TIDMINPP
RNS Number : 1232Z
International Public Partnership Ld
24 May 2016
International Public Partnerships Limited
Portfolio Update
For the period 1 January 2016 to 20 May 2016
24 May 2016
International Public Partnerships Limited ('INPP', 'the
Company'), a listed infrastructure investment company which invests
in global public infrastructure projects, today issues the
following update for the period 1 January 2016 to 20 May 2016.
Highlights
-- The Company's portfolio of 122 public infrastructure
investments are performing fully in line with expectations;
-- The Company reported an increase in Net Asset Value ('NAV')
per share to 130.2 pence at its 2015 Full Year Results for the
period to 31 December 2015;
-- Inflation linkage in the portfolio remains strong such that a
1.00% increase in inflation leads to a 0.76% increase in return(1)
;
-- A second half year 2015 dividend of 3.225 pence per share was
declared on 24 March 2016 and is expected to be paid on 27 May 2016
with a full year 2015 dividend(1) of 6.45 pence per share (up 2.5%
from full year 2014);
-- A minimum target dividend for the 2016 financial year of 6.65
pence per share has been set and in 2017 the minimum target
dividend will be 6.82 pence per share, an average increase of
c.2.5%(2) or greater in each year;
-- Considerable progress is being made on pipeline opportunities
with c.GBP53 million of investments made or committed during the
period, including in the Westermost Rough offshore transmission
project, the fifth batch of the Priority Schools Building
Programme, drawdowns as part of its investment in the Thames
Tideway Tunnel, as well as a commitment to invest in Gold Coast
Light Rail;
-- The Company has an attractive pipeline of new opportunities
across the UK, Northern Europe, Australia and North America, and
will continue to deploy its commitment in the Thames Tideway
Tunnel;
-- The Company has delivered a Total Shareholder Return
(comprising share price growth and aggregate dividends) since IPO
in November 2006 to 20 May 2016 of 129.29% or 9.09% on an
annualised basis(3) .
Rupert Dorey, Chairman of International Public Partnerships
Limited, commented: "The first quarter of 2016 has been another
encouraging period in which the Company has made four significant
investments in the electricity transmission, education and
transport infrastructure sectors, respectively. The Company and its
Investment Adviser also reached a milestone in the completion of
the Priority Schools Building Programme, helping to fund
improvements in a total of 46 UK schools.
Having delivered a consistent 2.5% increase in the second half
year dividend for 2015, we look forward to targeting similar
successes in the next period."
Portfolio performance
The Company's portfolio of assets continues to perform well with
revenues and cash receipts in line with management forecasts and
levels of satisfaction remaining high amongst public sector
clients.
The portfolio currently has 9.3% of assets still in physical
construction although activities relating to commissioning,
snagging and the transition to full operations are ongoing. The
weighted average concession life of the portfolio is currently 28
years with a weighted average (non-recourse) debt tenor of 26
years.
As at 20 May 2016, the portfolio comprised economic interests in
122 projects with a geographical split as detailed below:
Geographic 20 May Sector breakdown 20 May
Split 2016 2016
% %
---------------- ------- -------------------- -------
United Kingdom 70.3% Energy Transmission 29.5%
---------------- ------- -------------------- -------
Belgium 11.7% Education 21.9%
---------------- ------- -------------------- -------
Australia 7.0% Transport 20.2%
---------------- ------- -------------------- -------
Germany 3.9% Health 7.0%
---------------- ------- -------------------- -------
Canada 2.9% Waste Water 6.0%
---------------- ------- -------------------- -------
United States 2.6% Courts 5.7%
---------------- ------- -------------------- -------
Ireland 1.4% Police Authority 3.4%
---------------- ------- -------------------- -------
Italy 0.2% Military Housing 2.6%
---------------- ------- -------------------- -------
Custodial 0.8%
---------------- ------- -------------------- -------
Government
Offices/Other 2.9%
---------------- ------- -------------------- -------
Investment 20 May Project Stake 20 May
Life 2016 2016
% %
------------- ------- -------------- -------
<20 years 52.4% 100% 67.4%
------------- ------- -------------- -------
20-30 years 22.7% 50% - 100% 4.5%
------------- ------- -------------- -------
30> years 24.9% <50% 28.1%
------------- ------- -------------- -------
Note: This breakdown is based on the fair value market valuation
of the Group's investments calculated utilising discounted cash
flow methodology, consistent with European Private Equity and
Venture Capital Association (EVCA) guidelines.
Gearing and cash position
The Company has approximately GBP141 million of uncommitted
credit available under its GBP300 million revolving credit facility
(after taking into account its future investment obligations into
new projects including its investment commitments to the Thames
Tideway Tunnel project). The Company has all but fully deployed the
capital it raised in November 2015, with c.GBP2 million available
for investment.
Acquisitions
During the period to 20 May 2016, c. GBP49 million of investment
was made into three projects, with confirmation of committed
investment into a fourth.
Westermost Rough offshore transmission project
Transmission Capital Partners, the consortium comprising INPP,
Amber Infrastructure and Transmission Investment reached financial
close on its sixth offshore transmission project.
The Company made a GBP26.8 million investment for 100% of the
equity and subordinated debt of the transmission cable connection
to the Westermost Rough Offshore Wind Farm.
Priority Schools Building Programme 'Aggregator'
During the period the Amber Consortium of which INPP is part,
invested GBP5.1 million into the fifth and final batch of schools
being delivered through the Priority Schools Building Programme
('PSBP').
Additional investment in Gold Coast Light Rail project
The Company committed to make a further approximately A$7
million (c.GBP3.8 million) investment into a 7.3km extension to the
Gold Coast Light Rail project in Queensland, Australia. The
commitment is supported by a letter of credit provided by the
Company.
The Company has secured a 26.7% equity stake in the extension
alongside Plenary Group, Marubeni Group, Palisade, Keolis and Aveng
Group. Construction is expected to reach completion at the end of
2017, with operations commencing in early 2018 in time for the
opening of the Gold Coast Commonwealth Games in April.
Tideway project update
In the year to date the Company has invested GBP17.1 million
into the Tideway project and has an additional c.GBP134 million to
be committed by early 2018 (currently supported by a letter of
credit) of which c.GBP53 million is expected to be committed during
2016.
During the period Tideway made good progress towards
commencement of construction and the Company recently announced a
35-year GBP700 million loan with the European Investment Bank in
addition to the GBP1 billion in funding already in place.
Top Ten Investments
The Top Ten Investments of the Company in terms of investment
made as at 20 May 2016 were:
Rank Asset Investment
Fair Value
------ ------------------------------ -------------
1 Lincs Offshore Transmission 13.5%
------ ------------------------------ -------------
2 Diabolo Rail Link 11.7%
------ ------------------------------ -------------
3 Ormonde Offshore Transmission 10.1%
------ ------------------------------ -------------
4 Thames Tideway Tunnel 5.9%
------ ------------------------------ -------------
5 Angel Trains 4.8%
------ ------------------------------ -------------
6 Royal Children's Hospital 3.3%
------ ------------------------------ -------------
7 BeNEX Rail 3.0%
------ ------------------------------ -------------
8 Northampton Schools 2.6%
------ ------------------------------ -------------
9 US Military Housing 2.6%
------ ------------------------------ -------------
Hereford & Worcester
10 Courts 2.5%
------ ------------------------------ -------------
Valuation
The Company's investment portfolio valuation is revised
semi-annually by the Investment Advisor, and presented for approval
by the Directors and reviewed by the Company's auditors, Ernst
& Young. In addition, the Company provides quarterly NAV
guidance predominantly based on movements over the period in the
government bond yields of countries where the Company holds
investments and changes to relevant foreign exchange rates.
This quarterly guidance does not include any changes (positive
or negative) in NAV arising from matters specific to individual
investments (e.g. 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.), although any material project specific
issues occurring in the period can be expected to be reported on
separately in this quarterly update. The directors' valuations
published with the Company's full and interim results are reviewed
by the Company's auditors and updated to reflect both
project-specific and macroeconomic factors.
Since 31 December 2015 (NAV: 130.2 pence per share), government
bond rates in all of the jurisdictions in which the Company invests
have decreased. The decrease in these rates could, other things
being equal, be expected to have a positive effect on the Company's
NAV.
Over the same period, the GBP forward curve has weakened against
the four currencies to which the Company has exposure, particularly
the Euro. The weakened foreign exchange position of GBP could be
expected, other things being equal, to have a positive effect on
the Company's NAV.
Based on these two macroeconomic updates alone the NAV could be
expected to have increased since 31 December 2015.
In the course of its normal practice the Company also reviews
market based evidence (market intelligence and its own experience
of the secondary market for assets such as those owned by the
Company) in its assessment of NAV. Since 31 December 2015 the
Company has seen continued evidence of rising valuations for assets
of the type it owns in all the major countries where it invests.
The extent of the positive impact which this is likely to have on
NAV is being considered and will be reported on more fully at the
time of the Company's interim results.
Distributions
On 24 March 2016, the 2015 second half year distribution of
3.225 pence per share was declared for shareholders on the register
as at 15 April 2016. This distribution was for the period 1 July
2015 to 31 December 2015 and was a c.2.5% 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 will be made on 27 May 2016.
The Board of Directors have previously announced minimum targets
for the 2016 and 2017 distributions of 6.65 pence per share and
6.82 pence per share (respectively), providing additional guidance
to investors as to the Company's future intentions. The targeted
payments would represent a minimum c.2.5% increase on the preceding
distributions and would continue to be in line with the growth
target indicated at the time of the Company's IPO in 2006.(2)
Investment environment and outlook
Performance of the portfolio in 2016 to date has continued to be
positive and the Company remains confident in its ability and that
of its Investment Adviser to continue to identify and execute new
investments in core markets to strengthen the portfolio further.
This includes both infrastructure assets within the primary PPP/PFI
space and regulated infrastructure assets.
Key areas of current activity within the Company and/or its
Investment Adviser (or associates) include:
-- Continued activities in the area of UK offshore transmission
where the Company has recently closed its sixth project, Westermost
Rough OFTO and is actively bidding on each new opportunity as it
comes to market;
-- Enhanced access to US P3 opportunities, particularly through
the relationship with Amber/Hunt;
-- Other UK and European primary investment opportunities (for
instance in the regulatory, healthcare and judicial sectors);
-- Acquisition of additional investments in projects where the
Company already has an investment. Typically these will arise under
pre-emption and similar rights;
-- Appropriately priced proposals from third parties seeking to
dispose of projects meeting the Company's investment criteria which
have synergies with the Company's existing portfolio.
Where new investment opportunities do arise the Company will
continue to be selective in those acquisitions which it brings into
the portfolio to ensure that they bring long-term value to
shareholders.
Finally, and notwithstanding the comments above and the
opportunities listed below, it should be noted that the Company's
projected economic performance is not dependent upon making future
investment commitments in order to deliver its projected returns.
These can be delivered in the Company's view from its existing
assets. Further investment opportunities will, first and foremost,
be judged based on whether they add value and quality to the
Company's existing portfolio.
Notes to Editors:
While it is no longer a requirement under the Disclosure and
Transparency Rules for the Company to issue Interim Management
Statements, the Board believes it is in the interest of
shareholders for the Company to provide quarterly updates in
addition to its half year reports.
1. In aggregate, the weighted return of the portfolio would be
expected to increase by 0.76% per annum in response to a 1% per
annum inflation increase across the whole portfolio over the
currently assumed inflation rates.
2. Dividend targets are targets and not profit forecasts and
there can be no guarantee they will be achieved. Projections are
based on the current individual asset financial models and may vary
in the future.
3. Source: Bloomberg, share price appreciation plus income.
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/Mitch Barltrop +44 (0) 20 3727 1046/1039
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 North America. INPP
seeks to provide its shareholders with both a long-term yield and
capital growth through investment across both construction and
operational phases typically of 25-40 year concessions.
Amber Infrastructure Group ('Amber') is the Investment Advisor
to INPP and consists around 90 dedicated staff who manage, advise
on and originate projects for INPP.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
This update 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.
The potential acquisition by the Company of any of the
investments referred to in this quarterly update 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
PFUSEASALFMSELI
(END) Dow Jones Newswires
May 24, 2016 04:50 ET (08:50 GMT)
International Public Par... (LSE:INPP)
Historical Stock Chart
From Jun 2024 to Jul 2024
International Public Par... (LSE:INPP)
Historical Stock Chart
From Jul 2023 to Jul 2024