HICL sees ‘intense competition’ in UK

In an interim statement the London-listed infrastructure fund says it is cautious about larger transactions in the UK.

HICL Infrastructure Company (HICL) has released an interim management statement which includes a caution “in relation to larger UK transactions where intense competition may make acquisition prices unattractive”.

The London-listed firm, whose statement covered the period 1 October 2013 to 7 February 2014, said a competitive climate in the UK “is likely to continue in 2014, with more potential acquirers and potentially fewer investments coming to market”.

HICL – which says its deal pipeline includes opportunities in France, Ireland and Australia, as well as the UK – insisted it has been maintaining pricing discipline and “as a result has been unsuccessful at auction on a number of occasions”.

The firm currently has 93 infrastructure investments in its portfolio, up from 89 at the end of September last year. All of these are social and transport infrastructure concessions, predominantly with availability-based income streams.

During the period, HICL invested a net total of £32.3 million (€38.9 million; $52.9 million) following six new investments, three incremental stake purchases and two disposals. Its new investments included its first in France: an 85 percent stake in the University of Bourgogne academic accommodation project and a 90 percent interest in the RD901 road project.

The firm said it was on track to deliver its targeted 7.1p per share dividend for the year ending 31 March 2014. It added that it was in discussion with its relationship banks regarding an increase in its revolving debt facility from £100 million to £150 million and an extension of the final maturity from February 2015 to May 2016.

HICL added that it has a current net funding requirement of around £23 million and had the authority to issue a further 52 million shares by way of a tap issue when appropriate.