International PPL declares interim dividend in line with target

5th Sep 2024 11:07

(Sharecast News) - Infrastructure investor International Public Partnerships declared a fully cash-covered interim dividend of 4.18p per share in its half-year results on Thursday, contributing to full-year target dividend growth of 3%, bringing the total to 8.37p per share for 2024, up from 8.13p in 2023.

The FTSE 250 company said it maintained a strong inflation-linkage of 0.7% for the six months ended 30 June, supporting long-term real shareholder returns.

It also reported significant financial developments, including the full repayment of cash drawings under its corporate debt facility.

The board subsequently approved a reduction of the facility from £350m to £250m, reflecting its healthy financial position.

Additionally, International PPL said it had realised proceeds of around £235m from asset disposals over the ;ast 18 months.

A notable highlight was the acquisition of the Moray East Offshore Transmission Owner (OFTO) for around £77m in February, aligning with the company's goal of contributing to the UK's net zero carbon transition.

"The company's solid performance in the period is a testament to the resilience of its diversified, low-risk portfolio and fundamentals of the investment case," said chair Mike Gerrard.

"The company has a progressive dividend policy on which it has delivered every year since its IPO in 2006.

"Moreover, the strength of the portfolio is such that no further investments are needed to continue this policy for at least the next 20 years."

Gerrard said the board continued to believe the share price at which the company was currently trading relative to the net asset value "materially undervalues" the company.

"Discount management is a primary focus for the board and investment adviser, having realised £235m through asset recycling in the last 18 months.

"The realisation proceeds achieved were in line with the last published valuations.

"The company expects further divestment activity and, as a consequence, also expects to extend its existing share buyback programme, increasing the programme to up to £60m."

That, Mike Gerrard said, demonstrated the board's confidence in the company's valuation.

"Whilst the bar is high for new investment, we continue to originate compelling opportunities to further enhance long-term shareholder value, investing over £85m in new investments in the energy transmission, social and digital infrastructure sectors during the period."

At 1059 BST, shares in International Public Partnerships were down 0.16% at 127.4p.

Reporting by Josh White for Sharecast.com.