TIDMINPP
RNS Number : 6373H
International Public Partnerships
26 March 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH
AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR
TO U.S. PERSONS. THE INFORMATION CONTAINED HEREIN DOES NOT
CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION.
** Please note new analyst and investor conference call details
at the end of this notice
26 March 2020
INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
('INPP', the 'Company')
MARKET UPDATE FOR THE TWELVE MONTHSED 31 DECEMBER 2019
HIGHLIGHTS
-- The Company's final results for the year ending 31 December
2019 have been postponed due to the request by the Financial
Conduct Authority ('FCA') and the Financial Reporting Council
('FRC') for all listed companies to delay the issuance of
preliminary results for at least two weeks.
-- Prior to this the Company was on track to publish its full
audited results for the full year to 31 December 2019 as scheduled
for today (26 March 2020). The Board continues to be ready to
publish these and will do so as soon as possible, once this
moratorium has been lifted.
-- The Company believes that its business model and the
diversity of the portfolio continue to offer a significant degree
of protection to shareholders and it is reassured by the
operational performance of its assets which has to date continued
as expected.
-- The Company's Investment Adviser, Amber Infrastructure Group
('Amber') and its asset management team are fully resourced and are
actively managing portfolio performance. During this time of
uncertainty, the team has been working to continue to provide
clients with the support they need, whilst ensuring the health and
safety of staff.
-- 2019 was a good year for the Company with a 10.3% increase in
Net Asset Value(i) ('NAV') to GBP2.4 billion (31 December 2018:
GBP2.2 billion) and an increase in NAV per share(i) to 150.6 pence
(31 December 2018: 148.1 pence per share). The total NAV return of
6.3%(ii) was consistent with the Company's expectations for the
year. The Company expects to declare a dividend for the second half
of 2019 in the amount previously targeted at the same time as it
publishes its 2019 full year results.
-- The Company is in a strong position with a GBP400 million
revolving debt facility (maturing in July 2021) of which only
c.GBP9.5 million is currently utilised. The Company currently also
has c.GBP70 million of cash available with additional cash reserves
held within the underlying investments.
OPERATIONAL UPDATE
-- The Company reaffirms that the operational performance of its
investment portfolio continues as expected.
-- The Covid-19 pandemic has, to date, had no material impact on
the Company's cashflow from its investment portfolio. However, the
Company notes that the Covid-19 pandemic is unprecedented and its
full impact on the Company over time cannot be ascertained at this
time.
-- The Company notes that there are a range of contingent risks
stemming from the Covid-19 pandemic. These include, but may not be
limited to, staff shortages and supply chain breakdowns and similar
risks. The Company will continue to monitor and where possible take
action to avoid or mitigate the consequence of any such impacts on
its portfolio.
-- The Company believes that its investments benefit from a
range of protective mechanisms to mitigate the consequences of
adverse events. These include contractual and regulatory mechanisms
together with project insurances.
-- However, the Company notes that even where these mitigants
apply they may not work in "real time" which might result in
changes to the currently assumed profile and/or timing of cash
receipts by the Company from specifically affected assets.
-- The Company will continue to monitor the performance of all
its assets but notes the following:
o With respect to the Thames Tideway Tunnel (9.2% of NAV(i) )
the Company notes Tideway's announcement on 25 March 2020 that,
based on the government's direction, it has now temporarily reduced
operational activities and is continuing only with essential and
safety-critical works. As a result, the Company believes that some
degree of extra cost and delay is likely. The Tideway project
documentation includes provisions to share additional costs between
stakeholders (including INPP), up to a threshold beyond which they
are borne by Government.
o The Company's investment in the Diabolo rail link to Brussels
airport (8.6% of NAV(i) ) has approximately 75% of its revenues
linked to either the usage of the link or the wider rail system in
Belgium. Usage was higher than base case in 2019 but can be assumed
to be lower at the current time. There are contractual mitigants
where usage is lower than the base case which have been effectively
used previously.
o We note the closure of all schools in the UK and Germany (and
likely closures in Australia). The Investment Adviser has engaged
positively with our public sector partners over affected schools
within the investment portfolio. We currently expect that the
Company will be in a no worse position as a result of these
closures, given the portfolio is not exposed to usage risk.
o Many businesses may seek to maximise liquidity in the current
circumstances. The Company notes that it is not in direct control
of the timing or amount of distributions from entities in which it
is a minority investor. However, it is closely monitoring
distributions from all investments and through its Investment
Adviser is actively engaging with counterparts at the portfolio
level - the majority of which are public sector counterparties.
-- Debt at the level of the Company's underlying assets is
bespoke to each asset but is non-recourse to the Company and is
typically either fixed-rate debt, which fully amortises over the
asset life without refinancing risk, or where refinancings are
required, there are regulatory or other mechanisms designed to
compensate for changes in the market cost of debt over time.
-- Overall, the Company believes that its liquidity position,
its business model, diversified portfolio and its focus on risk
mitigation combine to offer a significant degree of protection to
shareholders.
PERFORMANCE FOR THE PERIOD TO 31 DECEMBER 2019
-- The Company's investments generated strong operational cash
flows to support a 10.3% increase in NAV(i) to GBP2.4 billion and
an increase in NAV per share to 150.6 pence (31 December 2018:
148.1 pence per share).
-- The reliability of the portfolio's operational performance
supported an expected 2.6% increase in full-year dividend
distribution of 7.18 pence per share. The 2019 second half year
dividend of 3.59 pence per share is expected to be declared with
the full-year results when published.
-- Strong inflation-linkage was maintained, measured by a
projected increase in return of 0.82% p.a. resulting from a 1.00%
p.a. increase in inflation (31 December 2018: 0.82% p.a.).(iii)
-- Low correlation to the FTSE All Share Index of 0.25 and 0.19
over 12 months and 5 years, respectively.(iv)
-- 2019 cash dividend cover of 1.3x. (v)
-- GBP281.3 million of new cash investments were made during
2019, reflecting the Investment Adviser's continued origination of
value-enhancing opportunities in line with the Company's investment
strategy.
-- The Company successfully raised GBP190.1 million of new
capital during the year to partially repay the cash drawn on its
corporate debt facility.
-- The Company continues to progress its current pipeline of
investments with up to GBP130 million of investment opportunities
identified including the Rampion and Beatrice OFTOs and continued
deployment of the Company's commitment to the National Digital
Infrastructure Fund.
MEETING STAKEHOLDER EXPECTATIONS
-- During 2019, the Company continued to deliver long-term
benefits for all its stakeholders by responsibly managing its
portfolio of 130 public and social infrastructure projects and
businesses.
-- Our infrastructure assets collectively touch over 13 million
lives, households and businesses daily across the countries in
which we invest.
-- The Company's Investment Adviser is a signatory to the UN
Principles of Responsible Investment ('UN PRI'), and during the
period assisted the Company to increase its alignment to the UN
Sustainable Development Goals ('UN SDGs') to help reduce risk and
drive environmental progress across its assets.
Michael Gerrard, Chairman of International Public Partnerships
Limited, said: "2019 was another strong year for the Company in
which we expect to deliver our target inflation-linked returns to
shareholders. Our immediate thoughts are now engaged with the
consequences of Covid-19 and, in particular, the health and
well-being of the many people who contribute to the Company's
success. We believe that we have a robust and risk mitigated
portfolio and will work to ensure that any impacts of Covid-19 on
shareholders are mitigated as far as possible. Our progress in 2019
supports my belief that the Company is in a very strong shape to
deal with the current uncertainties."
DIRECTORATE CHANGES
As part of the Board's ongoing succession planning, John Stares
will retire from the Board with effect from 31 March 2020 and, as
previously announced, John Whittle will retire from the Board at
the 2020 AGM.
Mr Gerrard added: "I and my fellow directors thank John Stares
and John Whittle for their dedicated service to the Company over
many years, and for the always wise counsel they have
provided".
Important notice: Investors should note that the financial
information contained in this release is based on the Company's
books and records but remains unaudited pending release of the
market wide FCA and FRC imposed moratoria.
S.
INVESTOR AND ANALYST CONFERENCE CALL
INPP will be holding an analyst and investor conference call at
9.00am today in conjunction with this announcement.
** Please note that the dial in details for the conference
facility have changed and the call can now be accessed by visiting
https://secure.emincote.com/client/ipp/ipp001/vip_connect . Please
note the conference call is not open to the media or their third
party representatives.
A copy of the presentation will be available on the Company's
website
(https://www.internationalpublicpartnerships.com/investors/results-reports-presentations-and-circulars/).
NOTES TO EDITORS
Amber Infrastructure
Erica Sibree / Amy Joslin +44 (0)20 7939 0558 / 0587
FTI Consulting
Ed Berry / Mitch Barltrop +44 (0) 20 3727 1046 / 1039
Important Information
This announcement contains information that is inside
information for the purposes of the Market Abuse Regulation (EU)
No. 596/2014.
This announcement is an advertisement. It does not constitute a
prospectus relating to the Company and does not constitute, or form
part of, any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for, any shares
in the Company in any jurisdiction nor shall it, or any part of it,
or the fact of its distribution, form the basis of, or be relied on
in connection with or act as any inducement to enter into, any
contract therefor.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These forward-looking statements speak only as at the
date of this announcement. The Company, Amber and Numis Securities
expressly disclaim any obligation or undertaking to update or
revise any forward-looking statements contained herein to reflect
actual results or any change in the assumptions, conditions or
circumstances on which any such statements are based unless
required to do so by the Financial Services and Markets Act 2000,
the Prospectus Rules of the Financial Conduct Authority or other
applicable laws, regulations or rules.
About International Public Partnerships ('INPP'):
INPP is a listed infrastructure investment company that invests
in global public infrastructure projects and businesses, which
meets societal and environmental needs, both now, and into the
future.
INPP is a responsible, long-term investor in 130 infrastructure
projects and businesses. The portfolio consists of utility and
transmission, transport, education, health, justice and digital
infrastructure projects and businesses , in the UK, Europe,
Australia and North America. INPP seeks to provide its shareholders
with both a long-term yield and capital growth.
Amber Infrastructure Group ('Amber') is the Investment Adviser
to INPP and consists of approximately 130 staff who are responsible
for the management of, advice on and origination of infrastructure
investments.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
Endnotes
i. NAV figures (and percentages derived from those figures) are
unaudited due to the moratorium applied to audit opinions
ii. Calculated by dividing the NAV return of GBP138.5m by the
opening NAV of GBP2,198.7m. 2019 NAV figures (and percentages
derived from those figures) are unaudited due to the moratorium
applied to audit opinions.
iii. Calculated by running a 'plus 1.00%' inflation sensitivity
for each investment and solving each investment's discount rate to
return the original valuation. The inflation-linkage is the
increase in the portfolio weighted average discount rate.
iv. Correlation (R) from Bloomberg - 12 months and five years to 31 December 2019.
v. Cash dividend cover is the estimated cash dividend cover from
the dividend anticipated to be declared. For the purpose of
calculation this figure payments to investors are assumed paid from
net operating cash flow before non-recurring operating costs as
detailed.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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