HICL Infrastructure profits rise, net asset value narrows

(Sharecast News) - HICL Infrastructure reported a 50% increase in profit before tax to £46m for the year ended 31 March, it announced on Wednesday, driven by solid portfolio performance and successful asset disposals, despite a decline in net asset value. Earnings per share rose to 2.3p from 1.5p, while income dipped to £97.1m from £105.4m a year earlier.

The FTSE 250 company maintained the full-year dividend at 8.25p per share.

Its net asset value per share fell 3.2% to 153.1p, primarily due to an increase in the portfolio's weighted average discount rate to 8.4%.

Growth assets, which make up 45% of the portfolio by value, delivered strong results, with EBITDA rising 11% year-on-year.

Overall, the portfolio generated a 7.7% underlying return before macroeconomic adjustments.

HICL completed £244m in divestments during the year, taking total disposals to £509m over the last 20 months, with all sales made at or above carrying value.

The company also completed a £50m share buyback and expanded the programme by another £100m, reflecting its focus on capital discipline and shareholder returns.

Net debt stood at £102.2m, supported by £441.8m of available liquidity under its revolving credit facility.

Looking ahead, the board reaffirmed dividend guidance of 8.35p for the year ending March 2026 and issued new guidance of 8.5p for 2027, citing improved portfolio cash generation.

It also announced changes to management fees, which would be based equally on net asset value and market capitalisation from July, enhancing alignment with shareholders.

HICL said it remained confident in its ability to deliver long-term returns, supported by a resilient balance sheet and ongoing portfolio rotation.

"The company's share price performance continues to be disappointing," said HICL chair Mike Bane.

"This is despite another year of solid operating results and actions taken to address the discount.

"I am confident that through disciplined execution of our strategy the company will continue to demonstrate financial robustness and operational excellence thus proving its inherent value."

Edward Hunt, head of core infrastructure funds at InfraRed Capital Partners, HICL's investment manager, added that the company's "high-quality portfolio" was continuing to support its total return proposition, with progression in portfolio cash generation, delivery of portfolio company capex plans and increased earnings from the portfolio's growth assets in the year.

"Looking forward, the active approach to asset rotation remains a key lever to enhance value and address share price weakness, while further refining the portfolio for long-term success."

At 1009 BST, shares in HICL Infrastructure were down 0.56% at 114.36p.

Reporting by Josh White for Sharecast.com.