29 June 2023
SEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND LIMITED
(the “Company” or “SEQI”)
RESULTS FOR THE YEAR ED 31 MARCH 2023
The Directors of SEQI, the specialist investor in economic infrastructure debt, are pleased to announce the Company’s results for the year ended 31 March 2023.
RESILIENT PERFORMANCE DESPITE VOLATILE MARKET
ROBERT JENNINGS, CHAIR, COMMENTED:
“The Company has remained resilient against a backdrop of an increase in credit spreads and tighter lending conditions globally, driven by interest rates which rose at almost unprecedented speed in FY23. Our income for the year increased due to the high proportion of floating rate investments in our diversified portfolio which has allowed us to increase our annual dividend by 10% to 6.875p per Ordinary Share, starting with the February 2023 dividend payment in respect of the quarter ended 31 December 2022.
The Board and the Investment Adviser are very mindful of the wide discount to Net Asset Value per share which our shares currently trade on. In that context, SEQI’s shorter duration is beneficial and allows us to take a flexible approach to capital allocation in optimising the balance between share buy backs, leverage and attractively yielding portfolio investments.”
We believe our economic infrastructure portfolio is well positioned in the current high interest rate environment and are taking advantage of credit markets that are favourable to debt providers. We have demonstrated our resilience throughout the challenges of the last eight years and, our well-diversified portfolio, growing interest income and disciplined approach to capital deployment gives us confidence for our future.”
HIGHLIGHTS
· Annualised portfolio yield-to-maturity of 11.9% (2022: 8.4%) as at 31 March 2023
· Dividends totalling 6.5625p per Ordinary Share (2022: 6.25p) paid in respect of the year in line with annual dividend targets
· Strong dividend cash cover of 1.21x (2022: 1.06x)
· Defensive, diversified portfolio of 68 investments across 8 sectors, 26 sub-sectors and 12 mature jurisdictions
o 98% of investments in private debt (2022: 95%)
o 58% floating rate investments (2022: 50%), capturing short-term rate rises
o Short weighted average life of 3.5 years (2022: 4.1 years) creating reinvestment opportunities
o Weighted average equity cushion of 34% (2022: 33%)
· NAV per Ordinary Share cum-dividend of 93.26p (31 March 2022: 100.50p) mostly reflecting the mark-to-market effect of higher interest rates and credit spreads
· NAV total return of -0.9% (2022: 3.5%) in the year
· Share price total return of -16.1% (2022: 4.5%) in the year
· Ongoing charges ratio of 0.96% (2022: 0.87%) (calculated in accordance with AIC guidance)
· ESG score of the portfolio is on a long-term and sustainable upward trend
ANNUAL REPORT
A copy of the annual report has been submitted to the National Storage Mechanism and will be shortly available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The annual report is also available on the Company’s website at https://www.seqi.fund/investors/results/ where further information on SEQI can be found.
INVESTOR PRESENTATION
The Investment Adviser will host a presentation on the annual results for investors and analysts today at 10:00am BST. There will be the opportunity for participants to ask questions at the end of the presentation. Those wishing to attend should register via the following link:
https://stream.brrmedia.co.uk/broadcast/648c3fe1cdb8783915128cb1
For further information, please contact:
| Sequoia Investment Management CompanySteve CookDolf KohnhorstRandall SandstromGreg TaylorAnurag Gupta | +44 (0) 20 7079 0480 |
| Jefferies International Limited (Corporate Broker & Financial Adviser)Gaudi Le RouxStuart Klein | +44 (0) 20 7029 8000 |
| Teneo (Communications Adviser)Martin PengelleyFaye Calow | +44 (0) 20 7353 4200 |
| Sanne Fund Services (Guernsey) Limited (Company Secretary)Matt FallaLisa Garnham | +44 (0) 20 3530 3107 |