HICL Infrastructure's net assets rise as 'minimal impact' seen from Brexit

Investment firm HICL Infrastructure Company’s half year net asset value increased as it felt “minimal” impact from any uncertainty in the wake of the EU referendum.

Total shareholder return for the six months ended 30 September was 10.4%, which was based on interim dividends declared and uplift in the net asset value per share.

The net asset value per share at 30 September rose 2.5% to 145.7p compared to last year, while the value of the investment portfolio was up 7.9% to £2,189.9m.

The FTSE 250 company said that the impact of the economic uncertainty after the Brexit vote in June has been “minimal to date”, as the weak pound has strengthened the value of its overseas investments and the “gain has been materially offset by the currency hedging employed by the group, which is designed to mitigate the impact on the company's net asset value from foreign exchange volatility”.

It said that while the long-term impact, if any, of Brexit on the company's valuation cannot yet be determined, a short-term pick-up in inflation may result in a small improvement in financial performance, but the company maintained that its investment performance is not sensitive to movements in UK gross domestic product.

During the period the company raised £113m and made four investments and one follow-on investment. It also signed a contract for a further four new investments and two follow-on investments, for a combined total of £102.5m.

Chairman Ian Russell was confident about the outlook and said: "The company's investment proposition - to deliver sustainable, long-term income to shareholders while preserving the capital value of its investment portfolio - remains as relevant and attractive as ever, particularly given the challenging macroeconomic conditions and market volatility in the UK.

“This was evidenced by the over-subscribed equity issue in September, which is testament to investors' confidence in the company's diversified portfolio and its ability to generate the stable, inflation-correlated cashflows that underpin future dividend payments.”

Quarterly dividends for the first half of the year amounted to 3.82p per share and it is on track to reach its aggregate dividend target of 7.65p for the full year, a 2.7% increase.

Shares in HICL Infrastructure Company were up 0.24% to 168p at 0807 GMT.