HICL on course for dividend target after in-line third quarter

10th Feb 2014 07:07

Infrastructure investment group HICL Infrastructure said that its portfolio performed as expected in the third quarter and that the investment pipeline remains healthy. "The group's performance and cash generation gives the board confidence in the company's ability to deliver the 7.1p-per-share dividend target for the current financial year," said Chairman Graham Picken. This would be slightly higher than the 7p-a-share payout for the previous year.During the quarter, total net investment was £32.3m as a result of six new investments, three acquisitions and incremental stakes and two disposals. These brought the total number of projects in the portfolio to 93.The company made its first two investments in France and continues to "pursue other opportunities" in the country.HICL said that there are a "number of factors" that are likely to have a positive impact on net asset value (NAV) when the portfolio is next valued at the end of the year on March 31st. At the half-year stage on September 30th, NAV per share on an investment basis was 119.6p.The firm said that an imbalance in the UK between supply and demand may lead to a reduction in the weighted average discount rate used to value its portfolio; while the reduction in UK corporation tax rates from 23% to 21% from April onwards will also have a positive impact on valuation. These factors will be partly offset by a lower contribution to value from inflation than in recent reporting periods, HICL said.BC