Gcp Infrastructure Inves... Share Discussion Threads

[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?

[the deacon] 31/1/2024 07:09

Research from QD todayhttps://quoteddata.com/research/gcp-infrastructure-dont-anger-qd/

[chucko1] 29/1/2024 11:42

CC, occasionally the same with GABI this morning.

[cc2014] 29/1/2024 10:42

Hmm. Not for the first time the MM are messing around here, trying to get stock

I can sell in reasonable size at above the offer.

[hpcg] 29/1/2024 10:19

The dividend has gone down in real terms - to have retained purchasing power one would need to have done more than reinvest for most of the period, though not if one held off and put in the dividend at the lows. Ditto a static share price would also have been a reduction in real terms. I quibble though, this still looks a not unreasonable place to allocate funds. As such, and since I have no need to sell, I would be quite happy for the share price to remain becalmed for a while longer yet.

[cc2014] 29/1/2024 09:41

Nothing to do but wait. NAV stable, dividend decent and discount to NAV slowly closing.

[donald pond] 29/1/2024 09:24

Also the risk is much reduced as there are no new investments being made. So they hold a portfolio of assets that they've had for many years and know well

[spectoacc] 29/1/2024 08:47

Personally looking/hoping for 80p+ on GCP, agree it's succeeding in not mis-stepping.

Paid to wait.

[spangle93] 29/1/2024 08:18

Sorry, wrong thread

[spangle93] 29/1/2024 08:10

Another quarter goes by. Still no reduction in dividend, or dramatic cliff fall of NAV...

There's a webcast later this week to discuss the results " Gravis will be holding a webinar on 1 February 2024 at 11.00am". Details in the link.

[spectoacc] 29/1/2024 07:10

Not read it all:

"Notwithstanding the lower electricity price forecasts, the portfolio continues to perform materially in line with the Company's expectations."

[donald pond] 20/1/2024 08:51

https://x.com/donaldpond6/status/1748326593955594263?s=46&t=YfR7OyhMlqZLtI-h86iCxA

[donald pond] 20/1/2024 08:50

On the subject of Gravis selling, they do have a sizeable open ended U.K. infra fund which invests in the sector. The last factsheet showed that it had dropped in size by around £200m last year and most of that was redemptions, so they will have been selling around £7m of GCP and £4/5m of GABI if they've been selling pari passu. I saw yesterday that Schroders Greencoat were launching "semi-liquid" infra funds for institutional investors. Interesting to see if they use funds to build new projects or acquire some of the existing ones trading at huge discounts

[hindsight] 19/1/2024 17:54

The gilt discounts to par are very attractive to HNWs on 45%, must be sucking a lot of money up

[cc2014] 19/1/2024 16:56

Rathbones/Investec have around 102m
Fidelity 64m
Gravis 42m
West Yorks Pension Fund 38.4m

It won't be Gravis. (lol).
It won't be West Yorks Pension fund - they never sell anything across any stock

So, that leaves Rathbones and Fidelity. I assume it's Rathbones selling down a few as they've decided they've got too many as part of the merger and I assume since it's a specific number they have finished.

[chucko1] 19/1/2024 16:11

Quilter only had 28mn shares. If it was a private client broker advising clients to get out, or getting out on their behalf - great.

It seems that all the fixed income-like advice given by such entities of late has been utterly hopeless. The more they advise, the more opportunities there are for the not-hard-of-thinking-for-oneself.