Interim Management Statement

RNS Number : 3453W

International Public Partnership Ld

17 November 2010

 



International Public Partnerships Limited

Interim Management Statement

For the period 1 July 2010 to 16 November 2010

17 November 2010

International Public Partnerships Limited ("INPP"), a listed infrastructure investment company which invests in global public infrastructure projects developed under the public private partnership (PPP) and private finance initiative (PFI) procurement methods, today issues the following Interim Management Statement for the period 1 July 2010 to 16 November 2010.

Highlights:

·     Asset portfolio continues to perform in line with expectations

·     Reduction in risk free rates likely to positively impact valuation

·     Two new NHS LIFT investments during the period

·     Successful capital raise of £22.3 million through use of tap facility

·     Significant pipeline of opportunities at an advanced stage of development

·     Current and proposed investments unaffected by Comprehensive Spending Review

·     Encouraging outlook for the wider infrastructure sector.

Asset Performance

The Company's asset portfolio continues to perform well with revenues and cash receipts in line with management forecasts.

The Company reports its Net Asset Value (NAV) every six months when it publishes its full and interim results in March and August each year. In addition, the Company provides quarterly NAV guidance predominantly based around risk free rate movements in the countries where INPP holds investments.

Since 30 June 2010 (NAV: 112.9p), risk free rates have continued to reduce in many of the countries where INPP has assets and this can be expected to have a positive effect on net asset valuation.

Outlook

The Company is pleased to report a significant pipeline of opportunities that are at an advanced stage of development. These include four U.K. offshore electricity transmission projects being developed jointly by the Company's investment advisor, Amber Fund Management Limited ("Amber"), and Transmission Capital Partners. These projects are expected to be signed in early 2011, following which INPP will hold 100% of the equity.

The Company is also pursuing a number of opportunities in Australia and Europe where announcements may be expected before year end. These may include new investments as well as acquisitions of additional stakes in existing assets.

The Company is encouraged by the wider outlook for the infrastructure sector. The U.K. government has made several very encouraging announcements about its intention to facilitate further private sector investment into infrastructure as part of its Comprehensive Spending Review and the recently released National Infrastructure Plan. None of the Group's current or proposed investments have been adversely impacted by the Spending Review.

Furthermore, the Company continues to be in receipt of proposals from third parties seeking to dispose of assets meeting the Company's investment criteria. A number of these are under detailed examination by Amber. The Company pursues a very disciplined approach to analysis of these opportunities and to the extent that these materialise, they can be anticipated to be accretive to the Company's cashflows and projected returns.

New Investments in the Period

The Group has made two investments in the period. These were both investments in the National Health Service Local Improvement Finance Trust (NHS LIFT) initiative, where the Group has already made a series of significant investments. NHS LIFT is a long-standing initiative to deliver improved accommodation for community and primary healthcare across 42 areas of England. These additional investments are further examples of how the Group continues to expand the portfolio.

The first investment is in relation to a 1,883m² health and well-being centre in Newby Place in East London. The Project includes the design, build, finance and operation of the centre which is expected to take less than 18 months to build, followed by a 25 year operational period.

The second investment is in Nightingale Lane, East London, and includes the design, build, finance and operation of a 946m² accommodation complex from which the Primary Care Trust (PCT) and occupying GP Practice will deliver a wide range of primary care services. It is expected to take 12 months to build, followed by a 25 year operational period.

Both projects are expected to be accretive for investors in both NAV and yield terms.

Interim Distribution

On 15 October 2010, an interim dividend of 2.85 pence per share was paid to shareholders on the register as at 3 September 2010. This was for the period 1 January 2010 to 30 June 2010 and is a 2.7% increase on the distribution paid in the previous corresponding period.

In line with the Scrip Dividend Alternative Circular that was issued in September, a number of shareholders elected to take script in the Company, in lieu of cash, that resulted in an additional 1,622,132 shares being issued.

The Board intends to issue an announcement before year end outlining the 2011 distribution which is expected to be an increase on 2010. The Board confirms that it expects to increase distributions in future years at least in line with its inflation forecast of 2.5% pa.

Capital Raising

The Company successfully issued 20 million new shares and raised over £22.3 million through utilisation of its tap facility in the first half of September. The average price paid for the shares was 111.9 pence (a 1.8p premium in excess of NAV at 30 June 2010 adjusted for the distribution paid on 15 September). These proceeds have been fully allocated to existing opportunities where INPP or Amber has exclusivity.

Share Capital

As a result of the shares issued under the tap facility and under the Scrip Dividend Alternative the Company had 479,040,303 shares on issue as at 12 November 2010.

Cash on Balance Sheet

The Company has approximately £55 million cash available as at 16 November 2010. It is expected that this will be used to finance new opportunities and pay distributions to investors.

Portfolio

As at 16 November 2010, the portfolio comprised economic interests in 55 projects with a geographical split as detailed below:

Location	Number of projects	Sector	16 November 2010 %1	30 June 2009 % 1
United Kingdom	40	Health Govt accommodation Courts Police Authority Education	52	52
Australia	7	Health Roads/Tunnels Health/Custodial Entertainment	15	15
Canada	2	Education Courts	8	8
Belgium	1	Transport	12	11
Germany	2	Transport Education	8	8
Ireland	1	Courts	4	5
France	1	Health	<1	<1
Italy	1	Health	<1	<1

1.     This breakdown is based on the fair value market valuation of the Group's investments calculated utilising discounted cash flow methodology, adjusted for European Private Equity and Venture Capital Association (EVCA) guidelines.

Top Ten Investments

The Top Ten Investments of the Company as at 16 November 2010 were:

Investment	%
Diabolo Project	12.4
Royal Children's Hospital, Victoria, Australia	8.4
Hereford & Worcester Magistrates Courts	8.2
BeNEX	8.1
Northamptonshire Schools	7.1
Strathclyde Police Training Centre	6.4
Alberta Schools	5.6
Dublin Courts, Ireland	4.3
Tower Hamlets Schools	3.9
Orange Hospital, Australia	3.5

End

For further information:

Bianca Francis                                                            [phone]

Amber Fund Management Limited                                        

Nick Westlake/Hugh Jonathan                                    [phone]/1263

Numis Securities       

Ed Gascoigne-Pees/Ed Berry                                                [phone]/7297
Financial Dynamics

Notes to Editors:

About International Public Partnerships (INPP):

International Public Partnerships Limited (INPP) is a listed infrastructure investment company which invests in global public infrastructure projects developed under the public private partnerships (PPP) and private finance initiative (PFI) procurement methods.

Listed in 2006, INPP is a long-term investor in 55 social and transport infrastructure projects, including schools, hospitals, courts, police headquarters and transport projects in the U.K., Europe, Australia and Canada. INPP seeks to provide its shareholders with both a long-term government-backed yield and capital growth through investment across both construction and operational phases of 25-40 year concessions.

Amber Infrastructure Group (Amber) is the Investment Advisor to INPP and consists of more than 50 dedicated infrastructure specialists which originate and source a strong pipeline of projects for INPP.

This interim management statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules and the interim management statement should not be relied on by any other party or for any other purpose.

 

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