3i Infrastructure profits drop despite strong portfolio growth

(Sharecast News) - 3i Infrastructure reported a 36% decline in first-half profits on Tuesday, although the investment company said it remained on track to meet its full-year return and dividend targets, supported by strong underlying growth across its portfolio.

The FTSE 250-listed group generated a total return of £166m in the six months to 30 September, down from £258m a year earlier, representing a return of 4.5% on opening net asset value (NAV), compared with 7.4% previously.

However, the company said it remained on course to achieve its annual target return of 8% to 10%, with underlying portfolio earnings continuing to grow at a double-digit rate.

NAV per share increased to 416.4p from 405.2p at the end of March, while total NAV rose to £3.84bn from £3.74bn.

Underlying portfolio EBITDA rose more than 12%, with strong performances from Infinis, Tampnet and FLAG, although Ionisos and SRL continued to face company-specific challenges.

Total income and non-income cash jumped 61% year-on-year to £195m from £121m, supporting a 6.3% increase in the interim dividend to 7.15p per share.

The company also maintained its full-year dividend target of 14.30p per share, up 6.3% on the previous year, which it expects to be fully covered by net income.

Chair Richard Laing said: "We have a high-quality, diversified portfolio aligned with a range of supportive long-term megatrends, which continues to deliver strong earnings growth."

The group completed the sale of airport equipment leasing business TCR in June and invested in the Lefdal Mine Datacenter platform in August, increasing its exposure to digital infrastructure.

The company ended September with £269m in cash and an undrawn £900m credit facility, providing approximately £1.2bn of liquidity for further investment.