International PPL posts growth in FY NAV per share
By Josh White
Date: Thursday 16 Apr 2020
(Sharecast News) - International Public Partnerships reported net asset value per share growth to 150.6p from 148.1p in its full-year results on Thursday.
The FTSE 250 company said its full-year dividend was increasing 2.6% to 7.18p per share.
It said its IFRS profit before tax totalled ?137.8m for the 12 months ended 31 December, down from ?138.1m.
Strong inflation-linkage was maintained, the board said, with a projected increase in return of 0.82% per annum, for a 1% per annum increase in inflation.
International PPL said it was targeting 2020 and 2021 full-year dividends of 7.36p and 7.55p per share, respectively.
"Whilst we currently have good forward-visibility of cash flows generated by the company's investments given their predictability, we continue to monitor the current Covid-19 related uncertainty," the board said.
It also noted a "low correlation" to the FTSE All Share Index of 0.25 and 0.19 over 12 months and five years, respectively, and said it had 2019 cash dividend cover of 1.3x.
The board said the portfolio's operational performance in 2019 had supported its aim of achieving consistent and growing returns.
It explained that its liquidity position remained "strong", with a ?400m revolving debt facility maturing in July 2021, of which around ?13.4m was currently utilised.
International PPL said it also currently had around ?90m of cash available, with additional cash reserves held within the underlying investments.
A total of ?281.3m of new cash investments were made during 2019, which the board said reflected the investment adviser's continued origination of value-enhancing opportunities in line with the company's investment strategy.
International PPL successfully raised ?190.1m of new capital during the year, to partially repay the cash drawn on its corporate debt facility.
As part of a portfolio-wide review of key performance indicators, the company said it had revised its medium-term annualised internal rate of return target to 7% per annum, to reflect the growing maturity of the infrastructure asset class in which it invested, and the effects of a lower-for-longer interest rate environment.
That included the associated compression in returns on investments as a result of a current base interest rate below 1% per annum, compared to 5% per annum at the time of the company's initial public offering.
On the subject of Covid-19, the firm said its investment adviser Amber Infrastructure Group and its asset management team were "fully resourced", and were continuing to actively manage portfolio performance.
The team was still supporting clients, while also ensuring the health and safety of staff.
International PPL said the full extent of the pandemic and its associated impact on the firm could not yet be ascertained.
"Our portfolio of 130 infrastructure assets is proving resilient through an uncertain environment created by the Covid-19 pandemic and its global economic consequences," said chairman Michael Gerrard.
"The strength of our underlying cash flows supports the forthcoming payment of our full-year dividend, as scheduled.
"The investment adviser continues to focus on ensuring that our clients and their end-users are well supported during this exceptionally difficult time, and I have great confidence in the company's continued ability to generate inflation-linked returns for our shareholders, in line with expectations."
At 1001 BST, shares in International Public Partnerships were up 0.04% at 156.06p.
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