Last checked at 
19 May 2010 08:37
19 May 2010
International Public Partnerships Ltd
Interim Management Statement
For the period 1 January 2010 to 19 May 2010
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 18 May 2010, the portfolio comprised economic interests in 52 projects with a geographical split as detailed below:
| Location | Number of projects
| Sector | 18 May 2010 %1 | 31 Dec 2009 % 1 |
| United Kingdom | 37 | Health Govt accommodation Courts Police Authority Education |
53 |
54 |
| Australia | 7 | Health Roads/Tunnels Health/Custodial Entertainment
|
17
|
16 |
| Canada | 2 | Education Courts
|
8 |
7 |
| Belgium | 1 | Transport | 11 | 11 |
| Germany | 2 | Transport Education | 8 | 8 |
| Ireland | 1 | Courts | 3 | 3 |
| France | 1 | Health |
|
|
| Italy | 1 | Health |
|
|
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
The Group has made two investments in the period. The first was a further investment into the NHS LIFT initiative where the Group already has made a series of significant investments. NHS LIFT (Local Improvement Finance Trust) is a long standing NHS initiative to deliver improved accommodation for community and primary healthcare across 42 areas of England. The most recent investment was a modest investment of £217,000 made in February 2010 to develop a new NHS Resource Centre in Hackney in London. The project provides for the design, build, finance and operate (building maintenance and lifecycle services) for a resource centre with an area of 2,254 square metres on part of the old Hackney Hospital site in Hackney, East London for City & Hackney PCT. It is expected to take 16 months to build followed by a 25 year operational period.
On 14 May 2010, the Group acquired a 98% interest in its second German investment. This is the City of Pforzheim School PPP project. The project has completed its main phase of construction and is expected to provide long term public authority backed revenues to INPP over a period of 30 years. The investment was acquired at a price in excess of €1 million and provides immediate additional yield to the Group.
Both projects are expected to be accretive for investors in both NAV and yield terms.
Interim Distribution
On 6 May 2010, an interim dividend of 2.775 pence per share was paid to shareholders on the register as at 6 April 2010. This was for the period 1 July 2009 to 31 December 2009 and is a 3% increase on the distribution paid in the previous corresponding period.
The Group also announced a target distribution for the full year, 1 January 2010 to 31 December 2010, of 5.7p pence per share. INPP 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 Group successfully completed a raising of new capital in January 2010. This was conducted by way of a Placing, Open Offer and Offer for Subscription. Approximately £89m of new capital was raised.
2009 Results
The Company announced its annual results for the period to 31st December in the period covered by this Interim Management Statement and these results were released by RNS to the market on 8th April 2010.
Asset Performance
The Company's asset portfolio continues to perform well with revenues and cash receipts in line with management forecasts. Asset performance was reviewed at the time of the release of the 2009 accounts for the Group. Performance across the portfolio is good and construction completion has been substantially completed on two of the projects in which the Group has an investment since the start of 2010. These are River City Motorway (where the Group has a
Performance of the operational portfolio of assets continues to be at or ahead of expectations with cashflows being received by the Group from these investments in accordance with projections.
The Company reports its assessment of its Net Asset Value (NAV) half yearly when it publishes its full and interim results and does not publish quarterly NAV updates. By way of guidance however, the Company expects that its NAV at 18 May 2010 would have been slightly above its last published NAV figure at 31 December 2009 of 112.7 pence per share.
This has been driven by macro-economic factors, as well as the organic growth of the portfolio and the growing maturity of the portfolio.
Outlook
The Group is encouraged that it continues to be in receipt of a large number of investment opportunities. These include opportunities in Australia, Canada and elsewhere as well as in the UK and Euro-zone. A number of such opportunities are at an advanced level of consideration.
The pipeline of projects being developed by associates of the Investment Adviser also continues to look promising with further NHS LIFT projects and a project in Scotland being under detailed review and a pipeline of other opportunities under development.
Additional investment opportunities also continue to arise on existing investments where variations or additions are requested. Consideration is being given at the current time to potential additions to the project facilities at Tower Hamlets in East London and to the BeNEX transport concession business in Germany.
Finally the Group and its Investment Adviser continue to receive a number of approaches from third parties either seeking co-investment into new PPP project facilities or seeking to sell interest in existing facilities. A number of these opportunities are attractively priced currently.
As noted above the Group raised approximately £89m of new capital in January 2010 and including undrawn corporate credit lines the Group currently has more than £150m of cash available to invest. The Group continues to believe that it will deploy the capital raised by it in January in the course of 2010. In doing so it will continue to evaluate opportunities on a prudent basis with the focus on the creation of long term investor value. The Group will consider additional capital raising where it considers that the volume of attractive opportunities exceeds the level that the Group can meet from existing resources.
At a macro level, there has been considerable speculation in the UK as to whether the change of Government may have any effect on the landscape for PPP investing in the UK. In the view of the Group there has been no sign of any adverse sentiment to date and all the signs are that the new Government continues to see well founded PPP type initiatives as continuing to offer long term value for money in the delivery of infrastructure.
Review for the period
The Top Ten Investments of the Group as at 18 May 2010 were:
| Investment | % |
|
|
|
| Diabolo Project | 10.9 |
| Hereford & Worcester Magistrates Courts | 9.0 |
| Royal Children's Hospital, Victoria, Australia | 9.0 |
| BeNEX | 7.8 |
| Northamptonshire Schools | 7.2 |
| Strathclyde Police Training Centre | 6.8 |
| Alberta Schools | 5.2 |
| Angel Trains | 4.7 |
| Tower Hamlets Schools | 3.9 |
| Dublin Courts, Ireland | 3.4 |
For further information, please contact:
Amber Fund Management Limited: +44 (0)20 7939 0558
Bianca Francis
Numis Securities Limited: +44 (0)20 7260 1345
Nick Westlake
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 Rule. In accordance with these rules the interim management statement must provide:
(1) an explanation of material events and transactions that have taken place during the relevant period and their impact on the financial position of the issuer and its controlled undertakings, and
(2) a general description of the financial position and performance of the issuer and its controlled undertakings during the relevant period.
The interim management statement should not be relied on by any other party or for any other purpose.