TIDMINPP
RNS Number : 0754Y
International Public Partnership Ld
27 August 2009
?
27 August 2009
International Public Partnerships Limited (INPP)
(formerly Babcock & Brown Public Partnerships Limited)
2009 Interim Results
Operational Highlights
· Outperformance of +13% and +31.3% relative to FTSE 250 and FTSE AllShare
· 1H 2009 distribution of 2.775 pence per share as anticipated
- Distribution covered entirely by operating cash flow
· NAV movement of -3.4 pence per share
- Ignoring impact of risk-free rates, underlying growth in the portfolio of +3.7
pence per share
· Solid financial position for future opportunities
- GBP34.2m uncommitted cash & GBP41.7m of undrawn corporate debt facility
- Conservative gearing of 6%1
· Continued resilient asset performance
· Appointment of Mr. John Whittle as fourth independent director to INPP Board
· Transition of management and advisory arrangements to Amber Fund Management
Limited
(AFML), part of the Amber Infrastructure Group
Financial Highlights
+----------------------------------+----------------+----------------+----------------+
| | 30 June | 30 | 31 Dec |
| | 2009 | June | 2008 |
| | | 2008 | |
+----------------------------------+----------------+----------------+----------------+
| Profit before tax for the | GBP10.0 | GBP6.3 | GBP12.2 |
| period/year | million | million | million |
+----------------------------------+----------------+----------------+----------------+
| Uncommitted cash available for | GBP34.2 | GBP45 | GBP32.8 |
| investment1 | million | million | million |
+----------------------------------+----------------+----------------+----------------+
| Net Asset Value2 | GBP419.0 | GBP410.5 | GBP431.8 |
| | million | million | million |
+----------------------------------+----------------+----------------+----------------+
| Net Asset Value (per Share) | 2.1% | 1.9% | 4.6% |
| annual increase | | | |
+----------------------------------+----------------+----------------+----------------+
| Net Asset Value per share | 111.8 | 109.5 | 115.2 |
| | pence | pence | pence |
+----------------------------------+----------------+----------------+----------------+
| IFRS net assets per Balance | GBP345.0 | GBP407.2 | GBP305.1 |
| Sheet | million | million | million |
+----------------------------------+----------------+----------------+----------------+
Giles Frost, on behalf of the Investment Advisor said:
"Performance across the portfolio remains good. In particular it has been
pleasing to note the strong recovery in the Company's share price over the
period to 30 June 2009 following the change of the management and advisory
arrangements. We believe that the Company continues to offer an attractive
proposition for those investors seeking opportunities that are to a substantial
extent not correlated with general economic conditions.
"In addition, the Company continues to be aware of and receive high quality
opportunities to invest in attractive public infrastructure investments in
developed countries around the world. These are arising both as a result of the
continued access provided to the Company to opportunities created through the
development activities of the Amber Infrastructure team and through transactions
sourced from third parties independently by the AFML management team. As well,
financial events of the last 12 months have motivated some owners of assets in
the class of assets in which the Company invests to seek to sell their assets at
prices that appear attractive compared to historic pricing in the sector. The
Investment Adviser believes that the Company is well placed to take advantage of
such opportunities.
"Finally, as more investors come to appreciate the fact that performance of
stocks like the Company are significantly de-linked from the factors that affect
the general equity markets, the Investment Adviser believes that stocks like the
Company's may become relatively more attractive - particularly for those
investors looking for long term sustainable performance."
Keith Dorrian, Chairman of the Board said:
"I am pleased to be able to confirm that the appointment of AFML as Investment
Advisor has been successfully concluded.
"I am also pleased to advise that a strong pipeline of new investment
opportunities has been identified and is being researched. It is your Board's
view that market conditions are now sufficiently clear to enable the
identification of further investment opportunities for the Company. We believe
that the supply of attractive opportunities is likely to provide an excellent
opportunity to increase the size of the Company over the medium term with
attractive internal rates of return and increasing economies of scale which will
benefit our investors.
"The combination of current market conditions, the completion of the Amber
transition and the opportunities we see indicate to me a very optimistic
future."
A copy of the interim results presentation is available from the INPP website:
www.internationalpublicpartnerships.com
+----------------------------------------------------------------------------------------------+
| For further information: |
+----------------------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------------------+
| Bianca Francis |
+----------------------------------------------------------------------------------------------+
| Chief Operating Officer & Investor Relations Manager +44 (0)20 7203 7418 |
+----------------------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------------------+
| Nick Westlake +44 (0)20 7260 1345 |
+----------------------------------------------------------------------------------------------+
| Numis Securities |
+----------------------------------------------------------------------------------------------+
1. Gearing calculated as the proportion of recourse debt, less uncommitted
cash, to portfolio valuation.
International Public Partnerships Limited
(formerly Babcock & Brown Public Partnerships Limited)
Half yearly financial report for the
six months ended 30 June 2009
Registered number: 45241
Contents
Responsibility Statement
Summary
Chairman's Statement
Portfolio Interests
Investment Advisor's Report
Independent Review Report to the Members
Condensed Consolidated Income Statement
Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of Financial Position
Condensed Consolidated Cash Flow Statement
Notes to the Condensed set of Financial Statements
Directors and Advisors
+-------------------+
| Cautionary |
| Statement |
+-------------------+
| |
+-------------------+
| The |
| Chairman's |
| Statement |
| and |
| Investment |
| Advisor's |
| Report |
| ("IAR") |
| has been |
| prepared |
| solely to |
| provide |
| additional |
| information |
| to |
| shareholders |
| to assess |
| the Group's |
| strategies |
| and the |
| potential |
| for those |
| strategies |
| to succeed. |
| These should |
| not be |
| relied on by |
| any other |
| party or for |
| any other |
| purpose. |
+-------------------+
| |
+-------------------+
| The |
| Chairman's |
| Statement |
| and IAR |
| may |
| include |
| statements |
| that are, |
| or may be |
| deemed to |
| be, |
| "forward-looking |
| statements". |
| These |
| forward-looking |
| statements can be |
| identified by the |
| use of |
| forward-looking |
| terminology, |
| including the |
| terms |
| "believes", |
| "estimates", |
| "anticipates", |
| "expects", |
| "intends", |
| "may", "will" |
| or "should" or, |
| in each case, |
| their negative or |
| other variations |
| or comparable |
| terminology. |
+-------------------+
| |
+-------------------+
| These |
| forward-looking |
| statements |
| include all |
| matters that |
| are not |
| historical |
| facts. They |
| appear in a |
| number of |
| places |
| throughout this |
| document and |
| include |
| statements |
| regarding the |
| intentions, |
| beliefs or |
| current |
| expectations of |
| the Directors |
| and the |
| Investment |
| Advisor |
| concerning, |
| amongst other |
| things, the |
| investment |
| objectives and |
| investment |
| policy, |
| financing |
| strategies, |
| investment |
| performance, |
| results of |
| operations, |
| financial |
| condition, |
| liquidity, |
| prospects, and |
| distribution |
| policy of the |
| Company and the |
| markets in |
| which it |
| invests. |
+-------------------+
| |
+-------------------+
| By |
| their |
| nature, |
| forward-looking |
| statements |
| involve risks |
| and |
| uncertainties |
| because they |
| relate to |
| events and |
| depend on |
| circumstances |
| that may or may |
| not occur in |
| the future. |
| Forward-looking |
| statements are |
| not guarantees |
| of future |
| performance. |
| The Company's |
| actual |
| investment |
| performance, |
| results of |
| operations, |
| financial |
| condition, |
| liquidity, |
| distribution |
| policy and the |
| development of |
| its financing |
| strategies may |
| differ |
| materially from |
| the impression |
| created by the |
| forward-looking |
| statements |
| contained in |
| this document. |
+-------------------+
| |
+-------------------+
| Subject |
| to |
| their |
| legal |
| and |
| regulatory |
| obligations, |
| the |
| Directors |
| and the |
| Investment |
| Advisor |
| expressly |
| disclaim any |
| obligations |
| to update or |
| revise any |
| forward-looking |
| statement |
| contained |
| herein to |
| reflect any |
| change in |
| expectations |
| with regard |
| thereto or any |
| change in |
| events, |
| conditions or |
| circumstances |
| on which any |
| statement is |
| based. |
+-------------------+
| |
+-------------------+
| This |
| Half |
| Yearly |
| Report |
| has |
| been |
| prepared |
| for the |
| Group as |
| a whole |
| and |
| therefore |
| gives |
| greater |
| emphasis |
| to those |
| matters |
| which are |
| significant |
| to |
| International |
| Public |
| Partnerships |
| Limited and |
| its |
| subsidiary |
| undertakings |
| when viewed |
| as a whole. |
+-------------------+
Responsibility Statement
The Directors are responsible for preparing this half-yearly financial report in
accordance with applicable law and regulations. The Directors confirm that to
the best of their knowledge:
* the condensed set of financial statements has been prepared in accordance with
IAS 34 'Interim Financial Reporting';
* the interim management report includes a fair review of the information required
by DTR 4.2.7R (indication of important events during the first six months and
description of principal risks and uncertainties for the remaining six months of
the year); and
* the interim management report includes a fair review of the information required
by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the Board,
Keith Dorrian
Chairman
27 August 2009
Summary
History
International Public Partnerships Limited (LSE: INPP), formerly Babcock & Brown
Public Partnerships Limited, is a limited liability, Guernsey incorporated,
authorised closed-ended investment company. The Company offers shareholders an
exposure to investments in international infrastructure assets, particularly
those with a public or social character, including those developed in
conjunction with public bodies under private finance initiative (PFI) or public
private partnership (PPP) type procurements.
The Company floated on the main market of the London Stock Exchange on 9
November 2006 raising a total of GBP300 million and acquired a seed portfolio of
22 projects. Since then the company successfully completed a C Share capital
listing, raising a total of GBP84 million. At 30 June 2009, the portfolio
comprised economic interests in 50 projects across several OECD countries and
PFI/PPP sectors.
Financial Highlights
+--------------------------------------+----------------+----------------+----------------+
| | 30 June | 30 June | 31 |
| | 2009 | 2008 | December |
| | | | 2008 |
+--------------------------------------+----------------+----------------+----------------+
| Profit before tax for the | GBP10.0 | GBP6.3 | GBP12.2 |
| period/year | million | million | million |
+--------------------------------------+----------------+----------------+----------------+
| Uncommitted cash available for | GBP34.2 | GBP45 | GBP32.8 |
| investment1 | million | million | million |
+--------------------------------------+----------------+----------------+----------------+
| Net Asset Value2 | GBP419.0 | GBP410.5 | GBP431.8 |
| | million | million | million |
+--------------------------------------+----------------+----------------+----------------+
| Net Asset Value (per Share) annual | 2.1% | 1.9% | 4.6% |
| increase | | | |
+--------------------------------------+----------------+----------------+----------------+
| Net Asset Value per share | 111.8 | 109.5 | 115.2 |
| | pence | pence | pence |
+--------------------------------------+----------------+----------------+----------------+
| IFRS net assets per Balance Sheet | GBP345.0 | GBP407.2 | GBP305.1 |
| | million | million | million |
+--------------------------------------+----------------+----------------+----------------+
1 Uncommitted cash available for investment is the balance of cash that is
unrestricted and is available to the Group for investment and excludes any
undrawn amount available under the corporate debt facility.
2 The Net Asset Value ("NAV") referred to above and on pages 3, 10 and 11
differs from the basis of recording net assets as set out in the statement of
financial position included in the condensed financial statements. Net Asset
Value as shown above is a fair market valuation of the Group's economic
interests (note 3), calculated utilising discounted cash flow methodology,
adjusted for European Private Equity and Venture Capital Association (EVCA)
guidelines, a methodology considered appropriate, given the special nature of
infrastructure investments. Estimated future cash flows accruing to each
economic interest have been discounted using discount rates that reflect the
risks associated with that interest.
The only current exception to this methodology is with respect to the valuation
of the following:
· Stapled units in RiverCity Motorway project, valued using the closing share
price at 30 June 2009 ('market value'),
The Net Asset Value also includes cash, cash equivalents and assets and
liabilities attributable to the Company and intermediate holding companies at 30
June 2009.
Chairman's Statement
I am pleased to present the Company's Half Yearly report for the period 1
January to 30 June 2009, the first such report since the appointment of the new
Investment Advisor.
The Company's Investment strategy is to invest in a portfolio of public
infrastructure assets targeted to provide stable, sustainable and predictable
returns for investors. Your Board, together with the Investment Advisor have
worked diligently to ensure this objective is met. It is particularly pleasing
following 12 months of exceptional stock market volatility to note that an
investment in the Company made at the time of the Company's launch in November
2006 over the period to 30 June 2009 outperformed the FTSE All Share Index by
34%. A shareholder who has held the Company's stock since the time of the
Company's launch had at 30 June 2009 seen a total return, before any tax, of
13.9%.
The attraction of public infrastructure as an asset class is that, by virtue of
the long term, government backed contracts that underpin it and the Investment
Advisor's ability to structure these assets on a matched funded basis, the
portfolio performance is largely uncorrelated to some of the wider economic
factors which have caused such volatility in other asset classes.
I am pleased to be able to confirm that the appointment of Amber Fund Management
Limited (AFML) (part of the Amber Infrastructure Group) as Investment Advisor
has been successfully concluded. Also I am pleased to advise that a strong
pipeline of new investment opportunities has been identified and is being
researched. You will already have seen an announcement of the increase in our
holding of Brescia Hospital, which was made at an attractive internal rate of
return.
Additionally, I am pleased to report that as noted in our previous reports we
have been looking for the opportunity to recruit a new independent director. We
have been fortunate to secure the services of Mr John Whittle to the Board. John
is an FCA with substantial experience in both the corporate and investment fund
sectors and his expertise and knowledge will complement and enhance your Board's
existing skill base.
Following on from the announcement made by UBS at the year end that it was no
longer able to provide Broking services to the Company we have reviewed all
options open to us and I am pleased to report that we have appointed Numis
Securities as our replacement Broker.
Financial results for the period
On a consolidated basis the Group reported a profit before tax of GBP10.0
million for the period and basic earnings per share of 3.12 pence. The Net Asset
Value (NAV) of the Group's investments is valued at GBP419 million, which on a
per share basis, represents a slight decrease of 2.95% since 31 December 2008.
This was due mainly to a general increase in risk free rates in the countries
where the Company has assets. It is worth noting that after stripping out items
which are outside the control of the Company this shows underlying growth in the
value of the portfolio of 3.2% was achieved.
The Company made no new investments in the six month period of this report. This
was due in part to the desire to consolidate within the portfolio the GBP134
million of acquisitions made in 2008 and in part due to the need to see market
conditions stabilise.
The Company retains a committed GBP100 million loan facility from the Royal Bank
of Scotland plc and NAB Capital Limited. The Company had utilised GBP58 million
of this facility as at 30 June 2009. The current intention of the Board is not
to maintain long term corporate debt within the Company but to use debt at the
corporate level to finance the acquisition of attractive investment
opportunities for the Company at times when sufficient equity capital is
unavailable. It is the intention of the Board to seek additional equity capital
when appropriate opportunities are identified and the Board will use such funds
to finance new acquisitions and repay current borrowings. The Board and
Investment Advisor consider that the implementation of this policy will ensure
that equity funds are invested in appropriately yielding assets. It will be the
Boards intention to draw down the loan facility, when appropriate investment
opportunities are identified, to bridge the period up until the next equity
raising. All other borrowings of the Group relate to the underlying project
vehicles and remain non-recourse to the Company.
Distribution
Your Board's declared policy is to manage the Company in such a way so as to, as
far as is possible, continue to provide a consistent growing dividend for our
investors together with potential for capital growth reflecting increases in
value in our portfolio derived from the management and investment opportunities
identified and implemented by our Investment Advisor. Our target distribution
for 2009 is 5.55 pence per share and the first payment of 2.775 pence per share
in respect of this target will be made in October 2009. The second payment is
expected to be made in May 2010.
Outlook
It is your Board's view that market conditions are now sufficiently clear to
enable the identification of further substantial investment opportunities for
the Company. We believe that our investment strategy coupled with the proven
expertise of the individuals within the Investment Advisor will enable us to
provide both new and existing investors the opportunity to increase their
holdings thus benefiting from the sustainable income coupled with prospects for
capital gain in the medium to long term available through investment in the
Company. We believe that the supply of attractive investment opportunities for
the Company is likely to provide an excellent opportunity to increase the size
of the Company over the medium term with attractive internal rates of return and
increasing economies of scale which will benefit our investors.
AFML continues to report a steady flow of investment opportunities and its
associated company, Amber Infrastructure Limited has identified an attractive
pipeline of potential development proposals on which it is currently undertaking
appropriate due diligence. The Company has a right of first refusal on such
Investments and as such, we are looking forward to a period of investing in
attractive growth opportunities.
The six month period to 30 June also saw us put behind virtually all aspects of
the Company's relationship with Babcock & Brown. On 1 April 2009, Babcock &
Brown sold its 8.3% stake in the Company via a placement to both existing and
new investors. On 26 June 2009, the Company changed its name to International
Public Partnerships Limited and at the same time replaced its Investment Advisor
with AFML. As previously reported, AFML provides the Company with full
continuity in all aspects of its operations and we are very pleased with the
smooth transition of responsibilities from the previous advisor Babcock & Brown
Investment Management Limited.
The combination of current market conditions, the completion of this transition
and the opportunities we see indicate to me a very optimistic future.
Keith Dorrian
Chairman
27 August 2009
Portfolio Interests
The Company held economic interests in the following projects at 30 June 2009 as
set out below.
+------------------------------+----------------+--------------------------------+
| Project Name | % economic | Status (scheduled completion |
| | interest1 | date) |
| | held by the | |
| | Group | |
+------------------------------+----------------+--------------------------------+
| Abingdon Police Station | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Bootle Government Offices | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Derbyshire Magistrates | 100% | Operational |
| Courts | | |
+------------------------------+----------------+--------------------------------+
| Derbyshire Schools Phase 1 | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Hereford & Worcester | 100% | Operational |
| Magistrates Courts | | |
+------------------------------+----------------+--------------------------------+
| Norfolk Police HQ | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| North Wales Police HQ | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Strathclyde Police Training | 100% | Operational |
| Centre | | |
+------------------------------+----------------+--------------------------------+
| St Thomas More School | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Derbyshire Schools Phase 2 | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Calderdale Schools | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Northamptonshire Schools | 100% | Operational2 |
+------------------------------+----------------+--------------------------------+
| Tower Hamlets Schools | 100% | Operational |
+------------------------------+----------------+--------------------------------+
| Long Bay Forensic and Prison | 50% | Operational |
| Hospitals Project | | |
+------------------------------+----------------+--------------------------------+
| RiverCity Motorway Project | 4.9% | Construction (completion due |
| | | mid 2010) |
+------------------------------+----------------+--------------------------------+
| Royal Melbourne Showgrounds | 50% | Operational |
| Redevelopment Project | | |
+------------------------------+----------------+--------------------------------+
| Reliance Rail | 12.75% | Construction (rolling stock |
| | | completion starting in 2010 |
| | | through 2013) |
+------------------------------+----------------+--------------------------------+
| Durham (Canada) Courthouse | 100% | Construction (completion due |
| Project | | late 2009) |
+------------------------------+----------------+--------------------------------+
| BeNEX | 49% | Operational |
+------------------------------+----------------+--------------------------------+
| Dublin Criminal Courts | 100% | Construction (completion due |
| Project | | 2010) |
+------------------------------+----------------+--------------------------------+
| Amiens (France) Hospital | 95% | Operational |
| Project | | |
+------------------------------+----------------+--------------------------------+
| NSW Schools | 25% | Operational (part |
| | | construction) |
+------------------------------+----------------+--------------------------------+
| Diabolo Project | 65% | Construction (completion due |
| | | 2012) |
+------------------------------+----------------+--------------------------------+
| Maesteg Schools | 100% | Operational |
+------------------------------+----------------+--------------------------------+
+------------------------------+----------------+--------------------------------+
| Project Name | % economic | Status (scheduled completion |
| | interest1 | date) |
| | held by the | |
| | Group | |
+------------------------------+----------------+--------------------------------+
| Orange Hospital | 100% | Construction (completion due |
| | | June 2011) |
+------------------------------+----------------+--------------------------------+
| Royal Childrens Hospital | 100% | Construction (completion due |
| | | December 2014) |
+------------------------------+----------------+--------------------------------+
| Brescia Hospital | 24% | Operational |
+------------------------------+----------------+--------------------------------+
| Angel Trains UK | 4.6% | Operational |
+------------------------------+----------------+--------------------------------+
| Alberta Schools | 75% | Construction (completion due |
| | | September 2010) |
+------------------------------+----------------+--------------------------------+
The Company also owns subordinated debt provided to finance certain projects
developed under the NHS LIFT initiative as set out below. The Company's
interests in NHS LIFT subordinated debt are estimated to comprise approximately
5% by value of the portfolio.
+-------------------------+----------------------+--------------------------------+
| |
+-------------------------+
| Project Name | Issuer | Status (scheduled completion |
| | | date) |
+-------------------------+----------------------+--------------------------------+
| Beckenham Hospital | BBG Lift | Operational |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Garland Road Health | BBG Lift | Operational |
| Centre | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Alexandra Avenue | BHH Lift | Operational |
| Primary Care Centre | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Monks Park Health | BHH Lift | Operational |
| Centre | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Gem Centre Bentley | Wolverhampton City | Operational |
| Bridge | and Walsall Lift | |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Phoenix Centre | Wolverhampton City | Operational |
| | and Walsall Lift | |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
+-------------------------+----------------------+--------------------------------+
| Project Name | Issuer | Status (scheduled completion |
| | | date) |
+-------------------------+----------------------+--------------------------------+
| Lakeside | BBG Lift | Operational |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Mt Vernon | BHH Lift | Operational |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Sudbury Health Centre | BHH Lift | Operational |
| | Accommodation | |
| | Services Limited | |
+-------------------------+----------------------+--------------------------------+
| Fishponds & Hampton | Bristol Infracare | Operational |
| House | LIFT (1) Ltd | |
+-------------------------+----------------------+--------------------------------+
| Shirehampton & | Bristol Infracare | Operational |
| Whitchurch | LIFT (2) Ltd | |
+-------------------------+----------------------+--------------------------------+
| Dunnock Way & East | Oxford Infracare | Operational |
| Oxford | LIFT (1) Ltd | |
+-------------------------+----------------------+--------------------------------+
| Ridge Hill & | Dudley Infracare | Operational |
| Stourbridge | LIFT (1) Ltd | |
+-------------------------+----------------------+--------------------------------+
| Brierley Hill | Dudley Infracare | Construction (completion due |
| | LIFT (1) Ltd | March 2010) |
+-------------------------+----------------------+--------------------------------+
| Church Road Health | East London LIFT | Operational |
| Centre | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Barking Road Health | East London LIFT | Operational |
| Centre | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Frail Elders Hospital | East London LIFT | Operational |
| | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Mile End Specialist | East London LIFT | Operational |
| Addition Unit | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Barkantine Health | East London LIFT | Operational |
| Centre | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Hackney Childrens | East London LIFT | Operational |
| Development Centre | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
| Vicarage Lane Health | East London LIFT | Operational |
| Centre | Company Ltd | |
+-------------------------+----------------------+--------------------------------+
1 Economic interests reflect an investment in the capital of the underlying
project.
2 One school remains in construction.
To view the omitted portfolio image go to
www.internationalpublicpartnerships.com for a copy of the interim results.
Investment Advisor's Report
Introduction
About the Investment Advisor
Amber Fund Management Limited (AFML) is a wholly owned subsidiary of Amber
Infrastructure Group Limited. Amber Infrastructure Group acquired the business
of Babcock & Brown which previously provided investment advisory services to the
Company in June 2009 and at the same time, following approval at a meeting of
the shareholders of the Company and regulatory approval, the management and
advisory arrangements relating to the Company were transferred. Amber
Infrastructure retains a global investment and advisory remit and AFML is
authorised and regulated by the Financial Services Authority.
Portfolio Investment Performance
Performance across the portfolio remains good. In particular it has been
pleasing to note the strong recovery in the Company's share price over the
period to 30 June 2009 following the change of the management and advisory
arrangements. We believe that the Company continues to offer an attractive
proposition for those investors seeking opportunities that are to a substantial
extent not correlated with general economic conditions.
It is noteworthy for instance that the performance of the Company since IPO in
autumn 2006 has outperformed a number of key indices.
+----------------------------------------+----------------------------------------+
| Index | Outperformance |
+----------------------------------------+----------------------------------------+
| FTSE All Share Index | 34% |
+----------------------------------------+----------------------------------------+
| STOXX 600 price index (utilities) | 36% |
+----------------------------------------+----------------------------------------+
| FTSE Global EPRA Development index | 45% |
| (real estate) | |
+----------------------------------------+----------------------------------------+
| UK Investment Trust Private Equity | 62% |
| index | |
+----------------------------------------+----------------------------------------+
| FTSE EUR Construction & Materials index | 35% |
+----------------------------------------+----------------------------------------+
| FTSE Support Services index | 31% |
+----------------------------------------+----------------------------------------+
| FTSE British Govt. Bond 15y index | 15% |
+----------------------------------------+----------------------------------------+
| | |
+----------------------------------------+----------------------------------------+
Source: Numis Securities - For the period 9 November 2006 to 30 June 2009.
Clearly some of this outperformance has come through falls in value suffered in
other sectors but notwithstanding this an investor in the IPO of the Company had
to 30 June 2009 received a positive total return (share price growth plus
distributions) of 13.9%. It is to be hoped that more investors recognise over
time the value of investing in an asset class that is less exposed to
recessionary and other macro economic forces.
The assets within the Portfolio again performed in line with the Company's
projections during the period. The Portfolio continues to be actively managed.
While the focus of the advisor over the last six months has centred on
resolution of the relationship with Babcock & Brown, there are a number of
exciting developments for the Company scheduled to occur before the end of 2009.
These include:
- working with its construction partners to ensure delivery of Durham Courthouse
on time in late 2009 and to deliver Dublin Courts in late 2009, ahead of
programme;
- working with its public sector counterparties to deliver further investment to
the projects including:
* GBP12m of works proposed for Tower Hamlets Schools;
* GBP25m investment in Orange Hospital;
* GBP3m investment in Abingdon police station, along with numerous other smaller
investments in the other schemes;
- awarding of additional rail and bus concessions within Benex (refer to
previous announcement);
- effective mobilisation and delivery of the FM services at Long Bay and Maesteg
projects, with minimal/no performance/availability deductions across the mature
operational assets;
- working with its insurance advisor to ensure further premium savings to the
portfolio can be delivered in the full year.
Currently 31% of the portfolio is in the construction or delivery phase and the
remainder is operational. Progress on building out those assets that are in the
construction or delivery phase remains good across the portfolio which is in
line with our expectation and there are no significant problems. One investment
(Reliance Rail in Australia) is receiving increased monitoring largely due to
the financial issues outside the control of the company affecting the monoline
insurers who guarantee the debt in the project. This project however represents
less than 1.5% of the Company's portfolio.
Further statistics about the portfolio are set out below:
To view the omitted portfolio image go to
www.internationalpublicpartnerships.com for a copy of the interim results.
Rebased NAV includes the effect of the additional shares issued following the
C-Share capital raising in April 2008. The C Shares were converted to Ordinary
shares in June 2008.
Acquisitions
The Company made no acquisitions in the period. Since the end of the period the
Company has announced the acquisition of a further investment in the Brescia
Hospital project where it already had an ownership interest.
Valuation and Net Asset Valuation Calculation
The Administrator (Heritage International Fund Managers Limited) calculates the
Net Asset Value (NAV) of an Ordinary Share with the assistance of AFML, and
produces fair market valuations of the Group's investments on a six-monthly
basis as at 30 June and 31 December.
Over the period the Company's Net Asset Value declined by 3.4p per share
(2.95%). This was substantially the result of an increase in government bond
rates impacting negatively on the NAV. The full impact of this was however
mitigated by a degree of underlying organic growth in the value of the portfolio
as assets matured. On a like for like comparison ignoring movements in the risk
free rates in the countries within which the Company has investments, the
portfolio would have showed an increase in value of 3.7p per share (3.2%).
The Company's NAV is calculated by valuing the projected cashflows from the
Company's underlying assets utilising a discounted cashflow methodology. The
discount rate utilised for each asset for this purpose is the aggregate of the
risk free rate in the relevant country plus an appropriate additional risk
premium applicable to that asset. The risk premium applied by the Directors of
the Company in valuing the Company's economic interest is based on the advice of
the Investment Advisor, market knowledge, advice from the Company's external
advisors and information in the public domain from comparable transactions.
Over the period the average weighted risk free rate applicable across the
portfolio increased by 0.68% while the average weighted additional risk premium
of the portfolio on a net basis remained virtually constant over the period as
might be anticipated given the absence of acquisitions and construction
completions in the period.
The discount rates used for valuing each of the Group's economic interests in
the Portfolio as at 30 June 2009 range from 6.35% to 15.0% and the weighted
average discount rate was 8.61%. This compares to the position as at 31 December
2008 when the weighted average discount rate utilised for valuation purposes was
7.95%.
The Company's portfolio was valued at GBP419 million at 30 June 2009 (GBP431.8m
as at 31 December 2008). As indicated this decline in value is attributable to
the generally rising yields on government bonds over the period which is the
most important factor in deriving the discount rate utilised to value the
Company's portfolio.
Borrowing
As at 30 June 2009 the Company had in place a GBP100 million debt facility with
Royal Bank of Scotland plc and NAB Capital. An amount of GBP58.3 million has
been drawn under the facility but the Company also holds free cash balances of
GBP34.2 million. The intention of the Company remains not to maintain long term
corporate debt within the Company but to use debt at the corporate level to
finance the acquisition of attractive investment opportunities for the Company
at times when equity capital is less freely available. The Company has no
further gearing and there are no outstanding commitments payable by the Company.
Borrowings of the Group referred to in the Condensed Consolidated Financial
Statements also include the underlying project level debt which is non-recourse
to Group entities except the project vehicle to which the borrowing applies.
Risks and uncertainties
There are a number of potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of the
financial year and could cause actual results to differ materially from expected
and historical results. Additional information on the principal long-term risks
and uncertainties of the Group, which remain unchanged from the previous year
end, are included in the 2008 annual report on pages 33 to 40.
The Company and its assets are managed in ways that are designed to mitigate
risks and to provide high levels of confidence to investors as to the
availability of project cashflows to enable payment of anticipated dividends.
The Company's business model does not depend on growth or borrowing in order for
anticipated dividends to be paid.
The Company currently enjoys projected excess cashflow from underlying
investments over that anticipated to be required to pay costs and targeted
levels of dividends. Such excess is available for re-investment.
As indicated above the Company's NAV is calculated half yearly and its
calculation is dependent in part on movement in risk free rates (i.e. government
bond yields) from time to time in the countries where the Company has
investments. The Company is unable to influence changes in such rates.
Inflation also may affect the Company's projected returns either in a positive
or negative manner: generally higher inflation should have a net positive effect
on cashflows arising from a number of the Company's investments.
Finally while the operational performance of the Company's portfolio is
currently good, the possibility of an unanticipated deterioration in performance
in one or more projects can never be excluded with the possible consequence that
cashflow from investments to the Company is adversely affected.
Outlook
The Investment Adviser believes that the outlook for investors remains positive,
for the following reasons:
* Firstly, investment performance from the existing asset portfolio is good and
the Company continues to achieve returns at levels consistent with projections
and hopefully will achieve returns at levels ahead of these in the future.
* Secondly, Governments around the world are continuing to require new
infrastructure projects to be delivered and are in most countries encouraging
the use of private sector investment to fund these.
* Thirdly, the Company continues to be aware of and receive high quality
opportunities to invest in attractive public infrastructure investments in
developed countries around the world. These are arising both as a result of the
continued access provided to the Company to opportunities created through the
development activities of the Amber Infrastructure team and through transactions
sourced from third parties independently by the AFML management team.
* Fourthly, the financial events of the last 12 months have motivated some owners
of assets in the class of assets in which the Company invests to seek to sell
their assets at prices that appear attractive compared to historic pricing in
the sector. The Investment Adviser believes that the Company is well placed to
take advantage of such opportunities
* Finally, as more investors come to appreciate the fact that performance of
stocks like the Company are significantly de-linked from the factors that affect
the general equity markets, the Investment Adviser believes that stocks like the
Company's may become relatively more attractive - particularly for those
investors looking for long term sustainable performance.
Amber Fund Management Limited
27 August 2009
Independent Review Report to the Members of
International Public Partnerships
Limited
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2009 which comprise the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed consolidated
statement of changes in equity, the condensed consolidated statement of
financial position, the condensed consolidated cash flow statement and related
notes 1 to 17. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK & Ireland) 2410, 'Review of Interim Financial
Information performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board. Our work has been undertaken so that we might state to
the company those matters we are required to state to them in an independent
review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company, for
our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
report in accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34 'Interim Financial Reporting'.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 and the
Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority.
Deloitte LLP
Chartered Accountants
Guernsey, Channel Islands
27 August 2009
Condensed Consolidated Income Statement (unaudited)
Six months ended 30 June 2009
+--------------------------------+----------+----------+--------------+--------------+
| | Notes | | Six months | Six months |
| | | | ended 30 | ended 30 |
| | | | June 2009 | June 2008 |
| | | | GBP'000s | GBP'000s |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Continuing operations | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Revenue | 3,4 | | 253,235 | 59,731 |
+--------------------------------+----------+----------+--------------+--------------+
| Cost of sales | | | (246,705) | (54,230) |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Gross profit | | | 6,530 | 5,501 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Investment income | | | 58,226 | 26,332 |
+--------------------------------+----------+----------+--------------+--------------+
| Other gains and losses | 3 | | (3,154) | 2,949 |
+--------------------------------+----------+----------+--------------+--------------+
| Share of results from | | | 952 | 563 |
| associates | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Other operating income | | | 84 | 569 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total other income | | | 56,108 | 30,413 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Finance costs | 3 | | (40,975) | (19,881) |
+--------------------------------+----------+----------+--------------+--------------+
| Operating expenses | 3 | | (10,037) | (8,837) |
+--------------------------------+----------+----------+--------------+--------------+
| Administrative expenses | 3 | | (1,585) | (860) |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total other expenses | 3 | | (52,597) | (29,578) |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Profit before tax | | | 10,041 | 6,336 |
+--------------------------------+----------+----------+--------------+--------------+
| Tax credit/(charge) | 5 | | 1,220 | (1,343) |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Profit for the period from | | | 11,261 | 4,993 |
| continuing operations | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Attributable to: | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Equity holders of the parent | | | 11,709 | 5,102 |
+--------------------------------+----------+----------+--------------+--------------+
| Minority interest - share of | | | (448) | (109) |
| losses1 | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
+--------------------------------+----------+----------+--------------+--------------+
| | | | Pence | Pence |
+--------------------------------+----------+----------+--------------+--------------+
| Earnings per share | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| From continuing operations | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Basic | 7 | | 3.12 | 1.55 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Diluted | 7 | | 3.12 | 1.55 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
1. The minority interest share of losses relates to the 35% holding in the Diabolo
project, the 25% holding in the Alberta Schools project and the 5% holding in
the Amiens (France) Hospital project that are not held by the Group.
Condensed Consolidated Statement of Comprehensive Income (unaudited)
Six months ended 30 June 2009
+--------------------------------+---------+----+----+----+--------------+--------------+
| | | | Six months | Six months |
| | | | ended 30 | ended 30 |
| | | | June 2009 | June 2008 |
| | | | GBP'000s | GBP'000s |
+--------------------------------+--------------+---------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+---------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+---------+--------------+--------------+
| Profit for the period from | | | 11,261 | 4,993 |
| continuing operations | | | | |
+--------------------------------+--------------+---------+--------------+--------------+
| | | | | |
+--------------------------------+--------------+---------+--------------+--------------+
| Other comprehensive income, | | | | |
| net of tax | | | | |
+--------------------------------+--------------+---------+--------------+--------------+
| Net increase in foreign | | | 4,464 | 2,540 |
| exchange translation reserves | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Net decrease in fair value of | | | (4,121) | (5,891) |
| available for sale financial | | | | |
| assets | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Net increase in fair value of | | | 38,330 | 13,424 |
| hedging derivatives | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Other comprehensive income for | | | 38,673 | 10,073 |
| the six months, net of tax | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Total comprehensive income | | | 49,934 | 15,066 |
+--------------------------------+---------+---------+-------------------+--------------+
| | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Total comprehensive income | | | | |
| attributable to: | | | | |
+--------------------------------+---------+---------+-------------------+--------------+
| Equity holders of the parent | | | 45,373 | 15,175 |
+--------------------------------+---------+---------+-------------------+--------------+
| Minority interest | | | 4,561 | (109) |
+--------------------------------+---------+---------+-------------------+--------------+
| | | | | |
+--------------------------------+---------+----+----+----+--------------+--------------+
Condensed Consolidated Statement of Changes in equity (unaudited)
Six months ended 30 June 2009
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | Share | Share | Hedging |Revaluation | Other |Retained | Total | Minority | Total |
| | capital | premium | and | reserves |distribut-able |earnings | |Interests | Equity |
| |Ordinary | account |translation | | reserve | | | | |
| | | | reserves | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| |GBP'000s |GBP'000s | GBP'000s | GBP'000s | GBP'000s |GBP'000s |GBP'000s | GBP'000s |GBP'000s |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Balance at | 37 | 81,758 | (68,635) | (4,152) | 293,506 | (802) | 301,712 | 3,451 | 305,163 |
| 31 December | | | | | | | | | |
| 2008 | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Distribution | - | - | - | - | - | (10,117) | (10,117) | - | (10,117) |
| paid during | | | | | | | | | |
| the period | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Total | - | - | 37,798 | (4,134) | - | 11,709 | 45,373 | 4,561 | 49,934 |
| comprehensive | | | | | | | | | |
| income for | | | | | | | | | |
| the six | | | | | | | | | |
| months | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Balance at | 37 | 81,758 | (30,837) | (8,286) | 293,506 | 790 | 336,968 | 8,012 | 344,980 |
| 30 June | | | | | | | | | |
| 2009 | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | |
+---------------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | Share | Share | Share | Hedging |Revaluation | Other |Retained | Total | Minority | Total |
| | capital | capital | premium | and | reserves |distribut-able |earnings | |Interests | Equity |
| |Ordinary | C | account |translation | | reserve | | | | |
| | | Shares | | reserves | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| |GBP'000s |GBP'000s |GBP'000s | GBP'000s | GBP'000s | GBP'000s |GBP'000s |GBP'000s | GBP'000s |GBP'000s |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Balance at | 30 | - | - | 1,322 | 2,215 | 293,506 | 7,175 | 304,248 | 18 | 304,266 |
| 31 December | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Issue of C | - | 7 | - | - | - | - | - | 7 | - | 7 |
| Shares | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Share | - | - | 83,678 | - | - | - | - | 83,678 | - | 83,678 |
| premium on | | | | | | | | | | |
| issue of C | | | | | | | | | | |
| Shares | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Conversion | 7 | (7) | - | - | - | - | - | - | - | - |
| of C | | | | | | | | | | |
| Shares | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Issue fees | - | - | (1,920) | - | - | - | - | (1,920) | - | (1,920) |
| applied to | | | | | | | | | | |
| share | | | | | | | | | | |
| premium | | | | | | | | | | |
| account | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Minority | - | - | - | - | - | - | - | - | 13,981 | 13,981 |
| share net | | | | | | | | | | |
| assets | | | | | | | | | | |
| acquired | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Distribution | - | - | - | - | - | - | (7,875) | (7,875) | - | (7,875) |
| paid during | | | | | | | | | | |
| the period | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Total | - | - | - | 15,964 | (5,891) | - | 5,102 | 15,175 | (109) | 15,066 |
| comprehensive | | | | | | | | | | |
| income for | | | | | | | | | | |
| the six | | | | | | | | | | |
| months | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| Balance at | 37 | - | 81,758 | 17,286 | (3,676) | 293,506 | 4,402 | 393,313 | 13,890 | 407,203 |
| 30 June | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
| | | | | | | | | | | |
+---------------+----------+----------+----------+-------------+-------------+----------------+----------+----------+-----------+----------+
Condensed Consolidated Statement of Financial Position (unaudited)
As at 30 June 2009
+--------------------------------+----------+----------+--------------+--------------+
| | Notes | | 30 June | 31 December |
| | | | 2009 | 2008 |
| | | | GBP'000s | GBP'000s |
+--------------------------------+----------+----------+--------------+--------------+
| Non-current assets | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Intangible assets | 10 | | 248,266 | 239,879 |
+--------------------------------+----------+----------+--------------+--------------+
| Property, plant and equipment | | | 8,709 | 8,917 |
+--------------------------------+----------+----------+--------------+--------------+
| Interests in associates | 9 | | 45,011 | 50,985 |
+--------------------------------+----------+----------+--------------+--------------+
| Available for sale financial | 11 | | 515,336 | 323,389 |
| assets | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Deferred tax asset | | | 1,807 | 5,025 |
+--------------------------------+----------+----------+--------------+--------------+
| Financial asset loans and | | | 473,406 | 486,692 |
| receivables | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total non-current assets | | | 1,292,535 | 1,114,887 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Current assets | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Available for sale financial | 11 | | 11,660 | 18,827 |
| assets | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Financial asset loans and | | | 8,516 | 7,647 |
| receivables | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Trade and other receivables | | | 14,244 | 13,061 |
+--------------------------------+----------+----------+--------------+--------------+
| Cash and cash equivalents | | | 909,557 | 1,006,818 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total current assets | | | 943,977 | 1,046,353 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total assets | | | 2,236,512 | 2,161,240 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Current liabilities | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Trade and other payables | | | 77,870 | 66,476 |
+--------------------------------+----------+----------+--------------+--------------+
| Current tax liabilities | | | 690 | 290 |
+--------------------------------+----------+----------+--------------+--------------+
| Bank loans | 12 | | 23,196 | 26,170 |
+--------------------------------+----------+----------+--------------+--------------+
| Short-term provisions | | | 852 | 790 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total current liabilities | | | 102,608 | 93,726 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Non-current liabilities | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Bank loans | 12 | | 1,609,637 | 1,528,991 |
+--------------------------------+----------+----------+--------------+--------------+
| Derivative financial | | | 72,106 | 141,150 |
| instruments | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Deferred tax liabilities | | | 107,181 | 92,210 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total non-current liabilities | | | 1,788,924 | 1,762,351 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total liabilities | | | 1,891,532 | 1,856,077 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Net assets | | | 344,980 | 305,163 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
+--------------------------------+----------+----------+--------------+--------------+
| | Notes | | 30 June | 31 December |
| | | | 2009 | 2008 |
| | | | GBP'000s | GBP'000s |
+--------------------------------+----------+----------+--------------+--------------+
| Equity | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Share capital | 13 | | 37 | 37 |
+--------------------------------+----------+----------+--------------+--------------+
| Share premium account | | | 81,758 | 81,758 |
+--------------------------------+----------+----------+--------------+--------------+
| Revaluation reserves | | | (8,286) | (4,152) |
+--------------------------------+----------+----------+--------------+--------------+
| Hedging and translation | | | (30,837) | (68,635) |
| reserves | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Other distributable reserves | | | 293,506 | 293,506 |
+--------------------------------+----------+----------+--------------+--------------+
| Retained earnings | | | 790 | (802) |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Equity attributable to equity | | | 336,968 | 301,712 |
| holders of the parent | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Minority interests | | | 8,012 | 3,451 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
| Total equity | | | 344,980 | 305,163 |
+--------------------------------+----------+----------+--------------+--------------+
| | | | | |
+--------------------------------+----------+----------+--------------+--------------+
The half yearly financial report was approved by the Board of Directors on 27
August 2009.
Keith Dorrian Rupert Dorey
Chairman Director
27 August 2009 27 August 2009
Condensed Consolidated Cash Flow Statement (unaudited)
Six months ended 30 June 2009
+------------------------------------------+---------+---------------+---------------+
| | Notes | Six months | Six months |
| | | ended 30 June | ended 30 June |
| | | 2009 | 2008 |
| | | GBP'000s | GBP'000s2 |
+------------------------------------------+---------+---------------+---------------+
| | | | |
+------------------------------------------+---------+---------------+---------------+
| Net cash (used)/generated in operating | 14 | (7,791) | 3,918 |
| activities | | | |
+------------------------------------------+---------+---------------+---------------+
| | | | |
+------------------------------------------+---------+---------------+---------------+
| Investing Activities | | | |
+------------------------------------------+---------+---------------+---------------+
| Interest received | | 25,657 | 4,212 |
+------------------------------------------+---------+---------------+---------------+
| Dividends received from associates and | | 459 | 188 |
| investments | | | |
+------------------------------------------+---------+---------------+---------------+
| Acquisition of subsidiaries (net of cash | | - | 644,929 |
| acquired) | | | |
+------------------------------------------+---------+---------------+---------------+
| Investment in financial and intangible | | (209,950) | (68,458) |
| assets1 | | | |
+------------------------------------------+---------+---------------+---------------+
| Acquisition of equity in associates & | | - | (26,586) |
| investments | | | |
+------------------------------------------+---------+---------------+---------------+
| Repayment of debt instruments | | 5,216 | - |
+------------------------------------------+---------+---------------+---------------+
| | | |
+----------------------------------------------------+---------------+---------------+
| Net cash (used)/ generated in investing | | (178,618) | 554,285 |
| activities | | | |
+------------------------------------------+---------+---------------+---------------+
| | | |
+----------------------------------------------------+---------------+---------------+
| | | | |
+------------------------------------------+---------+---------------+---------------+
| Financing Activities | | | |
+------------------------------------------+---------+---------------+---------------+
| Proceeds from issue of shares | | - | 83,685 |
+------------------------------------------+---------+---------------+---------------+
| Dividends paid | | (10,117) | (7,875) |
+------------------------------------------+---------+---------------+---------------+
| Share issue/flotation expenses paid | | - | (1,920) |
+------------------------------------------+---------+---------------+---------------+
| Proceeds from borrowings | | 96,930 | 38,909 |
+------------------------------------------+---------+---------------+---------------+
| Loan amendment fee | 12 | (500) | - |
+------------------------------------------+---------+---------------+---------------+
| | | |
+----------------------------------------------------+---------------+---------------+
| Net cash provided by financing | | 86,313 | 112,799 |
| activities | | | |
+------------------------------------------+---------+---------------+---------------+
| | | |
+----------------------------------------------------+---------------+---------------+
| | | | |
+------------------------------------------+---------+---------------+---------------+
| Net (decrease)/increase in cash and cash | | (100,096) | 671,002 |
| equivalents | | | |
+------------------------------------------+---------+---------------+---------------+
| Cash and cash equivalents at beginning | | 1,006,818 | 234,485 |
| of period | | | |
+------------------------------------------+---------+---------------+---------------+
| Exchange gains | | 2,835 | - |
+------------------------------------------+---------+---------------+---------------+
| | | |
+----------------------------------------------------+---------------+---------------+
| Cash and cash equivalents at end of | | 909,557 | 905,487 |
| period | | | |
+------------------------------------------+---------+---------------+---------------+
| | | | |
+------------------------------------------+---------+---------------+---------------+
1 Net cash used in investing activities represents the construction costs
incurred on service concessions under development.
2 The 30 June 2008 comparatives have been restated to reflect the presentation
adopted in the 2008 Annual report.
Cash and cash equivalents of GBP909.6 million at 30 June 2009 (GBP905.5 million
at 30 June 2008) includes GBP875.3 million held by non-recourse PFI project
entities (GBP835.6 million at 30 June 2008), but excludes restricted cash held
in trust for deferred equity contributions of GBPnil (2008 - GBP25.3 million).
Notes to the Condensed set of Financial Statements (unaudited)
Six months ended 30 June 2009
1.General information
International Public Partnerships Limited (formerly Babcock & Brown Public
Partnerships Limited) is an authorised closed ended investment company
incorporated in Guernsey under The Companies (Guernsey) Law, 2008. The address
of the registered office is given on page 29. The nature of the Group's
operations and its principal activities are set out in the Investment Advisor's
Report on pages 9 to 12.
These condensed financial statements are presented in pounds sterling as the
currency of the primary economic environment in which the Group operates and
represents the functional currency of the Group.
The financial information for the year ended 31 December 2008 is derived from
the financial statements delivered to the UK Listing Authority. The financial
information for the year ended 31 December 2008 included in this half-yearly
report does not constitute statutory accounts as defined in The Companies
(Guernsey) Law, 2008. The auditors reported on those accounts, their report was
unqualified, did not draw attention to any matters by way of emphasis, and did
not contain a statement under section 263 (2) and (3) of The Companies
(Guernsey) Law, 2008.
2.Accounting policies
The annual financial statements of International Public Partnerships Limited are
prepared in accordance with IFRS. The set of condensed financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standards 34 - 'Interim Financial Reporting'.
The same accounting policies, presentation and methods of computation are
followed in this set of condensed financial statements as applied in the Group's
latest annual audited financial statements for the year ended 31 December 2008,
with the exception of the amendments made to IAS 1 - 'Presentation of Financial
Statements' and the additional reporting requirements of IFRS 8 - 'Operating
Segments' which are effective for reporting periods commencing on or after 1
January 2009.
The Directors, in their consideration of going concern have reviewed
comprehensive cash flow forecasts prepared by management, which are based on
prudent market data and past experience and believe, based on those forecasts
and an assessment of the Group's committed banking facilities and the available
headroom, that it is appropriate to prepare the financial statements of the
Group on the going concern basis.
In arriving at their conclusion that the Group has adequate financial resources,
the Directors were mindful that the Group had unrestricted cash of GBP34 million
as at 30 June 2009, banking facilities (available for investment in new or
existing projects) which are committed until May 2011 and is forecast to
continue in full compliance with the associated banking covenants.
Certain risks and uncertainties, as detailed in the 2008 Annual Report on pages
33 to 40, which arise as a result of the current economic environment, have been
considered by the Board. The Board has concluded that these do not represent a
significant threat to the Group as its income is generated from a portfolio of
PFI concessions which are supported by government backed cash flows and are
forecast to cover the Group's committed costs.
3.Profit before tax
Profit before tax for the period has been arrived at after charging:
+-----------------------------------------+------------------------------------+------------------------------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | GBP'000s | GBP'000s |
+-----------------------------------------+------------------------------------+------------------------------------+
| Asset management fees | 4,614 | 4,033 |
+-----------------------------------------+------------------------------------+------------------------------------+
| Amortisation of intangible assets | 4,068 | 3,987 |
+-----------------------------------------+------------------------------------+------------------------------------+
| Other operating expenses | 1,355 | 817 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Operating expenses | 10,037 | 8,837 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Audit & accounting | 391 | 335 |
+-----------------------------------------+------------------------------------+------------------------------------+
| Legal fees | 772 | 274 |
+-----------------------------------------+------------------------------------+------------------------------------+
| Bank service charges | 100 | 73 |
+-----------------------------------------+------------------------------------+------------------------------------+
| Other administrative expenses | 322 | 178 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Administrative expenses | 1,585 | 860 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Total finance costs | 40,975 | 19,881 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Total other expenses | 52,597 | 29,578 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
| Depreciation | 208 | 205 |
+-----------------------------------------+------------------------------------+------------------------------------+
| | | |
+-----------------------------------------+------------------------------------+------------------------------------+
Revenue and Cost of Sales has increased significantly as a result of an increase
in construction activity during the current period for projects in construction,
including Royal Childrens Hospital, Orange Hospital and the Diabolo Rail
project, which were not owned by the Group for the full comparative 6 month
period.
Other gains and losses includes GBP5.8 million unrealised foreign exchange
losses (2008 - GBP2.3 million - gain). This loss is partly off set with a credit
of GBP2.2 million (2008 - GBP0.6 million) originating from changes arising in
the cash flows of financial assets in the construction phase.
4.Segment reporting
IFRS 8 - Operating segments was effective for reporting periods from 1 January
2009 and adopts a 'through the eyes of the management' approach to an entity's
reporting of information relating to its operating segments and also requires an
entity to report financial and descriptive information about its reportable
segments.
Based on a review of information provided to the chief operating decision makers
in IPP the Group has identified four reportable segments based on the
geographical risk associated within the Group. The factors used to identify the
Group's reportable segments are centred on the risk free rates and the maturity
of the PFI/PPP industry within each country. Further, foreign exchange and
political risk is identified, as these also determine where resources are
allocated. Management has concluded that the Group is currently organised into
four reportable segments being UK, Europe (non UK), Australia and North America.
These reportable segments are the basis on which the Group reports information
to the chief operating decision makers.
Segment information is presented below.
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | Six months ended 30 June 2009 |
+--------------------+-------------------------------------------------------------------+
| | UK | Europe |Australia segment | North | TOTAL |
| | segment | (non UK) | | America | |
| | | segment | | segment | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | GBP'000s | GBP'000s | GBP'000s | GBP'000s | GBP'000s |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Revenues from | 25,684 | 52,342 | 73,785 | 101,424 | 253,235 |
| external customers | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Interest revenue | 21,246 | 2,263 | 29,159 | 5,558 | 58,226 |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Interest expense | (15,869) | (1,121) | (15,649) | (8,336) | (40,975) |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Net interest | 5,377 | 1,142 | 13,510 | (2,778) | 17,251 |
| revenue | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Depreciation and | 2,526 | 1,070 | 678 | 2 | 4,276 |
| amortisation | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Income from | (339) | 1,284 | 7 | - | 952 |
| associates | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Income tax | (629) | (375) | 346 | (562) | (1,220) |
| (credit)/charge | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Reportable segment | 2,863 | (2,671) | 12,454 | (1,385) | 11,261 |
| profit/(loss) | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Reportable segment | 977,254 | 152,006 | 777,790 | 329,462 | 2,236,512 |
| assets | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Reportable segment | 602,296 | 174,874 | 781,407 | 332,955 | 1,891,532 |
| liabilities | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
| Investments in | 6,466 | 26,526 | 12,019 | - | 45,011 |
| associates | | | | | |
+--------------------+-----------+-----------+-------------------+-----------+-----------+
The UK and Europe segments were previously reported as a single geographical
segment (Europe) in the 2008 Annual report. The amounts reported as at 30 June
2008 have been restated accordingly.
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | Six months ended 30 June 2008 |
+--------------------+-----------------------------------------------------------+
| | UK | Europe |Australia | North | TOTAL |
| | segment | (non UK) | segment | America | |
| | | segment | | segment | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | GBP'000s | GBP'000s | GBP'000s | GBP'000s | GBP'000s |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Revenues from | 20,460 | 10,231 | 9,578 | 19,462 | 59,731 |
| external customers | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Interest revenue | 24,245 | 1,235 | 189 | 663 | 26,332 |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Interest expense | (17,769) | (360) | (1,381) | (371) | (19,881) |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Net interest | 6,476 | 875 | (1,192) | 292 | 6,451 |
| revenue | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Depreciation and | 2,535 | 1,055 | 599 | 3 | 4,192 |
| amortisation | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Income from | - | 243 | 320 | - | 563 |
| associates | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Income tax | 2,301 | (84) | (467) | (407) | (1,343) |
| credit/(charge) | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Reportable segment | 5,863 | (689) | 1,035 | (1,216) | 4,993 |
| profit/(loss) | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Reportable segment | 1,038,594 | 52,697 | 754,934 | 315,015 | 2,161,240 |
| assets | | | | | |
| at 31 December | | | | | |
| 2008 | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Reportable segment | 679,797 | 90,952 | 766,622 | 318,706 | 1,856,077 |
| liabilities at 31 | | | | | |
| December 2008 | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
| Investments in | 6,805 | 28,459 | 15,721 | - | 50,985 |
| associates at 31 | | | | | |
| December 2008 | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+
No inter-segment sales were made for the six months ended 30 June 2009 (none for
the six months ended 30 June 2008).
5. Tax
Income tax for the six month period includes a current period tax charge of
GBP1.1 million (2008 - GBP1.3 million) and a deferred tax credit of GBP2.3
million (2008 - GBP0.2 million charge). Tax is calculated at 28% (2008 - 28.5%)
representing the best estimate of the average annual effective income tax rate
expected for the full year, applied to the pre-tax income of the six month
period.
6.Distributions
The Board has approved an interim distribution for the period 1 January 2009 to
30 June 2009 of 2.775 pence per share.
A summary of the distributions are as follows:
+----------------------+-------------+------------------+--------------+--------------+
| Period | No of | Amount per share | Record Date | Payment Date |
| | Ordinary | | | |
| | Shares | | | |
+----------------------+-------------+------------------+--------------+--------------+
| Incorporation to 30 | 300,000,000 | 3.35 pence per | 28 Sept '07 | 26 Oct '07 |
| June 2007 | | share | | |
+----------------------+-------------+------------------+--------------+--------------+
| 1 July to 31 | 300,000,000 | 2.625 pence per | 14 Mar '08 | 2 May '08 |
| December 2007 | | share | | |
+----------------------+-------------+------------------+--------------+--------------+
| 1 January to 30 June | 374,714,645 | 2.70 pence per | 5 Sept '08 | 3 Oct '08 |
| 2008 | | share | | |
+----------------------+-------------+------------------+--------------+--------------+
| 1 July to 31 | 374,714,645 | 2.70 pence per | 27 Mar '09 | 13 May '09 |
| December 2008 | | share | | |
+----------------------+-------------+------------------+--------------+--------------+
| 1 January to 30 June | 374,714,645 | 2.775 pence per | 11 Sept '09 | 9 Oct '09 |
| 20091 | | share | | |
+----------------------+-------------+------------------+--------------+--------------+
1 This distribution was approved by the board of Directors on 27 August 2009 and
has not been included as liabilities in the Condensed Statement of Financial
Position at 30 June 2009.
7. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings
+---------------------------------------------+----------------+----------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | GBP'000s | GBP'000s |
+---------------------------------------------+----------------+----------------+
| Earnings for the purposes of basic and | 11,709 | 5,102 |
| diluted earnings per share being net profit | | |
| attributable to equity holders of the | | |
| parent | | |
+---------------------------------------------+----------------+----------------+
| | | |
+---------------------------------------------+----------------+----------------+
| | Number | Number |
+---------------------------------------------+----------------+----------------+
| Number of shares | | |
+---------------------------------------------+----------------+----------------+
| Weighted average number of Ordinary Shares | 374,714,645 | 328,325,882 |
| for the purposes of basic and diluted | | |
| earnings per share | | |
+---------------------------------------------+----------------+----------------+
| | | |
+---------------------------------------------+----------------+----------------+
The weighted average number of shares is based on the period from 1 January 2009
to 30 June 2009 and 1 January 2008 to 30 June 2008 for the comparatives.
The denominator for the purposes of calculating both basic and diluted earnings
per share are the same for both periods as the Company had not issued any share
options or other instruments that would cause dilution.
+-------------------------------------------+-----+----------------+----------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | pence/share | pence/share |
+-------------------------------------------------+----------------+----------------+
| | | |
+-------------------------------------------------+----------------+----------------+
| Basic | 3.12 | 1.55 |
+-------------------------------------------------+----------------+----------------+
| | | |
+-------------------------------------------+----------------------+----------------+
| Diluted | 3.12 | 1.55 |
+-------------------------------------------+----------------------+----------------+
| | | |
+-------------------------------------------+-----+----------------+----------------+
8.Acquisition of subsidiaries
There have been no acquisitions of subsidiary companies during the period.
9.Investments in associates
There have been no additional investments in associated companies during the
period.
10.Intangible assets
The increase in the intangible asset balance during the period represents
construction costs capitalised on the bifurcated IFRIC 12 intangible asset net
of amortisation charges.
11.Financial assets
There has been an increase in the total financial asset available for sale
balance from GBP342 million at 31 December 2008 to GBP527 million at 30 June
2009 due to construction activity during the period.
12.Bank loans
There has been no change to the amount drawn under the GBP100 million corporate
facility provided to the Company since 31 December 2008. The amount outstanding
at 30 June 2009 was GBP58.3m. A change in the terms of the facility was
effective from 23 June 2009 resulting in a revised interest rate margin of 175
basis points over Libor. In addition, a GBP500,000 consent fee was required to
be paid to the providers of the corporate facility. The loan facility matures on
8 May 2011 and is secured over all of the assets of the Company.
13.Share Capital
The total number of Ordinary shares in issue at 30 June 2009 was 374,714,645 and
has not changed during the period.
14.Notes to the cash flow statement
+--------------------------------------------+----------------+----------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | GBP'000s | GBP'000s 1 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Profit for the period after taxation | 11,261 | 4,993 |
+--------------------------------------------+----------------+----------------+
| Adjusted for: | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Investment revenue recognised in profit | (25,517) | (4,034) |
| and loss | | |
+--------------------------------------------+----------------+----------------+
| Share of profit from associates | (952) | (563) |
+--------------------------------------------+----------------+----------------+
| Interest on bank loans (finance costs) | 37,996 | 19,881 |
+--------------------------------------------+----------------+----------------+
| Depreciation of plant property and | 208 | 205 |
| equipment | | |
+--------------------------------------------+----------------+----------------+
| Amortisation of intangible assets | 4,068 | 3,987 |
+--------------------------------------------+----------------+----------------+
| Amortisation of loan issue costs | 1,892 | 1,105 |
+--------------------------------------------+----------------+----------------+
| Income tax expense recognised in profit | (1,220) | 1,343 |
| & loss | | |
+--------------------------------------------+----------------+----------------+
| Dividends received from available for | - | 520 |
| sale financial assets | | |
+--------------------------------------------+----------------+----------------+
| Other gains | 3,155 | (2,946) |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Operating cash flows before movements in | 30,891 | 24,491 |
| working capital | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Decrease in receivables | 7,091 | 2,642 |
+--------------------------------------------+----------------+----------------+
| Increase/(decrease) in payables | 1,053 | (4,796) |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Cash generated by operations | 39,035 | 22,337 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Interest paid | (47,115) | (18,372) |
+--------------------------------------------+----------------+----------------+
| Income taxes received/(paid) | 289 | (47) |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Net cash (outflow)/inflow from operating | (7,791) | 3,918 |
| activities | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
1 The 30 June 2008 comparatives have been restated to reflect the presentation
adopted in the 2008 Annual report.
Cash and cash equivalents held by the Group are short-term bank deposits with an
original maturity of three months or less. The carrying value of these assets
approximates their fair value.
15.Contingent liabilities
The Directors have not identified any contingent liabilities at the date of this
report other than those recorded on the balance sheet as short term provisions.
16.Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
During the period, Group companies entered into certain transactions with
related parties who are not members of the Group and who are related parties by
reason of being in the same group as Amber Infrastructure Group Limited, which
is the ultimate holding company of the Investment Advisor, Amber Fund Management
Limited ("AFML").
Mr G Frost is a Director of the Company and also a Director of Amber
Infrastructure Group Limited. Hence, transactions with Amber Infrastructure
Group Limited are considered related party transactions under IAS 24 "Related
Party Disclosures".
On 30 March 2009, the Company announced that Babcock & Brown Investment
Management Limited ("BBIML") had agreed to transfer the business of providing
investment advisory and management services for the Company to the Amber
Infrastructure Group Limited ("Amber") group of companies, a newly formed
investment management group led by Giles Frost, Hugh Blaney and Michael Gregory.
The transfer of the business was conditional upon Amber obtaining the requisite
regulatory approvals and also upon the Company agreeing to the transfer of the
various management contracts from BBIML to Amber. This transfer was concluded on
23 June 2009.
Under the Investment Advisory Agreement ("IAA"), BBIML was appointed to provide
investment advisory services to the Company including advising the Company as to
the strategic management of its portfolio of investments. Following Shareholder
approval, the Company, BBIML and AFML entered into the IAA Deed of Amendment and
Novation to effect the novation of the rights and responsibilities of BBIML
under the IAA to AFML.
Under the terms of the IAA Deed of Amendment and Novation, the Company agreed to
release BBIML from its obligations under the IAA and AFML assumed those
obligations in its place. Subject to the amendments set out in the Circular to
Shareholders dated 23 April 2009, the terms of the IAA have not been varied as a
consequence of the novation of the agreement from BBIML to AFML. In particular,
the fees payable to AFML following the novation are calculated on the same basis
as those payable to BBIML in respect of the period prior to the novation.
The Company was also party to a Financial Advisory Mandate with Babcock & Brown
(UK) pursuant to which Babcock & Brown (UK) was granted the first and last right
of refusal to provide financial advisory and investment banking services to the
Company and its subsidiaries in respect of future acquisitions and disposals,
financing, equity raisings, refinancing, restructuring and certain other related
activities. As part of the novation of the IAA from BBIML to AFML the existing
Financial Advisory Mandate was terminated and its provisions substantially
incorporated into the IAA.
The Limited Partnership agreement between International Public Partnerships GP
Limited (formerly Babcock & Brown Public Partnership GP Limited) and Babcock &
Brown Public Partnerships 2 Sarl was amended to reflect the changes in the
agreements described above.
Upon transfer of the management arrangements to Amber and following the disposal
by Babcock & Brown International Pty Limited of its holding of shares in the
Company, which was announced on 1 April 2009, and the conclusion of the
Transitional Services Agreement, the Company will have no association with the
Babcock & Brown group.
Related party transactions arose in the period or the prior period with the
following entities all of whom have Amber Infrastructure Group Limited (or
formerly Babcock & Brown Limited) as their ultimate holding company:
+----+-----------------------------------------------------------------------------------------------+
| a | International Public Partnerships GP Limited (formerly Babcock & Brown Public Partnerships GP |
| | Limited) is the General Partner of the limited partnership through which the Company holds |
| | its investment and is entitled to a Base Priority Profit Share and an Incentive Priority |
| | Profit Share. The amount reflected in the income statement for the period and in the |
| | statement of financial position at 30 June 2009 is GBP2.9 million (2008 - GBP2.6 million). |
+----+-----------------------------------------------------------------------------------------------+
| b | In addition, International Public Partnerships GP Limited has been appointed by International |
| | Public Partnerships Limited Partnership (the "Partnership") (formerly Babcock & Brown Public |
| | Partnerships Limited Partnership) to manage and operate the Partnership and its investments. |
| | The amount reflected in the income statement for the operator fee in the period and in the |
| | statement of financial position at 30 June 2009 is GBP250,000 (2008 - GBP200,000). |
+----+-----------------------------------------------------------------------------------------------+
| c | Amber Asset Management Holdings Limited (registered in England and Wales) is a related party |
| | of the Group and its subsidiary companies have various asset management agreements with the |
| | underlying PFI concession companies of the Group to provide asset management services. The |
| | amount reflected in the income statement and in the statement of financial position at 30 |
| | June 2009 for the period is GBP1.4 million (2008 - GBP1.2 million). |
+----+-----------------------------------------------------------------------------------------------+
| d | International Public Partnerships Limited has not provided any loans to any member of the |
| | Amber Infrastructure Group or the Babcock & Brown Limited group of companies. |
+----+-----------------------------------------------------------------------------------------------+
17. Events after the balance sheet date
On 29 July 2009, Numis Securities Limited was appointed as broker to
International Public Partnerships Limited.
On 30 July 2009, the Group acquired an additional 13% equity interest (plus an
additional 13% interest in subordinated debt) in Catalyst Brescia S.r.l, a
limited company incorporated in Italy that is involved in the refurbishment and
enlargement of two wings of Brescia Hospital, for EUR1.0 million.
On 6 August 2009 Mr John Whittle was appointed as an Independent Non- Executive
Director of International Public Partnerships Limited.
+----------------------------------------+---------------------------------------------------------------+
| Directors and Advisors |
| |
| Directors |
+--------------------------------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------------------------------+
| Keith Dorrian | Independent Non- Executive Chairman |
+----------------------------------------+---------------------------------------------------------------+
| Rupert Dorey | Independent Non- Executive Director |
+----------------------------------------+---------------------------------------------------------------+
| Giles Frost | Non- Executive Director |
+----------------------------------------+---------------------------------------------------------------+
| Carol Goodwin | Independent Non- Executive Director |
+----------------------------------------+---------------------------------------------------------------+
| John Whittle | Independent Non- Executive Director (appointed 6 August 2009) |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Registered Office | Heritage Hall |
+----------------------------------------+---------------------------------------------------------------+
| | PO Box 225, Le Marchant Street, |
+----------------------------------------+---------------------------------------------------------------+
| | St Peter Port, |
+----------------------------------------+---------------------------------------------------------------+
| | Guernsey, Channel Islands, GY1 4HY |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Administrator & | Heritage International Fund Managers Limited |
+----------------------------------------+---------------------------------------------------------------+
| Company Secretary | Heritage Hall, PO Box 225, |
+----------------------------------------+---------------------------------------------------------------+
| | Le Marchant Street, St Peter Port, |
+----------------------------------------+---------------------------------------------------------------+
| | Guernsey, Channel Islands, GY1 4HY |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Investment Advisor | Amber Fund Management Limited |
+----------------------------------------+---------------------------------------------------------------+
| | 14th Floor |
+----------------------------------------+---------------------------------------------------------------+
| | 5 Aldermanbury Square |
+----------------------------------------+---------------------------------------------------------------+
| | London EC2V 7HR |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Auditors | Deloitte LLP |
+----------------------------------------+---------------------------------------------------------------+
| | P.O. Box 137, Regency Court, Glategny Esplanade, |
+----------------------------------------+---------------------------------------------------------------+
| | St Peter Port, |
+----------------------------------------+---------------------------------------------------------------+
| | Guernsey, Channel Islands, GY1 3HW |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Legal Advisor | Ozannes |
+----------------------------------------+---------------------------------------------------------------+
| | 1 Le Marchant Street |
+----------------------------------------+---------------------------------------------------------------+
| | St Peter Port, |
+----------------------------------------+---------------------------------------------------------------+
| | Guernsey, Channel Islands GY1 4HP |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Broker | Numis Securities Limited |
+----------------------------------------+---------------------------------------------------------------+
| | The London Stock Exchange Building |
+----------------------------------------+---------------------------------------------------------------+
| | 10 Paternoster Square |
+----------------------------------------+---------------------------------------------------------------+
| | London EC4M 7LT |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Bankers | Royal Bank of Scotland International |
+----------------------------------------+---------------------------------------------------------------+
| | 1 Glategny Esplanade, |
+----------------------------------------+---------------------------------------------------------------+
| | St Peter Port, |
+----------------------------------------+---------------------------------------------------------------+
| | Guernsey, Channel Islands GY1 4BQ |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| | |
+----------------------------------------+---------------------------------------------------------------+
| Website | www.internationalpublicpartnerships.com |
+----------------------------------------+---------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QQLFLKVBEBBQ
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