GCP Infrastructure Investments (GCP) H1 2024 earnings summary

Executive summary

• Net assets at 31 March 2024 were £933.9m, with a diversified UK infrastructure debt portfolio focused on renewables, social housing, and PPP/PFI sectors.

• Dividends of 3.5p per share paid for the six months, in line with the annual 7.0p target; NAV per share was 107.62p.

• Profit for the period was £9.9m, down from £25.8m year-over-year, mainly due to lower electricity prices and higher discount rates.

• Share price at period end was 72.30p, a 32.8% discount to NAV, but total shareholder return for the period was 12.5%.

• No new loans advanced; £12.3m in advances to existing borrowers and £19.5m in loan repayments received.

Financial highlights

• Operating income was £19.9m (31 March 2023: £35.6m); net unrealised valuation losses on investments were £26.0m.

• Net gains on derivatives were £0.7m, reflecting effective electricity price hedging.

• Ongoing charges ratio remained stable at 1.2%; finance costs increased to £4.4m due to higher interest rates.

• Cash and cash equivalents increased to £17.7m from £16.9m at the previous year end.

• Annualised dividend yield was 9.7% against the share price at 31 March 2024.

Outlook and guidance

• Focus remains on capital allocation: reducing leverage, rebalancing the portfolio, and returning at least £50m of capital by year-end 2024.

• Anticipates attractive new lending opportunities as interest rates are expected to decrease, allowing for higher returns on new investments.

• The Board and Investment Adviser expect the current share price discount to NAV to narrow as macroeconomic conditions improve.

• Dividend target of 7.0p per share for the year ending 30 September 2024 is maintained.