Digital 9 Infrastructure PLC on Thursday withdrew its dividend target as it turned to an interim loss, citing soft UK consumer confidence and high inflation.

Shares fell 28% to 40.06 pence each on Thursday morning in London.

The London-based company managed by Triple Point Investment Management LLP invests in assets such as data centres, subsea fibre cables, and mobile phone masts.

Net asset value on June 30 was 100.13 pence per share, down from 109.76p on December 31 and from 105.13p a year prior.

Annualised NAV total return for the six months was negative 11.2%, compared to positive 10.7% a year before.

For the six months to June 30, Digital 9 Infrastructure swung to a pretax loss of £57.4 million from a profit of £27.4 million a year prior. It reported a loss on investments of £81.5 million compared to a profit of £30.7 million.

The company declared an interim dividend of 1.50p per share, halved from 3.00p a year prior.

Digital 9 Infrastructure said it has decided to withdraw its target dividend of 6.0 pence per share for 2023. This is the amount it had paid for 2022.

‘The period has been characterised by a continued challenging macroeconomic backdrop across major developed economies, with rising inflation and interest rates resulting in continued uncertainty for the capital markets. That same difficult macroeconomic environment has continued to impact the company’s liquidity and sustainable balance sheet management,’ it said.

Digital 9 Infrastructure added that its underlying portfolio continued to perform well despite the headwinds and was in line with management expectations.

Chair Phil Jordan said: ‘Notwithstanding the currently challenging economic backdrop, which continues to feature high-single digit consumer price index growth and softening consumer confidence in the UK, we remain of the view that our investee companies are well positioned to weather the ongoing challenges.’

Regarding its syndication, Digital 9 Infrastructure said it expects executed terms in the fourth quarter of 2023. It will use cash proceeds from the syndication to pay down a ‘significant portion’ of its drawn revolving credit facility and cancel part of it to reduce costs. As at June 30 it had drawn £356 million of the £375 million RCF.

In June, Digital 9 Infrastructure had announced a potential syndication of a minority stake in existing investee companies to strategic capital partners. As a result, it initiated a competitive process to syndicate a minority stake in the Verne Global group of companies, including its operating sites in Iceland, Finland and the UK to strategic capital partners.

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