Gcp Infrastructure Inves... Share Discussion Threads

[woodhawk] 10/11/2022 17:07

Looks like my buy was well timed... for once!

[badtime] 10/11/2022 16:37

Nice move up today ..can that be held

[woodhawk] 07/11/2022 10:00

I agree with the substance of the two posts above, a 17% NAV discount and a 7.5% yield, paid quarterly, were just too tempting to resist - hence my maiden purchase on Friday.

[donald pond] 07/11/2022 08:45

The inflation and energy price linkages will help income significantly. The downside is the changes to the discount rate, but that is notional. Right now this yields around 7.5% on a notional 17% discount. And it is starting to identify plenty of opportunities to redeploy capital, though obviously can't raise any while at a discount. But it looks a bargain to me

[stewart64] 05/11/2022 08:31

The big multi Nationals were having a field day off the back of China's Covid easing ( Rio up 8%, my largest holding Friday morning, before I sold some during the day). Three months to wait for the next dividend. I guess buyers saw opportunities elsewhere and they were thin on the ground here.

In view of the recent upgrade on the nav and the fact that normalising interest rates should actually help GCP with getting a decent return on future loans, it looks like a screaming buy imo. It wasn't long ago that the panic was about zero interest rates and GCP had nowhere to go with its rollovers. Can't have it both ways.

GCP often has these big reversals that have always been reversed in quick order. Groundhog day again.

[badtime] 04/11/2022 16:42

Certainly unloved

[stewart64] 31/10/2022 17:04

Bought into what I thought might be the bottom of the dip today 96.6 but that continued downward. Strange price action today, I don't think those spikes up to a quid can be taken too seriously.

[donald pond] 28/10/2022 08:33

Just noticed the capital markets presentation on 12 Oct. 3 interesting developments - funding EV taxis, likely drilling a second geothermal well at Eden and looking at adding hydrogen production to Irish wind farms to maximise output ( around 15% of the time grid doesn't want the energy being produced).

[tonytyke2] 20/10/2022 12:04

Good they are now including NAV scenarios in their update for projected provision for future government intervention on renewable energy generated profits. Showing well discounted to all NAV scenarios here, I have added today.

[donald pond] 14/10/2022 08:45

Should get a new NAV next week and it will be interesting to see how it balances out. There's a lot of CPI and energy price linkages here but the discount rate will no doubt be up sharply. We await news on the government approach to renewable power but GCP were hedging prices in 2021 and any long term agreed price is likely to be well above that level. And as it is primarily a debt provider, the key thing is that the debtors remain solvent, so a long term arrangement in excess of 2021 expectations would be positive. And hopefully the impact of CPI is to increase dividend coverage

[hpcg] 29/9/2022 12:37

I guess the answer, to an extent, was pension fund liquidity needs.

[williamcooper104] 26/9/2022 20:47

The corporate tax benefit to NAV won't come through - or will on paper but not in reality As labour will whack up corp tax And very hard to see how they don't win the next election

[ptolemy] 26/9/2022 12:44

Reason for price drop anyone?

[donald pond] 26/9/2022 12:06

There are also uplifts linked to the energy price, and should be another 1.7p on NAV reflecting corp tax cuts. But discount rate likely to increase to reflect gilts

[lloydypool] 26/9/2022 11:50

Thanks, I may have to look further into this. Not ever looked before but looking for some homes for cash in PF & wary of completely buying into doom and gloom as the next few months could present some compelling long term opportunity for those willing to accept some volatility.

[speedsgh] 26/9/2022 10:28

According to the half-yearly report released in June, 52% of the income is inflation-protected...



Over half of the Company's investments, c.52% by portfolio value, have some form of inflation protection. This is structured as a direct link between the return and realised inflation (relevant to the supported living assets and certain renewables) and a principal indexation mechanism which increases the principal value of the Company's loans outstanding by a share of realised inflation over a pre‑determined strike level (typically 2.75% to 3.00%).

The table below summarises the change in interest accruals and potential NAV impact that would be associated with a movement in inflation.

SENSITIVITY APPLIED TO BASE CASE INFLATION FORECAST ASSUMPTION -- NAV impact (pence per share)

(2.0%) -- (10.3)
(1.5%) -- (8.0)
(1.0%) -- (5.5)
(0.5%) -- (2.9)
0% -- 0
0.5% -- 3.1
1.0% -- 6.6
1.5% -- 10.3
2.0% -- 14.2

[lloydypool] 26/9/2022 10:07

What sort of spread to the 10 year gilt yield has this traded in the past? If a 10 year gilt can yield 4.2% then it isn't surprising that the yield on this has moved out with it.

It would be interesting to know how much of the income is inflation linked as that would perhaps close the spread between this and the 10 year yield.

[speedsgh] 26/9/2022 10:01

Wow! Suddenly trading at 7.2% yield and 15% discount to last stated NAV of 114.31p. What does the market know that we don't?

[donald pond] 21/9/2022 08:30

When corporation tax rose it knocked 1.7p off NAV, so that should come back if Truss goes ahead with the proposed cut

[donald pond] 14/9/2022 09:20

A lot of their lending is inflation linked, so it should be feeding into increased income. I doubt we will see the dividend increase, but the coverage should do, which will get some positive broker attention.
I added yesterday at 106.4

[rik shaw] 12/9/2022 18:57

Agreed, I'm just suggesting yield on new investments might start to improve.

[cocopah] 12/9/2022 17:01

As far as I know the dividend cover is about 1x so I can’t see them increasing the dividend.🤷‍♂️

[rik shaw] 08/9/2022 16:20

Looking at the big picture for GCP, they reduced the dividend a while back because the returns they were able to get on new investments in whatever sector they looked at were generally lower when yields were being compressed. Hopefully this is being reversed in the current climate with interest rates rising.

[williamcooper104] 08/9/2022 15:59

https://www.insidehousing.co.uk/news/news/landlords-must-prepare-for-new-rent-cap-to-maintain-viability-warns-english-regulator-78040Reminds me of care homes - landlords confused government paid with government backed and lost shirts