HICL Infrastructure (HICL) H1 2025 earnings summary

Executive summary

• Balance sheet strengthened by asset sales, full repayment of the £400m Revolving Credit Facility, and initiation of a £50m share buyback programme, with £17.6m completed by 30 September 2024.

• Over £400m of liquidity available for selective capital deployment, positioning for long-term growth and investment opportunities.

• Dividend cash cover improved to 1.07x (2.06x including profits on disposals), supporting reaffirmed dividend guidance of 8.25p for FY2025 and 8.35p for FY2026.

• Portfolio remains diversified across sectors and geographies, with a focus on core, inflation-linked infrastructure assets.

• Growth assets performed well operationally, offsetting PPP headwinds and supporting future earnings.

Financial highlights

• NAV per share at 30 September 2024 was 156.5p, down from 158.2p at 31 March 2024, mainly due to increased forecast cost risk in UK PPP assets.

• Annualised underlying portfolio return was 5.5%, with total income of £71.7m and total return of £45.0m for the period.

• Earnings per share were 2.2p, up from a loss of 1.4p per share year-over-year.

• Weighted average discount rate increased to 8.1%, reflecting PPP lifecycle risk adjustments.

• Net debt reduced to £85m (from £304m at 31 March 2024), with available liquidity of £459m.

Outlook and guidance

• Board reaffirms target dividend of 8.25p per share for FY2025 and 8.35p for FY2026, with improving dividend cash cover expected.

• Focus remains on disciplined, selective growth and special situations with favorable risk-return dynamics.

• Market discount to private valuations for core infrastructure assets presents opportunities for long-term investors.

• Positive long-term outlook for infrastructure investment, supported by structural tailwinds and robust market fundamentals.