GCP INFRASTRUCTURE INVESTMENTS LIMITED Analyst Presentation Year end results for the period to 30 September 2019 December 2019 Authorised and regulated by the Financial Conduct Authority
IMPORTANT NOTICE This presentation (the " Presentation ") has been prepared by Gravis Capital No undertaking, representation, warranty or other assurance, express or implied, is Management Limited (the " Investment Adviser ") and is for information purposes made or given by or on behalf of the Company or the Investment Adviser or any of only. their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions This Presentation is not intended for distribution to, or use by, any person or entity contained in this Presentation and no responsibility or liability is accepted by any of in any jurisdiction or country where such distribution or use would be contrary to them for any such information or opinions or for any errors, omissions, local law or regulation. Any recipients of this presentation outside the UK should misstatements, negligence or otherwise for any other communication written or inform themselves of and observe any applicable legal or regulatory requirements otherwise. In addition, neither the Company nor the Investment Adviser undertake in their jurisdiction, and are treated as having represented that they are able to any obligation to update or to correct any inaccuracies which may become apparent receive this Presentation without contravention of any law or regulation in the in these slides. The information in this Presentation is subject to updating, jurisdiction in which they reside or conduct business. completion, revision, further verification and amendment without notice. This Presentation is not intended to provide the basis for any credit or other In considering the performance information contained herein, recipients should bear evaluation of any securities of GCP Infrastructure Investments Limited (the in mind that past performance is not necessarily indicative of future results, and " Company ") (or any other current or future investment vehicle managed or advised there can be no assurance that return projections will be met. Certain of the past by the Investment Adviser or any of its affiliates) and should not be considered as a performance information presented herein may not be representative of all recommendation, invitation or inducement that any investor should subscribe for, transactions of a given type. Any forward-looking statements have not been dispose of or purchase any such securities or enter into any other transaction with independently audited, examined or otherwise reviewed or verified and nothing in the Company or any other person. The merits and suitability of any investment this Presentation should be construed as a profit forecast. action in relation to securities should be considered carefully and involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, Certain information contained herein (including forward-looking statements and credit and other related aspects of such securities. economic and market information) has been obtained from published sources and/or prepared by third parties and in certain cases has not been updated to the Any recipient of this document you will be taken to have warranted, represented date hereof. While such sources are believed to be reliable for the purpose used and undertaken to the Investment Adviser and the Company that you have read, herein, none of the Investment Adviser or any of its directors, officers, employees, agree to and will comply with the terms of this notice; and you will conduct your partners, members, shareholders or affiliates, or any other person assumes any own analyses or other verification of the data set out in this document and will bear responsibility for the accuracy or completeness of such information. the responsibility for all or any costs incurred in doing so. This is a financial promotion and is not intended to be investment advice. The The Investment Adviser acts only for the Company and will not be responsible to content of this Presentation which has been prepared by, is the sole responsibility of any third party for providing the protections afforded to clients of the Investment and has been approved as a financial promotion, solely for the purpose of section Adviser and will not be advising a third party on investing in the Company. 21(2)(b) of the Financial Services and Markets Act 2000 (as amended), by Gravis, authorised and regulated by the Financial Conduct Authority. Gravis is registered in England and Wales No: 10471852 and its principal place of business is at 24 Savile Row, London W1S 2ES 1 I N F R A I N F R A
AGENDA Strategic Update Financial Update Portfolio Update Q&A 2
AGENDA Strategic Update Financial Update Portfolio Update Q&A 3
STRATEGIC UPDATE Company objectives DIVIDEND INCOME DIVERSIFICATION CAPITAL PRESERVATION To provide shareholders with regular, To create a diversified portfolio of To preserve the capital value of its sustained, long-term dividends. debt and similar assets secured investment assets over the long term. against UK infrastructure projects. 7.6p 49 111.66p Dividends per share paid for Holdings NAV per share at 30 September the twelve months to 30 2019 September 2019 6.0% 10.4% 126.60p Dividend yield to 30 September Size of largest investment* Share price at 30 September share price 2019 * Loan is secured against a cross-collateralised pool of 14 separate operational PFI assets, with no exposure to any individual project being in excess of 10% of the overall portfolio. 4 I N F R A I N F R A
STRATEGIC UPDATE UK Infrastructure revenue support models – the current picture Sectors Low carbon Example Economic Funding Scale Social assets Wind, Solar RO ✓ 26,000 projects, 33 GW capacity Energy bills Wind, Solar FiT (Levy control 820,000 projects, 6 GW capacity ✓ Subsidies framework) CfD Offshore wind ✓ 57 CfD contracts, 6 GW capacity Biomass heat RHI ✓ Treasury 4.6 GW, ~20,000 installations (Non-dom) Education, >700 projects, capital value of £60bn PFI ✓ ✓ Central Leisure, Public private government / PF2 4 projects ✓ ✓ Healthcare partnership local Schools NPD (Scotland) ✓ 5 projects, c£0.5bn capital value models authorities / delegated MIM (Wales) Roads 3 schemes ongoing ✓ ✓ Regulated Asset Base User fee National Grid £160bn of capital value (RAB) ✓ ✓ Denotes support models that remain open / available 5 I N F R A I N F R A
STRATEGIC UPDATE Historic revenue support levels Capital value 50 CfD 45 Levy Control £100bn FiT Framework Project based RO 40 Energy bills Comprehensive Non-domestic RHI Spending Review Domestic RHI 35 PFI - Health / social care £60bn Government budgets Treasury / Gvmt PFI - Defence departments 30 PFI - Education PFI - Transport PFI - Other 25 Thames Tideway DPRC5 RIIO-ED1 (2015-23) Electricity distribution 20 GDPCR1 User charging RIIO-GD1 (2013-21) Gas distribution Corporate 15 TPCR4 & RO (2007-13) Pass-through to £160bn RIIO-T1 (2013-21) Electricity / gas distribution users (geographic) 10 2019 Price Control 2014 Price Control 5 Water / wastewater 2009 Price Control 0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Sources: - Consumer funded policies report (November 2016), RO annual reports, FiT annual reports, RHI annual reports, - https://www.nao.org.uk/wp-content/uploads/2018/01/PFI-and-PF2.pdf, Current projects as at 31 March 2018 - Various Ofgem and Ofwat documents 6 I N F R A I N F R A
STRATEGIC UPDATE Company Context Strengths Weaknesses • Diversified portfolio of infrastructure investments with • Focus on UK and therefore exposed to changes in UK some inflation protection; policy; • Focus on debt investments (40% of which is senior), • Current portfolio challenges related to biomass assets, reducing volatility in income; construction disputes; • Limited construction risk and foreign currency exposure; • Diversity of service providers responsible for operating assets; Opportunities Threats • There are sectors where government support remains for • Increasing regulator involvement across all sectors; new infrastructure, such as heating, transport, social housing, energy storage; • General election and nationalisation proposals from Labour; • Increasing activity in the secondary market for refinancing or asset sales; • Limited new revenue support models from UK government which seek to attract private finance to infrastructure; • Exposure to shareholder interests in secondary market transactions; • Rising interest rates; 7 I N F R A I N F R A
AGENDA Strategic Update Financial Update Portfolio Update Q&A 8
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