Shares in infrastructure investment trust BBGI (BBGI) edged 0.5% higher to 171p in Friday morning trading as it raised its dividend target in a welcome boost for income investors.

BBGI said it was targeting a 2020 dividend of 7.18p per share, up 2.6% on the 2019 dividend, and a 2021 dividend of 7.33p per share, up 2.1% on the 2020 target.

It declared an interim dividend of 3.59p per share, covered 1.58 times by cash.

NO IMPACT FROM PANDEMIC

It comes after the FTSE 250 trust reported a rise in first-half net assets and said its portfolio experienced no material adverse operational or financial impact from the coronavirus pandemic, with cash receipts ahead of business plan.

BBGI’s net asset value (NAV) at the end of the six months to 30 June stood at 136.4p, an increase of 0.1% over the 136.2p recorded at the end of December, and at the lower end of analysts’ target range of 135p-140p.

Its investment basis NAV was up 0.3% to £860.8 million as at 30 June 2020, compared with £858.6 million seen at 31 December 2019.

It brings the total shareholder return since IPO to 136.2%, unmoved from the end of December, while the annualised shareholder return now stands at 10.6%, down from 11.3% at the end of 2019.

PORTFOLIO ‘RESILIENT’ DESPITE UNCERTAINTY

BBGI said its portfolio performance was ‘resilient’ during the first half of the year despite the wider market and economic uncertainty, thanks to its focus on ‘value preservation’ and the low-risk nature of the portfolio’s composition.

Around 99.8% of its assets – which include roads and bridges, as well as health, justice and education facilities – remained available during the period, with no material lock-ups or default events reported.

Going forward, chairman Sarah Whitney said the infrastructure sector will remain attractive, particularly given the ongoing low interest rate environment, and the fact many governments have signalled a commitment to infrastructure spending as part of a post-pandemic recovery, especially as the ‘headroom for sustained intense monetary policy declines’.

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Issue Date: 28 Aug 2020