Net Asset Value(s)

RNS Number : 4808W

RM Infrastructure Income PLC

18 April 2023

 

RM Infrastructure Income Plc

("RMII" or the "Company")

LEI: 213800RBRIYICC2QC958

Net Asset Value

NAV Performance The Company's NAV % Total Return for the month of March was 0.26%, which brings the NAV % Total Return for the quarter to 1.33%. The NAV % Total Return over the last twelve months was 4.43% and inception to date 39.05%. The Ordinary Share NAV as at 31st March 2023 was 92.10 pence per share. This monthly NAV return of -1.385 pence per share arose primarily from the ex-dividend effect of the 1.625 pence per share ordinary dividend for the period Q4 2022, declared and paid in March 2023. Otherwise, there was positive interest income, net of expenses, of 0.52 pence per share and a decrease in portfolio valuations of 0.28 pence per share. Summary for March 2023 (pence per share) Net interest income +0.520p Change in portfolio valuations -0.280p Payment of Dividend (Q4 2022) -1.625p Net NAV Movement -1.385p Market Update A volatile quarter for markets as a banking crisis caused a pullback to an otherwise strong start to the year. Global equity markets generally finished the quarter higher, and in the rates market, UK government bond yields remained broadly unchanged in the 5-year part of the curve although short dated UK interest rate expectations continued to rise as 1 year UK government bond yields rose 30bp to circa 3.9%. Credit spreads saw a material reduction in the risk premium with the Markit ITRX European Crossover Index opening at 475bps in January and closing at 425bp at the end of the quarter. Spreads briefly touched 400bps before widening during March when there were some regional bank failures within the US and further questions were being asked on the stability of the banking system. RMII has significantly outperformed benchmark loan and bond indices in 1Q2023 as outlined in the below table: Total Return 1yr 3yr 5yr RM Infrastructure Income NAV 4.43% 30.73% 32.63% RM Infrastructure Income Share Price -8.10% 35.39% 11.89% S&P European Leveraged Loan Index -4.18% 12.63% -6.02% Ishares Core Corp Bond UCITS ETF GBP -10.95% -7.81% -4.18%   Portfolio Update The Investment Manager remains confident with regards to the low interest rate sensitivity of the portfolio. This is largely driven by the short average duration nature of the portfolio, which is currently 2.13 years. This in turn means that loans can be repaid relatively quickly and reinvested at higher yields. This has been evidenced during the last twelve months as a number of loans written over previous years were repaid and the capital redeployed into higher yielding loans. In conjunction with this, the Portfolio Manager has been seeking to increase security with a move up the capital structure by recycling this capital into senior secured loans and reducing mezzanine or junior lending exposure. The portfolio yield has thus increased over the quarter by 50bps from 9.15% to 9.65%. Increased investments · Environmental Infrastructure - Energy Efficiency, Ref 96: £135k · Social Infrastructure - Care Home, Ref 97a&b: c.£120k · Social Infrastructure - Health and Well-being, Ref 76: £100k · Social Infrastructure - Aged Care, Ref 88 : c.£38k Repayments: · Environmental Infrastructure - Energy Efficiency, Ref 62 : £20k · Environmental Infrastructure - Energy Efficiency, Ref 63 : c.£47k · Non-Core - Asset Finance, Ref 61: c.£4,500k · Environmental Infrastructure - Renewable Heat Incentive, Ref 9&52 : c.£61k · Social Infrastructure - Child Care, Ref 95a&b: £40k · Social Infrastructure - Health and Well-being, Ref 94a: £35k Shareholder Consultation Update In Q2 2021, the Company consulted widely with Shareholders regarding a potential liquidity opportunity, to consider their liquidity needs and structure a set of proposals that were suitable and cost effective, with the result being that Shareholders were overwhelmingly supportive of the Company's performance, particularly during the pandemic and its recovery, as well as the updated investment focus and strategy. Based on this feedback and the lack of demand for a near-term liquidity opportunity, the Board determined that the next liquidity opportunity consultation would be put to Shareholders in 2024, as per the Company's prospectus, or, should the Company's shares trade at a discount over the six-month period from 1 October 2022 to 31 March 2023, the Board would bring the liquidity opportunity consultation forward by 12 months to prior to the 2023 AGM. The Company has generated a NAV total return of 9.24% during 2021 and 4.98% during 2022, outperforming many other fixed income comparables. However, the Company's shares, in common with many investment trusts, have traded at a discount over the last six months, and accordingly the Board confirms it is bringing forward the liquidity opportunity consultation and will consult with shareholders shortly. RMII has paid consistent dividends since IPO and as announced in March 2023, based on the current run rate, the Company is on track to generate a net interest income of more than 7 pence per share for FY2023, in excess of the annual dividend target of 6.5 pence1.  Since the last consultation and in line with the Company's refreshed investment focus on social & environmental infrastructure, the Company has increased exposures to its core target sectors of [accommodation, healthcare, childcare & education, clean energy & renewables, waste management and energy efficiency & carbon reduction] with 58% of the portfolios committed capital invested within social & environmental infrastructure. Peel Hunt and Singer Capital Markets, joint financial advisers and brokers to the Company, will contact Shareholders in due course. Any Shareholders not contacted by Peel Hunt or Singer Capital Markets wishing to participate in the shareholder consultation are invited to contact Peel Hunt or Singer Capital Markets. Any retail Shareholder who wishes to participate in the consultation should contact their own broker / independent financial adviser for advice or the Company Secretary via email ([e-mail]). Neither the Company nor its advisers can provide any advice to Shareholders on this matter. If you are in any doubt about the contents of this announcement you are recommended to seek your own financial advice from an independent financial adviser who is authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom. A further announcement will be made following the Board's review of the shareholder consultation.

The Company also announces that the Monthly Report for the period to 31 March 2023 is now available to be viewed on the Company website:

https://rm-funds.co.uk/rm-infrastructure-income/rm-funds-investor-monthly-fact-sheets-2/

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For further information, please contact:

RM Capital Markets Limited - Investment Manager

James Robson

Thomas Le Grix De La Salle

Tel: [phone]

FundRock Management Company (Guernsey) Limited - AIFM

Chris Hickling

Dave Taylor

Tel: [phone]

Apex Listed Companies Services (UK) Limited - Administrator and Company Secretary

Brian Smith

Ciara McKillop

Tel: [phone]

Singer Capital Markers Advisory LLP - Financial Adviser and Broker

James Maxwell

Asha Chotai

Tel: [phone]

Peel Hunt LLP - Financial Adviser and Broker

Luke Simpson

Liz Yong

Tel: [phone]

About RM Infrastructure Income

RM Infrastructure Income Plc ("RMII" or the "Company") is a closed-ended investment trust established to invest in a portfolio of secured debt instruments.

The Company aims to generate attractive and regular dividends through loans sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate. Loans in which the Company invests are predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables.

For more information, please see

https://rm-funds.co.uk/rm-infrastructure-income/

 

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