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Infrastructure investor International Public Partnerships (INPP) reported its half-year results on Thursday, announcing a fully cash-covered interim dividend of 4.18p per share. This dividend contributes to the company's full-year target of 8.37p per share, representing a 3% increase from the previous year’s 8.13p per share.
For the six months ending on June 30, INPP highlighted a robust inflation-linkage rate of 0.7%, supporting long-term real returns for shareholders. The company also made significant strides in its financial management, including the complete repayment of cash drawn from its corporate debt facility. Consequently, the board approved a reduction of this facility from £350 million to £250 million, underscoring the company’s strong financial position.
Over the past 18 months, INPP realized approximately £235 million from asset disposals, further enhancing its financial stability. A key transaction during this period was the acquisition of the Moray East Offshore Transmission Owner (OFTO) for around £77 million in February, aligning with the company's commitment to supporting the UK’s net zero carbon transition.
Chair Mike Gerrard emphasized that the company’s performance reflects the resilience of its diversified, low-risk portfolio and the robustness of its investment case. Since its initial public offering in 2006, INPP has adhered to a progressive dividend policy, a track record it plans to continue due to the strength of its portfolio, which does not necessitate additional investments to maintain this policy for at least the next 20 years.
Gerrard also noted that the current share price relative to net asset value suggests a significant undervaluation of the company. Managing this discount remains a primary focus, with £235 million realized through asset recycling in the past 18 months aligning with the latest valuations. The company anticipates further divestment activity and plans to extend its share buyback program, potentially increasing it to up to £60 million.
Despite a high bar for new investments, INPP continues to identify promising opportunities. During the reporting period, the company allocated over £85 million to new projects in the energy transmission, social, and digital infrastructure sectors.
As of 1059 BST, shares in International Public Partnerships were down by 0.16%, trading at 127.4p.
