Source - LSE Regulatory
RNS Number : 1759H
International Public Partnerships
26 July 2023



26 July 2023


International Public Partnerships Limited ('INPP', or the 'Company'), the listed infrastructure investment company, which invests in public and social infrastructure assets and related businesses internationally is pleased to provide a market update and to announce a date for a Capital Markets Day.


Market Update and Macroeconomic Protections

During the first six months of 2023, the Company's assets continued to perform strongly and in line with expectations.  The level of actual cash receipts remained in line with the Company's projections, enabling the net operating cash flows to more than cover the Company dividend. The portfolio's resilience in challenging macroeconomic conditions is largely attributable to:


High levels of protection to increasing base rates

·    As at 31 December 2022, 90% of INPP's portfolio by fair value benefits from mitigations in relation to changes in base rates.  This is either due to the asset-level debt having been hedged for the full term at the original close of each investment (representing 61% of the portfolio by fair value) or because the assets benefit from mechanisms as part the regulatory regimes in which they operate, where the regulator includes a revenue allowance for the cost of debt (29% of the portfolio by fair value). 


·    For the remaining 10% of INPP's portfolio by fair value, increased debt costs are typically able to be recovered from the end user. For example in the Company's UK and German train leasing company investments (which together constitute 8% of the portfolio by fair value), increased costs are expected to be passed through to the client at the relevant re-leasing point.


High levels of inflation correlation

·    The investment portfolio generates strongly inflation-linked cash flows such that a 1.0% increase in assumed inflation rates across all assets is currently projected to result in a 0.7% increase in portfolio returns.


Predictability of operational cashflows

·    Since its IPO in 2006, the Company has delivered average annual dividend growth of c.2.5% and has increased the dividend for 15 consecutive years. The Company has reaffirmed its future dividend targets of 7.93 and 8.13 pence per share for 2023 and 2024 respectively, representing additional c.2.5%[i] annual increases.


·    The projected cash receipts from the Company's existing portfolio of over 140 investments are such that even if no further investments are made, INPP would be able to continue to meet its existing progressive dividend policy for at least the next 20 years.


The Board remains confident that the high quality and long tenor of the Company's cash flows continues to demonstrate its differentiated investment thesis. Notwithstanding this, the Investment Adviser and the Company's Board fully recognise that its shares remain at a discount to the Company's last published net asset value ('NAV').


The Company will publish its interim results on 7 September 2023.  This publication will include a revised NAV as at 30 June 2023. 


As with previous periods, this revised NAV will reflect changes to the macroeconomic environment that have occurred since 31 December 2022.  These changes will include adjustments to the discount rates used to value the forecast cashflows (expected to have a negative impact on NAV) as well as changes to the forecast cashflows themselves to reflect the latest inflation rate and deposit rate expectations (expected to have a positive impact on NAV).  Overall, the Board believes the combined effect will be to have a modestly negative impact on the 31 December 2022 NAV.


The Board and its Investment Adviser continue to believe the discount to NAV at which the Company's shares are trading materially undervalues the Company. The principal current actions taken by the Board in consultation with the Investment Adviser to address this issue include:

·    A strong focus on efficient balance sheet management and, in particular, minimising to the extent possible use of the Company's revolving credit facility ('RCF');


·    Realisation of value from specific existing investments where it is prudent to do so and utilising the proceeds to reduce corporate indebtedness.  The sale of Airband, referred to below, is a first step; and


·    In addition to the reduction of the RCF through additional realisations (further announcements are expected to follow in Q4 2023), further tools, such as share buy-backs and a review of dividend policy remain available for consideration by the Board if the circumstances so justify.


These actions are consistent with the Company's established approach. Moreover, the Board and the Investment Adviser are firmly committed to the creation and delivery of long-term shareholder value.  The continued strength and long duration of the Company's future anticipated cash receipts provide the Board and the Investment Adviser with confidence to continue to meet the Company's investment objectives.


Balance Sheet and Realisation

The Company maintains a strong liquidity position. INPP's £350 million RCF is currently c.£125 million utilised (including c.£17 million committed by way of letters of credit) and is available until June 2025, following the refinancing earlier in 2023.  Current fund level leverage therefore constitutes c.4% of the Company's 31 December 2022 NAV. 


It is also the Company's intention to repay c.£20 million of the RCF before the end of July utilising a combination of free cashflow and the proceeds from the sale of its remaining investment[ii] in one of its digital infrastructure assets, Airband, in respect of which a sale was recently agreed and which is expected to reach completion shortly.


Airband is a fibre to the premise and fixed wireless access network operator which, since INPP's investment in 2018, has rolled out up to 1GB speed broadband to over 290,000 homes, businesses and industries in rural and hard-to-reach areas in the UK. 


Notification of Date of Interim Results and October Capital Markets Day

The Board is also pleased to announce that in addition to its interim results presentation expected to be held on Thursday 7 September 2023, it intends to host a Capital Markets Day for investors on the morning of Wednesday 4 October 2023 in central London.


The Capital Markets Day will include a panel with representatives from portfolio companies together with members of the Investment Adviser's team. 


Institutional investors and sell-side analysts who wish to register in advance of either event can do so via  Further details including timings and access to both events will be released via RNS at a later date.




For further information:


Erica Sibree      

Amber Fund Management Limited         


+44 (0) 7557 676 499

Hugh Jonathan

Numis Securities

+44 (0)20 7260 1263

Ed Berry/Mitch Barltrop               

FTI Consulting

+44 (0) 7703 330 199 / (0) 7807 296 032


About International Public Partnerships:

INPP is a listed infrastructure investment company that invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.


INPP is a responsible, long-term investor in over 140 infrastructure projects and businesses. The portfolio consists of utility and transmission, transport, education, health, justice and digital infrastructure projects and businesses, in the UK, Europe, Australia, New Zealand and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.


Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists of approximately 180 staff who are responsible for the management of, advice on and origination of infrastructure investments.

[i] Future profit projections and dividends cannot be guaranteed. Projections are based on current estimates and may vary in the future.

[ii] Held through the National Digital Infrastructure Fund which INPP is invested in alongside the UK Government.

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