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(INPP) International Public Partnerships share chat

Discussion in 'General Share Chat' started by Groucho, Dec 23, 2020.

  1. Groucho

    Groucho Member

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    10 September 2020

    INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED

    ('INPP', the 'Company')

    HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

    OPERATIONAL UPDATE

    · The high quality of the Company's investments and the active stewardship of the portfolio by the Investment Adviser, Amber Infrastructure Group ('Amber'), has ensured that the portfolio has continued to perform well, both for shareholders and wider stakeholders.

    · The Company has to date, experienced limited impact from Covid-19 on its financial and operational performance and net cash flows received in the period were consistent with expectations prior to the pandemic.

    · However, there are a few specific risk areas which the Company has previously indicated, relating principally to Tideway, the Company's largest asset under construction, and where the Company is exposed to elements of demand-based risk, the most significant example being the Diabolo Rail Link.

    · Notwithstanding the ongoing uncertainty caused by Covid-19 and the Company's deliberately cautious approach to managing associated risks, the reliability of the portfolio's operational performance and cash flow has supported a 2.5% increase in half-year fully-covered cash dividend distribution of 3.68 pence per share. The Company has also reaffirmed its current dividend guidance for the full year 2020 and 2021[ii].

    · The Company's liquidity position remains robust with a £400 million revolving debt facility (maturing in July 2021) of which only c.£28.3 million is currently utilised[iii].

    COVID-19 RISK MITIGATION

    · The Company has taken a cautious approach and sought to reflect the anticipated financial impact of Covid-19 within its 30 June 2020 cash flow forecasts and valuations. This cautious approach has contributed to a 0.7% decrease in Net Asset Value ('NAV') to £2.41 billion (31 December 2019: £2.43 billion). The implications and risks of Covid-19 are most significant on Tideway and the Diabolo Rail Link. Further information on these two investments is set out below:

    o Tideway, UK: In February 2020, the excavation of the main tunnel reached the halfway mark of the new 25km super sewer. However, in response to Covid-19, progress has slowed owing to new working protocols and safety measures required and in order to ensure the safety of Tideway workers and the wider community. As a result, in August 2020, Tideway published an update which indicated that the project cost could increase from c.£3.9bn to c.£4.1bn and the completion date could be delayed to the first half of 2025. The impact on Tideway investors (the Company is a 16% shareholder in Tideway) is mitigated by existing contractual and regulatory safeguards. The estimated impact on the Company after applying judgement in respect of the anticipated mitigating factors is reflected in our 30 June 2020 valuation.

    o Diabolo Rail Link, Belgium: As a result of Covid-19, passenger numbers have been materially lower during 2020 to date compared to previous periods. In the event of prolonged under-performance without remedial action, the Company is unlikely to receive distributions from this investment for some time and a technical default may be triggered under the terms of the debt secured on that investment. We have strong, long-term relationships with our stakeholders and constructive discussions are ongoing with project lenders and the Belgian state railway in order to agree how to overcome any potential liquidity or compliance issues. In addition, if required the project benefits from a contractual mechanism which permits an adjustment to the passenger fee in the event that passenger numbers and returns fall below a certain threshold. Notwithstanding these nearer term uncertainties, which have been reflected within our cash flow forecasts, the Company maintains a positive view on the quality of this investment and remains reassured by the contractual protections and the length of the contract term, which runs until 2047.

    FINANCIAL HIGHLIGHTS[iv]

    · NAV per share of 149.2 pence (31 December 2019: 150.6 pence).

    · Interim dividend increase of 2.5% to 3.68 pence per share (30 June 2019: 3.59 pence per share).

    · Total Shareholder Return ('TSR') of 219% since IPO, equivalent to an annualised TSR of 8.9%.[v]

    · IFRS profit before tax of £35.4 million (30 June 2019: £83.7 million). The reduction compared to the prior corresponding period was principally reflective of the BeNEX transaction being recognised in the prior period, as well as the current period decrease in valuation of the portfolio overall as a result of factoring in additional uncertainty caused by Covid-19.

    · Strong inflation protection was maintained with a projected increase in return of 0.78% p.a. in the event of a 1.00% p.a. increase in inflation over and above the assumed rates (31 December 2019: 0.82% p.a.).[vi]

    · Low long-term correlation to the FTSE All Share Index of 0.37 over the five years to 30 June 2020.[vii]

    · Interim cash dividend cover of 1.3x (HY 2019: 1.3x).[viii]


    PORTFOLIO HIGHLIGHTS

    · £11.7 million of new cash investments were made during the first half of 2020 as the Company continues to leverage the breadth and scale of Amber's resource to undertake additional investment activity alongside actively managing the existing portfolio. All acquisitions in the period were funded through the Company's existing cash balances.

    o UK schools: taking further advantage of its pre-emption rights, the Company invested £6.7 million in the Essex Building Schools for Future ('BSF') project which provides education facilities to over 3,700 secondary school pupils across the country of Essex, UK. Post-period end, the Company acquired additional stakes in six BSF project companies that own 14 schools across Bradford and Lewisham.

    o UK digital infrastructure: as part of the £45 million commitment to the National Digital Infrastructure Fund ('NDIF'), the Company invested a further £5 million in three of NDIF's existing investments, which include urban and rural alternative network providers offering ultrafast fibre connectivity to UK homes and businesses. Post-period end, NDIF partially realised an initial investment in Community Fibre which reflected a positive return on the Company's original investment and will support the further growth of Community Fibre in delivering fibre connectivity across London.


    ASSET STEWARDSHIP

    · Along with the management team at Cadent (a UK gas distribution network) and its co-investors, the Company - via its Investment Adviser - has continued to engage with Ofgem concerning the regulatory settlement for the five-year period beginning April 2021. Cadent, the Company and other market participants will continue to work towards the best possible outcome for both customers and investors in the final determination that Ofgem is expected to publish in December 2020.

    · Over 400 commissioned contract variations on the Company's PPP projects resulted in c.£12 million of additional project work conducted on behalf of the respective commissioning bodies. The Company also repurposed several social infrastructure assets - including schools, blue light facilities and other public buildings - to help support the wider community in response to Covid-19. For those investments whose performance is measured by both availability and performance, the availability of those assets was 99.6% for the six months to 30 June 2020.

    · The Company integrates the UN Sustainable Development Goals into its investment lifecycle in order to improve the ESG performance of its underlying assets. The Company's Investment Adviser, a signatory to the United Nations backed Principles of Responsible Investment, was awarded an A+ ranking in its inaugural assessment for both the strategy, governance and the infrastructure modules as testament to the responsible investment approach the Company remains committed to.


    OUTLOOK

    The full implications of Covid-19 remain difficult to fully ascertain. However, the wider market for new infrastructure investment remains positive and the Company is supportive of governments around the world using infrastructure spending as a tool for fiscal stimulus to foster global economic recovery. The asset valuations seen in the secondary market continue to support the Company's existing valuations. The Investment Adviser's team have been very active during the period and the Company have reviewed over 40 different investment opportunities. We will continue to deploy shareholders capital prudently towards an identified global pipeline, including c.£100m of new investment opportunities at preferred bidder stage or equivalent. More information is detailed on pages 16 of the Interim Report.


    Michael Gerrard, Chairman of International Public Partnerships Limited, said: "Many aspects of modern society have been tested by the Covid-19 pandemic and our social and public infrastructure is not immune. However, the Company's portfolio continues to show considerable resilience. As a result of the high-quality, diversified investments carefully originated and actively managed by our Investment Adviser's dedicated team, we have continued to generate consistent and growing returns for our shareholders. The near-term uncertainty due to the implications of Covid-19 will likely result in some short to medium term headwinds for some of our investments, but together with our track record of successfully solving asset management issues and the contractual protections we have in place to protect downside risks, I remain fully confident in the Company's ability to generate positive outcomes for all our stakeholders."


    http://www.rns-pdf.londonstockexchange.com/rns/5449Y_1-2020-9-9.pdf


     
  2. Groucho

    Groucho Member

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    INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED
    PORTFOLIO UPDATE
    FOR THE PERIOD 1 JULY 2020 TO 19 NOVEMBER 2020

    20 November 2020

    International Public Partnerships Limited ('INPP', the 'Company'), the FTSE 250 listed investment company which invests in global public infrastructure projects and businesses, has today issued the following portfolio update for the period 1 July 2020 to 19 November 2020.

    OPERATIONAL HIGHLIGHTS

    · The Company reaffirms that its investment portfolio has continued to perform well, with no material changes to its operational or financial performance since it announced its Interim Results on 10 September 2020

    · During the period, the Company made further investments of c.£9.2 million across the education and digital infrastructure sectors

    · The Company's portfolio of 130 investments in public and social infrastructure projects and businesses continue to deliver essential services to all its stakeholders, maintaining high levels of asset availability

    · The Company continues to maintain confidence in the portfolio's resilience and notes that Covid-19 has resulted in a limited impact on the portfolio and the Company to date

    · Nevertheless, the Company continues to monitor certain specific risk areas, particularly relating to Tideway and the Diabolo Rail Link ('Diabolo'), as highlighted at the time of its Interim Results

    · The Company has delivered a Total Shareholder Return1 since IPO in November 2006 to 19 November 2020 of 231.7% or 8.9% on an annualised basis

    · A first half-year 2020 dividend of 3.68 pence per share was declared on 10 September 2020 and was paid on 13 November 2020

    PORTFOLIO UPDATE

    Overall, the Company's portfolio of assets continues to perform well, both for shareholders and wider stakeholders. We continue to closely monitor the performance of all of our investments specifically in relation to the implications of Covid-19.

    · The portfolio currently has 8.9%2 of assets still in physical construction. The weighted average investment life of the portfolio is currently 34 years3 with a weighted average (non-recourse) debt tenor of 31 years3.

    · As at 30 June 2020, the portfolio comprised economic interests in 130 projects and businesses with a composition as detailed below. This has largely remained unchanged to 19 November 20202:
    Screenshot_20201223-074457_HL.jpg
    Portfolio review

    During the period, the Company has continued to work with the management team at Cadent, an essential UK gas distribution business serving 50% of UK gas customers (16.6% of Investments at Fair Value2). Together with its co-investors, the Company has been engaging with the industry regulator, Ofgem, as it seeks a fair regulatory settlement in respect of Cadent's allowable returns and incentives over the next five years. Cadent, the Company and other market participants will continue to work for a better outcome for both Cadent's customers and investors in the final determination that Ofgem is expected to be publish in December 2020.

    In addition, as previously indicated, there continues to be specific areas of uncertainty as a consequence of Covid-19 relating principally to Tideway, being the Company's largest asset under construction, and Diabolo, where the revenues are linked to passenger numbers.

    · Tideway (8.9% of Investment at Fair Value2) - Tideway is building the 25km 'super sewer' under the River Thames to create a healthier environment for London. Further to the update provided on 10 September 2020, construction activities have continued across the Tideway construction sites with processes and procedures in place to protect the health of workers and the wider community. Progress continues to be made with 19km of tunnel now constructed and the last of the 21 bridges over the River Thames has now been passed. At the end of September 2020, construction works were 60% complete compared to 57% as at 30 June 2020. As previously reflected in the Company's Interim Results, Tideway published a progress update in August 2020 reflecting the impact of Covid-19, which included an estimated £233 million negative effect on cost, increasing the total project cost from £3.9 billion to £4.1 billion, and a nine-month impact on schedule, taking completion to the first half of 2025. There are a number of contractual and regulatory safeguards available to Tideway to help minimise the possible financial impacts of these measures. These include provisions to share additional costs between contractors, Tideway investors (including the Company) and end-customers, up to a threshold, beyond which they are borne by the UK Government. Tideway remains in discussions with Ofwat on a package of measures that would mitigate the financial impact of Covid-19 on the Company. Progress is being made in these discussions and an agreement is expected to be reached in the coming months.

    · Diabolo (8.2% of Investment at Fair Value2) - Diabolo integrates Brussels airport with Belgium's national rail network. Whilst Diabolo does not operate train services and part of its revenues are paid on an availability basis, the majority of its revenues are linked to passenger use of either the rail link itself or the wider Belgian rail network. As a result of Covid-19, passenger numbers have been significantly lower over the course of 2020 compared to previous years, and the reinstatement of a national lockdown in Belgium at the end of October 2020 will have further impacted passenger numbers. Discussions are ongoing with project lenders and the Belgian state railway in order to agree resolutions to short-term liquidity and related debt covenant issues consequent to the reduction in passenger numbers. We will provide further information in due course. In the longer-term, the project benefits from a contractual mechanism which permits an adjustment to the passenger fee should passenger numbers and returns fall below a certain threshold. This mechanism operated successfully earlier in the life of the contract albeit under different circumstances. The operational performance of the asset remains excellent.

    FINANCIAL HIGHLIGHTS

    On 10 September 2020, the Company announced its results for the six months to 30 June 2020 reporting:

    · A 0.9% decrease in Net Asset Value ('NAV') per share to 149.2 pence (31 Dec 2019: 150.6 pence)

    · The portfolio maintains a high level of inflation-linkage such that a 1.00% increase in inflation leads to a 0.78% increase in return4

    · On 10 September 2020, the 2020 first half-year distribution of 3.68 pence per share was declared. This distribution was made in respect of the period 1 January 2020 to 30 June 2020 and represents a c.2.5% increase on the distribution paid in the previous corresponding period

    · The Scrip Dividend Alternative Circular applicable to that dividend was available to investors and the associated scrip allotment or dividend payment was paid on 13 November 2020

    · A target dividend for the 2020 and 2021 financial years has been set at 7.36 and 7.55 pence per share, respectively, in line with the current target annual increase of c.2.5%5. Whilst we currently have good forward-visibility of the cash flows projected to be generated by the Company's investments, we continue to monitor the portfolio for the impact of Covid-19 related risks including those noted above

    The Company also notes that it has a £400 million corporate debt facility (available until July 2021) and as at 19 November 2020, c.£29 million of the facility was drawn, leaving c.£371 million undrawn to support nearer term investment commitments of c.£100 million.

    VALUATION

    · The Company's investment portfolio valuation is determined semi-annually by the Directors after advice from the Investment Adviser and is reviewed by the Company's auditors, EY. This semi-annual valuation is published within the Company's Interim and annual accounts, the last of which was published with the Company's Interim Results ended 30 June 2020 on 10 September 2020

    · The Company also provides quarterly NAV guidance predominantly based on movements over the period in the government bond yields of countries where the Company holds investments and changes to relevant foreign exchange rates

    · This quarterly guidance does not include any changes (positive or negative) in NAV arising from matters specific to individual investments (e.g. changes in asset specific risks, changes to cash flow projections and assumptions, indexation adjustments due to changes in inflation, etc.) although attention is drawn to commentary provided above on the performance of individual assets in the current environment

    · Since the Company published its 30 June 2020 NAV of 149.2 pence per share, government bond yields have decreased in all jurisdictions in which INPP is invested. Other things being equal, the decrease in government bond yields could be expected to have a positive impact on the Company's NAV

    · Since 30 June 2020, Sterling strengthened against all currencies that the Company is exposed to, being the Australian Dollar, Canadian Dollar, the Euro and the US Dollar. The net impact of these foreign exchange rate movements could also be expected, other things being equal, to have a small negative impact on the Company's NAV.

    INVESTMENT ACTIVITY

    During the period since 1 July 2020 the Company made new investments of c.£9.2 million.

    · As previously reported, in August 2020, the Company acquired stakes in six PFI project companies that own 14 UK schools. These schools provide education facilities to over 17,000 pupils across Bradford and Lewisham. The Company invested a further £3.6 million and as a result increased its existing stake by 4% in each of the six underlying project companies. Upon completion, the Company will hold a 54% investment in three of the Lewisham BSF schemes and 45% in the fourth; as well as increasing its share in the two Bradford schemes to 15.5% and 19% in the phase 1 and 2 schemes, respectively

    · During the period, as part of the Company's £45 million commitment to the National Digital Infrastructure Fund ('NDIF'), the Company made further commitments across two of the NDIF's existing portfolio companies, toob and Airband. In addition, and as reported in the Interim Results, NDIF partially realised an initial investment in Community Fibre which reflected a positive return on the Company's original investment and will support the further growth of Community Fibre in delivering fibre connectivity across London

    · In October 2020, the Company acquired an additional interest in Blackburn and Darwen BSF project. The Company invested a further £1.1 million to acquire stakes in two project companies which owns three schools. As a result, the Company now has 100% ownership.


    INVESTMENT ENVIRONMENT AND OUTLOOK

    · Our portfolio of investments provides essential infrastructure to over 13 million people, households and businesses daily across the countries in which we invest

    · As Covid-19 continues to affect many aspects of society and government policy, we continue to assess and monitor its impact on the Company's portfolio

    · Since the outbreak of the pandemic, earlier in the year, there has been an increased focus on ensuring resilience against future threats and the recognition that infrastructure plays a pivotal role in delivering this globally

    · The appetite for long-term responsible investment into public and social infrastructure remains high. There continues to be a positive outlook for private sector investment into public infrastructure across the geographies that the Company invests in particularly in supporting the post-Covid-19 recovery

    · International momentum for action on climate change continues to grow, with China and Japan joining the UK, EU, Sweden and New Zealand in setting net zero carbon targets. The Company continues to monitor the opportunities that will emerge from climate action

    · The pipeline for the types of assets the Company invests in is positive and the Company remains confident in the ability to continue to source and develop high-quality, well-performing opportunities, across the Company's target geographies, that deliver long-term, predictable cash flows with strong inflation-linkage that meet the Company's risk-return profile

    · In addition, the Company continues to monitor developments as Brexit preparations progress and as previously expressed, we do not believe that we are unusually exposed or that there will necessarily be a significant impact on the Company's existing investments. However, this cannot be guaranteed, and we continue to monitor developments closely, as the new relationship between the UK and the EU continues to evolve


    Notes to Editors:

    While it is no longer a requirement under the Disclosure and Transparency Rules for the Company to issue Interim Management Statements, the Board believes it is in the interest of shareholders for the Company to provide quarterly updates in addition to its half year reports.

    1. Source: Bloomberg. Share price appreciation plus dividends assumed to be reinvested.

    2. This is based on the fair valuation of the Company's investments as at 30 June 2020 calculated utilising a discounted cash flow methodology as stated in the valuation section.

    3. This includes non-concession entities which have potentially a perpetual life but are assumed to have finite lives.

    4. In aggregate, the weighted average return of the portfolio would be expected to increase by 0.78% per annum in response to a 1.00% per annum inflation increase over the currently assumed inflation rates across the whole portfolio. Based on analysis as at 30 June 2020.

    5. Dividend targets are targets and not profit forecasts and there can be no guarantee they will be achieved. Projections are based on the current individual asset financial models and may vary in the future.
     
  3. Groucho

    Groucho Member

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    CONSORTIUM AWARDED PREFERRED BIDDER - OFTO PROJECT


    22 December 2020


    International Public Partnerships Limited ('the Company', 'INPP'), the listed infrastructure investment company, is pleased to announce that Transmission Capital Partners, the consortium comprising INPP, Amber Infrastructure and Transmission Investment has been appointed as preferred bidder for the long-term license and operation of a further offshore transmission project ('OFTO').

    The latest scheme, comprising the transmission cable connection to East Anglia One Offshore Wind Farm represents the tenth such project that Transmission Capital Partners has been appointed to, as preferred bidder. The Company expects to invest up to £90 million into East Anglia One OFTO, with financial close estimated in the second half of 2021.

    This investment commitment is in addition to the Company's extremely strong near term OFTO pipeline where it has already been appointed preferred bidder on Rampion and Beatrice OFTOs, representing additional investment commitments of up to £100 million. These OFTOs are also expected to reach financial close during the course of 2021.

    The East Anglia One offshore windfarm is located c.50km off the coast of Suffolk. East Anglia One has an installed capacity of 714MW providing enough green energy to power over 630,000 homes, thereby increasing the number of homes that are powered by the Company's OFTO portfolio to over two million homes.

    The Company takes no exposure to electricity production or price risk but is paid a pre-agreed, availability-based revenue stream over 21 years which is fully linked to UK inflation ('RPI').

    The offshore wind farm connected by this transmission project is, as at the time of the bid submission, jointly owned by Scottish Power Renewable (UK) Limited (60%) and Bilbao Offshore Holding Limited (40%) (part of the Green Investment Group).


    Additional information on the project will be realised on financial close.

    A copy of the Ofgem press release can be found at www.ofgem.gov.uk.
     
  4. Groucho

    Groucho Member

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    FURTHER INVESTMENT INTO NORTHERN DIABOLO RAIL LINK

    23 December 2020


    International Public Partnerships Limited ("INPP" or the "Company"), the FTSE 250 listed infrastructure investment company, announces that it has made an additional investment of €10 million and made a contingent commitment of a further €14 million to the 100% indirectly owned special purpose company that owns the Northern Diabolo Rail Link (the "Project" or "Diabolo"). Diabolo is a rail infrastructure investment which integrates Brussels airport with Belgium's national rail network.

    The additional €10 million has been invested by the Company to support the Project's liquidity position, ensure its debt covenants will continue to be met, and ultimately protect the value of the Company's investment. The likely need for this commitment has been flagged previously.

    As previously advised, Covid-19 has resulted in the number of passengers using the Project being significantly lower over the course of 2020 compared to previous years, and the reinstatement of a national lockdown in Belgium at the end of October 2020 has further impacted passenger numbers. Whilst Diabolo does not operate train services, and part of its revenues are paid on an availability basis, the larger part of its revenues, while paid by the public authorities and not directly by passengers, are nonetheless linked to the numbers of passengers that use either the rail link itself or the wider Belgian rail network.

    The Project's operational performance remains excellent. However, without remedial action by the Company, the continued lower than projected passenger numbers would be anticipated to result in a liquidity shortfall and a breach of certain formula-based debt covenants in early 2021. The Company has been aware of this possibility for several months and has been proactively engaged in discussions with the Project's lenders and the Belgian state railway since the onset of Covid-19. Agreement has now been reached to provide this additional funding to mitigate the issues noted above.

    The extent to which funding additional to the €10 million investment is required will depend upon the timing of the recovery in passenger numbers. There is naturally a high degree of uncertainty inherent in future passenger projections so, with an intention of prudence, the Company has allowed up to €24 million in total to be made available should the Project require it. To the extent that the full €24 million is not required, unutilised commitments will be cancelled.


    Despite the Covid-19 related issues the Project has encountered, the investment remains strategically important for INPP and retains a number of attractive investment characteristics including:

    · Historic strong performance with high levels of passenger use;

    · A remaining concession term of over 26 years;

    · High degree of inflation linkage;

    · Providing an essential service for travellers; and

    · Supporting the climate-positive modal shift towards the greater use of public transport.

    The Company's valuation of the Project was reduced as at 30 June 2020 in recognition of the likely impact of reduced passenger numbers. Further negative adjustments are not currently anticipated to exceed the amounts of additional capital now being committed to the Project but this position will remain under review.

    The long term valuation and cashflow impact on the Company is not straightforward to project as, besides the fact that ongoing discussions continue with the Project stakeholders with respect to mitigation, in the longer-term, the Project benefits from a contractual mechanism which permits an adjustment to the future passenger fee should passenger numbers and returns fall below a certain threshold. This mechanism operated successfully earlier in the life of the Project but, subsequently, the higher than forecast passenger use during the period 2013 to 2019 resulted in returns above the threshold at which this mechanism could be invoked. The lower passenger numbers consequent on Covid-19 have not yet rendered this mechanism available. However, this mechanism remains an important downside protection for the remaining term of the concession.
     
  5. Groucho

    Groucho Member

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    NOTICE OF RESULTS


    16 February 2021


    International Public Partnerships Limited ('the Company', 'INPP'), the listed infrastructure investment company, will announce its results for the 12-month period ended 31 December 2020 on Thursday 25 March 2021.


    There will be a presentation by conference call to discuss the results at 9.30am on Thursday 25 March 2021.


    Analysts and investors wishing to join the presentation via the conference line can do so by registering their details athttps://secure.emincote.com/client/ipp/ipp003/vip_connect. The link will be activated closer to the results date, and once registered, participants will receive access to the relevant dial-in details for the presentation.

    As before, the conference call is not open to the media or their third-party representatives.


    For any queries, please contact Jenny Boyd at FTI Consulting on jenny.boyd@fticonsulting.comor +44 (0) 7971 005577.
     
  6. Groucho

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    INPP EXTENDS CORPORATE DEBT FACILITY FOR FURTHER THREE YEARS


    4 March 2021


    International Public Partnerships ('the Company', 'INPP'), the listed infrastructure investment company, is pleased to announce that it has renewed its corporate debt facility for a further three years to March 2024 to support its future investment pipeline.

    The new facility has the same overall £400 million capacity as the previous fully committed arrangement but is structured to more efficiently support the Company's near-term pipeline comprising £250 million on a fully committed basis together with a flexible 'accordion' component which will, subject to lender approval, allow for a future extension by an additional £150 million. The new facility will expire in March 2024 and the following key pricing terms have been negotiated:

    · a margin of 165bps over EURIBOR for Euro drawings and 170bps over SONIA for Sterling drawings; and

    · a ratchet mechanism applies to the commitment fee such that it varies between 50bps and 90bps depending on the level of utilisation.

    The banking group for the existing facility has been retained. This includes National Australia Bank, The Royal Bank of Scotland International, Sumitomo Mitsui Banking Corporation and Barclays Bank.


    As at 3 March 2021, the Company had utilised £38 million of the credit available to it under the debt facility, leaving £212 million of the new £250 million committed facility available. This available funding will be used to finance the Company's existing preferred bidder Offshore Transmission Project ('OFTO') investment commitments including Beatrice, Rampion and East Anglia One OFTOs, as well as further investments into Diabolo Rail, Offenbach Police Headquarters and existing digital infrastructure investments.
     
  7. Groucho

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    25 March 2021

    2020 Second Half Year Dividend


    The Board of International Public Partnerships Limited ("INPP", the "Company"), the FTSE 250 listed infrastructure investment company, declares a distribution covering the period:


    Distribution period: 1 July 2020 - 31 December 2020
    Distribution amount per share: 3.68 pence
    Ex-dividend date: 8 April 2021
    Dividend record date: 9 April 2021

    Circulation of Scrip Election Forms and Circular: 23 April 2021
    Last date to elect/revoke elections: 14 May 2021
    Payment date/Allotment of scrip: 4 June 2021

    Scrip Alternative in operation:

    Yes (subject to the average of the middle market prices of the Company's Shares derived from the Daily Official List of the London Stock Exchange for the Ex-Dividend Date and the four subsequent dealing days being at a premium to the last published NAV calculated on a per share basis)

    The 2020 second half year distribution of 3.68 pence per share is in line with the target previously outlined by the Directors and, as per previous periods, has been entirely funded through operating cash flow from the underlying projects.


    2020 and 2021 Full Year Distributions

    The Board of Directors reaffirms that it has established a target for 2021 of 7.55 pence per share and today announces a 2022 target distribution of 7.74 pence per share, providing additional guidance to investors as to the Company's future intentions and the overall continued performance of its portfolio.The targeted payments would represent a c.2.5% increase on the preceding distributions and would continue to be in line with the growth target indicated at the time of INPP's IPO in 2006. Whilst we currently have good forward-visibility of cash flows generated by the Company's investments given their predictability, we continue to monitor the current Covid-19 related uncertainty.


    Scrip Dividend Alternative

    The Board intend to offer a scrip dividend alternative for this distribution to those eligible INPP investors who wish to receive additional INPP securities in lieu of a cash payment. This offer is subject to the average of the middle market prices of the Company's shares derived from the Daily Official List of the London Stock Exchange for the Ex-Dividend Date and the four subsequent dealing days being at a premium to the last published NAV calculated on a per share basis. In line with prior dividends, the Company has implemented an online process, reducing the need for paperwork and allowing eligible INPP shareholders access to a web-based service to elect the scrip dividend alternative. Details will be sent to all eligible INPP shareholders on the register as at the record date for the dividend being 9 April 2021 with the scrip dividend circular being mailed on or about 23 April 2021, the terms of the scrip dividend alternative will also be available on the INPP website. Shareholders wishing to access the web-based service and receive electronic communications from the Company can do so at www.signalshares.com.

    Note: The above distribution guidance is provided by the Company in consultation with its Investment Adviser as a target only and is not a profit forecast. There can be no assurance that this target will be met or that the Company will make any distributions whatsoever. The times and dates in this announcement are expected times and dates only and are subject to change. The Board will continue to review whether scrip dividends are appropriate for future dividends. Any such changes will be notified to shareholders through a regulatory information service.
     
  8. Groucho

    Groucho Member

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    25 March 2021


    INTERNATIONAL PUBLIC PARTNERSHIPS LIMITED

    ('INPP', 'the Company')

    FULL YEAR RESULTS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2020



    OPERATIONAL HIGHLIGHTS

    · The Company had a successful year in 2020 particularly against the wider backdrop of the global Covid-19 pandemic

    · The overall resilience of the portfolio has supported a 2.5% full-year dividend increase to 7.36 pence per share. The Company's Board is pleased to reaffirm its dividend target for 2021 of 7.55 pence per share, and to provide new guidance for 2022 of 7.74 pence per share

    · Throughout the pandemic the Company has continued to deliver long-term benefits for all its stakeholders by investing in and responsibly managing 130 public and social infrastructure assets which deliver essential public services internationally

    · The pandemic has, to date, had only a limited impact on the overall financial and operational performance of the Company. However, there continues to be uncertainty relating to specific assets in the portfolio including Tideway and the Northern Diabolo Rail Link ('Diabolo') which have, respectively, ongoing construction activities and revenues that are indirectly linked to usage

    · Whilst contractual mitigants exist on both these assets and these risks are being actively managed by the Investment Adviser, the Company has adopted a cautious approach to these risks which has contributed to a 1.7% decrease in the NAV to £2.38 billion (December 2019: £2.43 billion). This represents a NAV per share decrease of 2.3% to 147.1 pence per share (December 2019: 150.6 pence per share)

    · The Company completed £30 million in new investments during 2020 and has an investment pipeline consisting of projects where it is preferred bidder, or equivalent, of c.£220 million, including its tenth UK offshore energy transmission project ('OFTO')

    · The Company's Investment Adviser submitted its inaugural PRI transparency report, obtaining an A+ ranking for both the strategy and governance, and the infrastructure modules. The Company draws on the Sustainable Development Goals ('SDGs') to help drive environmental and social progress across its investments and has resolved to align its reporting with the recommendations of the Task Force on Climate-related Financial Disclosures ('TCFD')

    FINANCIAL HIGHLIGHTS[ii]

    · NAV per share of 147.1 pence per share (31 December 2019: 150.6 pence per share)

    · Full-year dividend increase of 2.5% to 7.36 pence per share (31 December 2019: 7.18 pence per share) supported by strong 2020 cash dividend cover of 1.2x[iii]

    · IFRS profit before tax of £60.8 million (31 December 2019: 137.8 million). The decrease in valuation for the period overall as a result of the uncertainty caused by Covid-19 contributed to the reduction in profit before tax compared to previous years

    · The Company's underlying revenues continue to be underpinned by strong inflation-linkage with a projected increase in return of 0.78% p.a. for a 1.00% p.a. increase in inflation (31 December 2019: 0.82% p.a.)[iv]

    · Despite wider equity market volatility, the Company's shares maintained a continued low correlation to the FTSE All Share Index of 0.38 over the five years to 31 December 2020 (31 December 2019: 0.19)[v]

    · The Company will target full-year dividends for 2021 and 2022 of 7.55 and 7.74 pence per share, respectivelyi

    OPERATIONAL UPDATE

    · Thames Tideway Tunnel, UK ('Tideway') | SDG 6, 9 & 11: clean water and sanitation, industry, innovation and infrastructure and making sustainable cities and communities

    The tunnelling of a new "super sewer" beneath the Thames reached 60% completion during 2020, despite delays to the project's construction timetable as a result of the first UK national lockdown in March 2020, where only essential and safety-critical works were carried out, as well as ongoing distancing requirements. With appropriate processes and procedures in place to protect the health and safety of workers and the wider community, construction activities progressed over the period and the final tunnel boring machine was launched in January 2021. In August 2020, Tideway indicated that Covid-19 will cause the project cost to increase from £3.9 billion to £4.1 billion and the completion date to be delayed from June 2024 to March 2025. Existing contractual and regulatory safeguards will help mitigate the financial impact on investors (the Company is a 16% shareholder in Tideway) and Tideway is in discussions with Ofwat, its regulator, regarding a package of further mitigations. The Company has adopted a cautious approach by reflecting the latest cost and schedule information within the 31 December 2020 valuation, including a prudent assessment of the further mitigations.

    · Diabolo, Belgium | SDG 11: Making sustainable cities and communities

    The Company's investment in Diabolo, a rail infrastructure investment which integrates Brussels Airport with Belgium's national rail network, runs until 2047. The majority of revenues from Diabolo are linked to passenger use of either the rail link itself or the wider Belgian rail network, and as a result of the impact of the Covid-19 pandemic on international travel and national lockdowns in Belgium, passenger numbers were significantly lower over the course of 2020. Following proactive discussions with the project's lenders and the Belgian state railway since the onset of the pandemic, and as announced in December 2020, INPP committed £9.1 million in December 2020 to protect Diabolo's liquidity position and ensure its debt covenants will continue to be met. A further £12.6 million in contingent funding was committed to support the project's future liquidity position and ensure compliance with debt covenants, noting that any unutilised funding will be cancelled. To inform the 2020 valuation of Diabolo, the Company commissioned advice from a specialist independent technical adviser to help forecast future passenger numbers as lockdown restrictions ease and international travel resumes. The Company has continued to take a cautious approach to near-term uncertainty by assuming that no distributions will be made by Diabolo until 2023.

    · Gas distribution, UK | SDG 7 & 9: affordable and clean energy, and industry, innovation and infrastructure

    The Company's investment in the UK's largest gas distribution network which serves 11 million customers is the Company's largest asset by investment fair value. Cadent's revenues have remained largely unaffected by Covid-19, but an increase in costs from delays to planned works and new working protocols to accommodate social distancing is likely. Separately, Cadent's management team has engaged intensively with the UK energy regulator, Ofgem, to ensure the best possible outcome for Cadent's customers and investors for the next five-year regulatory period due to start in April 2021 ('RIIO-2'). Following Ofgem's final determination for Cadent in respect of RIIO-2 in December 2020, Cadent has sought an independent review by the Competition and Markets Authority ('CMA') as it believes this approach will best serve Cadent's customers' interests. Notwithstanding the appeal's outcome due later in 2021, the Company has sought to reflect the final determination issued by Ofgem in its revised cash flow forecasts for Cadent.

    INVESTMENT ACTIVITY

    During 2020, the Company completed £30 million of additional investments across the education, transport, and digital sectors; all of which help generate long-term, inflation-linked returns by growing the Company's dividend and creating potential for capital appreciation.

    · Digital infrastructure, UK | SDG 9: industry, innovation and infrastructure

    The need to reduce the digital divide has become acutely apparent during 2020, with the pandemic highlighting the importance of reliable digital connectivity across the UK. Of the Company's initial £45 million commitment to the National Digital Infrastructure Fund ('NDIF'), £37.3 million has now been drawn, following £9.5 million of additional investment during 2020 in three of NDIF's existing investments. The Company made two partial realisations in two alternative network providers, Community Fibre and Airband; the valuations reflected a positive return on the Company's initial investment.

    · Schools, UK | SDG 4 & 9: Quality education, and industry, innovation and infrastructure

    The Company invested £11.4 million in additional stakes in three Building Schools for Future ('BSF') projects in Essex, Bradford and Lewisham, and Blackburn and Darwen, respectively. These availability-based investments are expected to be accretive to the Company's returns and provide education facilities to over 23,000 pupils.

    · Energy transmission, UK | SDG 7 & 13: Affordable and clean energy, and climate action

    The Company was appointed as preferred bidder on the East Anglia One OFTO in December 2020 and expects to invest up to £90 million in what is the Company's tenth such appointment in the UK offshore transmission sector. The East Anglia One offshore wind farm is located c.50km off the coast of Suffolk and has an installed capacity of 714MW providing enough green energy to power over 630,000 homes.

    ASSET STEWARDSHIP AND RESPONSIBLE INVESTMENT

    The Company's portfolio of investments continues to deliver sustainable non-financial benefits for all stakeholders. The Investment Adviser and its c.135 staff have continued to work with public sector counterparties to maintain the delivery of essential public services and ensure strong ongoing asset performance. The Company has delivered, among other things:

    · Asset availability of 99.7% and 0.1% asset performance deductions;

    · The repurposing of certain social infrastructure assets, including schools, blue light facilities and other public buildings, to support the wider community where these locations would otherwise have been vacant due to the Covid-19 pandemic; and

    · Over 1,100 commissioned contract variations on the Company's PPP projects, resulting in a combined value of over £26 million of additional project work to be completed on behalf of the commissioning body.

    The Company's Board has established a dedicated ESG Committee to enhance its approach to managing ESG risks and opportunities. It has also resolved to align with TCFD framework to facilitate the tracking of the Company's carbon footprint to support its consideration and disclosure of transition and physical risks of climate change. The Company is pleased to report its Investment Adviser achieved an A+ in the UN-backed PRI 2020 assessment for both the strategy and governance and the infrastructure modules in its first year of participation.

    OUTLOOK

    Since the outbreak of the Covid-19 pandemic at the beginning of 2020, there has been broad recognition of governments' responsibility to ensure resilience against future threats, as well as of the pivotal role that infrastructure will play in supporting a sustainable economic recovery.

    While the full consequences of the pandemic and its long-term effects, both economic and social, remain unclear, the Company believes its business model and investment objectives continues to offer a significant degree of protection for investors.

    The Company will continue to play its part in helping societies and communities meet the challenges presented by the pandemic, by ensuring assets and businesses remain as available and resilient as possible. The Company is confident in a positive outlook for private sector investment into public infrastructure to support the post-Covid-19 recovery.



    Mike Gerrard, Chair of International Public Partnerships, said: "The high-quality, diverse nature of the Company's investment portfolio has proven resilient against the headwinds our market is facing as a result of the Covid-19 pandemic. Thanks to the dedication of our Investment Adviser in actively managing these implications, the Company has again met its full-year dividend target and I am pleased to declare two-year dividend guidancei which reaffirms the confidence we have in the Company's ability to generate long-term, inflation-linked returns to our shareholders.

    2020 has proven how critical public infrastructure is in delivering essential services to our economies and local communities, and our strong pipeline of investment opportunities coupled with our market-leading asset management expertise means the Company will be a net beneficiary of what I hope will be a stronger, greener economic recovery."

    International PPL - Full Year Results for the 12 Months to 31 Dec 2020 #INPP https://www.voxmarkets.co.uk/rns/announcement/0951a8a3-f961-4d27-abae-2812414689d3 #voxmarkets


    CURRENT ENVIRONMENT AND MARKET OUTLOOK
    Since the outbreak of the pandemic at the beginning of 2020, there has been a broad recognition that governments need to focus on ensuring resilience against future threats, but also the pivotal role that infrastructure will play in generating economic recovery.

    The UK published its first National Infrastructure Strategy ('NIS') in November 2020, in response to the UK's first ever National Infrastructure Assessment, produced by the National Infrastructure Commission in 2018. The NIS focuses on driving recovery and rebuilding the economy and it recognises the importance of infrastructure investment to achieve this, by maintaining jobs and creating conditions for long-term sustainable growth and decarbonising the economy to achieve net-zero emissions by 2050. Whilst it is currently unclear what role the private sector will have in this renewal of the UK's infrastructure, we remain confident that the need for infrastructure investment will prompt policy support and further clarity.

    The EU echoes a similar sentiment recognising the role of infrastructure in the transition to net-zero and maintaining and upgrading existing infrastructure, as well as driving economic recovery as a consequence of the Covid-19 pandemic. The EU's €1.8 trillion stimulus package comprises the €750 billion Next Generation EU Recovery Fund, a large component of which is focused on infrastructure. The emphasis of this package is on providing funding and direction for pan-European infrastructure projects targeting improved public transport, renewable energy generation, transmission and supply, including infrastructure for hydrogen, digital investments and supporting sustainable growth. The Company expects that over time these initiatives will continue to stimulate opportunities for private investment in infrastructure.

    The Company will continue to play its part in helping societies and communities meet the challenges presented by the pandemic, by ensuring that its assets and businesses remain as available and resilient as possible. There continues to be a positive outlook for private sector investment into public infrastructure across the geographies in which the Company invests, particularly in supporting post-Covid-19 recovery. Notwithstanding the increased demand for the types of assets in which the Company invests and consequent pressure on pricing, the Company remains confident in the ability of its Investment Adviser to continue to source and develop high-quality, well-performing opportunities, across the Company's target geographies, that deliver long-term, predictable cash flows with strong inflation-linkage that meet the Company's risk-return profile. The Company has identified a number of opportunities across Europe and Australia in the energy, transport and social infrastructure sectors as well as having a near-term pipeline of c.£200 million in digital infrastructure, energy transmission, transport and social infrastructure.

    There are a range of risks stemming from Covid-19, the long-term consequences of which are not yet known. Whilst the Company believes that its business model continues to offer a significant degree of protection to shareholders, it will continue to monitor the evolving situation closely and, where possible, take action to mitigate any adverse impacts on the portfolio. Please see more information on page 48.

    I and my fellow Directors would like to thank all those people within our Investment Adviser, our supply chains and all our client and stakeholder organisations, on your behalf, for their exceptional contributions to the performance of the Company during a difficult year.

    Mike Gerrard
    Chair
    24 March 2021
     

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