International Public Partnerships (INPP) H2 2023 earnings summary

Executive summary

• Portfolio delivered resilient operational and financial performance despite a volatile macroeconomic backdrop; 143 infrastructure investments across developed markets and sectors.

• NAV per share ended 2023 at 152.6p, down from 159.1p a year earlier; the NAV return was broadly in line with expectations.

• Dividend growth accelerated to 5.0% for 2023, with 1.1x cash dividend cover; inflation linkage remained 0.7%.

Financial highlights

• Cash from investments was £307.1m in 2023, versus £205.9m in 2022; net operating cash flow before capital activity rose to £263.5m from £172.8m.

• Cash investments made were £108.1m, down from £191.6m in 2022; investment distributions were £307.1m.

• NAV was £2,916.1m at year-end, versus £3,039.8m at 31 December 2022; NAV return added £183.6m, offset by bond yields, risk premia, FX and distributions.

• Closing cash was £128.6m, up from £92.8m; cash dividend cover was 1.7x, or 1.1x excluding cash from realisation activity.

• Ongoing charges were 1.20%, versus 1.06% in 2022; net financing costs rose to £7.8m from £2.9m.

Outlook and guidance

• 2024 dividend target increased to 8.37p per share, representing 3% growth; 2025 target is 8.58p, representing 2.5% growth.

• The long-term projected annual dividend growth rate remains 2.5%; targets are not assured.

• The portfolio does not require additional investment to deliver current projected returns; future opportunities will be assessed against strategic KPIs and alternative capital uses.

• Tideway remains scheduled to complete in 2025; Flinders University is scheduled for 2024 and Gold Coast Light Rail Stage 3 for 2026.

• Share price at 29 February 2024 implied a projected net return of 9.3%, 4.7% above a 30-year UK government bond.