International Public Partnerships paints robust picture – in its results for 2019, International Public Partnerships (INPP) emphasises the reliability and predictability of the cash flows that underpin its business. For the 2019 calendar year, its NAV rose from 148.1p to 150.6p and it paid dividends totalling 7.18p, up from 7.0p, whcih were covered by the cash generated by the portfolio 1.3x. For this year, the target is 7.36p and it is 7.55p for the year after.
INPP has already made a statement about COVID-19, in the results statement, the chairman said “As a business we are working hard to understand the likely impacts of Covid-19 on the Company’s operations. At the time of writing this letter, we believe that all our assets are operating as intended and the Company continues to receive cash from its investments as expected. While we are in no way complacent about the future, which is full of uncertainties, we take comfort from the fact that the overwhelming majority of our assets benefit from payments either linked to the availability of that asset for use, or made through a legislatively backed regulated mechanism.”
INPP has a broad spread of investments including:
- schools, where it has been funding part of the BSF (building schools for the future) programme – an additional £2m was invested in 2019 and it refinanced a number of projects, including a £12.4m recapitalisation of its Midlands Priority Schools Building Programme.
- OFTOs – the links between offshore wind farms and the UK mainland – £100m will be invested in its eighth and ninth offshore transmission projects, adding up to 988MW to the UK’s power generation, enough to power 800,000 houses.
- an extra £153.2m into Cadent – the national gas transmission network. INPP now owns 7.25% of this business and it is its largest investment, ahead of its stake in Tideway, the Thames super sewer.
- an additional £29.4m investment to give it 100% of BeNex, a German rail business
One measure that INPP highlights is the degree to which its cash flows are index-linked – 82p in each £1 of revenues is the subject of a contract that has some inflation protection built in. At the moment, we might be looking at deflation but in the wake of covid-19, anything might happen – governments are effectively printing a lot of money.
INPP is invested in a number of projects that are under construction – these account for about 9.2% of its portfolio.
INPP : International Public Partnerships paints robust picture