Interim Management Statement

RNS Number : 7610C

International Public Partnership Ld

19 November 2009

 



19 November 2009

International Public Partnerships Limited

Interim Management Statement 

for the period 1 July 2009 to 12 November 2009

International Public Partnerships Limited offers shareholders an exposure to investments in international infrastructure assets, particularly those with a public or social character, including those developed in conjunction with public bodies under private finance initiative (PFI) or public private partnership (PPP) type procurements.

As at 12 November 2009, the portfolio comprised economic interests in 50 projects with a geographical split as detailed below:

Location	Number of projects	Sector	12  November  2009 %1	30  June  2009 % 1
United Kingdom	36	Health Govt accommodation Courts Police Authority Education	54	58
Australia	7	Health Roads/Tunnels Health/Custodial Entertainment	17	17
Canada	2	Education Courts	7	5
Belgium	1	Transport	9	8
Germany	1	Transport	8	9
Ireland	1	Courts	4	3
France	1	Health	<1	<1
Italy	1	Health	<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. 

New Investments in the period

On 30 July 2009, the Group invested an additional €1.04 million to acquire an additional 13% of Brescia Hospital, located in Lombardy, Italy. This brings the total holding in the investment to 37%, with INPP now being joint majority shareholder in the project. The investment was funded from the Group's existing cash balance.

On 13 October 2009, the Group acquired an additional 10% of the Diabolo (Rail) Project. This 10% was acquired from Babcock & Brown and brings the total holding to 75%. The remaining 25% interest is owned by the project lender, HSH Nordbank. The purchase price (including costs) was £3.0 million and was funded from the Group's existing cash balance.

Interim Distribution

On 9 October 2009, an interim dividend of 2.755 pence per share was paid to shareholders on the register as at 11 September 2009. This was for the period 1 January 2009 to 30 June 2009 and is a 2.8% increase on the distribution paid in the previous corresponding period.

The target distribution for the full year, 1 January 2009 to 31 December 2009, is 5.55 pence per share. INPP expects to increase distributions in future years at least in line with inflation (INPP Inflation forecast: 2.5%).

Investor Day

In partnership with the INPP Board, Amber Fund Management Limited held an Investor Day at the newly completed Dublin Criminal Courts Complex on 6 November 2009.

This provided an opportunity for investors and other stakeholders to see first hand a major project in the Company's portfolio immediately prior to it reaching construction completion. During the day presentations were also made to investors from both the Company and the Company's advisors and partners. A copy of the presentations are available on the Company's website.

Performance 

The Company's asset portfolio continues to perform well with revenues and cash receipts in line with management forecasts. The tunnel boring element, a critical path element of the programme, of the Diabolo Rail project has now been completed on time and, as noted above, the Dublin Courts Project is expected to be completed within the week. Durham Courthouse, in Toronto, Canada, is also expected to complete construction by its contracted finish date of the end of November.

The Company reports its assessment of its Net Asset Value (NAV) half yearly when it publishes it full and interim results and does not publish quarterly NAV updates. By way of guidance however, the Company expects that its NAV at 12 November 2009 would have been slightly above its last published NAV figure at 30 June 2009 of 111.8 pence per share. This has been driven by macro-economic factors, as well as the organic growth of the portfolio. 

Outlook

While the Company retains its focus on providing long term sustainable income to investors coupled with capital growth generated by the existing portfolio, the Company has announced that it is considering options with respect to raising additional capital.

If the Company does raise additional capital then (after expenses) it would expect to deploy this in further investments having substantially the same characteristics as existing investments.  The Company expects that any surplus capital raising proceeds would be invested within 6-12 months and that projected cashflow of INPP from existing assets in the portfolio will be sufficient to meet distribution targets until all proceeds are invested.  

The Company considers that there are a large number of potential investment opportunities available to the Company which could be accretive to investors. Additionally the Company would expect to repay its existing debt facilities.

Specifically, the Company sees opportunities arising from two sources: 

• Firstly, the strong pipeline of transactions being developed by the Amber Infrastructure Group, the Company's investment adviser. This includes the £50million PPP redevelopment of Liverpool Central Library for which the Amber Infrastructure Group was awarded preferred bidder status on 30 October 2009, as well as nine further U.K. and European PPP projects where exclusivity exists. 

In addition, the Amber Infrastructure Group has a significant number of other projects it is currently bidding, including three opportunities where Amber is one of two bidders in the final competitive phase. INPP has a right of first refusal to acquire from Amber all such projects which meet its investment criteria. 

• Secondly, the Company and its Investment Adviser are being approached with a number of secondary market opportunities to invest in PPP projects (both in the U.K. and overseas) which have been developed by third parties and who are seeking new long term investors in these projects. Typically these projects are at a mature or semi-mature stage and may offer additional yield to INPP. The Board's policy remains to seek investment opportunities in both early stage PPP projects (which offer capital growth potential) and in more mature projects (which provide additional support to the Company's long term income projections and thus the ability to continue to grow distributions).

Review for the period

The Top Ten Investments of the Group as at 12 November 2009 were:

Investment	%
Diabolo Project	9.9
Hereford & Worcester Magistrates Courts	9.0
Royal Children's Hospital, Victoria, Australia	8.7
BeNEX	8.0
Northamptonshire Schools	7.3
Strathclyde Police Training Centre	6.9
Angel Trains	5.2
Tower Hamlets Schools	4.4
Alberta Schools	4.1
Dublin Courts, Ireland	3.8

For further information, please contact:

Bianca Francis                            

Amber Fund Management Limited                

[phone]

[e-mail]

Nick Westlake

Numis Securities Limited    

[phone]

[e-mail]

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.

 

END

 

 

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