International PPL posts solid NAV growth, profits slide

International Public Partnerships posted its half-year results for the six months to 30 June on Thursday, claiming healthy net asset value growth of 21.8% to £2bn, and net asset value per share growth of 1.8% to 144.7p.

The FTSE 250 company said its IFRS profit before tax was £57.1m, down significantly from the £109.6m profit it recorded in the first half of 2016.

It did claim an average annual dividend increase of 2.5% to 3.41p per share, representing a 1.3x cash dividend cover.

The board declared a minimum target for 2017 and 2018 full-year dividends of 6.82p and 7.00p per share, respectively.

Total shareholder return now stood at 162.5% since inception in November 2006, which International PP: said represented an average compound annual return of 9.5% per annum.

“We continue to see upward pressure on valuations from current market comparables which, if sustained, can be expected to filter through to future NAV increases over time,” said chairman Rupert Dorey.

“We also note that our NAV is calculated according to our published methodology, which for instance, assumes a sum-of-the-parts valuation and does not account for any value attributable to matters such as the size, scarcity and diversification of our portfolio.”

Dorey said the “significant oversubscription” of a further capital raising reaffirmed the broad confidence in the company’s “well-established strategy”, and its future prospects.

“Owing to this confidence and the predictability of the Company's outlook, I am pleased to provide shareholders with additional visibility in targeting a full-year dividend distribution per share of 6.82p and 7.00p in 2017 and 2018, respectively.”

On the operational front, International PPL said it invested £323.8m across energy distribution, wastewater and education sectors, either as primary or early-stage investor, or as part of a large investor consortium, with further commitments to invest in digital infrastructure and energy distribution during the period.

Recent acquisitions had “strongly bolstered” inflation linkage within the portfolio, the board claimed, with a 0.83% per annum projected increase in return for a 1.00% per annum increase over assumed inflation rates.

It also reported “enhanced opportunities” for capital growth, with 11.7% of the portfolio currently under construction.

During the period, International PPL successfully completed its “significantly oversubscribed” equity capital raising of £330m used to fully repay the company's cash drawn portion of existing debt facility.

It said it had a “highly visible and balanced” future pipeline in regulated and other public infrastructure projects in developed OECD geographies, including the UK, Europe, North America and Australia.

“Following another strong period of operational and financial performance with substantial levels of new investment, I am pleased to report an interim dividend of 3.41 pence per share, bringing our total shareholder return to 162.5% since 2006,” Rupert Dorey added.

“We continue to capitalise on our investment adviser's combination of primary origination capability, leading technical expertise and strong industry relationships to allow the company to assess a wide variety of comparable investment opportunities, from multi-million pound regulated infrastructure transactions to emerging core infrastructure sectors like UK fibre optic broadband.”