TIDMINPP
RNS Number : 6747Y
International Public Partnerships
08 September 2022
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AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION.
8 September 2022
INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
('INPP', the 'Company')
HALF-YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2022
International Public Partnerships ('INPP', the 'Company'), the
FTSE 250-listed infrastructure investment company, is pleased to
announce its results for the six months to 30 June 2022.
HIGHLIGHTS FOR THE SIX MONTHS TO 30 JUNE 2022
-- NAV increased 18.9% to GBP3.0 billion (31 December 2021:
GBP2.5 billion) whilst NAV per share increased 6.1% to 157.3 pence
(31 December 2021: 148.2 pence). The increases were driven by,
among other things, the portfolio's inflation-linkage, the
successful capital raise and the revaluation of the Company's
investment in Tideway during the period.
-- Despite an uncertain macroeconomic backdrop, the Company has
again delivered robust, predictable shareholder returns with a
c.2.5% increase in its H1 2022 dividend to 3.87 pence per share (30
June 2021: 3.78 pence per share). The Board has also reconfirmed
its full-year dividend targets for 2022 and 2023 at 7.74 pence per
share and 7.93 pence per share[i], respectively. The Company
achieved cash dividend cover in the period of 1.2x[ii] (H1 2021:
1.3x).
-- The Company continued to perform well with the quality of the
portfolio's inflation-linked cash flows highlighted during the
period, and the overall inflation-linkage maintained at 0.7% (31
December 2021: 0.7%)[iii].
-- The Company's active asset management approach of its
Investment Adviser has ensured all the portfolio's investment
performance objectives were met during the period, including asset
availability of 99.8% achieved against a target of over 98%. Strong
ongoing asset performance continues to create long-term value for
both investors and the local communities which our assets
serve.
-- The Investment Adviser continued to originate high-quality
investments, with the Company making new investments and investment
commitments of GBP56.1 million during the period, covering the
transport, digital, education and waste water sectors.
-- The Company has categorised itself as an 'Article 8'
financial product under the EU's Sustainable Finance Disclosure
Regulation ('SFDR'). This illustrates the Company's continued focus
on ESG and will support its approach to enhancing ESG data
collection to inform both SFDR and the Taskforce on Climate-Related
Financial Disclosures ('TCFD') reporting.
-- The successful completion of the Company's significantly
oversubscribed capital raise totalling GBP325 million (before issue
costs) indicated strong endorsement of the Company's investment
objectives from both existing and new shareholders.
-- The Company has delivered a total shareholder return ('TSR')
of 238.3% since IPO, equivalent to an annualised TSR of
8.1%[iv].
-- The Company's GBP250 million corporate debt facility ('CDF')
is undrawn in cash terms, with GBP16.4 million committed in respect
of support for the investment pipeline. The remaining proceeds of
the capital raise total GBP116.9 million, together with the CDF,
can be used to support the investment pipeline.
-- IFRS profit before tax was GBP219.2 million (H1 2021: GBP27.2
million), principally reflective of the unrealised fair value gain
on the portfolio in the period.
Mike Gerrard, Chair of International Public Partnerships, said:
"I am pleased to report another successful six-month period for the
Company, characterised by strong financial and operational
performance. The quality of the portfolio's inflation-linkage cash
flows and their positive impact on the Company's NAV demonstrates
the resilience of our investment case against a volatile economic
backdrop."
INVESTMENT ACTIVITY
The Company's GBP56.1 million of new cash investments and
investment commitments included:
-- Thames Tideway, UK: In June 2022, the Company conditionally
agreed to acquire a further shareholding in Tideway, London's new
"super sewer", increasing its stake to approximately 18% through
the investment of approximately GBP42.0 million of additional
capital. This investment completed on 7 September 2022. The project
remains a key investment for the Company, given its attractive
financial proposition, positive future impact on the environment
and strong engagement with local communities, which closely
reflects the Company's own values as a responsible investor.
-- Gold Coast Light Rail, Australia: The Company announced in
April 2022 that financial close had been reached on Stage 3 of the
Gold Coast Light Rail project, where it will make an additional
investment of c.GBP7.1 million in 2025. The Company's existing
investment into Stages 1 and 2 of the project has seen 60 million
passenger trips in total, with usage increasing by 43% across the
transport network. This has made an important contribution to the
reduction of reliance on car transport in the Gold Coast
region.
-- Other: Further investments totalling GBP7.0 million were made
during the period, including into several availability-based UK
public-private partnership ('PPP') schemes, the Diabolo Rail Link
('Diabolo') and the National Digital Infrastructure Fund
('NDIF').
OPERATIONAL PERFORMANCE AND ASSET STEWARDSHIP
Responsible investment is a core component of the Company's
ability to deliver essential public services, maintain
relationships with its clients and local communities, and preserve
and grow the long-term value of each investment. The references to
SDGs below refer to the contribution of each mentioned asset to
defined UN Sustainable Development Goals.
Social infrastructure | SDG 3, 4, 8 & 16: Good health and
wellbeing; quality education; decent work and economic growth;
peace, justice and strong institutions
Availability-based PPPs account for 29% of the Company's
portfolio by investment fair value with asset availability of 99.8%
achieved against a target of over 98% for those investments. The
Company's public sector clients commissioned and funded over 528
contract variations during the period, at a combined value of GBP7
million. The completed changes ranged from cleaning regimes to
supporting operational assets throughout the pandemic within the
education and healthcare facilities, to the delivery of significant
transport facility upgrades.
Energy transmission | SDG 7: Affordable and clean energy
-- OFTOs, UK: During the period, Ofgem released a second
consultation regarding the potential regulatory developments
underpinning an extension of the OFTO revenue stream. All parties
recognise that the life extension of renewable energy assets
(including offshore transmission assets) is required to meet the
UK's net zero emissions targets. Ofgem expects to publish summaries
of feedback received as well as its decisions in Autumn 2022; the
Investment Adviser continues to be actively engaged with all
relevant industry stakeholders and will keep investors informed of
forthcoming developments.
Transport | SDG 8, 9 & 11: Decent work and economic growth;
industry innovation and infrastructure; sustainable cities and
communities
-- Diabolo Rail Link, Belgium: Passenger numbers as of June 2022
had increased to approximately 85% of pre-Covid levels. Of the
EUR24 million committed to the project by the Company in December
2020, EUR6.7 million remains available to protect Diabolo's
liquidity position and ensure compliance with its debt covenants.
The extent and timing of any further cash injections is dependent
on the trajectory of the recovery in passenger numbers. Traffic
forecasts for Diabolo estimate a return of pre-Covid levels of
usage by 2024. Discussions are continuing with Infrabel, the
Belgian rail network owner, over the implementation of a passenger
fare adjustment which could partially mitigate the impact of lower
passenger numbers seen over the past couple of years.
-- Angel Trains, UK: Revenues have continued to be largely
unaffected by the Covid-19 pandemic, on account of the fact the
majority of the asset's revenues are generated from the contractual
leasing of rolling stock to TOCs. Unlike the TOCs, Angel Trains is
not involved in, or directly impacted by, any of the disputes
underpinning the industrial action that occurred during the period,
though the Company continues to monitor the situation. During the
period, Angel Trains successfully acquired the Readypower Group, a
specialist rail and infrastructure services provider specialising
in the supply of on and off-track plant equipment as well as other
maintenance and operating services to the UK rail sector. The
acquisition is evidence of Angel Trains' wider commitment to
investing in and supporting the enhancement of the UK rail
industry.
Gas distribution | SDG 8, 9 & 11: Decent work and economic
growth; industry innovation and infrastructure; sustainable cities
and communities
-- Cadent, UK: Whilst Cadent is largely insulated from changes
in gas prices and the associated energy price caps, aside from
where the changes can cause timing differences in certain cash
flows, the Company continues to closely monitor the implications of
changes in gas prices and other developments in the sector. During
the period, Cadent's proposal to convert 2,000 homes in Ellesmere
Port, Whitby, from natural gas to hydrogen was shortlisted by Ofgem
to be the UK's first ever 'hydrogen village'. Should the proposal
be successful, the 2,000 homes will be supplied with hydrogen for
cooking and heating fuel from 2025. The investment remains the
Company's largest by fair value, representing 15.1% of the
portfolio, and is evidence of the Company's ongoing support of the
UK Government in meeting its net zero targets through the
transition to cleaner fuels.
Wastewater | SDG 6, 8, 9 & 11: clean water and sanitation;
decent work and economic growth; industry innovation and
infrastructure; sustainable cities and communities
-- Tideway, UK: During the period, Tideway reached the end of
the primary tunnelling phase, which was a key milestone for the
project, and over half of the secondary lining had been completed
by the end of the period. Overall construction works were 80%
complete at the end of June 2022, with the focus now principally
being on the completion of the secondary lining as well as the
system commissioning phase. As reported above, an additional stake
was acquired on 7 September 2022.
OUTLOOK
The portfolio has demonstrated its resilience over its
approximately 16-year history by, among other things, consistently
meeting its published forward dividend guidance. The largely
regulated or availability-based nature of the underlying cash
flows, with high levels of inflation-linkage, means the portfolio
is well positioned despite the uncertainty in the wider market.
The outlook for infrastructure investment remains strong. There
continues to be a need for infrastructure investment across the
countries where the Company invests, and the sectors where its
activity is focused continue to drive the transition towards
climate goals. We remain confident in the ability of our Investment
Adviser to continue to generate a high-quality pipeline of future
investment opportunities that will deliver long-term benefits for
all stakeholders.
ENDS
NOTES TO EDITORS
Amber Infrastructure
Erica Sibree / Amy Edwards
+44 (0) 7557 646 499 / (0) 7827 238 355
FTI Consulting
Ed Berry / Mitch Barltrop / Jenny Boyd
+44 (0) 7703 330 199 / (0) 7807 296 032 / (0) 7971 005 577
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 over 140
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 over 160 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.
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.
[i] Future profit projection and dividends cannot be guaranteed.
Projections are based on current estimates and may vary in
future.
[ii] Cash dividend payments to investors are paid from net
operating cash flows before capital activity.
[iii] Calculated by running a 'plus 1.0%' inflation sensitivity
for each investment and solving each investment's discount rate to
return the original valuation. The inflation-linked return is the
increase in the portfolio weighted average discount rate.
[iv] Since inception in November 2006. Source: Bloomberg. Share
price appreciation plus dividends assumed to be reinvested.
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