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Infratil plans $120M return to shareholders; shares gain

Tuesday 11th November 2014

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Infratil will return $120 million to shareholders as a special dividend and share buyback after the infrastructure investor sold its Australian energy assets for a net $670 million. It's keeping a chunk of the funds in the kitty for future investments and expects to return more capital to investors should its plans fail to pan out.

Wellington based Infratil will pay $84 million to shareholders as a 15 cents per share special dividend and spend $36 million in an on-market share buyback after selling its Infratil Energy Australia assets Lumo Energy and Direct Connect to Snowy Hydro on Sept. 30, the company said in a statement.

"The recent asset sales have resulted in Infratil having over $600 million on deposit with its banks and low net gearing," chief executive Marko Bogoievski said. "Part of this capacity is earmarked for investment. Infratil continues to have a significant number of internal and external investment initiatives under development.

"If investment plans do not progress as hoped, consideration will be given to increasing the amount returned to shareholders in 2015/16."

Shares in Infratil jumped to a seven year high of $3.09. The stock was recently up 1.3 percent at $3.07.

Infratil today said profit attributable to owners of the company rose to $398.8 million, or 71 cents a share, in the six months ended Sept. 30, from $230 million, or 39.3 cents,  in the year earlier period. The company sold its European Airport investment in November 2013, its PayGlobal investment in August 2014 and the IEA Group in September 2014.

First half revenue rose 8.7 percent to $839.5 million.

The company will pay a 4.5 cent ordinary dividend, as well as the special dividend, on Dec. 15. The on market buyback is expected to occur via tender in the fourth quarter of the current financial year, it said. The combination of payments will improve capital efficiency while rewarding shareholders equitably, it said.

Infratil said its cash flow growth and outlook supports continued growth in dividends per share. It didn't provide a forecast.

The company expects full-year earnings before interest, tax, depreciation, amortisation and asset valuation changes of $475 million to $500 million, it said.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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