Ecofin Global Utilities and Infrastructure Trust posts strong first half

(Sharecast News) - Ecofin Global Utilities and Infrastructure Trust reported a strong first-half performance on Wednesday, with both its net asset value and share price rising as listed infrastructure and utility holdings benefited from accelerating power demand and infrastructure investment. The AIM-traded company said NAV per share rose 14.1% on a total return basis over the six months ended 31 March, while the share price increased 19.6%.

NAV per share stood at 275.70p at the period end, up from 245.65p at 30 September, while the share price rose to 256.00p from 218.00p. The discount to NAV narrowed to 7.1% from 11.3%.

Net assets attributable to shareholders were broadly stable at £256.9m, compared with £256.6m at the end of September, after share buybacks during the period.

The trust said it had continued to repurchase shares when they traded at a significant discount to NAV, while after the period ended it issued shares from treasury when the shares moved to a premium.

Revenue return per share was 1.92p, compared with 1.86p a year earlier.

Two quarterly dividends totalling 4.375p per share were paid during the half year, and the quarterly dividend was increased to 2.25p from February, equivalent to 9.0p per share annually.

At the period-end share price, the shares yielded 3.5%.

The trust bought back 11.6m shares during the half year at a cost of £27.0m, with a further 3.4m shares repurchased after the period ended.

Following a move to a premium, it issued 2.1m shares from treasury between 21 April and 29 May at an average price of 277.58p per share.

Gearing on net assets fell to 6.2% at the end of March from 10.2% at the end of September.

Chair Susannah Nicklin said the investment manager had actively reduced leverage in early March, after taking profits across outperforming positions as geopolitical risk increased following US and Israeli strikes on Iran.

The portfolio generated £30.9m of gains on investments during the period, compared with losses of £1.1m a year earlier.

Total net return after tax was £31.4m, compared with a £979,000 loss in the same period last year.

Nicklin said the portfolio had delivered "strong performance" through market volatility and geopolitical turmoil, supported by defensive income characteristics and the growth potential of regulated and contracted assets.

"The portfolio proved resilient through a period of market volatility and geopolitical turmoil, supported by the defensive income characteristics and long-term growth potential of regulated and contracted assets," she said.

Investment manager Jean-Hugues de Lamaze said the trust's holdings were supported by essential services including power networks, water and transport, which provided steady and predictable cash flows.

He said long-term themes such as electrification, datacentre growth, industrial reshoring and ageing infrastructure were increasing the need for investment in power grids, generation, storage, water systems and transport assets.

Performance during the half year was driven by stock selection in the UK and Continental Europe, while North American holdings were more mixed. Key contributors included National Grid, SSE, RWE, Enel, E.ON, Engie and Snam, as well as transport infrastructure holdings Vinci and ENAV and environmental services group Veolia.

The manager said listed infrastructure remained undervalued by historical standards, relative to wider equity markets and private infrastructure assets, despite some re-rating in the sector over the past year.

"While short-term performance may continue to be affected by interest rates, bond yields and geopolitical developments, the fundamental case for listed infrastructure remains compelling and the Portfolio Management team remains excited by the prospects for future shareholder returns," de Lamaze said.

At 1026 BST, shares in Ecofin Global Utilities & Infrastructure Trust were up 0.37% at 271p.

Reporting by Josh White for Sharecast.com.

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