HICL Infrastructure PLC
ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023
This announcement contains Inside Information.
The Board of HICL Infrastructure PLC (“HICL”, or the “Company”) announces Annual Results for the Company for the year ended 31 March 2023. The Annual Report and Accounts are available at the following link: https://www.hicl.com/AnnualReport2023
Highlights
For the year ended 31 March 2023
· Total Shareholder Return1 was 6.3% (2022: 12.8%) delivering long-term value for shareholders against an uncertain macroeconomic environment.
· 1.8p increase in NAV per share to 164.9p (31 March 2022: 163.1p), driven by the portfolio’s high (0.8x) inflation correlation, partially offset by a 0.6% increase in the weighted average portfolio discount rate.
· Portfolio return2 of 10.2% (2022: 9.6%), demonstrating the inherent defensive characteristics of the portfolio and the strong inflation linkage.
· 14% uplift in the Directors’ valuation3 of the portfolio to £3,772.8m (31 March 2022: £3,311.0m). This increase was largely driven by the £435m of net investment activity in the year.
· This investment activity refined the portfolio and enhanced the Company’s ability to generate sustainable long-term earnings, with:
o £545m invested across three assets with an additional investment agreed post year-end in Altitude Infra. These modern core infrastructure investments have added valuable diversification and improved portfolio metrics.
o £108m of disposal proceeds received from QAH, and a further partial disposal of Northwest Parkway agreed post year-end for USD 86m. Both disposals undertaken at a price in excess of carrying value, realising outperformance and providing an alternative source of funding for attractive investments.
· The Company strengthened its balance sheet with an increase in its Revolving Credit Facility (RCF) to £650m expiring on 30 June 2026 and an oversubscribed equity issue of £160m.
· In May 2023 HICL completed a £150m Private Placement, effectively converting existing short-term drawings to a longer maturity, reducing interest rate risk and diversifying the Company’s sources of funding.
· The dividend guidance of 8.25pps confirmed for the year to 31 March 20244 and extended to 31 March 20254 at the same level, reflecting the strength of the underlying cash flows. The extended guidance reflects the Board’s priority to continue to invest in building a healthy and sustainable long-term earnings base, particularly as its PPP concessions mature and redeem capital.
· HICL has published its Sustainability Report today, with enhanced disclosure and demonstrating significant progress against objectives. HICL’s Sustainability Report can be found at: https://www.ircp.com/SustainabilityReport2023
· The outlook for core infrastructure investment remains buoyant, powered by key growth drivers, including decarbonisation and digitalisation. Equipped with a healthy balance sheet, diversified sources of funding and InfraRed’s global capability, HICL is well placed pursue its strategy with discipline and ambition.
1. Based on interim dividends paid plus change in NAV per share in the year, divided by opening NAV per share
2. Performance of the portfolio relative to the opening weighted average discount rate
3. The Directors’ Valuation comprises the valuation of the investment portfolio under the Investment Basis and the investments committed to by the Company at the reporting period end. The Directors’ Valuation is an Alternative Performance Measure
4. This is a target only and not a profit forecast. There can be no assurance that this target will be met
Summary Financial Results
(on an Investment Basis)
| for the year to | 31 March 2023 | 31 March 2022 |
| Income1,2 | £254.2m | £405.8m |
| Profit before tax (“PBT”)3 | £198.5m | £368.4m |
| Earnings per share (“EPS”) | 9.9p | 19.0p |
| Dividend per share | 8.25p | 8.25p |
| 1. Includes net foreign exchange gain of £26.3m (2022: £5.5m)2. Income was £202.3m on an IFRS Basis (2022: £371.8m)3. PBT was £198.4m on an IFRS Basis (2022: £368.7m) | ||
| Net Asset Values | 31 March 2023 | 31 March 2022 |
| Net Asset Value (“NAV”) per share | 164.9p | 163.1p |
| Q4 Dividend | 2.07p | 2.07p |
| NAV per share after deducting Q4 dividend | 162.8p | 161.1p |
Mike Bane, Chairman of the Board, said:
“I am pleased to present another resilient set of results for the Company with NAV growth of 1.8p in the year contributing to a Total Return for shareholders of 6.3%. Against a volatile macroeconomic backdrop, this performance demonstrates the portfolio’s strength and key defensive characteristics.
The Company has delivered on the investment pipeline identified last year and continued its strategy of active asset rotation with accretive disposals. New high-quality investments spanning modern core infrastructure sectors add valuable attributes to the portfolio and, importantly, support long-term cash and earnings as HICL’s PPP concessions mature and redeem capital. This reflects the Board’s commitment to position the Company to deliver a sustainable dividend and compelling total return over the long term.”
Edward Hunt, Head of Core Income Funds at InfraRed Capital Partners, HICL’s Investment Manager added:
“The delivery of NAV growth against a volatile backdrop demonstrates the defensive characteristics of core infrastructure alongside the benefits of expert portfolio construction and sound capital management.
High quality acquisitions and accretive disposals in the year, and post year-end, illustrate the role of active management and asset rotation in optimising portfolio construction, enhancing long-term earnings generation and providing alternative sources of funding to the Company.
Infrastructure continues to benefit from powerful growth drivers, including decarbonisation and digitisation, which stand to benefit existing investments and underpins long-term demand for infrastructure development. HICL is well placed to pursue its strategy in a range of market conditions, supported by its diversified portfolio and robust balance sheet.”