Hicl Infrastructure Share Discussion Threads

[skinny] 26/3/2018 07:23

HICL Infrastructure Company Limited ("HICL"), the listed infrastructure investment company advised by InfraRed Capital Partners Limited ("InfraRed"), is pleased to announce that it has acquired an incremental 45% interest in the Priority Schools Building Programme North East Batch Project (the "Project") from Galliford Try plc ("Galliford Try"). The consideration of approximately £9m was funded from HICL's revolving credit facility. As a result of this transaction, HICL now holds a 90% interest in the Project.

The Project is a 25-year availability-based public-private partnership ("PPP") to design, build, finance and maintain six secondary schools and six primary schools in the northeast of England. Financial close was in March 2015 and the facilities are now fully operational. The Project is part of the wider Priority Schools Building Programme, a central government initiative set up to address the schools most in need of urgent repair. Hard FM services, as well as lifecycle replacement for the buildings' fabric and certain furniture, fittings and equipment, are being provided by a subsidiary of Galliford Try.

As a PPP, the Project fits within a core target market segment within HICL's stated acquisition strategy. This investment is accretive to the existing portfolio and was sourced through InfraRed's long-standing relationship with Galliford Try.



-ends-

[jonwig] 25/3/2018 11:35

MTO currently ~155p.
Broker views and target prices in March (Barclays not added to list yet):

Liberum BUY 240p
Peel Hunt REDUCE 179p
Numis HOLD 150p

I haven't read the IC article yet, but it's probably similar to that in the link in post #682. A broken outsourcer model may well be the end of PFI as we know it, and existing projects may incur higher costs. Must HICL absorb them? Dunno.

[alter ego] 25/3/2018 11:21

Jonwig, re Mitie, the IC have it as a sell saying they think the business model for low margin outsourcers is "broken". Who's right, Barclays or IC? No need to answer.

[irkin] 24/3/2018 14:35

jonwig & SpectoAcc - thanks.

[jonwig] 24/3/2018 12:33

Just as an addition, Mitie [MTO] seems to be turning round, and has been given a 'buy' rec by Barclays. Not for me, but still, all is not gloom maybe.

[spectoacc] 24/3/2018 07:33

@Irkin - not sure about that article. Yes, is possible the entire business model is kaput, and wasn't just Carillion's under-pricing wrecking the market for others. But to pick on CPI and IRV - both of whom have tanked but both of whom, as @Jonwig points out, have recently secured money - seems a tad odd.

Perhaps the biggest negative for HICL may be that contracts to manage their assets will now increase in price - no Carillion to do it cheaply, and IRV/CPI etc unlikely to under-bid anymore.

Neither CPI nor IRV are going bust near-term, though I'd not want money in either - the IRV cash-providers got warrants over 20% of the equity at 10p for eg.

That article needed to be written about 2 months ago, when there seemed a real chance of others following Carrillion into oblivion.

[jonwig] 24/3/2018 06:35

Irkin - thanks, a timely article. Clearly neither IRV nor CPI are out of the woods, but both have said they have credible turnaround plans (CPI in Jan, IRV this week). These won't necessarily help their ordinary shareholders any time soon, but that needn't concern us so long as the operations carry on.

There's another possible way out. HICL pays the outsourcer for the operation of the hospital. If the outsourcer went bust, the operators of the hospital could continue if they were paid directly by HICL or bought as an entity by another company, even an spv. The government wouldn't want a vital operation to go bust and stepping in wouldn't be the same as rescuing the outsourcer.

A lot of the business formerly known as Carillion is carrying on: lots of their vans around, and our local railway station has a few parked there quite often. Private enterprise can generally be relied upon to find inventive solutions though not necessarily cost-free ones.

Anyway, we hope both HICL and JLIF are exercising their talents to anticipate these possible problems!

[irkin] 23/3/2018 23:46

Any views of the impact on the likes of HICL & JLIF?

[exel] 23/3/2018 22:12

I too have taken the view that the gloom here is a tad overdone, and have added. Expect it to go +/- sideways, till we get the prelims late May.

[spectoacc] 23/3/2018 11:47

Probably thrown good money after bad, since growth seems to have gone for HICL, as for sure has premium, and yield still nothing to write home about, but - averaged a few.

Reasonable discount to NAV, reasonably solid whatever Trump/ftse does.

[scallywagkid] 21/3/2018 14:34

INPP have Carillion issue well under control. Seems HICL main one caught out by it, they shot themselves in proverbial foot with a double cost caution. INPP also seem less troubled by Corbyn & Co and have lower UK PFI political risk. It may take a while for HICL to repair confidence but I feel background improving and it remains a sound business. Greed will eventually prevail over fear!

[andyj] 21/3/2018 12:31

I am waiting to buy, but I have had my fill of companies that incessantly dribble down without any reason.

[spectoacc] 20/3/2018 09:57

A week's a long time in politics tho @Jonwig.. But Corbyn's pro-Putin stance won't be winning many votes.

Still a holder here too - the days of 20%+ premiums are long gone.

[jonwig] 20/3/2018 09:37

@ andyj - still holding. A lawyer from (I think) E&Y was interviewed on the radio yesterday and said it would be impossible to nationalise utilities without paying off bondholders and compensating overseas investors with cross-border treaties. I guess they'd have similar problems with infra funds.

And, fwiw, I think "peak labbour" has passed.

[andyj] 20/3/2018 09:33

A popular hedge against equities falling, a widely held company, falling inexplicably yet no one says a word. Where is everyone?

[skinny] 10/2/2018 15:20

Jonwig - its quite straight forward - to achieve the above, use what I've typed below and replace URL address with the link address and change the Link title accordingly.

You may have to change the the tt to TT in the link address as a non-payer :-)



<a href="URL address">Title of Link</a>

[jonwig] 10/2/2018 15:12

C'mon Skinny, you know we're cheapskate duffers! (And too old to learn how to ...)

[skinny] 10/2/2018 15:07

Or you smarten the link up :-)

[jonwig] 10/2/2018 14:55

They're trying to get non-payers (such as us) to upgrade. If you're a trader with short-term aims, it could be useful to do that.

[irkin] 10/2/2018 13:30

Cheers - in my defence I've only been using advfn for 17 years.

[jonwig] 10/2/2018 08:50

Yes - capitalise at least one of h t t p.

[irkin] 09/2/2018 23:23

How do you post links as a clickable link?

[irkin] 09/2/2018 23:21

hxxp://citywire.co.uk/investment-trust-insider/news/hicl-high-inflation-could-ease-pain-of-carillion-collapse/a1090745?re=52346&ea=133742&utm_source=BulkEmail_Money_Daily_Summary&utm_medium=BulkEmail_Money_Daily_Summary&utm_campaign=BulkEmail_Money_Daily_Summary

[jonwig] 05/2/2018 08:01

Actually they've clarified one important point, that the £50m includes the expected increase in the discount rate, which could have a fairly big effect on its own. presumably it also takes account of the discount unwind.