Cordiant Digital Infrastructure has published a trading update: It says that:
- The NAV per share was 105.5p at the last reported date of 30 September 2022, after adjusting for the 2p dividend paid in December 2022.
- Aggregate revenue across its investments increased by 8.8% to £146m and EBITDA increased by 5.9% to £76.5m over the nine months to 31 December 2022.
- In the majority of cases, contractual inflation adjustments for 2022 are expected to be implemented from the beginning of 2023.
- The dividend target for the financial year to 31 March 2023 of 4p is 3.3x covered by EBITDA and 1.4x covered by free cash flow. The dividend has been increased twice since the IPO in February 2021 and is three years ahead of the dividend target articulated at that time.
- Emitel has signed sales orders with a combined value of over PLN2.6 bn (c.£485m): this sum equates to 5x its annual revenues.
- CRA’s data centre capacity utilisation (measured in terms of available MW) rose 21.7%, signposting strong demand for its planned 26MW data centre.
- Hudson InterXchange signed up a large US telecoms company and a US TV and satellite operator.
In aggregate, Cordiant Digital Infrastructure paid 10.8x December 2022 EBITDA for its three companies. It says that this is substantially below both publicly traded comparables in the mobile tower and data centre space as well as the multiples being paid by private capital funds for digital infrastructure assets.
In aggregate, the company and its portfolio companies had gross debt equivalent to £441m at 31 December 2022. This resulted in net gearing of 30% as at 31 December 2022, measured as net debt divided by gross asset value. This is a level the board considers prudent and well below the 50% maximum permitted under the investment policy. This level of gearing is 3.9x EBITDA as at 31 December 2022, including the company’s own costs as a deduction in calculating EBITDA. 78% of all debt is on a fixed interest basis, with the remainder at floating interest; none is inflation-linked.
Buybacks
The board has authorised a discretionary programme of share buybacks of up to £20m, subject to the company’s working capital position.
As previously announced, during 2022 each of the directors increased their respective shareholdings. In addition, Steven Marshall, chairman of Cordiant Digital, acquired an additional 700,000 shares, taking his aggregate holding to 4m shares, following the release of the interim results in November 2022. The investment manager itself, and individuals within it and the portfolio companies, also acquired or added to their personal holdings in the company, resulting in an aggregate holding of 5.7m shares.
CORD : Cordiant Digital trading update emphasises robust dividend cover – will buy back shares
my bank hsbc will not trade in this share
The fund is listed on the specialist fund segment – this is from its prospectus – “The Shares will be admitted to the Specialist Fund Segment, which is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment. The Specialist Fund Segment is only suitable for investors: (i) who understand the potential risk of capital loss and that there may be limited liquidity in the underlying investments of the Company; (ii) for whom an investment in securities admitted to trading on the Specialist Fund Segment is part of a diversified investment programme; and (iii) who fully understand and are willing to assume the risks involved in such an investment portfolio. It should be remembered that the price of the Shares can go down as well as up.”
Some platforms, such as HSBC, take the view that individual investors should be actively prevented from buying shares listed on the Specialist Fund Segment. However, other platforms do allow it.