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To deliver a long-term, stable income to shareholders from a diversified portfolio of infrastructure investments positioned at the lower end of the risk spectrum.
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Yes it is currently a boring share but since my last post the sp has risen about 10p. There are loads of hot tips around but years of investing make me very wary. I am just going to hold for the dividends and be patient. You can get 6% on some building societies now but there is no growth. If you want a real boom youhave to gamble on a pharma. Oild stocks are now old hat..
I agree Simon. Sadly until interest rates come back down significantly I can't see this returning to the previous 160-170p range and I think that could be a long time away if ever. HICL is not offering any dividend growth either which is also a negative for the share price.
One positive is plenty of recent director buying so they obviously see upside from here.
Hi there,
Following on from the last comment, I've just come back from my desert island adventures. With good dividends paid out over the last five years and reinvested into the holding, I realise I am still 10.83% down on my original investment. To my mind that isn't a case of ''doing ok''...........far from it.
I think HICL has done all its ever been asked to do. Like Gilts and Bonds infrastructure products became overpriced as every man and his dog piled in. The natural process is then the price falls as those disappointed bail out with their losses. Still a share you could go away to a desert island for 5 years and come back and anticipate it'll still be doing ok
I'm disappointed in the big drop in valuation. I misunderstood the reasoning in investing in these types of funds.
I thought most infrastructure investments were 'relatively' safe because the underlying contracts were inflation linked, so that the income the trust derived would rise proportionally. To me, it was sold (through press commentary and various sites) as a fairly safe bet re yield, but with the prospect of a little capital growth.
I now realise that the price changes a bit like bonds do. If one has high interest rates, the price reduces. As interest rates fall, the sp should recover. Nevertheless, I am annoyed that the 'experts' in the investment industry 'mis-sold' these types of share. Clearly they didn't understand the product themselves!
This fund seems to be in a death spiral. It is beginning to act like an AIM share. It has fallen over 35%....
No logic... Still enjoy it while it lasts
I think i read that 80% of hicl income is linked to inflation so long term it should go up. Meanwhile I suppose shareholders have to take it on the chin, as always jam tomorrow.
I understand the falling share price reflects the interest rate rises, but perhaps it is exacerbated by the static dividend. I thought the earnings of most infrastructure investments would rise with inflation, but this does not seem to of been the case for a few years and no sign of a rise in the future.
This is certainly getting hit very hard. Then so are all my renewables. Oil is no better and builders are avoid at all costs.
I am taking dividends in cash and sitting on my hands but with 5.5% being offered on cash it is seen as less risky. You still lose though.
When markets go into reverse nowhere is easy to ride it out but as yet I am not in panic mode.....Will post if I see any new opportunities
Did you add any more spindok? what is your take on this disaster of a share price right now?
I never thought it would go lower than my first 2013 buy of 131p but here we are. All infras and renewables have been massacred of late. What a mess and these are generally considered lower risk!. At least the 2.07p dividend is paid on Friday but it won't be going in here that's for sure.
You'll need to buy inflation-linked bonds. HIC does have options for growth as well as income and asset appreciation. It will be a challenging period but much is factored in now and while interest rates will not go back to zero they could come down as goods inflation comes down. I am sure core will eventually come down.
They can renew the contract at "twenty or so years". I know its not quite the same as for example "twenty or so years" for a windfarm having to replace all its parts including the turbine blades. At least I the "taxpayer" and the income will pay for the re-surfacing of the road etc... Its all factored in and everything nicely goes up with inflation.
Tbh, I dont really understand this business. They buy a road or something and get an income stream for twenty or so years. At the end of twenty years they have no asset because they hand it back to the "taxpayer".
It's not like the dividend is awesome. The dividend doesnt really compensate for the fact that the eventual value of the assets is zero.
I can buy shares in PHP and get a 6% dividend. However at the end of the lease PHP still own the asset and can rent it out again.
The dividend is paid on Friday. This always slips just before. May add some but not happy at the market sentiment at present. Time costs little at the moment..
Discount is at 9.7% on NAV 165p last quoted. Hasn't been like this since the mini budget or covid. Wish I had sold more at 165 now. Any ideas, UK gilt bond yields are still less than yield here 5.5%
Don't blame you. I have held and added for over a decade here but trimmed a few at 165p for better opportunities. Higher interest rates and bond yields have hit the infrastructure funds which are seen as a reliable income stream in a low interest rate environment. Now this has not got much going for I'm afraid. Never quite recovered from the Truss mini budget debacle.
I think I may jump ship soon as I break even 162 and put the money into Greencoat wind as I have a few other infrastructure funds and a pure renewable share might be a more balanced option for me. :-). Not saying that there is anything wrong with HICL .
According to the Kepler Research the div is forecast at 8.25p to 2024 ie unchanged. It's only covered 1.03x so dont expect any inflationary uplift any time soon.
Steady as she goes given the current economic backdrop
Next quarter Q2 dividend declared at 2.06p, same as the last few years. Usually the Q4 dividend is bigger so we will have to wait and see if there is any inflationary increase then.
Inflation in the UK has only been an issue for the last 12 months, so probably takes a while to impact increases in the charges for infrastructure and i think HICL set there dividend payments on an annual basis. Based on that I hope to see an increase in dividends soon, otherwise my theory will start to be disproved by reality
The dividend here has not risen with inflation so far, maybe in the future but things don't look great right now. Had a recent small top up at 153p last week that already looks like a mistake. Those recent participants in the fund raise at 172p must be absolutely kicking themselves.
I think the advantage of infrastructure shares is that income will rise in inflationary times, as most of the contracts allow prices to rise with inflation, so yield should be on the way up?
Thanks for your post. I used to take dividends in cash but just ended up spending it!!