REG - RM Infrastructure RM SecDirect - RMDC - Net Asset Value(s)
17/07/2023 07:00
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RNS Number : 1194G RM Infrastructure Income PLC 17 July 2023
RM Infrastructure Income Plc
("RMII" or the "Company")
LEI: 213800RBRIYICC2QC958
Net Asset Value
NAV Performance
The Company's NAV % Total Return for the month of June was 0.75%, which brings
the NAV % Total Return for the quarter to 1.31%.
The NAV % Total Return over the last twelve months was 4.95% and inception to
date 40.87%.
The Ordinary Share NAV as at 30(th) June 2023 was 91.68 pence per share. This
monthly NAV return of -0.927 pence per share arose primarily from the
ex-dividend effect of the 1.625 pence per share ordinary dividend for the
period Q1 2023, declared and paid in June 2023. Otherwise, there was positive
interest income, net of expenses, of 0.687 pence per share and an increase in
portfolio valuations of 0.01 pence per share.
Summary for June 2023 (pence per share)
Net interest income +0.687p
Change in portfolio valuations +0.011p
Payment of Dividend (Q1 2023) -1.625p
Net NAV Movement -0.927p
Market Update
Overall, a challenging period for fixed income products which continue to be
dominated by the persistent UK inflation backdrop. This has been highlighted
by the continued increase in UK government yields, especially at the front end
of the UK yield curve which has led to further UK gilt yield curve inversion.
Indeed, the 2-year government bond yield has risen 350bps since June 2022 of
which circa 180bps has occurred during 2023.
Credit spreads, as measured by the Markit ITRX European Crossover Index, saw a
limited reduction in the risk premium opening at 425bps in April and closing
at 400bps at the end of the quarter. Given the shape of the UK yield curve,
which has seen its inversion widening during the quarter, RM is of the view
that we have probably seen the tightest point for credit spreads in the near
to medium-term as credit conditions are set to deteriorate with financing
becoming more expensive.
In light of the above and although it is disappointing to report a lower than
target NAV % Total Return for the quarter, we believe RMII has maintained its
medium to long-term outperformance versus other observable benchmark loan and
bond indices in Q2 2023 as outlined in the below table:
Total Return (%)
1yr 3yr 5yr
RM Infrastructure Income NAV 4.95 23.67 32.60
RM Infrastructure Income Share Price -19.41 9.79 -3.82
S&P European Leveraged Loan Index 5.37 1.27 -4.15
Ishares Core Corp Bond UCITS ETF GBP -6.06 -19.36 -7.27
Portfolio Update
The Investment Manager remains confident with regards to the low interest rate
sensitivity of the portfolio. This is largely driven by the short average
duration nature of the portfolio, which is currently 1.91 years. This in turn
means that loans can be repaid relatively quickly and reinvested within the
higher yielding environment. This can be evidenced by the weighted average
yield of the portfolio, which has increased to 10.02% at the end of the
reporting period, a widening in yield of 37bps versus Q1-2023 or 129bps versus
same period last year. In conjunction with this, the Investment Manager has
been seeking to increase security with a move up the capital structure by
recycling this capital into senior secured loans and reducing mezzanine or
junior lending exposure.
We outline below the key investment activities for Q2 2023:
New investments
· Hotel & Leisure, Ref 99: c.£2,880k
Material Repayments:
· Asset Finance, Ref 60: c.£1,500k
· Hotel & Leisure, Ref 69: c.£950k
Post period end, in line with the stated objective of exiting the Company's
exposure to its non-core asset-backed lending - Ref 60, the Company received a
further repayment of £1.5m, bringing the outstanding balance down to c.£5m.
Shareholder consultation update
On 23 May 2023, the Company announced that as part of its review of the
Company's strategy, it would undertake a shareholder consultation. Since that
announcement, the Board, the Investment Manager, and the Company's joint
brokers have consulted widely with RMII's major shareholders.
In general, consulted shareholders were overwhelmingly supportive of the
Company's management and performance, as well as its investment focus and
strategy. Shareholders did however highlight the Company's small scale which
has created challenges in generating improved liquidity in the Company's
shares and restricted the Company's ability to grow. To that end, it was
determined that reducing the size of the Company through a partial exit
opportunity would only exacerbate these challenges.
The Board remains conscious of the size of the Company, the discount to which
the shares trade and the need to maximise shareholder value and the Board
expects to put forward proposals regarding the future of the Company as soon
as possible.
The Company also announces that the Monthly Report for the period to 31 June
2023 is now available to be viewed on the Company website:
https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/
END
For further information, please contact:
RM Capital Markets Limited - Investment Manager
James Robson
Thomas Le Grix De La Salle
Tel: 0131 603 7060
FundRock Management Company (Guernsey) Limited - AIFM
Chris Hickling
Dave Taylor
Tel: 01481 737600
Apex Listed Companies Services (UK) Ltd - Administrator and Company Secretary
Brian Smith
Ciara McKillop
Tel: 020 3327 9720
Singer Capital Markers Advisory LLP - Financial Adviser and Broker
James Maxwell
Asha Chotai
Tel: 020 7496 3000
Peel Hunt LLP - Financial Adviser and Broker
Luke Simpson
Liz Yong
Tel: 020 7418 8900
About RM Infrastructure Income
RM Infrastructure Income Plc ("RMII" or the "Company") is a closed-ended
investment trust established to invest in a portfolio of secured debt
instruments.
The Company aims to generate attractive and regular dividends through loans
sourced or originated by the Investment Manager with a degree of inflation
protection through index-linked returns where appropriate. Loans in which the
Company invests are predominantly secured against assets such as real estate
or plant and machinery and/or income streams such as account receivables.
For more information, please see
https://rm-funds.co.uk/rm-infrastructure-income/
Market Update
Overall, a challenging period for fixed income products which continue to be
dominated by the persistent UK inflation backdrop. This has been highlighted
by the continued increase in UK government yields, especially at the front end
of the UK yield curve which has led to further UK gilt yield curve inversion.
Indeed, the 2-year government bond yield has risen 350bps since June 2022 of
which circa 180bps has occurred during 2023.
Credit spreads, as measured by the Markit ITRX European Crossover Index, saw a
limited reduction in the risk premium opening at 425bps in April and closing
at 400bps at the end of the quarter. Given the shape of the UK yield curve,
which has seen its inversion widening during the quarter, RM is of the view
that we have probably seen the tightest point for credit spreads in the near
to medium-term as credit conditions are set to deteriorate with financing
becoming more expensive.
In light of the above and although it is disappointing to report a lower than
target NAV % Total Return for the quarter, we believe RMII has maintained its
medium to long-term outperformance versus other observable benchmark loan and
bond indices in Q2 2023 as outlined in the below table:
Total Return (%)
1yr 3yr 5yr
RM Infrastructure Income NAV 4.95 23.67 32.60
RM Infrastructure Income Share Price -19.41 9.79 -3.82
S&P European Leveraged Loan Index 5.37 1.27 -4.15
Ishares Core Corp Bond UCITS ETF GBP -6.06 -19.36 -7.27
Portfolio Update
The Investment Manager remains confident with regards to the low interest rate
sensitivity of the portfolio. This is largely driven by the short average
duration nature of the portfolio, which is currently 1.91 years. This in turn
means that loans can be repaid relatively quickly and reinvested within the
higher yielding environment. This can be evidenced by the weighted average
yield of the portfolio, which has increased to 10.02% at the end of the
reporting period, a widening in yield of 37bps versus Q1-2023 or 129bps versus
same period last year. In conjunction with this, the Investment Manager has
been seeking to increase security with a move up the capital structure by
recycling this capital into senior secured loans and reducing mezzanine or
junior lending exposure.
We outline below the key investment activities for Q2 2023:
New investments
· Hotel & Leisure, Ref 99: c.£2,880k
Material Repayments:
· Asset Finance, Ref 60: c.£1,500k
· Hotel & Leisure, Ref 69: c.£950k
Post period end, in line with the stated objective of exiting the Company's
exposure to its non-core asset-backed lending - Ref 60, the Company received a
further repayment of £1.5m, bringing the outstanding balance down to c.£5m.
Shareholder consultation update
On 23 May 2023, the Company announced that as part of its review of the
Company's strategy, it would undertake a shareholder consultation. Since that
announcement, the Board, the Investment Manager, and the Company's joint
brokers have consulted widely with RMII's major shareholders.
In general, consulted shareholders were overwhelmingly supportive of the
Company's management and performance, as well as its investment focus and
strategy. Shareholders did however highlight the Company's small scale which
has created challenges in generating improved liquidity in the Company's
shares and restricted the Company's ability to grow. To that end, it was
determined that reducing the size of the Company through a partial exit
opportunity would only exacerbate these challenges.
The Board remains conscious of the size of the Company, the discount to which
the shares trade and the need to maximise shareholder value and the Board
expects to put forward proposals regarding the future of the Company as soon
as possible.
The Company also announces that the Monthly Report for the period to 31 June
2023 is now available to be viewed on the Company website:
https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/
END
For further information, please contact:
RM Capital Markets Limited - Investment Manager
James Robson
Thomas Le Grix De La Salle
Tel: 0131 603 7060
FundRock Management Company (Guernsey) Limited - AIFM
Chris Hickling
Dave Taylor
Tel: 01481 737600
Apex Listed Companies Services (UK) Ltd - Administrator and Company Secretary
Brian Smith
Ciara McKillop
Tel: 020 3327 9720
Singer Capital Markers Advisory LLP - Financial Adviser and Broker
James Maxwell
Asha Chotai
Tel: 020 7496 3000
Peel Hunt LLP - Financial Adviser and Broker
Luke Simpson
Liz Yong
Tel: 020 7418 8900
About RM Infrastructure Income
RM Infrastructure Income Plc ("RMII" or the "Company") is a closed-ended
investment trust established to invest in a portfolio of secured debt
instruments.
The Company aims to generate attractive and regular dividends through loans
sourced or originated by the Investment Manager with a degree of inflation
protection through index-linked returns where appropriate. Loans in which the
Company invests are predominantly secured against assets such as real estate
or plant and machinery and/or income streams such as account receivables.
For more information, please see
https://rm-funds.co.uk/rm-infrastructure-income/
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