GCP Infrastructure notes demand for dependable and predictable income

GCP Infrastructure notes demand for dependable and predictable income – GCP Infrastructure has announced results for the year ended 30 September 2017. The highlights are:

  • Total shareholder return for the year of 2.6% and total return since IPO in 2010 of 97.8%
  • NAV per ordinary share at 30 September 2017 of 110.57 pence (2016: 109.67 pence)
  • Profit for the year of £46.7 million (2016: £54.4 million). The reduction from prior year is due to a lower net unrealised revaluation movement across the investment portfolio and lower prepayment fees. Earnings per share were also negatively impacted by having a material cash balance for a significant part of the year in anticipation of the delayed GIB transaction
  • Dividends of 7.6 pence per share paid for the year to 30 September 2017 (2016: 7.6 pence)
  • £160 million successfully raised through two significantly oversubscribed share issues
  • Loans advanced totalling £227.1 million secured against UK renewable energy, social housing and PFI projects, with a further £65.9 million of investments made post year end
  • Transactions completed during the year included a significant commitment to acquire loans with a value of up to c.£140 million over a c.two year period from August 2017 as part of the acquisition of the GIB by a Macquarie-led consortium, with c.£91 million advanced to 30 September 2017 and a further £0.5 million advanced post period end
  • Third party professional valuation of the company’s partially inflation protected investment portfolio of £899.3 million
  • Post year end the company entered into an agreement with RBSI to increase its revolving credit facility by £15 million to £90 million, further to the £25 million increase negotiated during the year.

The investment portfolio has performed materially in line with expectations, accruing an average yield of c.8.5%. During the period, the operational and construction performance of most of the projects that support the company’s investments was substantially as forecast with two exceptions. Two biomass projects, representing 5.6% of NAV at 30 September 2017, continued to encounter operational challenges, which have been reflected in further valuation reductions representing 0.7% of NAV. In both cases the Board is establishing detailed rehabilitation plans to improve performance. At 30 September 2017, the portfolio was 23% exposed to PFI projects, 59% to renewable energy assets, 16% to social housing transactions with the remainder in energy efficiency and asset finance schemes. Approximately 60% of loans in the portfolio benefit from some form of exposure to inflation protection characteristics.

The chairman said that “The sustained period of low interest rates in the UK continues to drive demand for infrastructure assets from investors seeking dependable and predictable income. Despite the scarcity of new infrastructure projects within the company’s target markets and the ongoing competition for existing assets, the board is encouraged by the success enjoyed by the company in securing £227.1 million of new investments during the year.”

GCP : GCP Infrastructure notes demand for dependable and predictable income



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