5th Jul 2019 08:45
(Alliance News) - Sequoia Economic Infrastructure Income Fund Ltd on Friday said its net asset value rose in its most recent financial year due to positive market movements and a share issue at premium.
On March 31, the end of the economic infrastructure debt investor's year, its NAV per share stood at 103.41 pence, rising 2.1% from 101.32p the year before. Sequoia paid dividends of 6p per share, for a total return of 8.0%.
Chair Robert Jennings said: "This performance is predominantly the result of five factors: the portfolio consists of stable, cash generative assets which generate an annual return of over 8%; costs and expenses are moderate with an ongoing charges ratio of just over 1%; growing fee income resultant from originated investments; positive market movements on many of the company's investments; and a contribution of 0.78p from the issuance of shares at a premium during the year."
The company closed an oversubscribed placing and open offer in October, which was oversubscribed, and raised GBP253.0 million, of which GBP116.0 million was used to repay its loans. The shares were issued at a premium to NAV, which resulted in a 0.78p per share boost to NAV.
Interest income from investments added 8.70p to NAV per share, and positive market movements added 1.08p per share, while operating costs deduced 1.40p per share and IFRS adjustments and foreign exchange deduced 0.63p and 0.44p per share, respectively.
For the year ended March, Sequoia maintained its dividend at 6p per share, which took the total net increase after dividends to 2.09p per share. The company will pay a dividend of 6.25p per share going forward.
Jennings said: "Economic infrastructure debt remains an underinvested and attractive asset class, given its low correlation to the volatility of the wider equity markets and statistically higher recovery rates. The balance of floating rate and shorter term fixed investments means that the portfolio is also well positioned to benefit from a rising interest rate environment over time. The Board has confidence in the long-term direction of SEQI and in the investment adviser's ability to grow the diversified portfolio and source high quality, stable, cash-generative economic infrastructure debt investment opportunities."
Shares in Sequoia were up 0.2% at 113.64p each in London on Friday morning.
Related Shares:
Sequoia Economic Infrastructure Fund