 2022: two security deposits held in money market accounts). An
amount of USD11.3 million (£9.1 million) relates to collateral for a letter
of credit relating to the lease of the building occupied by Hudson, and
generated interest of 0.59% per annum during the year ended 31 March 2023.
9. Derivatives
Forward contracts As at As at
31 March 2023
31 March 2022
£'000
£'000
Foreign exchange forwards - 8,072
During the year ended 31 March 2023, the Company entered into six foreign
exchange forward contracts totalling £203.0 million in Polish zloty. The
maturity date of three of these foreign exchange forwards was 9 June 2022 and
of the remaining three was 11 July 2022.
10. Share capital
Ordinary shares
Date Issued and fully paid Number of shares issued Share capital Cumulative
total
GBP £'000 £'000
Shares at inception - - -
04-Jan-21 Incorporation - ordinary shares of - - -
no par value
Less share issue costs - - -
16-Feb-21 Capital raise - ordinary shares 370,000,000 370,000 370,000
Less share issue costs - (7,007) 362,993
01-Apr-21 Subscription Shares exercised 930,447 930 363,923
Less share issue costs - (13) 363,910
04-May-21 Subscription Shares exercised 771,713 772 364,682
Less share issue costs - (13) 364,669
01-Jun-21 Subscription Shares exercised 4,480,528 4,481 369,150
Less share issue costs - (13) 369,137
01-Jul-21 Subscription Shares exercised 6,221,004 6,221 375,358
Less share issue costs - (16) 375,342
02-Aug-21 Subscription Shares exercised 6,017,044 6,017 381,359
Less share issue costs - (121) 381,238
01-Sep-21 Subscription Shares exercised 21,274,718 21,275 402,513
Less share issue costs - (422) 402,091
21-Dec-21 Issuance of ordinary shares 154,238 175 402,266
Less share issue costs - (13) 402,253
20-Jan-22 Conversion of C Shares to ordinary shares 174,640,000 181,548 583,801
Less share issue costs - (12) 583,789
25-Jan-22 Capital raise - ordinary shares 188,679,245 199,999 783,788
Less share issue costs - (3,868) 779,920
01-Mar-22 Subscription Shares exercised 119,457 127 780,047
Less share issue costs - (151) 779,896
29-Jun-22 Issuance of ordinary shares 271,126 295 780,191
Less share issue costs - (91) 780,100
07-Sep-22 Subscription shares exercised 187 - 780,100
Less share issue costs - - 780,100
Issued and fully paid at 31 March 2023 773,559,707 780,100 780,100
10-Mar-23 Buyback of shares held in treasury (250,000) (225) 779,875
15-Mar-23 Buyback of shares held in treasury (550,000) (495) 779,380
17-Mar-23 Buyback of shares held in treasury (250,000) (223) 779,157
Outstanding shares at 31 March 2023 772,509,707 779,157 779,157
Subject to any special rights, restrictions, or prohibitions regarding voting
for the time being attached to any shares, holders of ordinary shares have the
right to receive notice of and to attend, speak and vote at general meetings
of the Company and each holder being present in person or by proxy shall upon
a show of hands have one vote and upon a poll shall have one vote in respect
of each ordinary share that they hold.
Holders of ordinary shares are entitled to receive and participate in any
dividends or distributions of the Company in relation to assets of the Company
that are available for dividend or distribution.
On a winding-up of the Company, the surplus assets of the Company available
for distribution to the holders of ordinary shares (after payment of all other
debts and liabilities of the Company attributable to the ordinary shares)
shall be divided amongst the holders of ordinary shares pro rata according to
their respective holdings of ordinary shares.
The Company holds the power to issue an unlimited number of shares and the
shares have no par value.
C shares
Date Issued and fully paid Number of shares issued Share capital Total
GBP £'000 £'000
10-Jun-21 Capital raise - C Share 185,000,000 185,000 185,000
Less share issue costs - (3,452) (3,452)
20-Jan-22 Conversion to ordinary shares (185,000,000) (181,548) (181,548)
Total at 31 March 2023 - - -
The C Shares were all converted to ordinary shares in January 2022.
C Shares of each class carry the right to receive all income of the Company
attributable to the C Shares, and to participate in any distribution of such
income by the Company pro rata to the relevant NAV attributable to each of the
classes of C Share and within each such class income shall be divided pari
passu amongst the holders of C Shares of that class in proportion to the
number of C Shares of such class held by them.
Treasury shares
31 March 2023 31 March 2022
Number of shares
Number of shares
Opening balance at 1 April - -
Shares repurchased during the year 1,050,000 -
Closing balance at period/year end 1,050,000 -
During the year ended 31 March 2023, the Company initiated a share buyback
programme. Investec, as Cordiant Digital Infrastructure Limited's joint
broker, has been given limited authority to undertake market buybacks.
1,050,000 ordinary shares (31 March 2022: nil) have been repurchased and held
in treasury by the Company during the year ended 31 March 2023.
Subscription shareholders have no right to any dividends paid by the Company
and have no voting rights.
11. Audit fees
Other operating expenses include fees payable to the Company's auditor, which
can be analysed as follows:
Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Fees payable to the statutory auditor
for audit of the statutory financial statements 195 114
for other audit-related services - -
for non-audit services - 16
195 130
Non-audit services paid to the Company's auditor during the period ended 31
March 2022 related to a review of the Interim Report and services around the C
Share conversion to ordinary shares. There were no non-audit services provided
during the year ended 31 March 2023. The statutory audit fees for the year
ended 31 March 2023 is £170,000 which excludes an amount of £25,000
relating to the prior year.
12. Taxation
a) Analysis of the tax charge for the year/period
Corporation tax Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Taxation for the year/period (see note 12b) - -
b) Factors affecting the tax charge for the year/period
The tax assessed for the year ended 31 March 2023 is lower than the Company's
applicable rate of corporation tax for that year of 19%. The factors affecting
the tax charge for the year/period are as follows:
Year ended Period ended
31 March 2023
31 March 2022
£'000
£'000
Profit for the year/period before tax 81,176 51,370
Net return before taxation multiplied by the Company's applicable rate 15,423 9,760
of corporation tax for the period of 19%
Effects of:
Capital return on investments (17,275) (11,475)
Expenses not deductible for corporation tax 1,586 1,173
Realised loss on restructure not deductible 746 -
Utilisation of expenses brought forward (480) -
Unrelieved current year/period expenses - 542
Total tax for the year/period (see note 12a) - -
c) Deferred taxation
The Company has an unrecognised deferred tax asset of £77,000 (Prior year:
£712,000) based on a main rate of corporation tax of 25%.
A change to the UK tax rate from 19% to 25% was enacted on 24 May 2021 and the
deferred tax asset not recognised has been calculated at the expected
applicable future rate.
It is unlikely that the Company will generate sufficient taxable profits in
the future to utilise these expenses and therefore no deferred tax asset has
been recognised.
Due to the Company's status as an investment trust and the intention to
continue to meet the conditions required to retain that status, the Company
has not provided for tax on any capital gains or losses arising on the
revaluation of investments.
13. Management and performance fees
Under the Investment Management Agreement, the Investment Manager is entitled
to receive an annual management fee and a performance fee, plus any applicable
VAT, in addition to the reimbursement of reasonable expenses incurred by it in
the performance of its duties.
Management fee
The Investment Manager receives from the Company an annual management fee,
based on the average market capitalisation of the Company, calculated using
the closing market capitalisation for each LSE trading day for the relevant
month, and paid monthly in arrears. The management fee has been payable since
30 April 2021, being the date on which more than 75% of the IPO proceeds were
deployed in investment activities.
The annual management fee is calculated on the following basis:
― 1.00% of the average market capitalisation up to £500 million;
― 0.90% of the average market capitalisation between £500 million and £1
billion; and
― 0.80% of the average market capitalisation in excess of £1 billion.
Following the publication of each Interim Report and Annual Report, the
Investment Manager is required to apply an amount, in aggregate, equal to 10%
of the annual management fee for the preceding six-month period in the
following manner:
a) if the average trading price, calculated over the 20 trading days
immediately preceding the announcement date, is equal to, or higher than, the
last reported NAV per ordinary share (as adjusted to reflect any dividends
reflected in the average trading price) the Investment Manager shall use the
relevant amount to subscribe for new ordinary shares (rounded down to the
nearest whole number of ordinary shares), issued at the average trading price;
or
b) if the average trading price is lower than the last reported NAV per
ordinary share (as adjusted to reflect any dividends reflected in the average
trading price) the Investment Manager shall, as soon as reasonably
practicable, use the relevant amount to make market purchases of ordinary
shares (rounded down to the nearest whole number of ordinary shares) within
two months of the relevant NAV announcement date.
Even though the annual management fee is payable on a monthly basis, ordinary
shares will only be acquired by the Investment Manager on a half-yearly basis.
Any ordinary shares subscribed or purchased by the Investment Manager pursuant
to the above arrangements are, subject to usual exceptions, subject to a
lock-up of 12 months from the date of subscription or purchase.
For the year ended 31 March 2023, the Investment Manager has charged
management fees of £7.3 million (31 March 2022: £4.7 million) to the
Company, with £0.6 million (31 March 2022: £0.7 million) owed at year end.
During the year ended, 31 March 2023, the Investment Manager was required to
subscribe for new ordinary shares for aggregate consideration of £0.29
million (31 March 2022: £0.18 million) and to conduct market purchases for
aggregate consideration of £0.39 million (31 March 2022: nil).
Performance fee
The Investment Manager may in addition receive a performance fee on each
performance fee calculation date, dependent on the performance of the
Company's NAV and share price. The first performance fee calculation date is
31 March 2024 and subsequent calculation dates are on 31 March each year
thereafter. The fee will be equal to 12.5% of the excess return over the
target of 9% for the NAV return or share price return, whichever is the lower,
multiplied by the time-weighted average number of ordinary shares in issue
(excluding any ordinary shares held in treasury) during the relevant period.
Any performance fee is to be satisfied as follows:
― as to 50% in cash; and
― as to the remaining 50% of the performance fee, subject to certain
exceptions and the relevant regulatory and tax requirements:
a) if the average trading price, calculated over the 20 trading days
immediately preceding the performance fee calculation date, is equal to or
higher than the last reported NAV per ordinary share (as adjusted to reflect
any dividends reflected in the average trading price) the Company will issue
to the Investment Manager such number of new ordinary shares (credited as
fully paid) as is equal to the performance fee investment amount divided by
the average trading price (rounded down to the nearest whole number of
ordinary shares); or
b) if the average trading price is lower than the last reported NAV per
ordinary share (as adjusted to reflect any dividends reflected in the average
trading price) then the Company shall (on behalf of, and as agent for, the
Investment Manager) apply the performance fee investment amount in making
market purchases of ordinary shares, provided any such ordinary shares are
purchased at prices below the last reported NAV per ordinary share.
Any ordinary shares subscribed or purchased by the Investment Manager pursuant
to the above arrangements will, subject to usual exceptions, be subject to a
lock-up of 36 months from the date of subscription or purchase.
For the year ended 31 March 2023, no performance fee is due to the Investment
Manager (31 March 2022: £nil) and no amount has been accrued as the share
price performance hurdle has not been met.
14. Earnings per share and net asset value per share
Ordinary shares Year ended 31 March 2023
Earnings per share Basic Diluted
Allocated profit attributable to this share class - £'000 81,176 81,176
Weighted average number of shares in issue 773,442,556 773,442,556
Earnings per share from continuing operations 10.50 10.50
in the year (pence)
Ordinary shares Period ended 31 March 2022
Earnings per share Basic Diluted
Allocated profit attributable to this share class - £'000 51,370 51,370
Weighted average number of shares in issue 411,129,146 411,644,654
Earnings per share from continuing operations 12.49 12.48
in the period (pence)
As at 31 March 2023, there were 6,434,884 (31 March 2022: 6,435,071)
potentially dilutive Subscription Shares in issue. During the year ended 31
March 2023, 187 (31 March 2022: 39,814,911) Subscription Shares were exercised
and 1,050,000 ordinary shares (31 March 2022: nil) were bought back.
The reconciliation of the weighted average number of shares for the purposes
of diluted earnings per share to the weighted average number of ordinary
shares used in the calculation of basic earnings per share is as follows:
Year ended Period ended
31 March 2023
31 March 2022
Weighted average number of shares used in the calculation of basic earnings 773,442,556 411,129,146
per share
Effect of Subscription Shares carrying a right to subscribe for ordinary - 515,508
shares
Weighted average number of shares used in the calculation of diluted 773,442,556 411,644,654
earnings per share
Net asset value per share
Net asset value - £'000 875,711 822,346
Number of ordinary shares issued 772,509,707 773,288,394
Net asset value per share (pence) 113.36 106.34
15. Dividends declared and paid with respect to the year/period
Dividends paid during the year ended 31 March 2023 Dividend per ordinary share pence Total dividend
£'000
Second interim dividend in respect of the period ended 31 March 2022 1.50 11,599
Interim dividend in respect of the year ended 31 March 2023 2.00 15,473
27,072
Dividends declared Dividend per ordinary share pence Total dividend £'000
Second interim dividend in respect of the year ended 31 March 2023 2.00 15,450
Dividends paid during the period ended 31 March 2022 Dividend per ordinary share pence Dividend per Total dividend
£'000
C Share
pence
Interim dividend in respect of the period ended 31 March 2022 1.50 8,920
1.50
On 21 June 2023, the Board approved a second interim dividend of 2.0 pence per
share in respect of the period from 1 April 2022 to 31 March 2023, bringing
the total dividend for the year to 4.0 pence per share. The record date for
this dividend is 30 June 2023 and the payment date is 21 July 2023.
16. Financial risk management
Financial risk management objectives
The Company's investing activities intentionally expose it to various types of
risks that are associated with the underlying investments. The Company makes
the investment in order to generate returns in accordance with its investment
policy and objectives.
The most important types of financial risks to which the Company is exposed
are market risk (including price, interest rate and foreign currency risk),
liquidity risk and credit risk. The Board of Directors has overall
responsibility for the determination of the Company's risk management and sets
policy to manage that risk at an acceptable level to achieve those objectives.
The policy and process for measuring and mitigating each of the main risks are
described below.
The Investment Manager and the Administrator provide advice to the Company
which allows it to monitor and manage financial risks relating to its
operations through internal risk reports which analyse exposures by degree and
magnitude of risks. The Investment Manager and the Administrator report to the
Board on a quarterly basis.
Categories of financial instruments
For those financial assets and liabilities carried at amortised cost, the
Directors are of the opinion that their carrying value approximates to their
fair value.
As at As at
31 March 2023
31 March 2022
£'000
£'000
Financial assets
Financial assets at fair value through profit or loss:
Investments 872,315 409,856
Forward contracts receivable - 8,072
Other financial assets at amortised cost:
Cash and cash equivalents 10,498 353,734
Trade and other receivables (excluding prepayments) 14,603 51,649
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables (21,782) (1,021)
Fair value hierarchy
The table below analyses financial instruments measure at fair value at the
reporting date by the level in fair value hierarchy into which the fair value
measurement is categorised. The amounts are based on the values recognised in
the Statement of Financial Position. All fair value measurements below are
recurring.
31 March 2023 Level 1 Level 2 Level 3 Total
£'000
£'000
£'000
£'000
Financial assets
Financial assets at fair value through profit or loss:
Investments - - 872,315 872,315
Foreign exchange forwards - - - -
- - 872,315 872,315
31 March 2022 Level 1 Level 2 Level 3 Total
£'000
£'000
£'000
£'000
Financial assets
Financial assets at fair value through profit or loss:
Investments - - 409,856 409,856
Foreign exchange forwards - 8,072 - 8,072
- 8,072 409,856 417,928
Capital risk management
The Company manages its capital to ensure that it will be able to continue as
a going concern while maximising the capital return to shareholders. The
capital structure of the Company consists of issued share capital and retained
earnings, as stated in the Statement of Financial Position.
In order to maintain or adjust the capital structure, the Company may issue
new shares. There are no external capital requirements imposed on the Company.
The Company's investment policy is set out in the Additional information
section of the 2023 Annual Report.
Market risk
Market risk includes price risk, foreign currency risk and interest rate risk.
Price risk
The underlying investments held present a potential risk of loss of capital to
the Company. As outlined in note 6, investments are in the form of shareholder
loans and equity with protective provisions in place. Price risk arises from
uncertainty about future prices of underlying financial investments held by
the Company. As at 31 March 2023, the fair value of investments, excluding
cash and cash equivalents, was £872.3 million (31 March 2022: £409.9
million) and a 5% increase/(decrease) in the price of investments with all
other variables held constant would result in a change to the fair value of
investments of +/- £43.6 million (31 March 2022: £20.5 million).
Please refer to note 6 for quantitative information about the fair value
measurements of the Company's Level 3 investments.
The Company is exposed to a variety of risks which may have an impact on the
carrying value of its investments. The risk factors are set out below.
Not actively traded
The Company's investments are not generally traded in an active market but are
indirectly exposed to market price risk arising from uncertainties about
future values of the investments held. The investments of the Company vary as
to geographic distribution of operations and size, all of which may impact the
susceptibility of their valuation to uncertainty.
Concentration
The Company invests in the Digital Infrastructure sector. While the Company is
subject to the investment and diversification restrictions in its investment
policy, within those limits material concentrations of investments may arise.
Although the investments are in the same industry, each individual underlying
data centre, mobile telecommunications tower or segment of a fibre-optic
network held within the portfolio constitutes a separate Digital
Infrastructure Asset. This risk is managed through careful selection of
investments within the specified limits of the investment policy.
Each of these investment restrictions is calculated and applied as at the time
of investment and non-compliance resulting from changes in the price or value
of assets following investment is not considered a breach of the investment
restrictions.
Foreign currency risk
The Company invests in financial instruments and enters into transactions that
are denominated in currencies other than its functional currency, primarily in
US dollars, Polish zloty and Czech koruna.
The Company's currency risk is managed by the Investment Manager in accordance
with the policies and procedures in place.
The Company also has exposure to foreign currency risk due to the payment of
some expenses in US dollars, Czech koruna, Polish zloty, Canadian dollars and
euros. Consequently, the Company is exposed to risks that the exchange rate of
its currency relative to other foreign currencies may change in a manner that
has an adverse effect on the value of that portion of the Company's assets or
liabilities denominated in currencies other than pounds sterling. Any exposure
to foreign currency risk at the underlying investment level is captured within
price risk.
The following table sets out, in pounds sterling, the Company's total exposure
to direct and indirect foreign currency risk and the net exposure to foreign
currencies of the monetary assets and liabilities:
As at March 2023
USD CZK CAD PLN EUR GBP Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Non-current assets
Financial assets at fair value through profit or loss 56,993 389,101 - 429,002 (2,984) 203 872,315
Total non-current assets 56,993 389,101 - 429,002 (2,984) 203 872,315
Current assets
Receivables and prepayments 9,164 - - - 2,639 2,877 14,680
Foreign exchange derivative - - - - - - -
Cash and cash equivalents 168 - 1 - 1 10,328 10,498
Total current assets 9,332 - 1 - 2,640 13,205 25,178
Current liabilities
Payables (30) - - - (20,745) (1,007) (21,782)
Total current liabilities (30) - - - (20,745) (1,007) (21,782)
Total net assets 66,295 389,101 1 429,002 (21,089) 12,401 875,711
As at March 2022
USD CZK CAD PLN EUR GBP Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Non-current assets
Financial assets at fair value through profit or loss 58,231 351,625 - - - - 409,856
Total non-current assets 58,231 351,625 - - - - 409,856
Current assets
Receivables and prepayments 8,599 - - - - 43,106 51,705
Foreign exchange derivative - - - 8,072 - - 8,072
Cash and cash equivalents 954 - 3 - - 352,777 353,734
Total current assets 9,553 - 3 8,072 - 395,883 413,511
Current liabilities
Payables - - (2) - - (1,019) (1,021)
Total current liabilities - - (2) - - (1,019) (1,021)
Total net assets 67,784 351,625 1 8,072 - 394,864 822,346
The table below sets out the effect on the net assets against a reasonably
possible weakening of the pound against the US dollar, Czech koruna, Polish
zloty and euros by 5%, at 31 March 2023. The analysis assumes that all other
variables remain constant.
Effect in increase of pounds sterling As at As at
31 March 2023
31 March 2022
£'000
£'000
USD 3,315 3,389
CZK 19,455 17,581
PLN 21,450 404
EUR (1,054) -
A strengthening of the pound against the above currencies would have resulted
in an equal but opposite effect to the amounts shown above.
Interest rate risk
The Company's exposure to interest rate risk relates to the Company's cash and
cash equivalents. The Company is subject to risk due to fluctuations in the
prevailing levels of market interest rates.
The Company has no other interest-bearing assets or liabilities as at the
reporting date. As a consequence, the Company is only exposed to variable
market interest rate risk. As at 31 March 2023, the cash balance held by the
Company was £10.5 million (31 March 2022: £353.7 million). A 1%
increase/(decrease) in interest rates with all other variables held constant
would result in a change to interest received of +/- £0.1 million (31 March
2022: +/- £3.5 million) per annum.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of
Directors.
Liquidity risk is defined as the risk that the Company may not be able to
settle or meet its obligations on time or at a reasonable price. The Company's
policy and the Investment Manager's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stress conditions,
without incurring unacceptable losses or risking damage to the Company's
reputation. The Company's liabilities are made up of estimated accruals and
trade creditors which are due to be settled within three months of the year
end.
The Company's liquidity risk arises principally from the fact that there is no
liquid market for its investments and it may not be able to realise their full
value on a timely basis, The Company will maintain flexibility in funding by
keeping sufficient liquidity in cash and cash equivalents, which may be
invested on a temporary basis in line with the cash management policy as
agreed by the Directors from time to time. Cash and cash equivalents as at the
year-end are insufficient to cover the forecast expenses for the following
twelve months, but the Company has access to further liquidity through the
debt facility raised by its subsidiary Cordiant Digital Holdings Two Ltd, of
which €150.0 million (£131.9 million) was undrawn at the balance sheet
date.
The Company adopts a prudent approach to liquidity management and through the
preparation of budgets and cash flow forecasts maintains sufficient cash
reserves to meet its obligations.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company.
Financial assets mainly consist of cash and cash equivalents and investments
at fair value through profit or loss. The Company's risk on liquid funds is
reduced because it can only deposit monies with institutions with a minimum
credit rating of A-. The Company mitigates its credit risk exposure on its
investments at fair value through profit or loss by the exercise of due
diligence on the counterparties and the Investment Manager.
The table below shows the material cash balances and the credit rating for the
counterparties used by the Company at the year/period-end date:
Location Rating 31 March 2023 31 March 2022
£'000
£'000
Royal Bank of Scotland International Guernsey A- 10,498
353,734
The Company's maximum exposure to loss of capital at the year/period end is
shown below:
Carrying value and maximum exposure
31 March 2023 31 March 2022
£'000
£'000
Financial assets (including cash and equivalents 25,101 413,455
but excluding prepayments)
Gearing
As at the date of these financial statements the Company has no gearing.
17. Related party transactions
Directors
The Company has four non-executive Directors, each of whom is considered to be
independent. Directors' fees for the year ended 31 March 2023 amounted to
£185,000 (31 March 2022: £218,000), of which £nil (31 March 2022: £nil)
was outstanding at the year end.
As part of the IPO Shonaid Jemmett-Page and Sian Hill purchased 20,000 shares
each, and Marten Pieters and Simon Pitcher purchased 25,000 shares each. Each
of the directors was also granted Subscription Shares at time of the IPO at a
rate of one Subscription Share for every eight ordinary shares purchased, and
each of them has subsequently exercised their rights to convert their
Subscription Shares into additional ordinary shares. In addition, all
directors made extra purchases of shares during the year. Shonaid Jemmett-Page
bought 5,539 shares, Sian Hill bought 15,000 shares, Marten Pieters bought
20,000 shares and Simon Pitcher bought 10,000 shares. The Directors' shares at
31 March 2023 are as shown in the table below:
Ordinary shares held at Ordinary shares held at
31 March 2023
31 March 2022
Shonaid Jemmett-Page 28,039 22,500
Sian Hill 37,500 22,500
Marten Pieters 48,125 28,125
Simon Pitcher 38,125 28,125
Investments
As part of the initial acquisition of Communications Investments Holdings
s.r.o. (CIH) in April 2021, the Company acquired a loan due from CIH which
accrues interest at 9.9% per annum. Total interest receivable by the Company
in relation to the year was £0.5 million (31 March 2022: £2.9 million), of
which £nil (31 March 2022: £nil) remained outstanding at the year/period
end. The loan investment was transferred to the Company's subsidiary Cordiant
Digital Holdings Two Ltd (CDH2) on 31 May 2022, in exchange for a promissory
note. The balance on the promissory note investment at 31 March 2023,
including accrued interest, was £32.6 million (31 March 2022: nil). In
January 2022, the assets of Hudson Interxchange were acquired by the Company's
subsidiary CDIL Data Centre USA LLC. The Company provided funding for this
transaction in the form of equity contributions. The balance of the equity
investment at 31 March 2023, was £52.2 million (31 March 2022: £58.2
million). The Company has also provided additional funding during the year
ended 31 March 2023 in the form of loans totalling £4.7 million.
Company subsidiaries
On 16 December 2022, the Company borrowed £20.3 million from CDH2,
representing proceeds from a Eurobond issued by CDH2. The loan is subject to
interest charged at variable rate. Interest charged during the year amounted
to £0.4 million (31 March 2022: £nil) which all remained outstanding as at
31 March 2023. The expenses paid by the Company on behalf of subsidiary
companies during the year amounted to £2.9 million (31 March 2022: £nil).
18. Ultimate controlling party
In the opinion of the Board, on the basis of the shareholdings advised to
them, the Company has no ultimate controlling party.
19. Subsequent events
With the exception of dividends declared and disclosed in note 15, there are
no material subsequent events.
Glossary of capitalised defined terms
Administrator means Aztec Financial Services (Guernsey) Limited
AIC means the Association of Investment Companies
AIC Code means the AIC Code of Corporate Governance
AIC SORP means the AIC Statement of Recommended Practice
AIF/AIFM/AIFMD means Alternative Investment Fund, AIF manager and AIF Managers
Directive respectively
AFFO means adjusted funds from operations
Board means the Directors of the Company as a group
CIH means Communications Investments Holdings s.r.o.
Company Law means the Companies (Guernsey) Law 2008
CRA means České Radiokomunikace s.a.
C Shares means C shares of no par value each in the capital of the Company
issued pursuant to the Company's placing programme as an alternative to the
issue of ordinary shares
Company means Cordiant Digital Infrastructure Limited
DCF means discounted cash flow
Digital Infrastructure means the physical infrastructure resources that are
necessary to enable the storage and transmission of data by telecommunications
operators, corporations, governments and individuals. These predominantly
consist of mobile telecommunications/broadcast towers, data centres, fibre
optic networks, in-building systems and, as appropriate, the land under such
infrastructure. Digital Infrastructure assets do not include switching and
routing equipment, servers and other storage devices or radio transmission
equipment or software
Directors means the directors of the Company
DTR means the Disclosure Guidance and Transparency Rules sourcebook issued by
the Financial Conduct Authority
EBITDA means earnings before interest, taxation, depreciation and amortisation
EEA means the European Economic Area
Emitel means Emitel S.A.
ESG means environmental, social and governance
EV means enterprise value
FCA means the UK Financial Conduct Authority (or its successor bodies)
FRC means the Financial Reporting Council
GFSC means the Guernsey Financial Services Commission
Hudson means Hudson Interxchange (previously operating under the name DataGryd
Datacenters LLC)
IAS means international accounting standards as issued by the Board of the
International Accounting Standards Committee
IASB means International Accounting Standards Board
IFRS means the International Financial Reporting Standards, being the
principles-based accounting standards, interpretations and the framework by
that name issued by the International Accounting Standards Board
Interim Report means the Company's half yearly report and unaudited condensed
interim financial statements for the six-month period ended 30 September 2022
Investment Entity means an entity whose business purpose is to make
investments for capital appreciation, investment income, or both.
Investment Manager means Cordiant Capital Inc.
IoT means the Internet of Things
IPEV Valuation Guidelines means the International Private Equity and Venture
Capital Valuation Guidelines
IPO means the initial public offering of shares by the Company to the public,
completed on 16 February 2021
Listing Rules means the listing rules made by the UK Listing Authority under
Section 73A of the Financial Services and Markets Act 2000
NAV or net asset value means the value of the assets of the Company less its
liabilities as calculated in accordance with the Company's valuation policy
and expressed in pound sterling
SASB means Sustainability Accounting Standards Board, an independent
non-profit, whose mission is to develop and disseminate sustainability
accounting standards that help public corporations disclose material,
decision-useful information to investors
Subscription Shares means redeemable subscription shares of no par value each
in the Company, issued on the basis of one Subscription Share for every eight
ordinary shares subscribed for in the IPO
TCFD means Task Force on Climate-related Financial Disclosures
UK or United Kingdom means the United Kingdom of Great Britain and Northern
Ireland
UK (or FRC) Code means the UK Corporate Governance Code issued by the
Financial Reporting Council
UNSDGs means United Nations Sustainable Development Goals
US or United States means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia
USD means United States dollars.
WACC means weighted average cost of capital.
Directors and general information
Directors (all appointed 26 January 2021)
Shonaid Jemmett-Page Chairman
Sian Hill Audit Committee Chairman and Senior Independent Director
Marten Pieters
Simon Pitcher
All independent and of the registered office below.
Website www.cordiantdigitaltrust.com
ISIN (ordinary shares) GG00BMC7TM77
Ticker (ordinary shares) CORD
SEDOL (ordinary shares) BMC7TM7
Registered Company Number 68630
Registered office Legal advisors to the Company
East Wing Gowling WLG (UK) LLP
Trafalgar Court 4 More London Riverside
Les Banques London
St Peter Port SE1 2AU
Guernsey
GY1 3PP
Investment manager Carey Olsen (Guernsey) LLP
Cordiant Capital Inc. Carey House
28th Floor Les Banques
Bank of Nova Scotia Tower St Peter Port
1002 Sherbrooke Street West Guernsey
Montreal GY1 4BZ
QC H3A 3L6
Company secretary and administrator Registrar
Aztec Financial Services (Guernsey) Limited Computershare Investor Services
(appointed 8 November 2022) (Guernsey) Limited
PO Box 656 1st Floor Tudor House
Trafalgar Court Le Bordage
Les Banques St Peter Port
Guernsey Guernsey
GY1 3PP GY1 4BZ
Ocorian Administration (Guernsey) Limited Brokers
(resigned 7 November 2022) Investec Bank plc
2nd Floor 30 Gresham Street
Trafalgar court London
Les Banques EC2V 7QP
Guernsey
GY1 4LY
Auditor Jefferies International Limited
BDO Limited 100 Bishopsgate
PO Box 180 London
Place du Pre EC2N 4JL
Rue du Pre
St Peter Port
Guernsey
GY1 3LL
Principal banker and custodian Receiving agent
The Royal Bank of Scotland International Limited Computershare Investor Services PLC
Royal Bank Place The Pavilions
1 Glategny Esplanade Bridgwater Road
St Peter Port Bristol
Guernsey BS99 6AH
GY1 4BQ
Cautionary Statement
The Chairman's statement and Investment Manager's review have been prepared
solely to provide additional information for shareholders to assess the
Company's strategies and the potential for those strategies to succeed. These
should not be relied on by any other party or for any other purpose.
The Chairman's statement and Investment Manager's review may include
statements that are, or may be deemed to be, 'forward-looking statements'.
These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms 'believes', 'estimates',
'anticipates', 'expects', 'intends', 'may', 'will' or 'should' or, in each
case, their negative or other variations or comparable terminology.
These forward-looking statements include all matters that are not historical
facts. They appear in a number of places throughout this document and include
statements regarding the intentions, beliefs or current expectations of the
Directors and the Investment Manager, concerning, amongst other things, the
investment objectives and investment policy, financing strategies, investment
performance, results of operations, financial condition, liquidity, prospects,
and distribution policy of the Company 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 guarantees of future
performance.
The Company'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 Directors and the
Investment Manager 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. 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 FR FBMLTMTJTBMJRecent news on Cordiant Digital Infrastructure
See all newsREG - Cordiant Digital Inf - Update on Speed Fibre Acquisition of BTCIL
AnnouncementREG - Cordiant Digital Inf - Emitel signs long-term mobile tower contract
AnnouncementREG - Cordiant Digital Inf - Director/PDMR Shareholding
AnnouncementRCS - Cordiant Digital Inf - Capital Markets Day 2025 Presentation
AnnouncementREG - Cordiant Digital Inf - Third Quarter Trading Update
Announcement