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Infratil annual earnings rise 2.5% on bigger contribution from retirement village units

Wednesday 18th May 2016

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Infratil lifted annual underlying earnings by 2.5 percent, meeting guidance, as its Metlifecare and RetireAustralia investments delivered bigger contributions. The listed investment firm said it is still looking for assets to buy. 

Underlying earnings from continuing operations before interest, tax, depreciation, amortisation and financial derivative movements (ebitdaf) rose to $462.1 million in the 12 months ended March 31 from $450.87 million a year earlier, the Wellington-based company said in a statement. The bulk of that came from Infratil's controlling stake in electricity generator Trustpower, which is being touted for an operational split, while its retirement village investments, NZ Bus, and Wellington International Airport units all delivered increased earnings. 

Infratil affirmed 2017 earnings guidance of between $475 million and $515 million. 

"Last year saw satisfactory creation of value for Infratil’s shareholders and a great deal of preparation for future investment," chairman Mark Tume and chief executive Marko Bogoievski said in the annual report. "We would have liked the $728.6 million on deposit with our banks to have been deployed to more productive investments, but this is an environment that will reward patience and discipline."

Infratil has up to $1 billion to spend on new investments after selling its 20 percent stake in Z Energy last year, having been unsuccessful in its bid for renewable electricity firm Pacific Hydro, which cost $5 million. Last month, the firm told investors it's looking at Australian and New Zealand technology prospects to build on its existing portfolio, and has committed US$25 million to California-based Envision Ventures Fund.

The board declared a final dividend of 9 cents per share payable on June 15 with a June 2 record date. That takes the annual dividend to 14.25 cents, up from 12.5 cents a year earlier. 

Net profit, which includes gains on the sale of assets and unrealised movements in the value of its portfolio, rose to $495.5 million from $466.3 million, on an 8.6 percent gain in revenue to $1.78 billion. 

The shares last traded at $3.31, and have increased 1.1 percent this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters, with a median target price of $3.53.

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