INPP hails government support(2)

In its latest six-monthly results announcement, the listed UK infrastructure investment firm has applauded government programmes designed to ‘ensure that important public infrastructure is delivered in a timely and efficient manner’ – highlighting the UK and Australia in particular.

In the firm’s results statement covering the six months from 1 January to 30 June 2012, International Public Partnerships Limited (INPP) credits governments for taking action to keep infrastructure projects on track.

While claiming that the UK-listed infrastructure investment firm would not need to draw on the UK government’s £40 billion (€51 billion; $62 billion) guarantees scheme – announced in July – chairman Keith Dorrian nonetheless said the scheme was “a measure of the UK government’s commitment to ensure that adequate investment is made into the sector”.

He also pointed to statutory body Infrastructure Australia’s recent report into the procurement of infrastructure across the country. He said it “called for a suite of reforms, including use of co-funding between governments and the private sector on nationally significant PPP [public-private partnership] projects”.

Dorrian said moves such as these were evidence that governments were aiming to “ensure that important public infrastructure is delivered in a timely and efficient manner”.

The results showed INPP increasing its net asset value (NAV) to 118.4p, compared with 116.9p a year earlier. NAV grew to £838.8 million from £624.3 million, and profits before tax rose to £19.4 million from £11.4 million.

The highlight of the period was a £200 million capital raising, which exceeded an initial target of £180 million. INPP said the announcement of the capital raising meant total return (share price performance and dividend growth) during the period was a “modest” 0.35 percent, but that the share price had “performed strongly” since the successful completion of the capital raising.

During the reporting period, INPP invested only an additional £8.7 million, mainly in existing Building Schools for the Future (BSF) projects. However, since the end of June, it invested more than £115 million in the Ormonde UK offshore electricity transmission project and almost £24 million in BSF projects.

Following these commitments, INPP says it has access to £53.5 million of cash and a further £100 million through its corporate debt facility. 

The firm also announced that it is reducing its base fees to 1.0 percent per annum in respect of the gross asset value (GAV) of the company’s operational projects that exceed £750 million, while for GAV less than £750 million and for non-operational projects the fee remains at 1.2 percent.  

Listed in 2006, INPP is invested in 121 social and transport infrastructure projects, including schools, hospitals, courts, police headquarters, transport and renewable energy projects in the UK, Europe, Australia and Canada. It seeks to provide long-term government-backed yield and capital growth through investment across both the construction and operational phases of 25- to 40-year concessions.