HICL Infrastructure (HICL) H1 2025 earnings summary

Executive summary

• Balance sheet strengthened by over £400m available liquidity, full repayment of the RCF, and proceeds from major asset disposals, positioning for selective investments and long-term growth.

• Dividend cash cover improved to 1.07x (2.06x including profits on disposals), supporting reaffirmed dividend guidance of 8.25p for FY2025 and 8.35p for FY2026.

• £50m share buyback programme underway, with £17.6m completed by 30 September 2024, supporting capital management and shareholder returns.

• Portfolio remains highly diversified across sectors and geographies, with 65% in the UK and 35% internationally, and a focus on essential, inflation-linked assets.

• Annualised underlying portfolio return was 5.5% for the six months ended 30 September 2024, down from 8.2% year-over-year, mainly due to increased forecast cost risk in a subset of UK PPP assets.

Financial highlights

• NAV per share at 30 September 2024 was 156.5p, down from 158.2p at 31 March 2024, mainly due to increased cost risk in UK PPP assets.

• Total income for the six months to 30 September 2024 was £71.7m, with a total return of £45.0m and EPS of 2.2p.

• Dividend yield increased to 6.8% on current trading, with a target dividend of 8.25p for FY2025 and 8.35p for FY2026 reaffirmed.

• Weighted average discount rate rose to 8.1%, reflecting PPP risk adjustments.

• Net debt reduced to £85m from £304m at 31 March 2024, reflecting strong cash flow and disposals.

Outlook and guidance

• Board reaffirms target dividend of 8.25p per share for FY2025 and 8.35p for FY2026, with dividend cash cover expected to continue improving.

• Focus remains on disciplined, selective growth, portfolio rotation, and prioritising higher-returning assets.

• Market conditions remain challenging but are expected to improve as interest rates stabilize and megatrends drive investment opportunities.