TIDMINPP
RNS Number : 9461E
International Public Partnership Ld
17 May 2013
International Public Partnerships Limited
Interim Management Statement
For the period 1 January to 16 May 2013
17 May 2013
International Public Partnerships Limited ("INPP", "the
Company"), a listed infrastructure investment company which invests
in global public infrastructure projects including those developed
under public private partnership ("PPP"), private finance
initiative ("PFI"), regulated asset and similar procurement
methods, today issues the following Interim Management Statement
for the period 1 January to 16 May 2013.
Highlights
-- The portfolio of 122 public infrastructure investments
continues to perform in line with expectations
-- In the period covered by this IMS, the Company announced its
2012 Annual Result for period to 30 December 2012 reporting an
increase in Net Asset Value ("NAV") per share to 121.0 pence (31
December 2011: 116.9 pence per share)
-- Since that time the portfolio has continued to perform well
and assets in construction continue to progress as planned. At the
macro economic level, favourable foreign exchange movements have
offset the marginal net increase in government bond yields observed
since 31 December 2012. This could be expected to lead to a slight
increase in NAV compared to 31 December 2013 NAV, other things
being equal
-- A second half year 2012 dividend of 3.0 pence per share was
declared on 28 March 2013 and is expected to be paid on 14 June
2013. A full year 2013 target dividend(1) of 6.15 pence per share
was announced (up 2.5% from full year 2012)
-- An additional GBP46.5 million of new capital was raised from
investors during January and April/May by means of tap issuance to
support the near term pipeline of opportunities and to satisfy
investor demand that could not be met through the secondary
market
-- The 25% interest minority interest in the Alberta Schools
project in Canada not already owned by the Company was acquired for
GBP7.5 million in April 2013. The Company now owns 100% of this
asset
-- The Company has delivered a Total Shareholder Return
(comprising share price growth and aggregate dividends) since IPO
in November 2006 to 16 May 2013 of 79.9%(2)
Portfolio performance
The Company's portfolio of 122 assets continues to perform well
with revenues, cash receipts in line with management forecasts and
levels of satisfaction remaining high amongst public sector
clients.
Good progress was made on the circa 9% of assets in the
portfolio that are currently under construction. The Company
recently hosted a very successful Investor Day at the new Liverpool
Central Library project showcasing the new facility and the
Company's leading role in its development. Pleasingly, the GBP50
million refurbished library is being opened to the public for the
first time today.
Valuation benefits from successful completion of the
construction phases of these projects are expected to be realised
throughout the next year as sustained operational performance is
demonstrated. All construction currently within the portfolio is
due to be completed by December 2014.
As at 16 May 2013, the portfolio comprised economic interests in
122 projects with a geographical split as detailed below:
Location Number Sectors represented 16 May 2013 31 December
of projects 2013
%(a) % (a)
---------------- ------------- ----------------------- ------------ ------------
Health
Govt accommodation
Courts
Police Authority
Education
United Kingdom 107 Offshore Transmission 61 62
---------------- ------------- ----------------------- ------------ ------------
Health
Roads/Tunnels
Health/Custodial
Australia 7 Entertainment 14 14
---------------- ------------- ----------------------- ------------ ------------
Belgium 1 Transport 13 12
---------------- ------------- ----------------------- ------------ ------------
Education
Canada 2 Courts 6 5
---------------- ------------- ----------------------- ------------ ------------
Transport
Germany 2 Education 4 4
---------------- ------------- ----------------------- ------------ ------------
Ireland 1 Courts 2 2
---------------- ------------- ----------------------- ------------ ------------
France 1 Health <1 <1
---------------- ------------- ----------------------- ------------ ------------
Italy 1 Health <1 <1
---------------- ------------- ----------------------- ------------ ------------
a. This breakdown is based on the fair value market valuation of
the Group's investments calculated utilising discounted cash flow
methodology, adjusted for European Private Equity and Venture
Capital Association (EVCA) guidelines.
Top Ten Investments
The Top Ten Investments of the Company as at 16 May 2013
were:
Investment %
-------------------------------------- -----
Ormonde offshore energy transmission
project 14.3
-------------------------------------- -----
Diabolo Project 12.7
-------------------------------------- -----
Building Schools for the Future
portfolio(3) 8.5
-------------------------------------- -----
Royal Children's Hospital 6.5
-------------------------------------- -----
Hereford & Worcester Magistrates
Courts 4.4
-------------------------------------- -----
BeNEX 4.2
-------------------------------------- -----
Alberta Schools 4.1
-------------------------------------- -----
Northampton Schools 3.9
-------------------------------------- -----
Strathclyde Police Training Centre 3.3
-------------------------------------- -----
Orange Hospital 3.0
-------------------------------------- -----
Valuation
The Company reports its Net Asset Value (NAV) every six months
when it publishes its full and interim results each year. In
addition, the Company provides quarterly NAV guidance predominantly
based on movements in the government bond yields of countries where
INPP holds investments and changes to relevant foreign exchange
rates. This quarterly guidance does not reflect any changes
(positive or negative) in NAV arising from matters specific to
individual investments (eg changes in asset specific risks, timing
implications of delayed or accelerated cashflows, changes to
cashflow projections and assumptions, indexation adjustments due to
changes in inflation etc). Such matters are reflected in the half
year directors' valuations published with the Company's full and
interim results.
Since 31 December 2012 (NAV: 121.0 pence per share), government
bond yield movements have been mixed, though on a weighted average
portfolio basis we have seen a slight net increase. The net
increase in these rates could, other things being equal, be
expected to have a negative effect on the Company's NAV.
Over the same period, foreign exchange ("FX") movements have
seen GBP weaken against the three currencies to which the Company
has exposure. The weakened GBP could, other things being equal, be
expected to have a positive effect on the Company's NAV.
Overall, the negative effects of the government bond yield
movements on NAV would be outweighed by the positive effects of the
FX movements. Based on these two macroeconomic updates alone (other
things being equal) the NAV could be expected to have increased
slightly since 31 December 2012.
In the course of its normal practice the Company also reviews
market based evidence (market intelligence and its own experience
bidding in the secondary market) in its assessment of NAV. Since 31
December 2012, assets comparable to those owned by the Company have
shown increasing evidence of valuation shifts broadly in line with
the cumulative net effect of such macroeconomic factors over recent
periods.
Distribution
On 28 March 2013, the 2012 second half year distribution of 3.0
pence per share was declared for shareholders on the register as at
26 April 2013. This distribution was for the period 1 July 2012 to
31 December 2013 and was a 2.6% increase on the distribution paid
in the previous corresponding period.
The Scrip Dividend Alternative Circular applicable to that
dividend was available to investors and the associated scrip
allotment or dividend payment is expected to be made on 14 June
2013.
The Board also confirms that the target distribution from income
received in the year 1 January 2013 to 31 December 2013 of 6.15
pence per share, which represents a 2.5% increase over the previous
year and a sixth consecutive annual increase. The Board continues
to expect to increase distributions in future years at least in
line with its current long term inflation assumption of 2.5% per
annum(4) .
Capital raisings, gearing and cash position
During the period, a total of GBP46.5 million of new capital was
raised from investors by means of tap issuance. GBP40.0 million was
raised in January to support the near term pipeline of
opportunities and an additional GBP6.5 million was issued during
April/May to satisfy demand for the Company's shares that cannot be
met through the secondary market, noting that the Company's share
price has been trading at a premium to the prevailing NAV per share
in the period since the start of 2013..
As a result and taking into account the recent Alberta Schools
acquisition the Company had approximately GBP85 million of cash
available for investment as at 16 May 2013. In addition, the
Company has GBP100 million of capacity within its corporate debt
facility available for re-draw by the Company, representing 100% of
the facility.
Outlook and Pipeline
The Company's portfolio continues to perform well and the
Company is confident that there continues to be a number of
attractive infrastructure opportunities in the UK and in the
overseas jurisdictions in which the Advisor is represented and
knowledgeable. These include the preferred bidder and other
preferential positions held by the Company (referred to in more
detail below) which have a combined investment value anticipated to
exceed the amount of cash and debt facility currently available to
the Company.
The recent commitments to infrastructure procurement made by the
UK Government and governments in other jurisdictions in which we
invest also support the longer term likelihood of a continued
supply of such opportunities. Additionally, we are encouraged by
continued investor demand for the infrastructure sector.
The Company continues to review opportunities brought to it by
third party developers and their advisers. While these are reviewed
on their individual merits, the Company's current analysis is that
some of these opportunities as unattractive at the prices being
sought.
More positively this trend may well have positive connotations
for the value of the Company's existing portfolio. It also
illustrates how better value for shareholders may be obtained by
investing in off-market transactions such as those developed from
earlier stages by the Company's Investment Adviser. A number of the
opportunities referred to below fall into this category.
Areas of particular focus for the Company currently include(5)
:
-- Continued application in the area of UK offshore transmission
where the Company has a strong market leading position, including
being part of a consortium appointed preferred bidder in a fifth
project, which is expected to reach financial close during the 2013
financial year;
-- Delivery of additional investments through pre-emptive
positioning within the BSF investment portfolio and follow-on
investments emanating from the existing portfolio of assets;
-- The wider regulated utility market both in the UK and
elsewhere, where attractive returns can be projected from assets
with low risk profiles;
-- Social infrastructure projects in Germany, Canada, Australia
and elsewhere, which conform to the existing risk profile within
the Company's portfolio;
-- Opportunities arising in the UK health and social care sphere
where an active pipeline of small to medium sized opportunities
continue to exist;
-- Opportunities that arise from re-pricing of capital in the debt capital markets; and
-- Proposals from third parties seeking to dispose of assets
meeting the Company's investment criteria.
Overall, we continue to be optimistic about the prospects for
the Company, both in terms of the performance of its existing
assets and the opportunity to add high quality assets to the
portfolio in the future.
End
For further information:
Erica Sibree +44 (0)20 7939 0558
Amber Fund Management Limited
Nick Westlake/Hugh Jonathan +44 (0)20 7260 1345/1263
Numis Securities
Ed Berry/Harry Stein +44 (0)20 7269 7297/7141
FTI Consulting
About International Public Partnerships (INPP):
International Public Partnerships (INPP) is a listed
infrastructure investment company which invests in global public
infrastructure projects developed under the public private
partnerships (PPP), private finance initiative (PFI), regulated
asset and other similar procurement methods.
Listed in 2006, INPP is a long-term investor in 122 social and
transport infrastructure projects, including schools, hospitals,
courts, police headquarters, transport and utility and transmission
projects in the U.K., Europe, Australia and Canada. INPP seeks to
provide its shareholders with both a long-term yield and capital
growth through investment across both construction and operational
phases of 25-40 year concessions.
Amber Infrastructure Group (Amber) is the Investment Advisor to
INPP and consists of more than 80 dedicated staff who manage,
advise on and originate projects for INPP.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
This interim management statement has been prepared solely to
provide additional information to shareholders as a body to meet
the relevant requirements of the UK Listing Authority's Disclosure
and Transparency Rules and the interim management statement should
not be relied on by any other party or for any other purpose. It
does not constitute an invitation to subscribe for or otherwise
acquire or dispose of securities in the Company (defined below) in
any jurisdiction. The information contained in this interim
management statement about the Issue is subject to updating and
amendment, and does not purport to be full or complete. No reliance
may be placed for any purpose on the information contained in this
interim management statement in connection with the Issue or the
purchase of securities in the Company. This interim management
statement does not constitute or form part of any offer to issue or
sell, or any solicitation of any offer to subscribe or purchase,
any investments nor shall it (or the fact of its distribution) form
the basis of, or be relied on in connection with, any contract or
commitment whatsoever. Any decision to purchase shares should be
made solely on the basis of the information contained in the final
prospectus issued by the Company.
The potential acquisition by the Company of any of the
investments referred to in this interim management statement is
subject, among other things, to those projects reaching legal
completion and to the Company having conducted satisfactory due
diligence in relation to such investments. Although the Company has
a right of first refusal for investments disposed of by the Amber
group, any acquisitions will be subject to agreement having been
reached between the Company and the relevant counterparty as to the
terms of the acquisitions. In addition, some of the investment
opportunities are those where Amber or the Company is currently
undergoing a bidding process. There is no guarantee that they will
be successful in any such bidding process. There is therefore no
guarantee that any of the investments will be acquired and if they
are on what terms.
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, International Public Partnerships and its
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.
(1) Note this is a dividend target and not a profit forecast
(2) Source: Bloomberg
(3) This represents the minority shareholdings only. (4) Provided for guidance only. This is a target and not a profit forecast. There can be no guarantee that any
distribution will be paid.
(5) Subject to due diligence etc. There is no certainty such assets will be acquired by INPP
This information is provided by RNS
The company news service from the London Stock Exchange
END
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