HICL reports 'resilient' set of results, confirms dividend guidance

HICL Infrastructure reported full-year income of £254.2m in its annual results on Tuesday, down from £405.8m in 2022.

The FTSE 250 infrastructure investor said its profit before tax for the 12 months ended 31 March totalled £198.5m, a decrease from £368.4m year-on-year, while earnings per share amounted to 9.9p, down from 19p.

The dividend per share remained unchanged at 8.25p.

HICL said its net asset value per share increased to 164.9p, from 163.1p in 2022, as its fourth quarter dividend remained steady at 2.07p.

The net asset value per share, after deducting the fourth quarter dividend, thus rose to 162.8p, compared to 161.1p in 2022.

Total shareholder return for the year was 6.3%, which was down from 12.8% in the prior year.

Looking at the portfolio, HICL said the weighted average discount rate saw a 0.6% increase, partially offsetting the rise in the net asset value.

Its portfolio return was 10.2%, and the directors' valuation of the portfolio increased by 14% to £3.77bn, after net investment activity amounted to £435m during the year.

The board confirmed its dividend guidance of 8.25p per share for the year ending 31 March 2024, and extended it to the following year, maintaining the same level.

Looking ahead, the company said it expected a buoyant outlook for core infrastructure investment, driven by factors including decarbonisation and digitalisation.

“I am pleased to present another resilient set of results for the company, with net asset value growth of 1.8p in the year, contributing to a total return for shareholders of 6.3%,” said chairman Mike Bane.

“Against a volatile macroeconomic backdrop, this performance demonstrates the portfolio's strength and key defensive characteristics.

“The company has delivered on the investment pipeline identified last year and continued its strategy of active asset rotation with accretive disposals.”

Bane said new, high-quality investments spanning modern core infrastructure sectors added valuable attributes to the portfolio, and supported long-term cash and earnings as HICL's public-private partnership concessions matured and redeemed capital.

“This reflects the board's commitment to position the company to deliver a sustainable dividend and compelling total return over the long term.”

At 1106 BST, shares in HICL Infrastructure were down 2.7% at 144p.

Reporting by Josh White for Sharecast.com.