Over H1 2015 BBGI delivered an increase in NAV to 110.4p from 109.2p an increase of 1.07%. The Board has increased its 2015 dividend target from 5.76p to 6.00p which represents an increase of 4.2%. The 2015 interim dividend is 3p.
At 30 June 2015 the Group had a total cash balance of £51m and total borrowings of £45m.
Within the portfolio they report a successful transition of Avon & Somerset Police Headquarters (UK) and Mersey Care Mental Health Hospital (UK) from construction to operational status, and Northern Territory Secure Facilities (Australia) from ramp up phase towards the stable operational phase.
They also say demand for PPP infrastructure assets remains strong with demand exceeding supply in most markets. This trend is expected to impact valuations favourably, but to make accretive secondary acquisitions more challenging to secure. They say primary opportunities continue to be relatively attractive.
In June 2015, the Company announced two follow-on acquisitions with a total value of approx. £37m. The further 30% interest in Avon & Somerset Police Headquarters in the UK completed in June 2015. The remaining 50% interest in the Northern Territory Secure Facilities in Australia completed in early July, subsequent to the end of the reporting period, and is therefore not reflected in these results. Both of these stakes were acquired on a negotiated basis from co-shareholders without having to engage in auction processes, which are expensive and can create an environment where the risk of overpaying is increased. In February the Company also made a £2.1m initial equity injection into the Mersey Care Mental Health project.
Subsequently on 29 July 2015 BBGI announced the acquisition, from John Graham Holdings Limited, of 100% of the equity and subordinated debt interests in two educational PPP projects, Belfast Metropolitan College and North West Regional College, in Northern Ireland for a total consideration of approx. £11.7m. The acquisition of these projects was also done on a negotiated basis without having to engage in an auction process.
Belfast Metropolitan College is an educational campus comprising two five-storey teaching facilities and a two-storey engineering facility with associated car parking and a landscaped courtyard. North West Regional College is a four-storey teaching facility located in Londonderry providing state of the art information, communications and education technology for 1,100 students in the fields of business, computing, tourism and hospitality.
Both projects are operational. The concessions run until August 2027 and January 2026 respectively. Upon completion, which is subject to obtaining necessary contractual consents under the projects documents, BBGI will receive availability payments during the concession periods from the governing bodies of each of Belfast Metropolitan College and North West Regional College.
BBGI targets 4% dividend increase