Hicl Infrastructure Share Discussion Threads

[godel] 05/2/2017 21:07

hxxp://quoteddata.com/company/f0000008zf/

[skinny] 02/2/2017 15:05

1 for 10 would be nice :-)

[jonwig] 02/2/2017 14:55

Useful chart, Skinny, thanks. So the fundraising between 148p and 161p. Guess 153p?

[skinny] 02/2/2017 14:48

Price / NAV

[jonwig] 02/2/2017 14:43

A portfolio update is encouraging, with NAV at 147.4p* (31/12) and forecast dividends of 7.65p, 7.85p, 8.05p for '17, '18, '19. This presumably on the increased capital. details due this month:



*So a NAV premium of about 9% is a big shrinkage!

[jonwig] 23/1/2017 07:19

Confirmation that the will issue a prospectus for the open offer next month.

Assuming it's £200m @ 150p, that's about 1 for 11. At 160p nearer 1 for 12.

[madengland_] 16/1/2017 12:48

Yes that's starting to look attractive at that entry point. Watching and waiting

[jonwig] 13/1/2017 12:32

You might get 10p off, yes.

Last stated NAV was about 146p (30 Sept) and they'll publish a revised one with the circular. Halve the difference between nav and share price would be my guess. Suggests 150 - 155.

[jombaston] 13/1/2017 09:28

With £200m or more to raise, it could come at an attractive price.

Is it to much to hope for a 10p discount? This would mean a 5% yield, similar to JLIF.

[tudes100] 12/1/2017 23:10

well spotted jonwig

[jonwig] 12/1/2017 16:08

Fundraising as expected. Placing and open offer. Details in due course.

[jonwig] 05/1/2017 07:15

Two Dutch acquisitions:



But the intriguing bit comes at the end:

The Company currently has a funding surplus of approximately £6m but also has commitments of approximately £200m in aggregate ... which are expected to occur during the first half of 2017.

So what? Does this suggest a fundraising? If so have they reached the non-preemptive issue ceiling? (I haven't checked.) £200m would be about 10% of their current MCap so we might be presented with an open offer.

[jonwig] 20/12/2016 07:36

What we were talking about in the last posts (Citywire) -

The decline in bond markets has knocked HICL Infrastructure’;s premium rating but its outlook is good if inflation rises, Winterflood Securities says.

HICL has been very popular in recent years. This is down to its attractive dividend yield of 4.7% andthe fact that infrastructure investing provides inflation-linked returns that are uncorrelated to the stock market.

In July the investment trust’s shares reached a peak of 30% above net asset value as investors sought defensive investments amid the Brexit uncertainty. Since then the premium has dropped back to 10% as confidence has returned and bond prices have fallen. This has pushed up the yield or the proportion of income that it pays to investors. This is important as bond yields affect the discount rate used to value the present value of future cash flows HICL expects to make from operating roads, bridges and hospitals for the government. Rising yields cause discount rates to rise, which by themselves can lower the trust’s net asset value (NAV).

However, Winterflood Securities Kieran Drake was not concerned about a hit to NAV, explaining the trust’s income stream was protected against a rise in inflation up to 2.75%. Inflation is currently 0.9%. ‘The link to inflation for the portfolio is a 0.7% change in return for a 1% change in inflation. An increase in inflation to 2.75% would therefore be positive for performance and contractual inflation linkages in the portfolio would soften the impact of inflation above this level,’ Drake added.

[madengland_] 08/12/2016 17:08

Thanks for post Jonwig

[jonwig] 08/12/2016 07:39

mad - most of the cashflows are indexed, so the dividend should be stable in real terms.
Higher interest rates would increase the discount rate used in calculating NAV, hence reducing the NAV.

I suspect the second effect would become apparent before the first - not sure.

[madengland_] 08/12/2016 07:18

Not missing out, I don't have a penny sat in a deposit account. But agree I am waiting and hoping, this is a great fund. I do think it's a bit enthusiastically priced, but the market decides that not me, and I don't expect my post to have zip effect. The comment about inflation proof. Is it really though? I wonder if during the initial phases of a pick up of inflation money would flow in or out of here? The yield might be safe yes, but would the yield look as appealing?

[badtime] 07/12/2016 16:38

Director bought a few

[schofip] 07/12/2016 13:04

Nothing wrong with wishful thinking and dreaming out loud. In the meantime you are missing out on an inflation proof investment paying circa 4.5%. You must have a very good savings a count to beat that.

[madengland_] 05/12/2016 18:32

Good to see diversification over the pond, just a shame pound is on the floor at present. Hopefully lots more potential in US in future years but still think this is heading further south to near NAV. Happy to buy then

[badtime] 02/12/2016 12:21

Nice reaction to the rns

[madengland_] 25/11/2016 10:06

NAV is my reentry point for some funds. 5.5% yield at that point is reasonable

[shavian] 24/11/2016 08:37

Thanks Jowig. The demand for infrastructure is certainly there, and exceeds the supply of 'shovel-ready' projects. Just awaiting the arrival of future government investment, which now seems to be more copious in the US than here. HICL may need to look across the pond.

[jonwig] 24/11/2016 07:49

Shavian - agreed. This is an article which you might find interesting:

[shavian] 24/11/2016 00:39

Jon, i take your point. FWIW an article in this weeks Investment Adviser (trade mag) on HICL says that it's an increasingly competitive environment out there for infrastructure funds, with funk money pouring into the sector and more funds chasing few projects. HICL Reports being outbid on 5 projects (toll roads and gas distribution) in the last reporting period. They may need to look further up the risk scale for new targets. Panmure Gordon are warning of a sharp repricing back to NAV across the sector. Maybe that's what we are seeing happen right now.However, we have some increased government spending in the sector to look forward to so maybe the current repricing may throw up a good entry point, but maybe not quite yet.

[jonwig] 23/11/2016 18:40

shavian - the problem might be that HICL and similar invest almost exclusively in completed, cash generating, lower risk projects. The people who want early-stage projects with more risk are thinner on the ground (JLG, I know). Even pension funds don't want the initial risk. It looks as though the gov't will need to offer guarantees at the start, eg. Hinckley. And gilts issuance.

Of course, HICL will have more to invest in further on in time, and might be persuaded to invest early with the right guarantees.