HICL Infrastructure forecasts dividends out to 2019 as it announces results for the year ended 31 March 2017.
Highlights for the year ended 31 March 2017
- Portfolio performance exceeded expectations during the year
- NAV per share as at 31 March 2017 of 149.0p, up 4.8% from 142.2p as at 31 March 2016
- Total shareholder return of 10.3% over the year (on a NAV per share appreciation plus dividends paid basis)
- Aggregate dividends declared for the year of 7.65p per share
- Target dividend per share of 7.85p for the year to March 2018 – a year-on-year increase of 2.6%
- Further guidance on a target dividend per share of 8.05p for the year to March 2019, reflecting Board’s confidence in near-term forecast cash flow performance
- Profit before tax of GBP176.8m (2016: GBP157.2m)
- Directors’ valuation of the portfolio of GBP2,380.0m, up 17% from GBP2,030.3m at 31 March 2016
- New investments for an aggregate consideration of GBP266.6m, comprising ten new acquisitions and five incremental investments
- Successful capital raisings of GBP381.0m in aggregate and an increased Revolving Credit Facility of GBP400m
- Post period-end, the Company has also acquired a significant interest in Affinity Water, a water-only company
- Improved inflation correlation in the portfolio: 0.7 at year-end (rising to 0.8 following the Affinity Water acquisition)
- Current funding requirement of GBP205m
- The Board is confident that the current pipeline will generate new investment opportunities
Ian Russell, Chairman of the Board, said: “We are pleased to report that HICL has delivered another good set of results this year, underpinned by a portfolio performance that has exceeded expectations. The Company delivered a total shareholder return of 10.3% in the year. The Board is reaffirming the dividend targets for both the year to 31 March 2018 and to 31 March 2019 at 7.85p and 8.05p per share respectively, reflecting the Board’s confidence in the future performance of the Group’s portfolio.
HICL’s investment proposition to deliver sustainable, long-term income to shareholders, while preserving the capital value of its portfolio, continues to resonate well with investors, particularly in a continued low interest rate environment. This was most evident in the context of the Company’s recent GBP260m equity issue, which was more than three times oversubscribed.
We remain disciplined in our approach and are committed to ensuring that new investments enhance the existing portfolio. During the year we invested GBP266.6m in 10 new and five incremental investments, which increased both the scale and the diversity of the Company’s portfolio. We are well placed to take advantage of new investment opportunities in our pipeline and, since the year-end, have secured an interest in Affinity Water which brings new benefits to the portfolio, including enhanced inflation correlation, which has increased from 0.6 at 31 March 2016 to 0.8 currently.
Today marks the culmination of a two-year succession plan at our Investment Adviser, with Harry Seekings assuming leadership of the InfraRed team responsible for the Company. The Board wishes to thank Tony Roper for his leadership and vision which, together with the excellent team at InfraRed, have driven the Company’s successful track record.”
Tony Roper, Director, InfraRed Capital Partners Limited, the Investment Adviser added: “The current Portfolio continues to perform well for both the Company’s clients and shareholders, in part due to the value preservation and enhancement initiatives of our asset management team. We remain confident of our ability to deliver outperformance in the medium term, particularly by taking a strategic approach to realising economies of scale across the portfolio.
Our broad range of industry relationships has enabled us to source a number of new investments at attractive prices during the year, such that only two of the 15 new investments were sourced via full market auctions.
Although demand for operational infrastructure assets remains high, we remain disciplined in our approach to sourcing new investments. The pipeline for further investments is healthy and diversified across the Company’s target market segments and geographies.”
HICL : HICL Infrastructure forecasts dividends out to 2019