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Good first half for HICL driven by imminent disposal

HICL : Good first half for HICL driven by imminent disposal

HICL Infrastructure’s interims for the six months ended 30 September show a decent increase in the net asset value over the period. The net assets value rose by 7.4% to 130.5p and the dividend was increased to 3.62p from 3.5p the previous year – they are going for 7.25p for the year ended 31 March 2014 and 7.4p for the year after.

HICL have announced that they have put one “significant” investment up for sale – they aren’t ready to tell us which one this is yet but it helped drive the NAV growth for the period and the team believe the price they’ll get for it will work out better than hanging on to the asset. They say the secondary market for social and transportation infrastructure continues to attract new investors, especially in the UK. This is pushing up prices and driving down the discount rates used to value these types of project. In the UK part of the problem is that the supply of operational PPP projects has decreased and may stay subdued until after the general election. For this reason they are looking harder at overseas opportunities.

The value of one health care asset was written down as it is experiencing operational difficulties. 5% of the portfolio is now invested in assets under construction

They have spent £164m since 31 March on new investments, partly funded by a £50m issue of new shares in June. They have been dipping into their credit facility to cover the shortfall.

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