INPP Allocates Further £10m to Share Buyback
INPP ALLOCATES FURTHER £10 MILLION TO SHARE BUYBACK PROGRAMME
£14 million of proceeds raised from the sale of Three Shires portfolio
08 August 2024
International Public Partnerships Limited, the listed infrastructure investment company ('INPP' or 'the Company'), is pleased to announce the divestment of its 50% interest in the Three Shires portfolio ('Three Shires' or 'the Portfolio') realising c.£14 million, with the sale price being in line with the Company's 31 December 2023 valuation.
The Company intends to use £10 million of the divestment proceeds to increase the size of its existing share buyback programme from £30 million to £40 million. The remaining proceeds from the divestment of Three Shires portfolio will be allocated to support long-standing investment commitments.
To date c.£18 million has been used to buyback the Company's shares under the 12-month buyback programme which commenced in January 2024. Shares will continue to be bought under the programme whilst they trade at a significant discount to their net asset value ('NAV').
Both initiatives support the Board of Directors' confidence in the Company's portfolio valuation and belief that optimising the portfolio and reallocating capital will have a positive impact on the discount at which the Company's shares are trading relative to their NAV.
Mike Gerrard, Chair of INPP, said: "In the last 12 months, the Company has successfully realised over £235 million from asset disposals and has recycled this cash to support shareholder value. These divestments are in line with, or modestly above, previously published valuations. These realisations' proceeds have been used to fully repay the CDF, commence a share buyback programme, increase dividend growth and fund accretive acquisitions. Both the Board and the Investment Adviser remain committed to realising further proceeds through divestments and ensuring that the Company remains well positioned for the long-term."
Three Shires divestment
The Three Shires portfolio comprises the design, build, financing and maintenance of four community healthcare facilities, including two in Derbyshire and one in each of, Leicestershire and Lincolnshire. The facilities support the delivery of various community health and social services, including dentistry, diagnostics, and mental health rehabilitation, which offer significant social benefits to the local community.
The Company's interest in the Portfolio will be acquired by funds managed by Equitix, an existing shareholder in the project. This realisation is consistent with the Company's previously stated intention to actively pursue further divestments.
The Company's investment portfolio remains well-diversified and responsibly invested across sectors delivering value and reliable services to local communities. The investment portfolio generates strongly inflation-linked cash flows, and has delivered robust performance since INPP's IPO such that the Company has been able to increase its dividend payments for 16 consecutive years.
The projected cash receipts from the existing portfolio are such that even if no further investments are made, INPP would be able to continue to meet its existing progressive dividend policy for at least the next 20 years[i].
Approach to capital allocation and discount management
The Company has previously stated that it will continue to maintain a disciplined approach to capital allocation to ensure it is taking proactive steps to reduce the discount to NAV at which the Company's shares are trading. The Board intends for the following actions to guide its decision-making process while the discount to NAV persists, including:
i) Continued limited use of the Company's CDF;
ii) Continuation of a programme of divestments to both demonstrate value and reallocate capital;
iii) The utilisation of any divestment proceeds towards both, (i) increasing the share buyback programme, and (ii) subject to the economics being more attractive over the medium to long-term relative to the opportunity to engage in a share buyback, making new, accretive investments.
Cash drawings under the Company's CDF remain at nil with c.£18 million utilised via letters of credit.
In addition, the Company has remaining long-standing commitments totalling c.£18 million across the transport (Gold Coast Light Rail - Stage 3), education (Flinders University Health and Medical Research Building) and digital (toob); and it is currently expectated that this amount will be funded from portfolio activity, including c.£4 million arising from the Three Shires divestment, as well as surplus operating cash.
ENDS.
For further information:
Erica Sibree/Amy Edwards +44 (0) 7557 676 499 / (0) 7827 238 355
Amber Fund Management Limited
Hugh Jonathan +44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0) 7703 330 199 / (0) 7807 296 032
FTI Consulting
About International Public Partnerships:
INPP is a listed infrastructure investment company that invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.
INPP is a responsible, long-term investor in over 140 infrastructure projects and businesses. The portfolio consists of utility and transmission, transport, education, health, justice and digital infrastructure projects and businesses, in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.
Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists of over 180 staff who are responsible for the management of, advice on and origination of infrastructure investments.
[i] This is reflective of the increased 2023 and 2024 dividend targets, and the c.2.5% dividend growth thereafter. There can be no assurance that these targets will be met or that the Company will make any distributions at all.
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