Bigger portfolio, lower earnings for HICL Infrastructure

Earnings at HICL Infrastructure were down significantly in the six months to 30 September 2015, the company reported on Wednesday morning.

Its interim results shows income of £84.4m, down from £142.3m in the corresponding period last year.

Profits were down too, from £132m last year to £71.7m for this period.

The net value per share of the public infrastructure investment company’s assets was up from 31 March 2015, however, by 1.8% to 139.1p.

Aggregate quarterly dividends were declared for the first half at 3.72p per share, as the company said it was on track to achieve its aggregate dividend target of 7.45p per share for the full year.

It brought total annualised shareholder return for the period to 9%, based on interim dividends declared and the uplift in net asset value per share.

HICL also pointed to the two new investments and two incremental stakes acquired during the period for a total of £130.7m.

They were funded by a £92.1m equity tap issue in July, as well as drawings under the group’s revolving credit facility.

“Sound portfolio performance has generated strong cashflow from the group's investments, enabling the board to remain confident in the achievement of the company's dividend target for the year to 31 March 2016”, said board chairman Graham Picken.

“The valuation uplift has benefitted from a 0.2% lowering of the weighted average discount rate for the portfolio. This was driven by two factors: the successful completion of construction of the Allenby & Connaught MoD accommodation project, coupled with continuing strong secondary market demand for social and transportation infrastructure investments”, he added.

The company said it currently has net funding requirements of around £30m, with the board considering another tap issue in the near future.

HICL Infrastructure also increased its revolving credit facility from £150m to £200m since the period ended.

As of 13:00 on Wednesday, shares in HICL Infrastructure were down 0.26% to 153.3p.