HICL Infrastructure credits inflation for strong results – HICL Infrastructure (HICL) has posted its annual results for the year to 31 March 2022. During this time, its shareholder return was 12.8% while its NAV increased by 7.1%.
This outperformance was driven by higher than expected inflation feeding through asset-level valuations, continued market pressure on infrastructure asset pricing, the accretive disposal of Queen Alexandra Hospital, and other value enhancement activities. The demand-based and regulated assets delivered an outsized contribution to portfolio outperformance, principally due to the stronger inflation linkage in these segments. The portfolio outperformance is reported net of asset-specific costs, including in respect of the management of defect remediation on selected healthcare projects.
The company ended the year with a robust balance sheet, supported by a new £400m GBP multi-currency facility announced in April 2022 and the proceeds from the sale of the Queen Alexandra Hospital. HICL has significant available cash resources to pursue investment opportunities as they arise.
The full year dividend declared for the year to 31 March 2022 is 8.25p per share and the board has re-confirmed the dividend guidance of 8.25p per share for the year to 31 March 2023. Cash cover for the 2023 dividend is anticipated to show a steady level of improvement against this year’s result.
Statement from the chair:
The outlook for infrastructure investment remains positive. The key defensive attributes of core infrastructure, including the strong yield, inflation-linked returns and low beta, underpin the continuing attractiveness of the asset class, and of HICL itself, to investors against the broader market backdrop. Demand for infrastructure investment is expected to continue to support valuations for high quality assets.
The Company continues to position itself for growth, to capture the significant opportunity identified across HICL’s core markets in both traditional and modern economy infrastructure sectors. InfraRed’s differentiated capability to source new investments via less competitive situations, as demonstrated in the year, remains crucial in the current market conditions. Continuation of partnerships with key industry relationships will support this pursuit.
With a well-developed and visible pipeline of core infrastructure opportunities and substantial headroom within the Company’s credit facilities, the Board is confident that HICL is well placed to continue to deliver on its strategy and grow into the future.
HICL : HICL Infrastructure credits inflation for strong results