Hicl Infrastructure Share Discussion Threads

[jonwig] 27/7/2021 07:19

Well, here's the update:



Everything seems to be "in-line" with expectations, though for the demand-based assets these expectations are significantly reduced from pre-covid.

[exel] 26/7/2021 14:17

Thanks guys! It’s entirely reasonable to infer (from no current update) that trading is broadly in line with guidance/expectations, but I just having a nagging doubt until we get that update, which surely must come before this goes ex div on 26/8/21.

[jonwig] 25/7/2021 14:41

I'm not convinced that lack of news is a problem.
The point of owning HICL is that you have a predictable earnings stream. This can be disrupted by politics (Corbyn, no longer) or by specific events (eg. Eurostar).
As far as I know, there have been none here. Good companies don't issue an RNS unless it's a calendar event or there's a specific issue.

If the AGM had included any trading details, they would have had to be communicated. However, last year there was a TS shortly after the AGM. I'm still willing to accept that 'no news is good news', though I understand the concern.

[petewy] 25/7/2021 12:42

I too am worried about lack of news.(foggy) and considered selling, but I noted John Baron still has HICL in his income portfolio, so I'll wait

Share list is in magazine

[exel] 25/7/2021 11:38

I find it odd that HICL's 20/7/21 AGM came and went without any comment on current year trading. Maybe the main aim was to get the uplifted Directors' Remuneration through? together with the regular authority to issue new shares (up to 10%) at Board discretion without pre-emption rights.

There is normally a Trading Update around this time of year. 2019 it was 6th Aug. and 2020 it was 16th July. As ex div for the unchanged qtrly dividend is now 26/8/21, I would expect an update before then. This may or may not contain an equity raise component? but the recent lack of new projects could suggest 'Not Needed', or they may be warming up for a big one? where some equity raise could also be justified.

Hard to tell. But it all feels a tad foggy, not helped by the regularity of some large late stock offloads, such as Friday 23/7/21. Am guessing that all may become clearer within 4 weeks or so. Trading may be in line, no equity may be needed, and (if so) lack of fresh deal flow could start to wear down investor sentiment - the ex growth syndrome. Any thoughts (anyone) would be welcomed.

[williamcooper104] 07/7/2021 09:43

BBGI raised equity, £50m or around 4 percent of its market cap; and the share price falls nearly 5 percent Annoyingly again no primary bid for retail participation

[exel] 06/7/2021 18:23

fragile again? this see-saw pattern (irritatingly!) repeats,,,,& repeats!

[williamcooper104] 30/6/2021 19:20

Yep - and no retail participation in INPP - which is very annoying I love their 35 year RPI grid connection project

[spoole5] 30/6/2021 17:50

INPP equity issue weighing on infrastructure

[exel] 11/6/2021 10:18

Director Pay may be a factor in the recent switch off, now that the AR & AGM notice are in our hands. eg Chairman going from £70k to £100k sounds a tad overcooked for a stock where the divs are not quite fully covered by eps - meaning that (at the margin) the company is dividending itself back to holders. But that only works if TNAV is above MMV (not the case here). Very crude, I know, but the more that premium of MMV to TNAV is stretched, the greater the chance of a snap-back (as seen yesterday). Anyway, I'll keep reading and look out for justifications for these pay awards.

[4spiel] 08/6/2021 10:52

Yes nice to buy at 1.40 comfortably below NAV.

[4spiel] 07/6/2021 20:29

I thought the annual report good but the increase in corporation tax from in 2023 they hint may affect future dividend. Butdepends of course on other things too!

[exel] 29/5/2021 17:09

Fair points above William, Many thanks.

[williamcooper104] 28/5/2021 23:11

I'm v happy with the discount to BBGI and INPP that HICL is trading at Near 5 yield for c70 percent PFI assets (remember PFI is total gold dust) is v good value in a zero yield world - and the current discount comes from demand assets that will recover And yes the yield is uncovered this year but that's totally irrelevant - all project financed infra is measures on asset life NPVs rather than one years CFAD I'm much happier with hicl diversifying into demand assets than GCP who have moved into junior loans against renewable projects

[jonwig] 26/5/2021 12:30

exel - defensive qualities, maybe?

Income will be partly inflation protected, but NAV will be hit by higher interest rates (ie. dicount rate).

[exel] 26/5/2021 12:00

Results show that this company is ever so slowing dividending itself back to its shareholders. TNAV is down from 154p at last 1/2 year. Div [8.25p.] isn't quite covered by EPS [7.9p]. share price at a 20p premium to the 150p per share asset value. Dividend guidance (flat) extended for 2 more years at 8.25p (presumably cash flow-covered?) - after then? That said, the numbers could have been worse, so I perceive something of a relief rally is under way. Good luck to all holders. I'm on the fence here.

[petewy] 26/5/2021 09:23

Results show the share is ticking over if not upwards

[jonwig] 26/5/2021 07:59

FY results:



I'm pretty happy with these numbers. Balance sheet fine. Demand-based assets not too bad (except HS1, but only 4% of portfolio value).
Dividend 0.9x covered (expected something like) and should be covered next year.

[williamcooper104] 21/5/2021 16:46

Not least because there's no asset management fee on capital returned to share holders

[williamcooper104] 21/5/2021 16:42

Yep they are more likely to reinvest into new assets

[jonwig] 21/5/2021 16:31

I wouldn't expect it to go into run-off any time soon: national infrastructure projects are all the rage in EU, GB, US.

[williamcooper104] 21/5/2021 16:27

That said I also wouldn't be shocked if there's another ATM raise

[williamcooper104] 21/5/2021 16:25

The covering of the divi as measured by one years ratio to free cf isn't really relevant It's the yield relative to the implied discount rate of the NPV of the remaining project cash flows that matters IMO - by implied yield mean the yield HICL use to value their assets as adjusted for the premium that HICL trades at Eg crudely if HICL values its NPVs at 7 percent and trades at a c10 percent premium then the implied return is c6.3 percent - which more than covers the dividend yield Eventually the divi will be uncovered as the PFI projects will run of and will be mainly returns of capital - but the total return will still be c6 percent

[exel] 21/5/2021 15:57

At the 170p level, HICL yields just under 5% - which is neither fully covered nor progressive. I've been poring through the Feb21 mid-H2 update + latest Interims & last year's AR for signs of reassurance, but come away feeling that there may be at least a little more disappointing news to come out with Wednesday's Finals (26/5/21) - notably re income from activity-related positions and EPS. With the stock going ex div on 27/5/21, I can imagine an share price of 158p-163p, in about 7 days from now. Finally, using last year as a marker, I would be unsurprised by further tap issuance, post AGM. Thereafter, I might be tempted back in, subject to pricing.

[joe say] 19/5/2021 08:00

As opposed to the beeb eh?