International PPL hikes interim dividend after resilient first half
By Josh White
Date: Thursday 10 Sep 2020
(Sharecast News) - International Public Partnerships reported a net asset value per share of 149.2p at the end of its first half on Thursday, down from 150.6p at the start of the year.
The FTSE 250 company reported IFRS profit before tax of £35.4m for the six months ended 30 June, down from £83.7m a year earlier.
It said the reduction was down to the BeNEX transaction being recognised in the prior period, as well as a decrease in portfolio value as a result of additional uncertainty caused by Covid-19.
The firm's total shareholder return had been 219% since its initial public offering, equivalent to an annualised total shareholder return of 8.9%.
International PPl said a "strong" inflation protection was maintained, with a projected increase in return of 0.78% per annum in the event of a 1.00% per annum increase in inflation over and above the assumed rates.
The board hiked the interim dividend by 2.5% to 3.68p per share, and said interim cash dividend cover was 1.3x, in line with the prior year.
Looking at the portfolio, the firm made £11.7m of new cash investments during the first half, all of which were funded through its existing cash balances.
In UK schools, International PPL invested £6.7m in the Essex Building Schools for Future project, which provides education facilities to more than 3,700 secondary school pupils across the country.
Post-period end, it acquired additional stakes in six project companies that own 14 schools across Bradford and Lewisham.
In UK digital infrastructure, the firm said that as part of the £45m commitment to the National Digital Infrastructure Fund, it invested a further £5m in three of the fund's existing investments, which include urban and rural alternative network providers offering ultrafast fibre connectivity to UK homes and businesses.
Post-period end, the fund partially realised an initial investment in Community Fibre, which reflected a positive return on the company's original investment and would support the further growth of Community Fibre across London.
Looking ahead, the board said the full implications of Covid-19 remained difficult to fully ascertain, although the wider market for new infrastructure investment remained positive with the company supportive of governments using infrastructure spending as a tool for fiscal stimulus to foster global economic recovery.
The asset valuations seen in the secondary market continued to support International PPL's existing valuations, the board said.
It added that the investment adviser's team had been "very active" during the period, with the company reviewing more than 40 different investment opportunities.
International PPL said it would continue to deploy shareholder capital towards an identified global pipeline, including around £100m of new investment opportunities at preferred bidder stage or equivalent.
"Many aspects of modern society have been tested by the Covid-19 pandemic and our social and public infrastructure is not immune," said chairman Michael Gerrard.
"However, the company's portfolio continues to show considerable resilience."
As a result of the "high-quality, diversified" investments originated and actively managed by the company's investment adviser, Gerrard said the firm had continued to generate consistent and growing returns for shareholders.
"The near-term uncertainty due to the implications of Covid-19 will likely result in some short to medium term headwinds for some of our investments, but together with our track record of successfully solving asset management issues and the contractual protections we have in place to protect downside risks, I remain fully confident in the company's ability to generate positive outcomes for all our stakeholders."
At 0924 BST, shares in International Public Partnerships were up 0.47% at 161.76p.
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