Hicl Infrastructure Share Discussion Threads

[jonwig] 11/3/2015 07:19

Are they switching to more early-stage projects no that completed ones are getting more expensive?

[skinny] 11/3/2015 07:08

New UK Investment in Schools Building Programme



HICL Infrastructure Company Limited, the listed infrastructure investment company advised by InfraRed Capital Partners Limited, is pleased to announce a new investment of £7.2m, being a 45% interest in the Priority Schools Building Programme ("PSBP") North East Batch Project (the "Project").

The Project, which has a capital value of £103m, reached Financial Close on 10 March 2015 and, once constructed, will comprise six new-build secondary schools and six new-build primary schools.

The Project is part of the wider PSBP, a centrally managed programme set up to address the needs of the schools most in need of urgent repair. Through the programme, 260 schools will be rebuilt or have their condition needs met by the Education Funding Agency (EFA).

PSBP Private Finance is procuring the design, build, finance and operation of 46 new schools in 5 geographic areas ('batches') across England. Each privately financed batch will be procured under the Private Finance - model 2 (PF2) framework, and the Project is the first privately funded project to close under this new model.

The construction works will be undertaken by a subsidiary of Galliford Try Plc over a period of 18 months from financial close, and will comprise the demolition of redundant buildings and the construction of the new schools.

Hard FM services will be provided by a subsidiary of Galliford Try Plc over a 25-year period under a concession contract, as well as lifecycle replacement for the buildings' fabric and services and certain furniture, fittings and equipment.



-ends-

[madengland] 24/2/2015 09:07

Thanks Jonwig. I appreciate the post. Just found the HICL NAV in all the text....Overall the NAV per share increased by 7.4p, after deducting the second quarterly interim dividend, to 130.5p at 30 September 2014 (31 March 2014: 123.1p). There were a number of factors contributing to this greater-than-expected growth, the largest of which (uplift of 3.0p per share) was the revaluation of certain investments, including the investment the Group has contracted to sell and the reduction in the weighted average discount rate (uplift of 2.0p per share).

[jonwig] 24/2/2015 09:02

GCP work differently - they provide loans to companies undergoing infrastructure projects, usually smaller in scale than HICL's.
Hence GCP as a pretty good idea of future income and can provide a NAV at a mouse=-click ... nearly!
And don't forget that HICL's revenues are largely index-linked.

[madengland] 24/2/2015 08:59

Ps I appreciate GCP is a different beast in many respects, my question is vis a vis HICL nav and current yield.

[madengland] 24/2/2015 08:56

I've been watching this for a long time waiting for an opportune moment to get back in. However with the yield where it now is and the unbelievable growth in share price given the asset class I can't help wondering if it's a tad overdone. I have put some funds into GCP that yields better by nearly 2%. GCP give a Nav every month, where to HICL give a NAV and how do holders square off the stellar share price return that has prevented me from wanting to buy back in. (This is not a cheap attempt at de ramping).

[jonwig] 23/2/2015 07:24

For those of us with poor head for heights, parts of this are reassuring, such as:

... will continue to exercise investment discipline. Although this approach may moderate the rate of asset growth, it serves to safeguard the level of return from the Group's portfolio.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I haven't been paying attention to "Base Erosion and Profit Shifting" - silly of me!!
Has HICL been fiddling on its taxes?

for enthusiasts.

[skinny] 17/2/2015 07:06

HICL Infrastructure Company Limited, the listed infrastructure investment company advised by InfraRed Capital Partners Limited, is pleased to announce a new investment in France, being the Ecole Centrale Supelec PPP Project ("Project") in which the Group now has an 85% ownership interest.

The Project reached Financial Close on 16 February 2015 and consists of the design, construction, finance and maintenance of a new facility for the Ecole Centrale Supelec on plateau de Saclay, near Paris, as well as a shared teaching and research facility, an underground carpark and a hotel facility (the revenue from which does not form part of the Project).

The Project will be built by Bouygues Batiment Ile de France and will take approximately 2 years to complete, with an operational period of 26 years from construction completion. The FM contract will be with Bouygues Energy & Services, which will also assume the lifecycle management risk.

The total consideration for the investment is €3.4m, comprising a loan stock subscription obligation payable upon construction completion.

-ends-

[hiddendepths] 02/2/2015 13:48

Thanks jonwig - useful info.

[losos] 02/2/2015 12:29

jonwig - "The year 2043 shows its ultimate demise."

I think my ultimate demise will be before that ha ha !!!!! of course (just like HICL) I could have some partial demises on the way.

[jonwig] 02/2/2015 11:56

HD - yes, valuations need to be explained by the companies.

We hold GCP as well - also JLIF. You'll probably have seen that John Laing PLC is floating next week (with PI included). I've put some comments on the JLIF thread about these and may well apply.

You say how little known infra stocks are, but they are big favourites with wealth managers (Brewin and Chas Stanley own a lot for clients).

[jonwig] 02/2/2015 07:19

So HICL sells its stake in Colchester barracks for 25% more than its 2014 valuation.

This follows 3IN's disposal of its Eversholt stake for 50% above, and BBY's revaluation of its infra portfolio by 50% upwards. It's tempting to think these companies should rethink their valuations across the board, in which case the current share price premiums will vanish.

Or, perhaps, the share prices will rise accordingly?

[skinny] 02/2/2015 07:18

HICL Infrastructure Company Limited ("HICL" or the "Company", and together with its subsidiaries the "Group") announces that the Group has sold its 56% equity and subordinated debt interest in the Colchester Garrison MoD Project ("Colchester") to subsidiaries of Allianz Group, the PPP Equity PIP limited partnership, and Dalmore Capital Fund II limited partnership (both partnerships managed by Dalmore Capital Limited).

The decision to sell was taken following the recent disposal by a co-shareholder of its holding in Colchester. This disposal was undertaken by way of a competitive tender process, and it provided a benchmark value for the Company's interest in Colchester which the Board considered to be significantly ahead of the value that could be achieved by retaining the project. The Board will always consider and evaluate potential disposals which are in the best interests of shareholders.

The sale of the Group's holding in Colchester constitutes the contracted disposal to which reference was made, on a no-names basis, in the Company's interim results in November of last year.

The profit on disposal, after costs, is £21.7m over the Directors' valuation of £86.6m as at 30 September 2014. After repaying the Group's revolving debt facility, drawn to make investments since 30 September 2014 (as previously reported), the Group currently holds approximately £25m of cash which is available for new investment opportunities.

The Company intends to update the market in February with respect to current portfolio performance, market dynamics and trends in market valuations for infrastructure assets of the type owned by the Group.
Tony Roper, Director, InfraRed Capital Partners Limited said:

"Following receipt of very attractive offers for this asset, the Board concluded that, rather than exercise the Group's pre-emption rights, it was in shareholders' best interests to sell and re-invest the proceeds. We continue to evaluate a pipeline of suitable investment opportunities and are confident of being able to re-invest this capital."

[skinny] 15/1/2015 07:06

HICL Infrastructure Company Limited ("HICL" or the "Company", and together with its subsidiaries the "Group"), the listed infrastructure investment company, is pleased to announce the acquisition of further equity interests in two of its existing projects, as follows:

· 50% of the share capital and all of the remaining loan notes in the Willesden Hospital PFI Project. (Completion of the acquisition of £0.7m of the loan notes is deferred until 2019).

· 15% of the share capital in the Barking and Dagenham Schools PFI Project.

Following completion of the acquisitions, the Group will hold 100% of the equity interests in each of the projects.

Willesden Hospital PFI Project is a 32-year concession for the design, construction, financing, maintenance and operation of a community hospital in North London. The project was signed in December 2002 and has been fully operational since April 2005.

Barking & Dagenham Schools PFI Project is a 27-year concession for the design, construction, financing, maintenance and operation of two new secondary schools in East London. The project was signed in March 2004 and has been fully operational since August 2009.

The consideration paid by the Group for both incremental investments, which amounted to approximately £8.1m in aggregate, is in line with the current valuation of similar UK social infrastructure projects in the Group's portfolio and was funded by way of drawings under the Group's revolving credit facility.

David Foot, Director, Infrastructure, InfraRed Capital Partners Limited, said:

"Both projects have performed well over recent years and we are pleased to be able to continue the strategy of increasing the Group's ownership of existing projects when suitable opportunities arise."



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[jonwig] 27/11/2014 07:30

Infrastructure investment must be treated as a wholly independent sector rather than a bolt-on for real estate or private debt investors, according to a panel of experts.

More:



There might be implications for institutional asset allocation, I don't know.
Any comments?

[jonwig] 19/11/2014 07:44

The market will have known that the NAV would increase automatically from the March value of 123.1p, but the size of some of the exceptional revaluations means there may be a bit of a surprise here ... the share price of 150p is *only* a 15% premium to the revised NAV.

If the premium reverts to more "normal" levels, that would suggest a share price of about 155p - looks a big leap!

[skinny] 19/11/2014 07:08

Interim Results Six Months Ended September 2014

Interim Highlights

for the six months ended 30 September 2014


· Interim dividends plus uplift in NAV per share contributed to total shareholder return of 9.0% in the six month period.

· Aggregate quarterly dividends declared in first half of 3.62p per share (2013: 3.50p) and on track to achieve the 7.25p per share dividend target for the year to 31 March 2015. Target dividend guidance for the financial year to 31 March 2016 of 7.40p per share.

· Value of the Group's investment portfolio as at 30 September 2014 of £1,639.1m1, up 9.2% from £1,500.6m at 31 March 2014.

· Valuation growth of 9.2%, driven by accretive acquisitions, revaluation of certain investments including an investment the Group has contracted to sell, portfolio performance and a net positive impact from valuation assumptions.

· Net asset value ("NAV") per share (post interim dividend) of 130.5p, up 7.4p (6.0%) from 123.1p at 31 March 2014.

· Three new investments and three incremental stakes acquired during the period for £63.7m funded by £51m equity tap issue in June and drawings under the Group's revolving credit facility.

· Four additional acquisitions of incremental stakes made since the period end for a combined consideration of £103.6m have resulted in a net funding requirement of £104m.

· Continued strong interest in UK PPP/PFI infrastructure investment driving up valuations and making sourcing of similar UK investments more challenging.

· Investment Adviser continues to pursue a disciplined acquisition strategy focused on using its network of industry contacts in the UK and internationally to source new investment opportunities.

1. Includes £8.1m of future investment obligations (March 2014: £5.1m)

Summary Financial Results

for the six months to

30 September 2014 30 September 2013
Restated1 Income £142.3m £82.1m

Profit after tax £131.9m £71.3m

Earnings per share 10.7p 6.2p

Interim dividend(s) per share2 3.62p 3.50p

Net Asset Values



• NAV per share as at 31 March 2014 after deducting the second interim dividend of 3.60p per share

123.1p
• Second quarterly interim dividend per share (declared 14 November 2014)
1.81p
• NAV per share as at 30 September 2014 before deducting the quarterly interim dividend
132.3p
• NAV per share as at 30 September 2014 after deducting the quarterly interim dividend
130.5p

[jonwig] 13/11/2014 15:22

schofip - if you revisit the link you'll find a couple of comments from me at the end of the article. (Different name, but mine own!)

It's an interesting conundrum! During last month's correction, infrastructure funds barely moved, but at least we know perhaps what to look out for!

[schofip] 13/11/2014 14:38

Of the 2 opinions I trust Jonwig's information over Questor. As the shares are well into overbought territory I have sold my holding for now, but I will be back.

[jonwig] 12/11/2014 11:57

But Questor still bangs the drum for 'Buy'.

[jonwig] 11/11/2014 20:20

H1 results on 19 Nov. Latest NAV I know of is 123.1p on 31 March, so the share price is at a 22% premium to that.
In June they managed to get 37m shares away at 137p, which they described as a 'premium to current NAV'. So presumably they have an in-house estimate of that.
Guidance for the current year dividend is 7.25p, giving a yield of 4.8%.

So what, we know all that. Well, this morning I was talking to a broker at XX - they have a notifiable stake for clients. The house view is that the shares are 'Hold/Sell', and the premium to NAV is rather toppy.
They've sold down but not a notifiable amount.

I said I hold but am unlikely to sell unless the chart starts sending signals - anyway, a 10% trailing stop-loss suits me as a rule of thumb. I asked what political risk could arise in the event of a Labour government. He said it was a real possibility that they could act against PFI/PPI contracts and cited the example of Railtrack. (Remember the coalition looked into these contracts at one point.)

[schofip] 06/11/2014 17:35

Thanks or clarifying

[skinny] 06/11/2014 10:48

First Quarterly dividend was paid on 30th September.

From

"· The Company is moving to quarterly dividends with the first quarterly interim dividend of 1.81p per share declared on 23 July 2014. This is in line with the Board's previous guidance of 7.25p per share for the financial year ending 31 March 2015.

· Following receipt of shareholder approval at the AGM on 22 July 2014, a scrip dividend alternative will operate for the four quarterly interim dividends for the financial year ending 31 March 2015, full details of which are set out in the 'Scrip Dividend Circular 2014-15' on the Company's website at under Circulars."