Pantheon Infrastructure’s annual results cover the year ended 31 December 2024. It was a good year for the trust with a NAV return of 14.3% and a share price return of 11.5%. The dividend was raised to 4.2p from 4.0p. That was not covered by cash flow – cash cover was 0.7x [but that reflects the trust’s focus on maximising total returns rather than revenue generation]. Cash dividend cover was higher than was initially forecast for the period. The portfolio delivered net cash flows of £21.3m (31 December 2023: £10.0m). The statement says that there is a breadth of opinion amongst shareholders about where the level of the dividend should go from here.
3.99m shares were bought back for £3.4m over the year. Since the trust started buying back shares, it has repurchased 11.375m shares for £9.2m, adding 0.5p to the NAV. There is still another £9.2m left to spend under the share buyback programme. [This really should not be necessary, given how successful the trust has been since launch, but shareholders will welcome it, nevertheless.]
The conditional sale of Calpine, that was announced earlier this year, marked the trust’s first exit. The board expects that the proceeds of the transaction will be staggered over the coming years, and notes that the transaction, once completed, will involve residual exposure to shares in Constellation, a business that has benefited from the same tailwinds that have propelled Calpine in the last two years, but has however recently endured some share price softening as part of a wider market correction in the US. Pantheon Infrastructure is talking to EDP (the sponsor for the Calpine deal) about the details of the Calpine exit. Once it knows more about how much will be received and when, the board and the manager intend to consider what steps may be available to de-risk and unlock value sooner. The proceeds will be recycled into new investments. The board says many shareholders have expressed a desire for this.
Valuation gains occurred across a number of assets, most notably driven by the AI boom benefiting Calpine and CyrusOne, but also with notable gains from GD Towers and National Broadband Ireland.
The board believes there are clear reasons to be optimistic, notably including some recent M&A in the sector, with a number of takeover acquisitions of, or active bids for, investment companies or their portfolios, at levels near or above their prevailing NAVs. In this vein, the board continues to be resolute in its view that any share price discount to NAV is unjustified for the company [and we agree].
PINT : Great year for Pantheon Infrastructure followed by first exit
