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HICL Hicl Infrastructure Plc

122.80
-1.80 (-1.44%)
16 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Hicl Infrastructure Plc LSE:HICL London Ordinary Share GB00BJLP1Y77 ORD 0.01P
  Price Change % Change Share Price Shares Traded Last Trade
  -1.80 -1.44% 122.80 3,633,961 16:35:02
Bid Price Offer Price High Price Low Price Open Price
123.20 123.80 124.40 123.20 124.00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Finance Services 202.3M 198.4M 0.1024 12.05 2.39B
Last Trade Time Trade Type Trade Size Trade Price Currency
17:36:14 O 30,784 124.383 GBX

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Date Time Title Posts
14/4/202415:14H I C L :::::::::::::::: long-term infrastructure investment1,209
15/1/201108:47secure income24

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Hicl Infrastructure (HICL) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2024-04-16 16:36:25124.3830,78438,290.06O
2024-04-16 16:26:23123.9380,15399,335.22O
2024-04-16 16:20:59123.484,2455,241.60O
2024-04-16 16:17:49122.8021,60826,534.41O
2024-04-16 16:15:10122.8044,78154,991.07O

Hicl Infrastructure (HICL) Top Chat Posts

Top Posts
Posted at 16/4/2024 09:20 by Hicl Infrastructure Daily Update
Hicl Infrastructure Plc is listed in the Finance Services sector of the London Stock Exchange with ticker HICL. The last closing price for Hicl Infrastructure was 124.60p.
Hicl Infrastructure currently has 1,937,000,000 shares in issue. The market capitalisation of Hicl Infrastructure is £2,390,258,000.
Hicl Infrastructure has a price to earnings ratio (PE ratio) of 12.05.
This morning HICL shares opened at 124p
Posted at 14/4/2024 15:14 by williamcooper104
Yep INPP and BBGI better HICL got hit with economically sensitive assets during covid and then when they recovered it's got its water co
Posted at 14/4/2024 13:00 by petersinthemarket
After years of steady dividend growth, HICL has held its dividend at 8.25p a share (yld 6.5% at 126p/sh) since its financial year to March 2020, but the trust doesn't plan to increase its dividend target in respect of financial years to March 2024 and 2025, meaning that the real value of shareholders investment income will decrease significantly. Jefferies analysts find dividend plans disappointing. By estimating future dividend cover based on cash flow projections, they believe that whether HICL will be able to resume dividend growth is largely contingent on inflation outperformance and HICL looks a bit like a bond proxy. 
Posted at 08/4/2024 14:42 by williamcooper104
That was a risk with Corbyn Labour Current Labour has no plans to get aggressive not least as it needs billions from the private sector to fund its climate plans It's rates and with HICL specific risks on some of its economically sensitive assets and water company
Posted at 08/4/2024 12:46 by schofip
I used to deal in these some time back but I am a bit out of touch with what is driving the price at the moment.If I had to guess I would say the prospect of an incoming labour government may want to unwind some of the lucrative PFI deals that hicl is invested in, what other positive/negative drivers are there.
Posted at 28/2/2024 10:36 by adamb1978
Valuations across this sort of asset class won't improve materially til we get interest rate cuts and probably more than 1 cut

At the moment, 5% risk free from a savings account is too competitive against these assets (or indeed small caps). Once those accounts are down at 2%-3% or on a path to there, I think we'll see a re-rating in things like HICL
Posted at 28/2/2024 07:15 by boozey
18BT my sentiments exactly. Also the proposed share buyback should underpin the price more.
Posted at 12/1/2024 10:07 by blueliner
Morning
I have escalating problems in receiving my HICL dividend.
My holding unfortunately is through HSBC Stockbrokers, a historical peculiarity.
The payment due to me 29th Dec remains unpaid on my account as HSBC admit they are having problems processing HICL dividends and some other stocks dividends. I had to ring up for the figure to complete the calendar year end. I could consider a stock transfer.

Anyone else haaving to wait so long, I know there are rumblings how long it takes with certain providers to credit pi's accounts, could be down to platforms cutting staff numbers.
Posted at 22/8/2023 09:31 by catch007
I have continued to add more HICL for the long term.

August update stated: 'In the Board's view, the Company's current share rating does not fully reflect the positive impact of higher than assumed inflation on HICL's cashflows'. IMHO there is currently a deep disconnect with the current share price based on the market weakness.
Posted at 19/7/2023 21:33 by williamcooper104
I'm out of HICL now; with now larger holdings in BBGI and INPP With the dividend growth of BBGI and INPP they end up in next year or so at around the same yield as HICL Of the share price last week the equity discount rate, adjusted for management fees and discount to NAV on share price was 7.3 on HICL and 7.8 on INPP
Posted at 16/7/2023 01:07 by unastubbs
HICL vs IPP: Which infrastructure trust should you buy?
International Public Partnerships and HICL Infrastructure are both relatively low-risk, but there are differences to factor in
Investor's Chronicle July 14, 2023

A popular asset class until last year, infrastructure has fallen out of favour quite spectacularly as interest rates rise and investors worry about the impact on net asset values (NAV). While it might be some time before a rally arrives, funds in this sector still have much to recommend them for the long term, including high yields, good levels of inflation linkage and government-backed revenues.

Sector giants International Public Partnerships (INPP) and HICL Infrastructure (HICL) have hardly ever been this cheap, but choosing between them isn't a simple task. As the chart below shows, over the past five years their performances have been similar, although HICL Infrastructure did better at times during 2022.

The two trusts have many features in common, so you need to look below the surface to gauge which of them might be more suitable for your investment approach.


Two evolving portfolios
Both trusts invest in core infrastructure, which HICL defines as “essential infrastructure assets that deliver resilient cash flows from a protected market position” and “sit at the lower end of the risk spectrum”. And both have exposure to private public partnerships (PPP), through which revenues come from the public sector so are less exposed to economic fluctuations.

But like most infrastructure trusts, over the past few years, both portfolios have evolved, reducing their exposure to PPP and ‘social’ infrastructure assets, for example in the health and education sectors, in favour of more economically sensitive projects, such as those in the utilities sector.

Despite their names, HICL is more exposed to PPPs than International Public Partnerships, which has significant investments in regulated assets instead. Regulated assets’ revenues are pre-determined for a given period via sporadic regulatory settlements.

IPP’s key assets in this area are Cadent, the UK’s largest gas distribution network, and Tideway, which is in charge of building and maintaining the new 25km London ‘super-sewer’ under the Thames. The trust recently published an update to reassure investors that the financial difficulties experienced by Thames Water are not impacting Tideway, which is a separate company and has arrangements in place to protect its revenues in such circumstances.

The past few years HICL has shifted towards a higher exposure to demand-based assets, particularly in the transport sector. For example, traffic levels have an impact on the revenues of the trust’s second-largest investment, the A63 motorway in France.

HICL's shift away from PPP, health and education is because no new PPP projects are being commissioned in the UK and the price of secondary transactions is rising, detracting from returns. Earlier this year, Stifel analysts argued that moving towards economic assets offers benefits including higher potential for returns and longer portfolio lives. But it also slightly changes the trusts’ risk profiles, leaving them more exposed to economic conditions and regulatory changes. “Given the weaker economic outlook, this is a bit of a concern,” they noted.

As well as having fewer PPP projects, International Public Partnerships has greater exposure to construction projects – 14 per cent of its portfolio compared with 3 per cent of HICL's. Both trusts are UK-focused, although HICL is slightly more internationally diversified with a 64 per cent exposure to the UK against International Public Partnerships’ 76 per cent.

Mick Gilligan, head of managed portfolio services at Killik, adds: “[Many infrastructure investors will] prefer assets that have low levels of economic sensitivity and execution risk, and high levels of inflation linkage. In effect, closer to an inflation-linked bond than to an equity. On this basis, HICL is more attractive than International Public Partnerships.”

Discount rates under pressure
While the composition of its portfolio means International Public Partnerships is arguably slightly riskier than HICL, there are other considerations including the discount rate they use – International Public Partnerships’ is 7.5 per cent, on average, while HICL’s is 7.2 per cent.

Because of the long lives of their assets, both trusts are heavily impacted by an increase in their discount rates. According to their last financial statements, a percentage point increase in discount rate was expected to result in 11.6 and 8.9 per cent NAV decreases for HICL and IPP, respectively.

This helps to explain why these trusts react so negatively to higher interest rates, with their share prices showing high levels of correlation with gilt yields (‘Why it's hard to find funds that benefit from higher rates’, IC, 23 June 2023). Higher rates put pressure on the risk premium offered by these funds, and International Public Partnerships has a bit of extra breathing room. In its latest portfolio update at the end of May, the trust acknowledged the increase in government bond yields since the publication of its December 2022 NAV, although it added that “historically discount rates have not moved in lockstep with government bond yields”.

Both HICL and IPP might yet have to increase their discount rates further this year, after increasing them by 60 basis points (bps) and 54bps, respectively, over the course of last year.

But this might not be as bad as the discounts in the sector would imply. At the end of June, Stifel analysts estimated that the market was pricing in discount rates of 8.8 per cent for HICL and 9.5 per cent for International Public Partnerships, which they deemed “relatively high".

The negative effect of discount rates is partly compensated for by inflation-linked revenues. HICL boasts an inflation correlation of 0.8, meaning that every percentage point increase in inflation is expected to result in a 0.8 per cent increase in its cash flow. International Public Partnerships has an inflation correlation of 0.7.

To gauge which of the two trusts looks more attractive at any given time, Gilligan uses a model that adjusts the discount rate to take into account factors such as any leverage or cash at the holding company level, fees and the premium or discount. The model calculates the “steady state return” or the rate of return that investors should receive based on the current share price. As at 4 July, this was 7.9 per cent for HICL and 8.4 per cent for International Public Partnerships.

“We like the relatively low-risk nature of both trusts and hold both in portfolios,” says Gilligan. “We tend to have a higher weighting in whichever [one] is showing a higher steady state return, which is currently International Public Partnerships.”

'Disappointing' dividend growth

HICL had a slightly wider discount and higher yield than International Public Partnerships. As of 7 July, but despite its high levels of inflation-linkage, the trust doesn't plan to increase its dividend target in respect of its financial years to March 2024 and 2025, meaning that the real value of its shareholders' investment income will decrease significantly. After years of steady dividend growth, HICL has held its dividend at 8.25p a share since its financial year to March 2020.

The trust’s board says that this is to future-proof the portfolio as the trust gradually moves to assets other than PPP that offer better growth prospects but tend to provide lower yields at first. The trust’s biggest asset, Affinity Water, which accounts for about 7 per cent of its portfolio, is not currently paying dividends to shareholders and is unlikely to do so until 2025. But HICL hopes to resume dividend growth in future.

International Public Partnerships targets annual dividend growth of 2.5 per cent, which is more promising, although still well below the current inflation rate.

Jefferies analysts say that the dividend plans of both funds are disappointing. By estimating future dividend cover based on cash flow projections, they believe that whether HICL will be able to resume dividend growth “is largely contingent on inflation outperformance”;, while International Public Partnerships “could consider a higher run-rate of dividend growth".

Yet both trusts could be good additions to a portfolio and their current discounts to NAV look like a solid opportunity to get them on the cheap. They provide a degree of inflation protection and a solid level of income at low risk. Which one you choose partly depends on your investment preferences – HICL looks a bit more like a bond proxy while International Public Partnerships has slightly more potential for growth.
Hicl Infrastructure share price data is direct from the London Stock Exchange

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