International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — FY2009 Earnings Presentation
45 slides from International Public Partnerships's earnings presentation, Apr 8, 2010
Slide 1: 2009 Audited Results
INTERNATIONAL PUBLIC PARTNERSHIPS
Slide 2: Agenda
Agenda 1. Results Highlights 2. Asset Management 3. Outlook Appendix • INPP Portfolio • Top 10 Investments Results Briefing 10am, Thursday 8 April 2010 Teleconference details: UK +44 (0)20 7162 0025 2
Slide 3: Results Highlights
Results Highlights INTERNATIONAL PUBLIC PARTNERSHIPS
Slide 4: 2009 Annual Review
2009 Annual Review • Net Asset Value (NAV) of £420.2m, an increase of 0.3 pence per share since 30 June to 112.1 pence per share • Profit before tax of £11.4m • Distribution of 5.55 pence per share as per target and covered by operating cashflow. Scrip dividend option available for 2H 2009 distribut
Slide 5: Events Post Balance Date
Events Post Balance Date • £89m capital raising completed in January 2010 • Corporate debt facility repaid in February 2010. Entire £100m credit facility remains available for redraw • Directors have confirmed distribution guidance of 5.70 pence per share for FY 2010. Expected to be entirely covered
Slide 6: Continued Investment Performance
Continued Investment Performance • Outperformance of FTSE AllShare by 20.5% in 2009 • Strong yield relative to market • Total Shareholder Return from IPO to 31 March 2010 of 35.0% 6
Slide 7: Operational Cashflow
Operational Cashflow Twelve month period to 31 December 2010 £m Investment cashflow1 37.3 add interest revenue 0.3 less corp. facility expense (1.6) less distribution to shareholders for FY 2009 (20.8) less transaction costs2 (1.4) less fees and expenses for FY 20093 (8.1) Net surplus cashflow 5.7 1
Slide 8: Income Statement
Income Statement IFRS Basis Twelve month period to 31 December 2010 £m Income 738.9 Cost of sales (585.3) Finance costs (95.0) Other costs (47.2) Profit before tax 11.4 Tax (3.0) Profit after tax 8.4 8
Slide 9: Net Asset Value (NAV)
Net Asset Value (NAV) • NAV increased by 0.3 pence per share in the second half - stable risk free rates and small f.x. changes • Discount rate up 2 basis points (b.p.) to 8.63% - reviewed by Deloitte every six months and considered appropriate based on market knowledge and comparable market transac
Slide 10: Analysis of Movement in NAV
Analysis of Movement in NAV Analysis of change in Net Asset Valuation (£m) Net Assets at 31 Dec 2008 431.8 Change in Risk Free Rate (26.5) Change in Project Risk Premium 1.0 Change in FX Curve1 4.6 Investments 3.5 Full year distribution (20.5) Portfolio Return2 26.3 Directors Valuation at 31 Dec 09
Slide 11: Macro-Economic Impacts on NAV
Macro-Economic Impacts on NAV Long Term 31 Dec 30 Jun 31 Dec Movement Movement Risk-free 2008 2009 2009 (Dec 08 – (Jun 09 – Rate Dec 09) Dec 09) Changes UK 3.98% 4.40% 4.47% +49 b.p. +7 b.p. Australia 4.09% 5.72% 5.79% +170 b.p +7 b.p. Canada 3.59% 4.01% 4.19% +60 b.p. +18 b.p. France 3.89% 4.35% 4.
Slide 12: Asset Management
Asset Management INTERNATIONAL PUBLIC PARTNERSHIPS
Slide 13: Asset Management Review
Asset Management Review • Construction completion of Dublin Courts 3 months ahead of schedule – Nov 2009 • Construction completion of Durham Courthouse on schedule – Nov 2009 • Active Operational Management: – Delivery of £40m Authority Change requirements underway – Third-party revenue generation:
Slide 14: Case Study – Tower Hamlets Schools
Case Study – Tower Hamlets Schools • £12m+ pipeline of additional works underway for Tower Hamlets Schools (£4.5m of works undertaken in previous years) • Latest works commenced in April 2009 • Extensions and new buildings to provide additional pupil capacity and increased community integration • In
Slide 15: INPP Construction Portfolio
INPP Construction Portfolio 29% of INPP’s portfolio is under construction. All projects on target or ahead of schedule: Asset Location Expected Status % of INPP Completion Date Dudley Brierley Hill LIFT U.K. April 2010 On schedule <1 River City Motorway Australia April 2010 5 months ahead 1 Alberta
Slide 16: Managing the Construction Portfolio – Opportunities for Capital Growth
Managing the Construction Portfolio – Opportunities for Capital Growth • As projects reach construction completion and the risks associated with their cash flows diminish, the project risk premium and therefore overall discount rate applied to those cash flows will decrease • The project risk premiu
Slide 17: Managing the Mature Portfolio – Opportunities for Enhanced Income
Managing the Mature Portfolio – Opportunities for Enhanced Income • 71% of INPP’s portfolio is operational, providing solid cashflow coverage of the distribution • INPP’s distribution is forecast to be covered by operational cashflow until at least 2034 (assumes 2.5% annual growth in distributions)
Slide 18: Outlook
RNATIONAL PUBLIC PA NERSHIPS
Slide 19: Opportunities Under Review
Opportunities Under Review Significant pipeline of new investment opportunities: 1.Projects under development within Amber Infrastructure - Seven projects at “preferred bidder” stage in the UK - aggregate value approximately £20m. Likely to be acquired by INPP in due course subject to independent va
Slide 20: NAV Update since 31 December 2009
NAV Update since 31 December 2009 Since 31 December 2009: • Further depreciation of £GBP vs. $AUD and $CAD • Offset by extra 25b.p. premium added to non-UK assets to account for ongoing f.x. volatility (f.x. premium now 75b.p. compared to 50 b.p. at 31 Dec) and payment of 2H dividend • Potential for
Slide 21: Summary
Summary • Robust financial position: £58.7m cash and £100m unused debt facility for future opportunities • Growing distribution profile, with distributions expected to continue to be funded by operating cashflow: Target distribution for 2010 up 3% to 5.7 pence per share • Solid capital growth potent
Slide 22: Appendix
Appendix RNATIONAL PUBLIC PA NERSHIPS
Slide 23: INPP Portfolio
INTERNATIONAL PUBLIC PARTNERSHIPS
Slide 24: Key Facts
Key Facts • Long-term investor in 51 social and transport infrastructure projects • 100% invested in OECD countries • > 99% of revenue is fixed or index-linked (e.g. RPI in the UK) • Weighted average contract life of 24 years • 71% operational (= income); 29% under construction (= capital growth) •
Slide 25: INPP Portfolio
NHS LIFT Investments Project Location Alexandra Avenue Primary Care UK Mt Vernon UK INPP Portfolio Beckenham Hospital Garland Road Health Centre UK UK Ridge Hill and Stourbridge Shirehampton and Whitchurch UK UK Gem Centre, Health Centre UK Sudbury Health Centre UK Monks Park Health Centre UK Church
Slide 26: Diversified Portfolio
Diversified Portfolio 50 projects across several PPP/PFI sectors1 Geographic and sector diversity: 46% of assets located offshore, up from 10% at IPO. Solid diversification by sector Contractual certainty of revenue streams: 99% of cashflows via availability-based mechanisms providing revenue certai
Slide 27: Robust Inflation Protection
Robust Inflation Protection • Movements in inflation result in changes to revenue due to the inflation linkage inherent in most of INPP’s concessions • 72% of total revenue is inflation linked, however operating costs also grow in line with inflation • Sensitivity analysis illustrates the modest cha
Slide 28: Limited Foreign Exchange Impact
Limited Foreign Exchange Impact • 64% of 2010 forecast distributions are expected to be generated by UK assets due to the early- stage nature of most of INPP’s non-UK projects • Hedging policy to be implemented progressively as non-GBP income increases to mitigate the risk that short-term movements
Slide 29: Conservative Gearing
Conservative Gearing No corporate level gearing – Debt facility repaid in February 2010. Entire £100m credit facility available for redrawing – In addition, £58m of cash available for new opportunities Long term asset-level debt – Fixed term, fixed rate – Non-recourse to INPP or any other asset – We
Slide 30: Top 10 Investments
Top 10 Investments INTERNATIONAL PUBLIC PARTNERSHIPS
Slide 31: Diabolo Rail, Belgium
Diabolo Rail Belgium Project description New rail tunnel project connecting Belgium international airport Zaventem with rail track between Brussels and Antwerp. Consists of two single track drilled tunnels of 1070 metres and extension of the existing train station Where Brussels, Belgium Project awa
Slide 32: Hereford and Worcester Courts, UK
Hereford and Worcester Courts UK Project description Three new build courthouses at Hereford, Worcester and Kidderminster, and one refurbished courthouse in Redditch Where Hereford, Kidderminster, Worcester and Redditch, UK Project awarded February 2000 Holding 100% % of INPP’s portfolio 9% Concessi
Slide 33: The Royal Children's Hospital Project, Australia
The Royal Children’s Hospital Project Australia Project description Construction of a children’s hospital on site adjacent to the existing hospital, refurbishment of selected existing hospital buildings, erection of temporary accommodation structures, transitional services and, upon completion, demo
Slide 34: The Royal Children's Hospital Project, Australia
The Royal Children’s Hospital Project Australia Actual construction status photo (March 2010) New main entrance to the Facility 34
Slide 35: BeNEX GmbH, Germany
BeNEX GmbH Germany Description BeNEX invests in companies holding rail and bus operating concessions in Germany. BeNEX is a joint venture between INPP and Hamburger Hochbahn AG (HHA), a subsidiary of the Federal State and City of Hamburg. Concessions currently include 6 rail and 4 bus subsidiaries w
Slide 36: BeNEX GmbH, Germany
BeNEX GmbH Germany PUBLIC PARTNERSHIPS
Slide 37: Northampton Schools, UK
Northampton Schools UK Project description New build, remodelling and refurbishment of 42 schools including primary, secondary and special education needs (SEN) schools, 12 of which are new build Where Northampton, UK Project awarded December 2005 Holding 100% % of INPP’s portfolio 7% Concession end
Slide 38: Strathclyde Police Training College, UK
Strathclyde Police Training College UK Project description Police training college which extends to 18,000m2. The facility includes a 224 capacity lecture theatre, student accommodation, firearms range and a replica bank, stadium and house for public order training Where East Kilbride, UK Project aw
Slide 39: Alberta Schools, Canada
Alberta Schools Canada Project description 9 new schools in Edmonton and 9 new schools in Calgary, with space for more than 12,000 students Where Edmonton and Calgary, Canada Project awarded September 2008 Holding 75% % of INPP’s portfolio 5% Concession end date September 2040 Construction completio
Slide 40: Angel Trains, UK
Angel Trains UK Description One of three rolling stock leasing companies (ROSCOs) formed from the part privatisation of British Rail – now the UK’s leading train leasing company, with an asset base comprising 4.400 vehicles (37% of the UK’s total rolling stock). Angel owns a mix of passenger and fre
Slide 41: London Borough Tower Hamlets Grouped Schools PFI Project, UK
London Borough Tower Hamlets Grouped Schools PFI Project UK Project description Design, build, finance and operation of 27 schools (22 primary, 5 secondary). The scheme comprises 2 new build primary schools with the remaining facilities receiving extensions, alterations, remodelling and refurbishmen
Slide 42: Dublin Criminal Courts, Ireland
Dublin Criminal Courts Ireland Project description New build Criminal Courts facility housing 22 individual court rooms and houses the Criminal Court of Appeal, Special Criminal Court, Central Criminal Court and Dublin District Courts Where Dublin, Ireland Project awarded April 2007 Holding 100% % o
Slide 43: Dublin Criminal Courts Opening Day Headlines
Dublin Criminal Courts Opening Day Headlines 43
Slide 44: Contacts
Contacts RNATIONAL PUBLIC PA NERSHIPS
Slide 45: Contact Details
Contact Details Amber Investment Management Finance Manager: Director: Nick Singleton Giles Frost Telephone: +44 (0)20 7203 7300 Telephone: +44 (0)20 7203 7300 Email: [email protected] Email: [email protected] Analyst Contact: Operations and Investor Relations:
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