Gcp Infrastructure Inves... Share Discussion Threads

[fordtin] 08/5/2024 10:58

Seems a bit strange that they chased the price all the way down from ~91p to ~60p, then stopped dead.

I guess the aborted merger might've gotten in the way a bit, but doesn't explain why they didn't resume buybacks after the offer fell apart.

[rik shaw] 08/5/2024 07:07

I assume they are focussed on reducing the rcf as a priority but each month they restate that they intend to return £50m to shareholders by the end of 2024. As dividends account for c £6m I guess the rest might well be share buybacks but linked to cash from disposals as it becomes available.

[fordtin] 08/5/2024 06:54

Anyone know what happened to the buyback programme?

The last buyback was announced on 10/11/2023.
On 15/11/23 they announced "The Company remains committed to pursuing buyback opportunities", but I can't find any further mention of buybacks after that.


15/11/2023 7:00am
UK Regulatory

“Share buyback programme
The Company remains committed to pursuing buyback opportunities in line with the strategy that has been set out previously, and to benefit from the investment opportunity that the Company's shares offer at the current price. "

[spectoacc] 02/5/2024 08:16

1.75p XD today.

[sharpedge7] 30/4/2024 08:29

I’m hoping capital wise - perhaps naively - for a return to circa 85-90p as the year progresses, inflation and rates fall and the capital return is implemented.
Baby recovery steps taken this week.

[hpcg] 26/4/2024 09:42

The market is no longer interested in bond proxy strategies. I don't anticipate any kind of capital appreciation but if dividends are secure one can invest / reinvest with a decent margin of safety. Ideally also NAV accretive buy backs.

[williamcooper104] 26/4/2024 08:36

That's very true It's always been - we are a debt fund Oh but we are hugely exposed to power prices

[chucko1] 26/4/2024 08:31

The disposal represents only around 3% of the portfolio, which partly explains the mere 1p rise in share price. However, it represents a high fraction of the remaining indebtedness, and that was (supposed to be) a driver for the 30% odd discount.

It is interesting that the Chairman makes specific note of the fact that this will reduce the exposure to electricity prices as I feel that this driver of asset valuation volatility has been harshly treated by the market in addition.

[spectoacc] 26/4/2024 07:15

A really good RNS - yes, still some disposals to make to get to target, but at a premium to the just-written-down NAV, and debt at co level is shrinking fast - very important considering interest rate expectations/RCF costs in general.

There's a lot to like at GCP IMO (but I would say that, being long from higher).

[hugepants] 26/4/2024 07:14

Release of wind and capital allocation policy update


Disposal proceeds of c. £31M
"The disposal occurred at a 6.4% premium to the valuation of the Project as at 31 March 2024."

The planned capital return this year of £50M (at least) is about 5.7p per share if my arithmetic is right.

[speedsgh] 25/4/2024 08:56

~ NAV down 2.2p to 107.62p/share at 31/3/24 (109.84p at 31/12/23), largely due to changes to inflation forecast to reflect the OBR's Spring Budget 2024 figures (-1.58p) and further reductions in forecast electricity prices leading to decreasing forecast cash distributions (-0.60p)
~ 1.75p quarterly dividend payable 4 Jun, XD 2 May
~ Continues to trade at 32% discount to NAV offering 9.6% yield

Company update, NAV and dividend declaration -

[panshanger1] 01/3/2024 15:12

Getting some momentum now Hopefully 80 pence coming into view Patience ...

[spangle93] 27/2/2024 16:12

‘Having been speaking to shareholders and potential shareholders it appears the uncertainty around the refinancing has been an issue making investors wary of the fund, and it has probably been a factor weighing on the discount,’ said Iain Scouller, analyst at Stifel, GCP’s broker.

‘We hope the clarity provided by this three-year facility and the board’s determination to delever and return cash to investors may create some demand for the shares and narrow the discount,’ he said, rating the fund a ‘buy’ with a 95p fair value. The shares stand at 71.3p.

[loglorry1] 20/2/2024 11:28

Octotrader!

[hpcg] 20/2/2024 11:00

In this market, not enough :D

[loglorry1] 20/2/2024 10:42

Just how many hands do you have @hpcg?

[hpcg] 20/2/2024 10:40

Surely the real net debt is more like £87mn because the quarterly dividend cost is £15mn and it is paid out in early March so it must be largely in by now. One the other hand what this does demonstrate is just how much capability the company would have in reducing its debt if it redirected dividends. On the other hand if we look at the actual interest payable on the revolver then it comes to £6.9mn per year for £96mn at 7.18%. In other words really not significant at all, and certainly not enough for the emotional stress it would cause some investors if there was any cut or missed quarter. On the other hand a risk free 7.18% is good enough to direct excess coverage to reducing the amount in the revolver.

[donald pond] 20/2/2024 08:00

So net debt down to £72m. That's a big positive.
Just need to shift the supported living portfolio and things will look even better.

[speedsgh] 20/2/2024 07:54

Revolving Credit Facility -

GCP Infra is pleased to announce that on 15 February 2024, the Company entered into a new revolving credit facility ("RCF"). The Company has reduced the total RCF commitments to £150 million, from £190 million previously, in line with the Company's stated capital allocation policy that has been set out in the 2023 annual report.

The RCF has been agreed with four lenders, Lloyds Bank, Mizuho Bank, Allied Irish Bank and Clydesdale Bank (trading as Virgin Money). The new facility has a three-year term and was refinanced on similar terms to the previous RCF, with the most notable amendment being the introduction of additional flexibility in utilisations and repayments to allow the Company to enhance its working capital management. The interest and commitment fees charged remain unchanged at SONIA plus 2.00% per annum and 0.70% per annum respectively.

As part of the refinance, the Company repaid c. £10 million of the RCF, reducing the drawn balance to c. £96 million, after accounting for accrued interest and refinance costs (31 December 2023: £104 million). The Company's net debt position is currently c. £72 million.

The Company remains committed to materially repay the RCF and intends to return at least £50 million of capital to shareholders during 2024 as has been set out previously. Further updates on the progress of the Company's disposal activities will be provided in due course.

[speedsgh] 12/2/2024 14:24

New Edison flash note...

GCP Infrastructure Investments: Key takeaways from capital markets day -

GCP Infrastructure Investments (GCP) has a mature, diverse and operational portfolio of 51 UK infrastructure assets with a total asset value of £1.1bn and a net asset value (NAV) of £953m, two-thirds of which is focused on renewables, and 41% of investments by value have some form of inflation protection. The portfolio is also well-positioned to benefit from the global trends of decarbonisation, energy security and population dynamics. The fund’s January capital markets day saw the board and management reconfirm the capital reallocation policy for the coming year, which consists of asset disposals and refinancing to position the fund in the strongest possible position.

Capital allocation strategy for 2024

GCP’s capital allocation strategy for 2024 of asset disposals and refinancing is focused on reducing the fund’s leverage position (£104m currently drawn from the fund’s revolving credit facility), returning capital to investors (minimum capital return of £50m in 2024 to shareholders, potentially via share buybacks or tender offer) and rebalancing the portfolio (away from equity towards debt). The total value of the potential asset disposals is c £500m, however the fund has set a base case target of £150m before the end of 2024. The four sectors in which the fund will most actively pursue asset disposals are supported living (£112m total portfolio exposure), onshore wind (£185m total portfolio exposure), rooftop solar (£102m total portfolio exposure) and anaerobic digestion (£99m total portfolio exposure) The overall aim of GCP’s capital re-allocation programme is to cycle out sectors within its portfolio (supported living), reduce NAV volatility to electricity prices, shorten duration (supported living) and refocus the portfolio’s position on debt.

Upside of recycling capital from asset disposals

The fund is trading at a 35% discount to NAV, the biggest discount in its 13-year history. This largely materialised in 2023 and mirrors the wider investment trust landscape, where discounts have emerged in a rising interest rate environment as investors have been drawn to money market funds and UK gilts over traditional investment trusts. There is potential upside therefore in repositioning the fund through the disposal of assets and then reinvesting capital by buying back stock while the fund is trading at such a significant discount to NAV. As an illustration, even if the select assets were sold at a 20% discount to NAV, there would still be significant upside in recycling the capital, given the fund is trading at a 35% discount.

Towards a debt focused portfolio in 2024

The fund trades at a c 10% dividend yield (1.23x covered for the 12 months to 30 September 2023) and offers a potential additional return of 54% if its discount to NAV were to close. On the date of the CMD, GCP highlighted the discount rate implied by the stock price is 18.8%, well above the applied NAV discount rate of 7.7% – for a portfolio that is returning 7.9% and increasingly shifting towards wholly debt investments, this seems surprising.

[dendria] 08/2/2024 16:10

Ex-div today (1.75p).

[junior21] 08/2/2024 16:05

Seems like the recent momentum has been killed off following last Thursdays BoE meeting

[speedsgh] 07/2/2024 12:00

#GCP #TRIG #HICL #INPP

Selloff tempts Rathbones into core infrastructure funds for the first time -

[bpdon] 06/2/2024 07:51

About 9.64% @finkie:

It goes ex-divi in 2 days:

[finkie] 06/2/2024 03:32

What is current divi yield here?