21st May 2015 08:54
LONDON (Alliance News) - HICL Infrastructure Company Ltd Thursday reported strong growth in earnings, asset values and returns for its last financial year, and raised its dividend target for the current year thanks to strong cash generation.
The investment company, which specialises in Private Finance Initiative and Public-Private Partnership funded projects in sectors including education, health, transport and infrastructure, reported a pretax profit of GBP231.0 million for the year to March 31, up by half from GBP153.8 million a year earlier.
Its net asset value per share stood at 136.7 pence at the end of March, up from 126.7p a year earlier, while the directors' valuation of its portfolio rose to GBP1.73 billion from GBP1.50 billion. The weighted average discount rate fell ti 7.9% from 8.2% over the year.
It posted a total shareholder return of 15.4% on a net asset value basis and 22.5% on a share price basis over the year.
"I am pleased to report a strong set of results - the culmination of a focused acquisition strategy, better-than-planned portfolio performance, an uplift in valuations due to strong market demand, and the profitable disposal of a significant investment," Chairman Graham Picken said.
HICL made nine new investments and 10 incremental acquisitions during the year, investing GBP113.1 million net of disposal proceeds. Total investments were GBP221.4 million minus the GBP108.3 million consideration for its one disposal.
It has made a further two investments and a disposal since the end of the year for a net investment of GBP8.7 million, and has a current net funding requirement of GBP8 million.
"The prices of UK investments have increased to levels which, at times, are unattractive for the group. Prices paid in auctions have frequently been at levels we feel would not be value accretive to the group and we have been outbid," said Tony Roper, director at InfraRed Capital Partners, the company's investment adviser.
"Overseas, we have made progress in Europe, securing new investments in France, Holland and Ireland in the year. The group continues to look positively but selectively for new investments in Australia, Canada and the USA. Whilst geographic diversity has certain benefits, the balance of the portfolio between UK and overseas investments is expected to remain materially the same in the current year," Roper added.
HICL said strong cash generation enabled it to exceed its dividend target for the last financial year. It paid 7.30 pence a share, instead of the 7.25p it had targeted. It has increased its target for the current year to 7.45p, from its previous guidance of 7.40p.
Its shares were down 0.2% at 155.23 pence Thursday morning, although the stock has risen 14.6% over the last 12 months.
By Steve McGrath; [email protected]; @stevemcgrath1
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