Pantheon Infrastructure’s interim numbers are very encouraging. The NAV continues to climb, the portfolio looks to be in good shape, and the board has felt confident to hike the full-year target dividend by 5% to 4.2p. However, given the discount that the shares trade on is preventing PINT from raising fresh capital, it has had to pass on £300m of deals so far in 2024 that the manager feels would have provided attractive opportunities for the trust.
The board continues to believe that any discount is unwarranted given the excellent NAV performance [and we wholeheartedly agree with this]. Over the six months ended 30 June 2024, the NAV total return was 8.5% (which compares to an annualised target of 8%–10%). £2.75m of share buybacks during the period increased NAV by 0.2p per share.
The board says it is encouraged by recent developments around the UK’s regime for cost disclosures of investment trusts. Specifically, the board considers that the FCA’s statement on forbearance and the imminent replacement of existing legislation has the potential to result in increased demand for the company’s shares over time. [Again we agree, a major barrier has been removed for professional investors wanting to buy the shares. The discount ought to narrow now.]
The chair says performance has been attributable to notable fair value gains on investments including, but not limited to: Calpine, which has benefited from a buoyant trading environment for energy companies and higher than anticipated capture prices and capacity market pricing; CyrusOne, which is expected to deliver earnings growth ahead of its original investment case due to increased cloud and AI computing demands from hyperscale organisations; and National Broadband Ireland, which continues to reduce the risks associated with its business through its fibre rollout and addition of new customers ahead of the original forecast adoption rate.
Zenobe’s grid-scale batteries have been impacted by the factors that have affected other battery investors, but its business is diversified beyond this and its vehicle electrification business is doing well.
The £115m revolving credit facility remains undrawn and available to cover risk buffers and undrawn commitments. It could yet be deployed to fund a particularly attractive opportunity with a relatively short-term payoff.
PINT : Pantheon Infrastructure passing up attractive opportunities for lack of capital
