BBGI looking at offshore transmission opportunities – BBGI’s 2018 results are out. Highlights are:
- Overall NAV up 24.4 per cent to GBP774.5 million as at 31 December 2018 (31 December 2017: GBP622.5 million) and NAV per Share up 2.8 per cent to 133.5 pence per share as at 31 December 2018 (31 December 2017: 129.9 pence per share).
- Dividend up 3.8 per cent to 6.75 pence per share as at 31 December 2018.
- Target minimum dividend for 2019 raised to 7.00 pence per share.
- Strong cash dividend cover of 1.5x (31 December 2017: 1.5x).
- Ongoing Charges ratio of 0.93 per cent (31 December 2017: 0.99 per cent).
- 48 high-quality, availability-based PPP infrastructure assets with portfolio performance and cash receipts ahead of business plan contributing to the increase in the 2018 dividend.
- Value enhancements resulted in a 1.9 per cent increase in NAV.
- Opening of North Commuter Parkway and Stanton Territorial Hospital in Canada (moving from construction to ramp-up phase – now less risky).
- Refinanced the Northern Territory Secure Facilities in Australia with longer-term financing.
- GBP128 million raised through two new ordinary share issues in April and September 2018.
- New four-year revolving credit facility of GBP180 million came into effect in January 2019, with access to a further accordion tranche of GBP70 million.
- At 31 December 2018, the Group had, on an Investment Basis, a net debt position of just GBP3.9 million, total cash of GBP11.4 million offset by total borrowings of GBP15.3 million.
- Investments in eight additional PPP assets during 2018 with a total value of GBP90.5 million. (31 December 2017: GBP93.3 million)
The managers said “We are looking to the future with real confidence in our existing portfolio and our continued availability-based, low-risk, geographically diversified and internally managed investment strategy. Although the competition for the types of assets we invest in is strong, our focus is to remain within our area of expertise and not invest in higher risk asset classes such as demand based or regulated assets.
The offshore transmission sector (OFTOs) is increasingly aligning with our strategic interests, where long-term, 25-year availability-based revenue streams provide a fit with our low-risk availability-based investment strategy. We will continue to explore the sector and are looking to participate in the upcoming tendering rounds in the UK where we believe our PPP track record positions us well in the bidding process.
Elsewhere, the transaction pipeline remains particularly strong in Continental Europe and North America, providing us with new opportunities to maintain portfolio diversification.
Overall, our pipeline includes five assets under consideration in North America via a strategic investment partnership, four additional road assets in our key markets, two social assets and OFTO infrastructure opportunities.”
[QD comment: Rival firm, International Public Partnerships, has already made a few OFTO investments – these are the transmission links that connect offshore windfarms to the national grid. as the government increases its focus on the offshore wind sector, more opportunities are expected to be created in this area.]
BBGI : BBGI looking at offshore transmission opportunities