Interim Results for the six months ended 30 Sep 25
Summary by AI BETAClose X
19 November 2025
HICL Infrastructure PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2025
This announcement contains Inside Information.
The Board of HICL Infrastructure PLC ("HICL", or the "Company") announces Interim Results for the Company for the six months ended 30 September 2025. The Interim Report is available at the following link: https://www.hicl.com/investors/reports-publications/
Highlights
For the six months ended 30 September 2025
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Proposed combination of HICL and TRIG: |
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This week, HICL announced a proposed combination with The Renewables Infrastructure Group (TRIG) to create the UK's largest listed infrastructure investment company with net assets in excess of £5.3bn. Please see the RNS announcement published on 17 November 2025 for further information. |
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Strategic progress on active portfolio management: |
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Portfolio sale of seven UK PPP assets in line with HICL's1 31 March 2025 valuation. |
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Total announced disposals over the past 24 months are over £730m, reinforcing HICL's active approach to portfolio construction and the credibility of its valuation. |
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Proceeds from strategic disposals continue to be deployed to support buybacks and existing investment commitments, reinforcing HICL's capital allocation discipline and positioning for long-term value creation. |
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Good cash generation & dividend cover: |
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Dividend cash cover increased to 1.10x as at 30 September 2025, up from 1.07x in March, excluding profits on disposals, supported by good inflation-linked cash generation across HICL's core PPP assets reinforcing confidence in HICL's FY26 target. |
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The Company remains on track to deliver its covered dividend target of 8.35p per share for the year to 31 March 2026 and reiterates its target of 8.50p per share for the year to 31 March 20272. |
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Sustainable valuation growth: |
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HICL's NAV per share increased by 2.9p to 156.0p as at 30 September 2025 (March 2025: 153.1p), with an annualised underlying return of 10.3% from the portfolio3 (30 September 2024: 5.5%). |
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Performance from HICL's growth assets4 was strong over the six-month period, contributing to NAV accretion and reinforcing the strategy to rotate into assets with a longer asset life and with capital growth potential. |
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HICL's yield assets, representing 50% of the portfolio following announced disposals, delivered robust operational performance, with higher historic inflation feeding through into cash receipts. This supported dividend cover and helped to mitigate asset-specific challenges in a small subset of this portfolio segment. |
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Over the period to 30 September 2025, 50.3m shares were repurchased under the expanded £150m buyback programme, generating 0.9p of NAV accretion. |
1 HICL Infrastructure PLC and its subsidiaries is defined as either HICL or the Group throughout the Report. HICL Infrastructure PLC, the Company only, is defined as the Company throughout the Report
2 For discussion purposes only. The information above is based on hypothetical assumptions that may not occur and represent the views solely of InfraRed. Investors should not rely upon the targeted/hypothetical information in making an investment decision. Targeted /Hypothetical returns are aspirational in nature and should not be relied upon when making an investment decision. There can be no assurance or guarantee that the targets or assumptions underlying the hypothetical information or any of the economics presented can or will be achieved. Upon request, InfraRed will provide the criteria and assumptions upon which we based such targeted/hypothetical information
3 Defined as the return on the portfolio that includes the unwind of the discount rate and portfolio performance (before adjusting macroeconomic assumptions)
4 Refer to the Glossary provided in the Annual Report 2025 for definitions
Mike Bane, Chair of HICL, said:
"HICL's ability to deliver on its strategy amid a challenging macroeconomic backdrop has been ably demonstrated in the period. With increasing dividend cash cover, NAV accretion and strong operational performance, the Company is well positioned to deliver a compelling value proposition for shareholders."
Edward Hunt, Head of Core Infrastructure Funds at InfraRed Capital Partners, HICL's Investment Manager, added:
"Taking an active approach to portfolio rotation underlines the Company's valuation and supports our ongoing objective to deliver sustainable NAV growth. This has been proven in the first half of the year with the disposal of seven UK PPP assets at NAV, enhancing key portfolio metrics and providing capital for accretive reinvestment."
Summary Financial Results (On an investment basis)
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For the six months to |
30 September 2025 |
30 September 2024 |
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Income |
£145.8m |
£71.7m |
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Total Return |
£119.5m |
£45.0m |
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Earnings / (loss) per share |
6.1p |
2.2p |
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Target dividend per share for the financial year to 31 March |
8.35p |
8.25p |
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Net Asset Value |
30 September 2025 |
31 March 2025 |
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NAV per share |
156.0p |
153.1p |
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Interim Dividend |
2.09p |
2.07p |
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NAV per share after deducting interim dividend |
153.9p |
151.0p |
Chair's Statement
HICL has delivered a strong performance in the first half of the year, building on its proven track record of strategic portfolio rotation, amid a volatile market backdrop. The Group has achieved underlying NAV growth while exceeding the targeted asset disposals for the financial year 2026, ahead of schedule and at robust valuations, enabling continued returns to shareholders.
On 17 November 2025, the Board was pleased to announce the proposed combination of HICL with TRIG Ltd to create the UK's largest listed infrastructure investment company with net assets in excess of £5.3bn. The combination represents a unique opportunity to capture the key megatrends shaping the infrastructure market today, which increasingly straddle both core infrastructure and the energy transition. The Combined Company will have the scale, portfolio diversification and balance sheet strength to better access a broader range of global opportunities and deliver sustainable long-term value for shareholders. The Combination is to be implemented through the reconstruction and voluntary winding up of TRIG, with TRIG assets transferred to HICL in exchange for the issue of new HICL shares and cash. For further details, please see the announcement published on 17 November 2025 by Regulatory Information Service by the Company. The remainder of the Group's interim report is prepared on an entirely standalone basis.
The Board and Investment Manager were pleased to announce the signing of c.£225m of asset disposals in the first half of the financial year, ahead of the stated target by 31 March 2026. This milestone, achieved for a total consideration in line with HICL's 31 March 2025 valuation, brings total signed disposals in the past 24 months to more than £730m, reinforcing the Company's active approach to portfolio construction and the credibility of HICL's valuation process and assumptions, across a range of asset types.
The disposal marks further progress in HICL's active portfolio rotation strategy, reducing exposure to short‑duration PPP assets and lifecycle risk, while lowering the Group's exposure to healthcare assets.
This supports HICL's ongoing objective to deliver sustainable NAV growth through reinvestment into longer-duration, earnings-generating assets with the potential to increase their valuation over time. Underlying earnings continue to comfortably cover dividend expectations, and we seek to enhance this further through ongoing asset out performance.
HICL's growth assets delivered operational performance in line with expectations, driven by a strong aggregate EBITDA uplift versus the same period in 2024, with notable contributions from Affinity Water, Fortysouth, and Altitude Infra. Following completion of disposals signed in the period, yield assets will represent 50% of the Directors' Valuation (31 March 2025: 55%) and continue to provide a stable complement to growth assets within the portfolio.
Dividend cash cover ratio of 1.10x has been delivered for the six-month period, enabling the Board to reaffirm its progressive dividend guidance of 8.35p per share for FY26 and 8.50p per share for FY27. In the first half of the financial year, the Group repurchased £60m of shares, demonstrating the commitment to supporting shareholder returns.
Financial performance
As at 30 September 2025, HICL's NAV was 156.0p (March 2025: 153.1p), with earnings per share of 6.1p (March 2025: 2.3p) and an annualised portfolio return of 10.3%1 (30 September 2024: 5.5%) in excess of the 8.4% weighted average discount rate.
Beyond the unwind of the discount rate, the 2.9p NAV increase was primarily attributable to operational outperformance from growth assets, an uplift in actual inflation and higher inflation expectations improving future cash generation within the portfolio, and 0.9p of accretion from share buybacks executed in the six-month period.
HICL's growth assets delivered a robust contribution to financial performance, with an annualised underlying return of 13.2% over the period and aggregate EBITDA across these portfolio companies 7% higher than the same period for FY25, while advancing disciplined capital expenditure plans to support long-term value creation. Furthermore, favourable regulatory outcomes received for Affinity Water and Texas Nevada Transmission ("TNT") positively influenced the valuations of these businesses.
1 Based on interim dividends paid plus change in NAV per share
HICL's yield assets generally continued to perform well, delivering an underlying annualised return of 7.6%, with PPPs maintaining over 99% asset availability. An upward adjustment to the asset-specific discount rate and a cash flow provision was made at one UK healthcare project to reflect greater risk of performance deductions and detracting from performance. The Group remains focused on maintaining high standards of facility condition for HICL's clients and end users across its asset base. Active portfolio management approach continues to mitigate lifecycle risk, which has reduced from 48% to 37% of gross portfolio value over the past 24 months as a result of asset disposals.
Further detail on the factors affecting the valuation is set out in the Valuation of the Portfolio section from page 12 of the report.
From 1 July, in line with prior guidance, the Board and Investment Manager implemented a revised management fee structure, now based 50% on market capitalisation and 50% on NAV, replacing the previous adjusted Gross Asset Value ("GAV") based calculation. This change, effective for half of the six-month period, has resulted in a 12% reduction in the proforma (assuming the revised fee was charged for the full year) annualised Operating Expense Ratio ("OER") to 1.00% as at 30 September 2025 (30 September 2024: 1.10%).
Capital allocation
HICL's capital allocation strategy remains clear and is being executed effectively; seeking to prioritise the most accretive use of capital, with a benchmark set by the return achievable through share repurchases.
Accordingly, buybacks continued at a steady pace, with £60m deployed during the period under the expanded £150m programme, and contributing 0.9p of NAV accretion since 31 March 2025.
Looking ahead, the persistent pricing dislocation between public and private markets is expected to present further opportunities to enhance portfolio construction, longevity of shareholder returns and growth through selective asset rotation. HICL remains well-positioned to capitalise on these opportunities, supported by a strong balance sheet and disciplined investment framework.
The Board and Investment Manager will continue to assess further disposals and new selective investments on an opportunistic basis, with due consideration to both the economic merit relative to further share buybacks, and the need to continue to progress HICL's strategy.
Dividend guidance
The Board reaffirms its commitment to delivering the target dividend of 8.35p per share for the financial year ending 31 March 2026 and reiterates guidance of 8.50p per share for the year ending 31 March 2027.
Dividend cash cover increased to 1.10x for the six-month period (31 March 2025: 1.07x), which reflects the pleasing cash generation from HICL's yield assets and the positive impact of a higher inflationary environment, in line with guidance for the FY26.
Outlook
As at 30 September 2025, the Company's share price implies a long-term annual expected portfolio return of 9.7%1 net of costs, over a weighted average asset life of 32 years. The Board believes this presents a compelling opportunity for investors to access HICL's high-quality portfolio at premium risk-adjusted returns.
Together with the Investment Manager, we remain focused on addressing the share price discount. In addition to the strategic capital allocation initiatives outlined above and diligent execution of active asset management across the portfolio, we are proactively engaged in industry-wide efforts to improve cost disclosure and to advocate for the inclusion of investment companies within key infrastructure indices.
Valuations for high-quality core infrastructure assets in private markets remain robust and transaction volumes are resilient. HICL continues to actively assess new opportunities across sectors and geographies where these advance the Company's strategy to deliver long‑term shareholder returns. Primarily, this will focus on proprietary pipeline through existing investments and relationships across the InfraRed2 group, noting that more broadly, the continuation, and indeed acceleration, of key infrastructure megatrends is reshaping and expanding infrastructure demand and the investment opportunity. With a strong balance sheet and ample liquidity, the Group is well-positioned to capitalise on these opportunities.
In the face of a reshaped macroeconomic environment, HICL is not standing still; we are evolving, adapting, and positioning the Group to thrive in a changing infrastructure landscape, delivering sustainable value for our shareholders today and into the future.
Mike Bane, Chair
18 November 2025
1 Based on discount rate, less ongoing charges ratio, adjusted to reflect the share price discount to the NAV using published discount rate sensitivities
2 The Investment Manager of HICL Infrastructure Plc, InfraRed Capital Partners Limited ("InfraRed")
Investment Manager's Report
The six months to 30 September 2025 marked a period of continued strategic progress for HICL, characterised by disciplined portfolio rotation, strong operational performance and pleasing cash generation.
InfraRed was pleased to build on its strong track record of asset disposals with the announcement of a sale of a portfolio of seven UK PPP assets to APG for a total consideration in line with HICL's 31 March 2025 valuation. The transaction was executed ahead of schedule, enhancing key portfolio metrics, while providing additional financial flexibility to support existing buyback commitments and future investment activity in support of shareholder returns.
Operational performance was strong, with dividend cash cover increasing to 1.10x in the first half, providing additional confidence in achieving the target for the 2026 financial year. NAV accretion in the period was underpinned by HICL's portfolio construction, with portfolio returns in excess of the dividend, supported by outperformance from HICL's growth assets.
Despite a challenging macroeconomic backdrop, HICL's differentiated investment proposition remains compelling. The Investment Manager believes the current share price materially undervalues the portfolio, with HICL's inflation-linked cash flows continuing to offer investors an attractive combination of income and growth. With a robust balance sheet, ample liquidity, and a proven ability to execute value-accretive disposals, totalling in excess of £730m over the past 24 months at robust valuations, HICL remains well positioned to navigate ongoing macroeconomic uncertainty and to capitalise on emerging opportunities across the infrastructure sector.
Operational highlights
Portfolio performance was solid over the first six months of the year, characterised by an annualised portfolio return of 10.3%1 (30 September 2024: 5.5%). This was ahead of the expected return for the period (as indicated by HICL's weighted average discount rate at 31 March 2025) before the impact of changes to macroeconomic assumptions, driven principally by higher actual inflation and outperformance from growth assets including Affinity Water and Altitude Infra. InfraRed's active management of both portfolio composition and individual asset performance remains central to delivering resilient earnings and long-term value.
Further details can be found as follows and in the Valuation of the Portfolio section of this report starting on page 12.
Operational performance review
HICL's portfolio delivered strong operational performance over the six months to 30 September 2025, with overall outperformance from growth assets and pleasing cash generation from yield assets continuing to underpin the investor proposition.
Across HICL's largest regulated assets, Affinity Water and TNT, performance over the six-month period was supported by important regulatory outcomes. At Affinity Water, HICL's 30 September 2025 valuation incorporated a modest upward adjustment to the revenue allowance for future weighted average cost of capital ("WACC"), reflecting an increase in allowed cost of equity as base rates have increased, combined with a staged increase in the cost of debt over several AMPs. Signs that the regulatory environment continues to improve were reinforced by the recently published Cunliffe Review, which included recommendations for a new integrated regulator to replace Ofwat, an outcome welcomed by HICL. The Company remains on track to deliver its £50m investment commitment into Affinity Water by 31 March 2026 and continues to anticipate the resumption of dividends from the business within this timeframe.
At TNT, the regulatory settlement with the Public Utility Commission of Texas for Cross Texas Transmission was concluded in October 2025, with the final allowed return on equity aligning with HICL's assumptions and adjustments in the proforma capital structure supporting the asset valuation. TNT continues to experience a significant increase in demand for transmission capacity as renewable energy developers in the US accelerate project completions ahead of the expiration of federal tax credits. In response to this favourable market backdrop, TNT anticipates reinvesting a greater portion of its near-term free cash flow into capacity expansion works. This is expected to support long-term earnings growth by increasing the size of the company's regulated asset base, which attracts the regulated return.
More broadly, capital expenditure programmes continue to be successfully executed across the Group's full set of operating assets, with notable progress in HICL's digital infrastructure assets. At Fortysouth, the tower rollout remains on track and 26 new co-location agreements were signed during the period, supporting long-term revenue growth. At Altitude Infra, the management team continues to expand network coverage, with the number of homes connected progressing broadly in line with HICL's valuation assumptions, and construction now >97% complete.
1 Defined as the return on the portfolio that includes the unwind of the discount rate and portfolio performance (before adjusting macroeconomic assumptions)
London St. Pancras Highspeed ("LSPH") recorded increased international train path bookings compared with the same period in 2024, with EBITDA in line with HICL's previous valuation assumption. In October 2025, the Office of Rail and Road issued its final decision regarding capacity at the Temple Mills depot, approving Virgin Trains' application for access to this strategically important maintenance facility, which supports cross-channel services. HICL welcomes this outcome, as it marks a key milestone in the process to introduce a second international operator to the line. The Group's valuation of LSPH continues to take a probability-weighted view of a new international operator commencing services.
HICL's portfolio of yield assets, comprising a diversified portfolio of PPP investments, will constitute 50% of the Directors' Valuation following the announced disposals. This portfolio segment continued to perform in line with expectations; average asset availability of over 99% was maintained during the period, and higher actual inflation feeding into these assets' index-linked contracted revenues increased future expected cash flows to equity, supporting asset valuations. Further details of the operational performance of HICL's five largest assets and the PPP portfolio can be found on pages 9-11.
During the period, an upward adjustment to the asset‑specific discount rate of Lewisham Hospital was made to reflect greater risk of performance deductions, in addition to a cash flow provision. The portfolio sale announced in August 2025 will reduce the Group's exposure to projects in the UK healthcare sector and those with lifecycle delivery obligations in line with HICL's strategy moving forward. Upon transaction completion, HICL's exposure to UK healthcare is expected to decrease from 22% to 16% of gross portfolio value and exposure to lifecycle risk from 41% to 37% of gross portfolio value. HICL's remaining PPP assets continue to benefit from contracted, inflation-linked revenues and fixed-rate debt structures.
Further details of the operational performance of HICL's five largest assets and the PPP portfolio can be found on pages 9 to 11.
Portfolio construction and capital allocation
Optimising portfolio construction through active management and asset rotation remains central to HICL's strategy and is a key driver of long-term shareholder value. Over the six months to 30 September 2025, InfraRed continued to execute this strategy with discipline, announcing disposals targeted for the financial year ending 31 March 2026, seven months ahead of schedule. Despite the challenging macroeconomic backdrop, the portfolio sale was agreed for a total consideration in line with the valuation of the assets as at 31 March 2025. This latest transaction builds on InfraRed's strong track record and brings total announced disposals to more than £730m over the past 24 months, reinforcing the robustness of HICL's NAV and discount rate assumptions.
The sale improves key portfolio metrics, including reducing HICL's exposure to short-duration assets and lifecycle risk, while continuing to right-size the Group's exposure to healthcare assets. These actions support HICL's ongoing objective to rotate into longer-duration assets with the potential to deliver capital growth as HICL's existing PPP assets are gradually handed back.
The sale improves key portfolio metrics, including reducing HICL's exposure to short-duration assets and lifecycle risk, while continuing to right-size the Group's exposure to healthcare assets. These actions support HICL's ongoing objective to rotate into longer-duration assets with the potential to deliver capital growth as HICL's existing PPP assets are gradually handed back.
Net proceeds from disposals, expected to be received by the end of the year, will be used to fully repay the Group's RCF, providing additional financial flexibility to fund the existing share buyback programme, outstanding equity commitments and future investment activity. c. £122m of the £150m share buyback programme has now been completed, with the risk and return proposition available to the Company through buying back its shares remaining a key benchmark for future capital allocation decisions. The Investment Manager will continue to explore selective further investments, with due consideration of the economic merit against buybacks and the necessary progression of HICL's strategy.
InfraRed remains focused on enhancing portfolio quality and resilience, and continues to assess opportunities that improve HICL's yield, total return, and asset life metrics to ensure the Group is well-positioned to deliver sustainable value for shareholders over the long term.
Financial highlights
The Company's NAV per share increased by 2.9p to 156.0p over the period (31 March 2025: 153.1p), driven by increased inflation assumptions, NAV accretion from share buybacks and the overall outperformance of HICL's growth assets. This performance reflects the progress made towards the Investment Manager's strategy to rotate the portfolio into longer-duration assets with the potential for valuation growth, while benefiting from the Group's high-yielding PPP assets. As a result, underlying portfolio performance of 10.3%1 (30 September 2024: 5.5%), comfortably exceeds the level of the dividend, reinforcing the sustainability of underlying portfolio NAV growth.
Dividend cash cover increased to 1.10x for the six-month period to 30 September 2025 (31 March 2025: 1.07x) providing confidence in achieving the target of 1.10x by the end of the financial year. This improvement was underpinned by higher historical inflation driving pleasing cash generation within HICL's PPP assets and allows the Board to reaffirm dividend guidance of 8.35p per share for the financial year ending 31 March 2026 and 8.50p per share for the year ending 31 March 2027. Should inflation remain above historical averages and HICL's own valuation assumptions, the portfolio's strong inflation correlation would provide a tailwind to future cash generation and feed into asset valuations.
1 Defined as the return on the portfolio that includes the unwind of the discount rate and portfolio performance (before adjusting macroeconomic assumptions)
The weighted average discount rate for the portfolio was maintained at 8.4% as at 30 September 2025. While the weighted average sovereign bond yield for the portfolio increased by approximately 10bps over the period, this is counterbalanced by evidence from the Group's own disposal activity and further transaction data from the broader market. The equity risk premium embedded in the discount rate has correspondingly reduced marginally to 3.4%, which remains suitable given the low-risk nature of HICL's core infrastructure portfolio and the inflation‑protected characteristics of its underlying cash flows.
Further detail on the approach to the valuation can be found in the Valuation of the Portfolio section of this report starting on page 12.
HICL ended the period in a net debt position of £142.2m (31 March 2025: £102.2m). The net proceeds of £216.8m will also be used to fund share buybacks and existing equity commitments of £115.5m by the end of March 2026.
Sustainability
In the period, the Investment Manager took proactive steps towards further embedding sustainability across HICL's portfolio. These efforts included around enhancing data collection processes, primarily to better understand the social value generated by HICL's assets, which will support more targeted, portfolio company-level initiatives.
InfraRed also continued its engagement with HICL's portfolio companies over the period to advance decarbonisation initiatives, with the aim of improving operational performance and contributing to the Company's climate ambition for 50% of its portfolio to either be aligning to, aligned to or at net zero by 2030. The Investment Manager will continue working closely with HICL's assets to implement these plans, positioning the portfolio to perform strongly in a lower-carbon, energy-resilient economy.
Key risks update
HICL's risk appetite statement, approach to risk management and governance structure are set out in the Risk and Risk Management section of HICL's 2025 Annual Report, which can be accessed on the Company's website at www.hicl.com.
The principal risks for the Group for the remaining six months of its financial year are unchanged from those reported on in the 2025 Annual Report. Developments over in the period for the Group's key risks are summarised as follows.
Macroeconomic risk
The macroeconomic backdrop remained challenging over the six months to 30 September 2025, with increased volatility in both equity and fixed income markets caused by tariff uncertainty and renewed macroeconomic pressures. Inflation remained stubborn in both the UK and the US, prompting further uncertainty for the expected trajectory for interest rates. While this environment supports HICL's cash generation, it has also moderated expectations for Bank of England base rate cuts and increased pressure on UK sovereign bond yields.
Sovereign bond yields across HICL's core geographies remained elevated and volatile over the period, reflecting investor concerns around inflation, slowing economic growth, and widening fiscal deficits. These dynamics continued to weigh on the Company's share price, although there was a notable narrowing of the share price discount over the period.
Despite a modest uptick in equity market activity, conditions in the UK remain subdued, and the market continues to be challenging for UK-listed infrastructure investment companies. In this context, the Investment Manager continues to prioritise disciplined capital allocation and active portfolio rotation, with the announced portfolio sale demonstrating the Group's ability to rotate capital despite the complex market backdrop.
Political and regulatory risk
Geopolitics
Geopolitical risk remained elevated during the period, with ongoing conflicts in Ukraine and the Middle East continuing to contribute to global market volatility, in addition to uncertainty surrounding tariff policy from the US. HICL's portfolio is expected to remain insulated from direct tariff impacts but there remains the risk of second‑order effects, such as increased supply chain costs, which InfraRed continues to monitor.
In the UK, political developments continue to dominate headlines. Recent macroeconomic data releases and rising UK sovereign bond yields increased focus on the UK's fiscal position, while the market is awaiting the publication of the Autumn Budget.
HICL continues to closely monitor the political environment in France, which remains unsettled following recent government changes and ongoing budget negotiations; however, InfraRed views the risk to HICL's portfolio to be limited. The Group's exposure to France is generally concentrated in sectors that benefit from broad political support or operate within stable regulatory frameworks, and no material changes to asset performance have been observed as a result of these dynamics.
Regulatory risk
Regulatory risk reduced further in relation to HICL's largest asset, Affinity Water, following the publication of the Cunliffe Review of the UK water sector on 21 July 2025. The review calls for a number of recommendations regarding an overhaul of the sector's regulation and main regulator, Ofwat. InfraRed welcomes the conclusions of the review and will continue to monitor its implications for Affinity Water over coming periods.
At TNT, the conclusion of the regulatory settlement with the Public Utility Commission of Texas in October 2025 has reduced the asset's regulatory risk exposure for this regulatory cycle. The Company now has greater certainty over its medium-term cash flows and the final allowed return on equity was aligned with HICL's assumptions. This outcome supported the Group's valuation of TNT and reinforces confidence in the asset's regulatory framework.
At LSPH, The Office of Rail and Road approved Virgin Trains' application to access the Temple Mills Depot, a facility of strategic importance for supporting cross‑channel rail operations. This decision enhances the prospect of a second international operator being introduced to the line and reduces regulatory risk for the asset.
Client relationships
Long-term partnership frameworks, such as those underpinning HICL's PPP portfolio, inherently carry certain risks, particularly in sectors such as UK healthcare, where broader operational and financial pressures on the public sector can increase the likelihood of performance challenges. A valuation downside was recognised at Lewisham Hospital. InfraRed is implementing a targeted service improvement plan with the facilities management provider to address these issues and support long-term asset performance.
While HICL generally maintains highly collaborative relationships with its public sector clients, the Investment Manager continues to monitor the risk of disputes that could result in reduced or withheld payments of contracted revenues. As part of its proactive approach to mitigating such risks, InfraRed contributes to the broader policy dialogue on private finance in UK infrastructure via its involvement in key industry and trade organisations, including as a founding member of the Association of Infrastructure Investors in PPPs ("AIIP"). Through the AIIP, InfraRed engages directly with government stakeholders, advocating for the long-term value that well-structured public-private partnerships can deliver to communities.
Facility condition risk
Maintaining high facility condition standards remains a core asset management priority for InfraRed. This is reflected in the ongoing remedial works at Birmingham Hospitals, which remain on schedule, with the support of the NHS Trust. This programme is one of several targeted initiatives across the portfolio aimed at enhancing asset quality and ensuring long-term operational resilience.
The existing provision in respect of facility condition risk within the PPP portfolio remains appropriate. The Investment Manager remains committed to proactive oversight and continuous improvement to ensure high standards of facility condition for HICL's clients and end users. Active portfolio management continues to serve as a key mitigant to facility condition risk, as evidenced by the reduction in lifecycle risk following the recent UK PPP disposals.
Market and outlook
The macroeconomic backdrop continues to be uncertain, with elevated interest rates and geopolitical tensions weighing on public market sentiment. Nevertheless, HICL's share price discount narrowed over the first half of the financial year, and the listed infrastructure sector demonstrated resilience, particularly during April's equity market correction. HICL's portfolio remains positively correlated to inflation, providing a natural hedge in a higher-rate environment.
Private market valuations for core infrastructure remain robust, supported by strong investor demand and the enduring appeal of inflation-linked, long-term assets. Capital raising for infrastructure in private markets has increased compared to the first half of 2024 with significant dry powder to be invested. Transaction volumes remain resilient, and political support across HICL's markets for infrastructure investment and renewal remains entrenched. This is underpinned by the accelerating global megatrends; digitisation, decarbonisation, and energy transition, which continue to shape the infrastructure landscape and align with HICL's strategic focus. The digital, utilities, transport and social infrastructure sectors stand to benefit as these trends drive sustained demand for connectivity, energy resilience, and the modernisation of essential public services.
The Investment Manager will continue to assess new investments and disposals selectively, where these improve long-term portfolio construction and value creation for shareholders. Capital allocation will continue to be guided by the hurdle presented by further share buybacks, balanced against the strategic contribution of reinvestment opportunities. This disciplined approach to capital allocation remains central to delivering long-term value for shareholders. HICL's strong defensive position in this market environment, characterised by long asset life, inflation‑linkage and limited cash flow exposure to interest rate volatility, represents a significant advantage for the Group. This inherent resilience, coupled with contracted earnings growth and proven asset management discipline, positions HICL favourably to deliver attractive risk-adjusted returns from the current share price position.
Directors' Statement of Responsibilities
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34") as adopted by the United Kingdom; and
· the interim management report, comprising the Chair's Statement, Investment Manager's Report and Financial Results, includes a fair review of the information required by:
o DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
o DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board
Mike Bane, Chair
18 November 2025
Publication of documentation
The above information is an extract of information from HICL's Interim Report. The Interim Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism. It can also be obtained from the Company Secretary or from the Investors section of the Company's website, at www.HICL.com.
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