3i Infrastructure on track to deliver target dividend

Long-term infrastructure investor 3i Infrastructure updated the market on its third quarter on Wednesday, reporting that its portfolio overall continued to perform in line with expectations, and was delivering a good level of income.

The FTSE 250 firm said total portfolio income and non-income cash was £25.9m in the three months ended 32 December.

It said it was on track to deliver its target dividend of 8.65p per share for the 2019 financial year, with the full year dividend expected to be covered with a “significant” surplus.

“The company continues to perform well and is on track to meet or exceed its objectives for the current financial year,” commented 3i Infrastructure chairman Richard Laing.

The board highlighted that on 29 October, Wireless Infrastructure Group (WIG) announced two acquisitions, growing its presence in the UK and Irish markets.

In the UK it acquired Arqiva's Indoor Networks business and in Ireland, it acquired Highpoint Communications.

Both acquisitions were financed by WIG, with no further equity contribution from the company.

The company also became an ‘Approved Investment Trust Company’ (AITC) for accounting periods commencing on or after 15 October.

It also signed a new management agreement with 3i Investments to act as its investment manager.

“The additional investments made by WIG are excellent examples of how we are delivering growth through the platform businesses in the portfolio,” said Phil White, managing partner and head of infrastructure at investment manager 3i Investments.

Looking at the portfolio, total portfolio income and non-income cash of £25.9m comprised income of £25.8m, and non-income cash of £0.1m.

That compared with £24.2m of income and £84.4m of non-income cash received in the quarter to 30 September.

At 31 December, 3i Infrastructure had £142m of cash balances and the undrawn balance of its revolving credit facility was £283m.

That cash was expected to be used to fund the firm’s outstanding commitment to acquire Tampnet - an independent offshore telecoms network operator in the North Sea and the Gulf of Mexico.

Completion of the transaction was expected to occur before the end of the financial year.

Pro forma net debt stood at £89m, after funding the interim dividend of £35m and the Tampnet commitment of £196m.