Company update and net asset value(s)

GCP Infrastructure Investments Ltd

23 October 2023

 

GCP Infrastructure Investments Limited

("GCP Infra" or the "Company")

LEI: 213800W64MNATSIV5Z47

Company update and net asset value(s)

23 October 2023

Net Asset Value

GCP Infra announces that at close of business on 30 September 2023, the unaudited net asset value per ordinary share of the Company was 109.79 pence (30 June 2023: 110.02 pence), a decrease of 0.23 pence per ordinary share. The net asset value takes into account cash, other assets, accrued liabilities and expenses and leverage of the Company attributable to the ordinary share class.

As announced on 15 May 2023, the Company completed a refinancing of two existing loan notes secured against two waste-wood biomass projects, valued at c. £85 million as at 31 March 2023 and committed to a new £50 million loan note as part of a syndicated facility supporting the same, and one additional, biomass project. Including prepayment fees and valuation impacts totalling c. £10 million, this refinancing generated £50 million of net cash proceeds that were used to repay the Company's revolving credit facility and led to a c. 1.2 pence per ordinary share uplift to the Company's net asset value, predominantly from prepayment fee income received. At 30 September 2023, the Company had £104 million (30 June 2023: £154 million) outstanding under its revolving credit arrangements. 

A period of very low wind speeds and exceptionally dry weather in England and Scotland has decreased actual cash distributions to the Company from its renewables investment portfolio, negatively contributing c. 1.2 pence per ordinary share to the movement. Further reductions in electricity prices continue to decrease actual and forecast cash distributions to the Company from its renewables investment portfolio driven by decreases in short-term power prices as a result of lower European gas demand, an ample supply of LNG, unseasonably mild weather and significant reductions in UK carbon prices leading to a wider price disconnect between the UK emissions trading scheme and the equivalent EU scheme. This is partially offset by the positive performance of the Company's hedging arrangements, therefore overall net movements negatively contributed c. 0.5 pence per ordinary share.

Various other downward movements across the portfolio totalled c. 0.4 pence per ordinary share, offset by updates for actual inflation that contributed c. 0.7 pence per ordinary share. As advised by the Company's independent valuation agent, discount rates remained unchanged this quarter, following the c.40bps increase in the weighted average discount rate used by the Company to value its portfolio at 30 June 2023. A summary of the constituent movements in the quarterly net asset value per ordinary share is shown below.

Net asset value analysis (pence per share)	NAV	Change
30 June 2023 NAV	110.02
Actual generation across the renewables portfolio		(1.19)
Biomass Refinance		1.18
Q3 2023 power price forecast (inclusive of hedging value changes)		(0.54)
Actual inflation updates		0.74
Share buyback accretion		0.33
Other valuation changes		(0.75)
30 September 2023 NAV	109.79

Portfolio

Notwithstanding the lower electricity price forecasts, the portfolio continues to perform materially in line with the Company's expectations. The Company's mature, diverse and operational portfolio provides defensive access to income against a backdrop of market volatility and uncertainty. It is the view of the Company that the long-term and structural demand for infrastructure, and particularly infrastructure debt, offers investors an attractive exposure to an asset class whose performance is non-correlated to wider markets and benefits from long-term and partially inflation protected income. Further portfolio information is available at: www.graviscapital.com/funds/gcp-infra/literature, including a line-by-line breakdown of the investment portfolio and underlying assets that has been made available during the quarter and will be updated by the Company periodically.

Buybacks

On 14 March 2023 the Company announced a proactive programme of share buybacks in response to the persistent discount at which the Company's share price is trading relative to the published net asset value. The Company remains committed to pursue buyback opportunities in line with the strategy that has been set out previously, and to benefit from the investment opportunity that the Company's shares offer at the current price. At 30 September 2023, the Company had bought back 13,565,019 shares.

Updates

The Board, and Gravis, are available to meet with the Company's shareholders at any time. A capital markets day is being scheduled for 16 January 2024, and following the release of the 30 September 2023 NAV, Gravis will be holding a webinar on 3 November at 11:00am. For further details and to book a place please contact [e-mail], [e-mail] or your usual Gravis contact.  

For further information please contact:

Gravis Capital Management Limited Philip Kent Ed Simpson Max Gilbert	[phone]
RBC Capital Markets Matthew Coakes Elizabeth Evans	[phone]
Stifel Nicolaus Europe Limited Edward Gibson-Watt Jonathan Wilkes-Green	[phone]
Buchanan/Quill Helen Tarbet Sarah Gibbons-Cook Henry Wilson	[phone]

Notes to the Editor

About GCP Infra

GCP Infra is a closed-ended investment company and FTSE-250 constituent whose shares are traded on the main market of the London Stock Exchange. Its objective is to provide shareholders with regular, sustained, long-term distributions and to preserve capital over the long term by generating exposure to UK infrastructure debt and related and/or similar assets.

The Company primarily targets investments in infrastructure projects with long term, public sector-backed, availability-based revenues. Where possible, investments are structured to benefit from partial inflation protection. GCP Infra is advised by Gravis Capital Management Limited.

GCP Infra has been awarded with the London Stock Exchange's Green Economy Mark in recognition of its contribution to positive environmental outcomes.

 

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