3i Infrastructure (3IN) has made a good start to its financial year with the shares recovering from the April squall caused by Donald Trump’s tariffs.
For the first quarter to 30 June, 3IN said its portfolio companies were either performing in line with or above expectations and generated total income and non-income cash of £63m.
The board of the £3.2bn investment company said it was on track to deliver a 13.45p dividend for the 2026 year. The target is 6.3% above last year’s payout, putting the shares on a 3.9% yield.
FLAG, the UK data communications service provider that accounts for 10% of 3IN assets, has refinanced its debts on better terms. The owner of 66,000km of subsea fibre optic cables spanning from North America to Asia has a $100m rolling credit facility to enable it to continue upgrades to its network.
TCR, the Belgian lessor of airport ground support equipment, ‘continues to outperform’ and won new contracts. Former deputy chief executive Jason Watson has stepped up to lead the company, succeeding Tom Bellekens who has become executive chairman.
SRL, the UK market leading provider of temporary traffic lights, continues to cause concern after it was knocked last year by pressure on local authority finances and increased competition.
3IN said the business was performing in line with revised expectations and its new remotely-monitored signals had been well received. However, it remained cautious ‘given market conditions have yet to materially improve.’
Market conditions for 3IN shares have improved. The stock has risen 5% in the past month, taking the year-to-date gain to 10.6% and reducing the discount to 11% compared to a one-year average of 13.5%.
This compares well to the infrastructure funds sector where the average share price trades 18% below net asset value. Before early 2023 3IN shares traded at a premium. The shares have provided a total return of 33.9% in the past five years, easily the best in a sector that was hit hard by rising interest rates and bond yields.
Bernard Sottomayor, managing partner and head of European infrastructure at 3i Investments, said: ‘Whilst the market remains uncertain, our diverse and resilient portfolio continues to offer a combination of defensive characteristics and long-term valuation upside.’
As at 30 June 3IN had drawn £343m on its £900m credit facility but held £65m cash to leave it with net debts of £278m. The cash balance will fall by £58m next week when the final dividend for 2025 is paid.
