International Public Partnerships has published results for the year ended 31 December 2015. The NAV increased by 2.5% to 130.2p. They have declared a full year 2015 fully covered cash dividends up c.2.5% at 6.45 pence per share and set a minimum target dividend for 2016 financial year of 6.65 pence per share and for 2017 of 6.82 pence per share.
They say the existing portfolio has continued to perform in line with expectations with strong asset management of investments being fundamental to the company’s overall long-term success. This approach not only encompasses larger-scale project issues such as ensuring that major construction schemes or project variations are tracking to schedule and budget, but the effective management of day-to-day relationships, such as ensuring that the head teachers in our schools are satisfied with the facility services being delivered and the terms of the concession contracts are being fulfilled.
In addition, the company’s investment in Angel Trains has been positively impacted in 2015 by recent market activity involving all main rolling stock companies in the UK rail sector. The market based evidence that these transactions produced resulted in the company making a substantial positive revision to its valuation of Angel Trains, currently the fourth largest asset. As reported at the interim result this investment has, taking into account its new carrying value, generated a total return of 3.6 times since acquisition in 2008.
They announced record levels of investment with commitments made to nine infrastructure investments totalling over £311.7m. This went into a number of projects in 2015 including Thames Tideway Tunnel (‘Tideway’) the £4.2bn, 25 kilometre ‘super-sewer’ to be built under the River Thames in London.
The capital required to fund the new investments came from a mix of the Company’s existing cash resources, its corporate debt facility and the proceeds from share issuances in the period. In May 2015, they revised the terms of their corporate debt facility, increasing the facility from £175m to £300m on more favourable terms including securing a reduction in the interest margin by 50 basis points to 175 basis points and allowing for the option of letters of credit in support of future capital commitments. The new facility will become due for renewal in May 2018.
The combination of portfolio growth and the subscription of new capital saw the Company’s market capitalisation reach nearly £1.4bn at the close of the year, up from c.£1.1bn at the equivalent time last year.
The portfolio’s returns are linked to inflation so that INPP should get a 0.76% projected annual increase in return for a 1% increase over anticipated portfolio inflation.
INPP : International Public Partnerships reports record levels of investment