The completion of two big disposals in the first half of the year for Pantheon Infrastructure (PINT) proved something of a mixed blessing, interim results showed today.
The sale of Intersect Power to Alphabet and of Calpine to Constellation Energy of the US announced last year generated $70m (£52.6m) of cash that enabled the company to make a $55m (£41m) investment in US energy renewables platform Terra-Gen in June, its 15th asset. That’s a good result when, in common with the rest of its sector, it can’t raise money through share issuance with its stock trading at a discount to net asset value (NAV).
However, the second of these deals in January 2025 left PINT with shares in Constellation Energy which tumbled 30% after a lack of new data centre supply contracts disappointed investors.
Constellation’s slide was the main factor in the portfolio dropping 5% or £25m to £586m. It accounted for 5.6p of the 6.5p fall in net asset value (NAV) per share to 123.9p in the six months to 30 June.
PINT received $28.5m of cash and over 326,000 shares in Nasdaq-listed Constellation in January, half of which it was free to sell from 1 July with the remainder locked up for a further year. It has since sold the unrestricted portfolio at an average price of $273 per share which, while below the $353 level in December, is an improvement on the $248 price in June. That netted a further $44.5m for potential reinvestment with the rest of the position valued at $42.7m at a share price of $262 on 21 September.
Portfolio manager Richard Sem was positive on the prospects for a further recovery in the share price. “Constellation’s operating performance remains strong, supported by growing recognition of nuclear energy’s role in powering the data economy, and Calpine, now part of Constellation, continues to benefit favourably from increased demand from AI data centres.”
Including the payment of a second dividend for last year of 2.173p per share, PINT’s underlying investment loss narrowed to 3.3%. Shareholders did better than that, however, with a 10.3% total return as the previously wide share price discount shrank from 16.8% to 5.2% as investor sentiment improved following the achievement of its first covered annual dividends in March. The gap to NAV has since widened slightly to 8%.
Last week PINT declared its first interim dividend for this year of 2.249p per share, a rise of 3.5% that puts the shares on a 3.8% yield if the second dividend comes in at the same level.
Sem said: “We continue to see encouraging developments across a number of our investments and a strong pipeline of opportunities across PINT’s core investment themes. We remain disciplined and selective in deploying capital, focusing on high-quality assets that we believe can deliver attractive long-term shareholder returns.”
Our view
Matthew Read, QuotedData senior analyst, said: “While shareholders may be disappointed with the modest NAV decline, we would highlight that this largely reflects the mark-to-market fall in Constellation Energy shares received through the Calpine disposal rather than weakness across the wider portfolio, and is perhaps to be expected given the market backdrop. Excluding Constellation, PINT recorded a modest valuation gain, while the Calpine and Intersect Power realisations generated more than $70m of cash and provided useful evidence that portfolio valuations can be crystallised.
“The subsequent sale of half the Constellation holding has reduced this source of volatility and raised a further $44.5m, strengthening the balance sheet. Meanwhile, the Terra-Gen investment shows that PINT can recycle proceeds into new opportunities rather than simply shrink the portfolio. With the dividend up 3.5% and expected to be fully covered this year, there is plenty to reassure shareholders, although further realisations will be important if PINT is to keep investing while its shares trade at a discount.”
