LONDON: HICL Infrastructure PLC announced its annual results for the year ended March 31, 2025, reporting a decline in net asset value (NAV) per share but highlighting solid operational performance and an expanded share buyback program.
The company’s NAV per share decreased by 5.1 pence (-3.2%) to 153.1 pence, primarily due to an increase in the portfolio’s weighted average discount rate to 8.4%. Despite this, the portfolio delivered an annualized underlying return of 7.7%, with growth assets outperforming expectations.
HICL completed £244 million ($310 million) in divestments during the year, bringing total realized divestments to £509 million over the past 20 months. The company also expanded its share buyback program by an additional £100 million after completing an initial £50 million repurchase.
New dividend guidance was set at 8.50 pence per share for the 2027 fiscal year, with 2026 guidance reaffirmed at 8.35 pence. Cash cover improved to 1.56 times, or 1.07 times excluding disposal profits.
The company revised its management fee structure to better align with shareholders, transitioning to a 50% NAV and 50% market capitalization basis starting July 1, 2025. This change is expected to reduce fees by 17%.
Chair Mike Bane acknowledged shareholder dissatisfaction with the stock’s performance but expressed confidence in the company’s strategy. Edward Hunt, head of core infrastructure funds at InfraRed Capital Partners, HICL’s investment manager, emphasized the portfolio’s resilience and growth potential.
Key Financial Highlights
– NAV per share: 153.1 pence (March 2024: 158.2 pence)
– Dividend per share: 8.25 pence (unchanged)
– Profit before tax (investment basis): £46.0 million ($58.4 million), up from £30.6 million in 2024
– Net debt: £102.2 million ($130 million), with £441.8 million ($561 million) in available liquidity
HICL said it remains well-positioned for long-term growth despite macroeconomic uncertainties.
Outlook
The Board has continued to prioritise proactive capital allocation for the benefit of shareholders and to address the current share price. The Investment Manager has repeatedly demonstrated the intrinsic value and solid performance of HICL’s investments by completing over £500m of accretive disposals over the last two years. We expect this to continue with £200m of further sales targeted and with proceeds recycled into accretive opportunities – including share buybacks and selective investments offering compelling risk-adjusted returns.
Looking ahead, we expect distributions from the Group’s investments to increase as HICL’s growth assets mature and PPP assets begin to return capital. Reinvestment of these cash flows is critical to the ability of the Company to maintain and grow its portfolio valuation and long-term earnings base. Appropriately balancing the portfolio between growth assets and higher yielding investments is a key strategic priority for the Board and InfraRed.
In this context, the outlook for infrastructure investment is arguably more compelling than for any other asset class. The increasing importance of private investment in infrastructure globally is in sharp focus as nations, including the UK, look increasingly inwards, renewing legacy infrastructure, responding to global infrastructure megatrends, and aspiring to fulfil ambitious growth agendas. The Investment Manager continues to selectively review investment opportunities for HICL that improve its portfolio composition, including, captive opportunities from existing investments.
HICL remains a highly diversified, long-term investor in critical infrastructure projects, positioned at the forefront of structural market tailwinds. Global demand for infrastructure investment is estimated to reach $68tn by 20406. As a global investor with a recognised track record and a resilient balance sheet, your Company is well positioned to benefit from these opportunities over the coming years.