Infratil flies on the back of investment portfolio

Friday 12th November 2004

After losing the market's interest in the early part of the year, Infratil has come back with a vengeance, the shares rising almost 30% since March.

The rise has been propelled by mostly good news across Infratil's investment portfolio.

The most recent booster was a 136% increase in reported profit to $29.6 mill for the six months to March, with earnings from 35.2% owned Trustpower up 19% from last year.

Glasgow Prestwick Airport, of which Infratil owns 100%, made a bigger contribution to earnings than expected, and while the amount of freight shifted through the airport continued to fall, there are signs this may have reached a plateau

However, there is another problem of declining passenger numbers starting to creep in and Infratil will have its work cut out generating a recovery.

Infratil has benefited from a "measured disposal" of Port of Tauranga shares, which have climbed steadily higher this year.

The joker in the pack though is the possibility Infratil will back a "second Auckland airport" at Whenuapai, but the government has yet to decide on the proposal.

Even if it gets the green light, Infratil will face significant hurdles, including resource consenting.

Analysts like what they see in this company and are predicting a heavy full year profit for the full year.

First NZ Capital said in a research note it estimated Infratil's net asset value at $3.85 a share, implying the stock is trading at a discount of around 17%.

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