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International Public Partnerships increases annual dividend target

7th Sep 2023 10:39

(Alliance News) - International Public Partnerships Ltd on Thursday upped its annual dividend target despite a significant drop in interim profit and a small reduction in net asset value.

The infrastructure investment company reported a pretax profit of just GBP259,000 in the first half of 2023, down sharply from GBP219.2 million the year prior.

The steep drop in profitability came as the company recorded a GBP67.1 million net fair value loss in investments in the period, compared to a net gain of GBP166.9 million the year prior.

INPP's net asset value as at June 30 was 155.2 pence, down 2.4% from 159.1p at December 31. This was primarily driven by an increase in the discount rates used to value the forecast cashflows, and partially offset by the positive impact of the portfolio's inflation-linkage and higher cash deposit rates, it said.

"The board continues to be disappointed by the persistent discount to NAV and we are committed to addressing it as best as we can. In the near-term, this includes pursuing asset realisations to reduce corporate leverage. We maintain high confidence in the future of the company, reflected in the 5% increase in the 2023 dividend target," said Chair Mike Gerrard.

The firm declared an interim dividend of 4.06p. INPP added it has decided to increase its 2023 dividend target to 8.13p per share, acknowledging the recent higher levels of inflation. This would represent a 5% increase against the previous year.

Beyond 2023, INPP said it will keep its dividend policy under review. It is currently expecting to continue its long-term projected dividend growth rate of around 2.5%, such that the 2024 dividend target is 8.33p per share.

Shares in the firm were up 0.7% at 129.70p on Thursday morning in London.

By Heather Rydings, Alliance News senior economics reporter

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