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International Public Partnership shareholders hit as moves to discount

International Public Partnerships has published results for 2022. The highlights are:

  • A total NAV return of c.12.5% for the year to 31 December 2022.
  • NAV per share increase of 7.3% to 159.1p from 148.2p driven by, among other factors, the positive impact of the portfolio’s inflation-linkage.
  • Full-year dividend growth of about 2.5% to 7.74p supported by 2022 cash dividend cover of 1.3x.
  • Inflation linkage of 0.7% for every 1% increase in inflation.
  • IFRS profit before tax increase of 153% to £326.8m (31 December 2021: £129.2 million), reflecting the unrealised fair value gain on the portfolio in the year.
  • During the year, the company made investments or investment commitments totalling over £310m across the energy, wastewater, social infrastructure and transport sectors. The company continued to diversify its portfolio, and committed to acquire its first investment in New Zealand.
  • A strong near-term pipeline of £230m, including its existing investment commitments, across the energy, transport and social infrastructure sectors.
  • In order to support this pipeline, the company has, in principle, agreed an increase in the committed size of its Corporate Debt Facility (CDF) to £350m and an extension of the maturity date to June 2025.
  • During the year, the company raised additional equity totalling £325m and fully deployed this to support recent investment activity.

The chair Mike Gerrard said “The board notes that this is one of only a few occasions in the company’s 16-year history in which the company’s shares have traded at a discount to NAV and, whilst we will continue to monitor the share price and discount carefully, we remain confident in the robustness and reliability of the company’s future cash flows.” [But what he didn’t say is that the return to shareholders for 2022 was -6.1% or that the shares have fallen by a further 5.3% over the course of 2023.]

The weighted average discount rate used to value the company’s forecasted cash flows to calculate the NAV rose to 7.71% from 7.38%. The discount rate rose by 54 basis points (0.54%) for the company’s equity investments but about 6.8% of the portfolio is invested in senior debt and this brings the weighted average for the whole portfolio down.

INPP : International Public Partnership shareholders hit as moves to discount

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