HICL Infrastructure (HICL) investor relations material

Strategic evolution and market positioning

• Portfolio has evolved to balance yield and growth assets, ensuring long-term NAV stability and resilience, with nearly 50% now in growth assets.

• Introduction of 'enhancer' assets aims to selectively capture higher returns, targeting a 10%+ total return over the medium term, with enhancer allocation capped at 20%.

• The strategy leverages InfraRed’s expertise in active management, asset rotation, and value creation across the asset lifecycle, supported by a 20-year track record.

• Diversification across geographies, sectors, and regulatory regimes remains central to managing political and regulatory risk.

• InfraRed's best-in-class practices and responsible investment principles support asset management and community engagement.

Financial plan and capital allocation

• The plan is fully self-funded, utilizing surplus cash, disposal proceeds, and further divestments to reinvest in higher-returning assets, with a £1.6bn five-year capital allocation framework.

• NAV is projected to nearly double by 2050 under the Evolve strategy, with a progressive dividend policy maintained and guidance unchanged for FY27 and FY28.

• Weighted average discount rate is expected to rise from 8.5% to 10% over four to six years, driving higher gross returns.

• Dividend cover may ease modestly in the near term but is forecast to remain at or above 1x, recovering as the strategy matures.

• No new fund-level leverage or equity issuance is assumed, with capital recycling through disposals and investment decisions benchmarked against share buybacks.

Operational highlights and portfolio examples

• Affinity Water delivered 20% revenue growth and 127% EBIT growth in FY 2026, with sector-leading credit ratings and resumed dividends.

• Fortysouth achieved 10% annual EBITDA growth, leveraging digital innovation and co-location strategies to drive tenancy and revenue.

• London St Pancras High Speed is preparing for a surge in international rail competition, with plans to double station capacity and attract new operators.

• Active management across construction, expansion, operation, and divestment has driven consistent NAV outperformance over two decades.

• The portfolio’s resilience was demonstrated during COVID-19, with no additional financial support required for demand-based assets.