Cordiant Digital Infrastructure’s results for the year ended 31 March 2025 are pretty good. The NAV rose from 117.9p (adjusting for the dividend) to 129.6p. That translated into an NAV total return of 11.6%. The share price total return was 43.1%, driven by a substantial narrowing of the discount.
The dividend has been upped by 3.6% to 4.35p. This is 4.6x covered by portfolio EBITDA and 1.7x covered by adjusted funds from operations.
EBITDA growth on the portfolio was 9.3%, hitting £151.4m. Revenue was up 7.7% to £315.1m. that was driven by:
- New broadcast contracts and telecom business at Emitel and CRA
- Strong growth in CRA’s data centre and cloud business
- Cost control
- Impact of inflation-linked revenues
Other highlights:
Four acquisitions including bolt-ons announced and/or completed in the year; on a pro forma basis the portfolio mix has diversified further with backbone fibre now the largest segment, accounting for 34% of revenue, followed by digital TV infrastructure at 29%.
Growth capital expenditure of £29m in the year to drive future revenues, including:-
Key regulatory permits for CRA’s flagship 26MW data centre development Prague Gateway have been secured, with ground works set to begin imminently and initial discussions with potential anchor tenants progressing in parallel.
c.£300m of term debt refinanced in the year. No material debt maturities in the portfolio before June 2029. Consolidated net gearing ratio at 31 March 2025 of 40.3% calculated on GAV.
4.6m additional shares acquired by the directors, the manager, and its staff since 31 March 2024, including 3.8m shares acquired by Steven Marshall, chairman of Cordiant Digital Infrastructure Management. Total ownership of insiders is now at 2.0%.
Management fees for the year ended 31 March 2025, calculated on market capitalisation, represented 0.6% of NAV.
The portfolio was valued at 31 March 2025, using a discounted cash flow methodology, at a value equivalent to 10.4x LTM EBITDA. Lower growth mobile tower assets and data centres in other countries have been the subject of recent transactions at over 20x EBITDA. While broadcast infrastructure assets typically attract a lower valuation multiple, the company’s broadcast assets are growing faster than most European mobile tower businesses and have higher escalation rates and a wider customer base.
The manager considers that there is no easy answer to resolve the discount, but that continued strong operational performance, value‑creating capital expenditure, maintaining acquisition price discipline and significant alignment of interests should all be recognised when macroeconomic issues affecting equity markets, and especially the investment trust sector, abate.
[QD comment, James Carthew: Increasingly, Cordiant Digital Infrastructure is looking like a class act. It’s unfortunate that it was tainted by association with Digital 9 Infrastructure, but this looks entirely undeserved. The discount last night was 22.6%. I can see that continuing to narrow.]
CORD : Great year for Cordiant Digital Infrastructure
