HICL Infrastructure makes "strong start" to year as earnings grow

HICL Infrastructure PLC said its portfolio has performed as expected in the first few months of its current financial year, and reaffirmed its dividend target and forecast further growth.

The London-based closed-ended infrastructure investment company, which is managed by InfraRed Capital Partners Ltd, said capital expenditure programmes across its growth assets have continued to drive growth in earnings before interest, tax, depreciation and amortisation in the four months ended July 31.

HICL's current financial year ends on March 31, 2027.

The firm noted that it acquired an additional 6.65% interest in Cross London Trains for approximately £52 million during the four-month period, and that its balance sheet "remains strong" with a still-undrawn £400 million revolving credit facility and £238 million in other available liquidity.

"HICL continues to selectively progress an advanced pipeline of investment opportunities," it added.

HICL also said cash generation from its PPP portfolio remains in line with expectations, and continues to support its dividend guidance.

Chair Mike Bane commented: "HICL has made a strong start to the financial year, with its portfolio of high-quality assets performing in line with expectations, delivering resilient cash generation and Ebitda growth, building on the strong performance of last year.

"During the period, we have completed the acquisition of an additional stake in Cross London Trains on attractive terms; provided new guidance on our progressive dividend; and implemented further enhancements in corporate governance arrangements. The improvement in the company's share rating over the period further reflects the positive progress being made."

It said it remains on track to deliver its target dividend of 8.50 pence per share for the current financial year, also reiterating that it expects a total dividend of 8.65p for the year ending March 31, 2028.

"Supported by a resilient portfolio, growing earnings generation, a strong balance sheet and significant capital allocation flexibility, the board remains confident in HICL's ability to deliver an attractive combination of progressive income and long-term capital growth for shareholders," HICL added.

Bane, meanwhile, said: "Following extensive shareholder engagement over the past year, the board was pleased to set out the next phase of HICL's strategic evolution at the company's recent Capital Markets Seminar in July.

"This evolution will maintain the active management approach, disciplined capital allocation and focus on core infrastructure that have been the hallmarks of the company's performance since IPO 20 years ago."

He added that HICL is "well placed to capitalise on the significant opportunity in the evolving infrastructure market."

HICL shares were up 1.6% at 138.18 pence on Monday afternoon in London.

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