BBGI Global Infrastructure S.A. (BBGI) Earnings Call Transcript & Summary

Good afternoon, and welcome to the BBGI Global Infrastructure Interim Results Investor presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Duncan Ball. Good afternoon to you.

Thank you. My name is Duncan Ball, and I'm the CEO of BBGI Global Infrastructure. I'm joined here with our CFO, Michael Denny. We're pleased to share with you the H1 results for the company. And I will start with the slides, and I'll try to go through them quickly, and we've got some time at the end for questions that have been submitted online. So as a quick reminder, our investment approach is centered on 4 key attributes: low-risk, internally managed, globally diversified and strong approach -- ESG approach. And what do I mean by low risk? It means that our investments are 100% availability-style in investments. So these are investments in core infrastructure and availability means, if they're available for use, we get paid. So we're getting paid by public sector counterparties. The results are that the cash flows are stable, predictable with a high-quality inflation linkage. Number 2 is we're internally managed, and that means we are the only infrastructure company with in-house management team. That means there's no external manager, both myself and Michael work for the company, not for an external manager providing services to the fund. We're focused on delivering shareholder value, and we're not focused on growth in AUM. We also are owners of the company as well. 100% of our Board and 87% of our employees or shareholders. So we very much act like owners and are aligned with shareholders in that regard. Global diversification is another pillar. So we're focused on AA and AAA-rated countries, which provide a very stable and well-developed operating environment. And the fourth pillar is a strong ESG approach. So sustainability and ESG is integrated into all parts of our business model. Our portfolio delivers strong social impact and is considered an Article 8 firm under the EU Sustainable Finance Disclosure Regulation because we're delivering social benefits through our investments. Additionally, our portfolio has been significantly reviewed and we have a high degree of climate resilience. So that means that our portfolio is well positioned for the future. Just touching on the financial highlights. It was another period of predictable performance. During the period, we delivered a 2.4% NAV total return. We're offering a very attractive dividend yield based on today's current share price. The dividend yield is about 6.2%. We grew the dividend last year by 6%. We're hoping to do the same this year, 6%. And we expect the dividend to grow by 2% in 2025. The inflation linkage from the portfolio is 0.5%, so it's -- and its high-quality inflation linkage and it's contracted, so it's very mechanical. The dividend is well covered at 1.47x. The annualized total net asset value return since IPO has been 8.5%, and our ongoing charge is the lowest in the sector at 90 basis points. This slide talks about our operating model, and there's really 3 core principles to our business. It's value-driven asset management, its prudent financial management, and it's a selective acquisition strategy. In terms of value-driven active management, our portfolio consists of 56 core infrastructure assets, and they all performed well during the period. We continue to have high levels of availability across our portfolio. It was 99.9%, and that keeps -- that helps deliver happy customers when the portfolio is performing well, you tend to have happy clients. There's no lockups, no defaults, all the assets are performing well. The prudent financial management, we had a revolving credit facility an RCF, we fully paid that. So there's no drawings outstanding on that. So we're very comfortable with our balance sheet. All our assets are financed on a nonrecourse basis and 55 of the 56 assets have no refinancing obligation. We have one asset where there's a tranche of debt that has to be refinanced that's well underway. It doesn't come up until fall of next year, and we're advanced in the process, and we don't see any issue there. The markets that we're dependent on for that, there's lots of interest, and we're making good progress. So very prudently managed balance sheet and income statement, and we're very comfortable with our -- how we're structured. And then the third platform or pillar is the selective acquisition strategy. We apply a disciplined approach to capital allocation. Any new acquisition is considered against buying back shares or other uses of capital. And we've looked at a lot of opportunities, but we haven't bought anything. And that's consistent with most periods, we look at far, far more opportunities than we ever execute on. So we're very selective in what we do. Just to highlight here, we're the only infrastructure investment company, which is internally managed, and we think this is a key benefit. It means there's no external manager. All the staff are employed by BBGI directly. We have a very experienced team. The team is fully aligned with the interest of our shareholders. 100% of our supervisory board, 100% of our management board and 87% of our employees are shareholders. So that really -- it sets the tone. We put our capital where our conviction is. So we're acting like owners every day. The ongoing charge is 90 basis points, and we don't engage in any other activity. So we're not distracted by other mandates or doing -- managing money for other parties. We wake up every day focused on our portfolio and delivering value for our clients and our shareholders. We're very much a specialist infrastructure company. As mentioned, ownership mindset with skin in the game is very important to us. The average team member has over 20 years of experience. There's -- our team members are spread across 8 different countries. Below are the BBGI people, we employ subcontractors to do some of the day-to-day management of the assets. And so there's over 2,000 people employed there. And our focus is really on value preservation, hands-on active management and trying to get value enhancements to make these assets better for our clients and for our shareholders. As mentioned previously, we have a 99.9% availability rate during the period. And we have a Net Promoter Score of 56, which is a very high score. It's top quartile. If you're not familiar with Net Promoter Score, the maximum score is 100, the minimum score is minus 100, so 56 -- it's not like 56 out of 100. It's a testament of good performance and high client satisfaction. And our belief is that if we have public sector clients who are happy that just makes life so much easier. It helps us deliver the services to the level they expect and a happy client results in strong asset performance. We have a disciplined approach to capital allocation. In recent periods, we benefited from higher inflation, and we've earned more on our -- on the cash we hold in the project companies on -- we've earned more on deposit. So that has benefited us. And what have we done with that? Well, we've -- we paid it out to shareholders through increased dividends. So we increased the dividend by 6% last year. We're increasing the dividend by 6% again this year, and we're forecasting to increase the dividend in the future by 2%. We've used the excess cash to pay down our revolving credit facility. So we have no drawings at the current time. As we move forward, we will consider new opportunities, but we'll also consider the -- one of the options we consider every day is buying back shares, as an -- but the priority was to pay down debt first and now we're in the envious position of having surplus cash flow. So we'll make informed decisions against that. And it makes sense that any investment decisions are measured against alternatives, especially a share buyback if we're trading at a discount. This slide shows our record regarding NAV growth and dividend growth. So we've grown the dividend continuously. We've had strong dividend growth, but we've also had strong NAV growth. So over the last 12 years, the accumulated NAV and dividends per share adds up to $227. So that means had you bought the shares for 97p in 2011, your return would have been $227, and the NAV has always grown -- the NAV and dividends together, we've always grown on a year-on-year basis. The total NAV return since IPO is 177% or 8.5% on an annualized basis. And the AIC has recognized us as the next dividend -- next-generation dividend hero. The dividend hero is a company that's consistently increased dividends for 20 years or more. Given we IPO-ed in 2011, we don't -- we haven't met the criteria for 20 years of dividend growth, but we certainly had a long track record of dividend growth. And so we're considered a next-generation dividend hero. And I think it's particularly relevant given that during COVID, there were over 400 listed companies on the London Stock Exchange that either cut or curtail dividends. So we're very proud of our track record of increasing dividends and NAV each year. This slide is a bit of a collage of some of the assets that we would have in our portfolio. So I'll try to run you through it very quickly and give you a snapshot of what makes up our portfolio. So we have 19 roads and bridges. We have one fully electric public transit line. We have 41 essential health care facilities. We have 4 police stations, 26 fire stations, 4 modern correctional facilities, 33 colleges and schools, 3 affordable residential housing facilities, 2 community centers, a hydro-generating station and 2 public administration buildings. Our hospitals serve over 4 million patients a year and have 2,400 beds. Our fire stations, as an example, provide protection and safety to over 800,000 people. Our roads include 2,800 kilometers of laneways and provide reliable transportation and reduce travel times for about 290 million vehicles per year. And our hydroelectric power station provides clean energy and reliable energy to over 80,000 homes. This slide demonstrates the strengths of our portfolio. So we're 100% invested in low-risk core infrastructure assets. They're all availability-style. 100% of our portfolio is currently operational. In the past, we've had some construction. We completed the construction. We're not adverse to having some assets in construction. But currently, the portfolio is 100% operational. We're geographically diversified. So our largest exposure is in Canada at 35%, but we're also in the U.K. at 33%, Continental Europe is 13%. U.S. stands at 10%, and Australia is 9%. So we're well diversified by country. We're focused on AA and AAA-rated countries. And we have a socially impactful portfolio with a balanced exposure. The biggest sector is transport. We like roads and bridges. There's fewer moving parts on roads and bridges, so they tend to be fairly straightforward. But we also have health care, civic infrastructure, education, affordable housing and clean energy. Again, flipping, this slide shows the top 10 investments. What you'll see is that the top 10 constitute 48% of our portfolio. No one asset has undue concentration. Our largest assets are -- we've got one that's 11% and another that's 10%, but you see the typical asset size is under 4%, and we've got lots of assets. So it's a collection of well-diversified core infrastructure assets across different geographies, all delivering core infrastructure types of assets people use every day. This slide talks about the 2 types of what we've started to do is we've started to break down and distinguish between our concession assets and our nonconcession assets. So concession assets are typically public private partnerships. In the U.K., they've been called PFI, Public Finance Initiative. And in those investments, you make the investment and you provide the asset and you get paid over a finite period of time. And at the end of the concession, the asset reverts to government. So those -- that makes up the vast majority of our portfolio, but we also have 6% where we have concessions, but we own the underlying assets. So typically, these are assets with their primary health care facilities. And in those ones, we actually own the dirt and the real estate. And at the end of the concession period, we have the opportunity to re-lease it and continue to have cash flows well into the future. So the weighted average remaining asset life across our portfolio is 22.8 years. With that, I'll pause and turn it over to Michael and Michael will walk you through the valuation slides.

Thank you, Duncan. So I'll just start by saying that the valuation process and methodology that's applied by BBGI is unchanged since our IPO, where the Management Board supported by the internal valuation team develops the valuation using a discounted cash flow methodology. And the resulting valuation is then reviewed by both our external valuation expert and also by our external -- company's external auditors, PwC. So during the period, our NAV per share has experienced a modest decline of 0.3%, moving from 147.8p per share to 147.4p. And there were a few notable contributors to this movement. In April, we paid a second interim dividend for 2023 of 3.965p per share, which reduced the NAV per share by 4p. The NAV return contributed 4.3p per share, driven largely by the unwinding of the discount rate, portfolio performance, updated operating assumptions and the changes in working capital. The discount rate itself has remained unchanged at 7.3%, and there was a modest gain of 0.3p per share from macroeconomic assumptions, mainly due to the adjustment in short- and long-term deposit rates. Foreign exchange again has acted as a headwind, resulting in a 1p per share reduction in NAV with a -- all currencies with the exception of the U.S. dollar weakening against the pound over the reporting period. So as a result, the NAV per share closed out at 147.4p at the end of the period. Let's turn to the next slide. So on this slide, where we illustrate the weighted average discount rate used since IPO, along with the allocation between the risk-free rate and the equity risk premium. So for the June '24 valuation, we have applied a weighted average discount rate of 7.3%, which remains unchanged from the rate we used in December '23. Our approach to determining appropriate discount rates is based primarily on market observed transactions. So during the period, we have observed a sufficient level of market transactional evidence to support the discount rates being used. We have, again in the June valuation process, complemented the market transaction type approach with a CAPM approach where we would look at the government risk free rates plus a risk premium, and these are used to construct a discount rate, and this CAPM approach is used primarily the reasonability check for our market-based approach, particularly in periods where there are muted or reduced or limited transactional data available. And as can be shown -- or as is shown on the chart, the weighted average risk-free rate has increased from 3.6% to 4% in June 2024. And based on this risk-free rate, our weighted average discount rate and the weighted average discount rate, resulting risk premium is 3.3% at 30 June, which the Management Board believe is appropriate for a portfolio of low-risk availability-style investments. With that, I'll turn back to Duncan.

Okay. Thanks, Michael. I'll just talk very briefly about our role as a responsible investor in the infrastructure space. So sustainability and ESG are fully integrated into our business model. It's very much part of what we do. We follow a series of ESG standards and frameworks. You can see those listed up here. We also are subject to external ratings and recognition. So we were rated by UN PRI, ISS and Sustainalytics, and that information is available on our website. What I really invite you to do is go to our website, and you can see a stand-alone sustainability report. We just published it today. It's quite a comprehensive document that talks about what we're doing for climate resilience. It talks about how we're setting that 0 targets. And there's a lot of case studies about what we're doing in the various portfolio companies. And as I say, it's a 61-page report, and I can't do it justice here, so I invite you to -- if you're interested to go online and get more information there. As we talk about the outlook for the sector, there's a couple of key takeaways from this slide. First and foremost, we're focused on making the portfolio better, not just bigger. So we're very much focused on portfolio construction. The macro themes for infrastructure remain very positive, and its infra sector -- infrastructure growth is influenced by a couple of key themes. One is deficits. So governments are running fiscal deficits, so they have to replace infrastructure and they don't have the capital to do it. So we think there's going to be a continued role for the private sector to work with the public sector to address infrastructure deficits and gaps. Demographics is another one that people are aging. So health care and primary care are going to continue to be important. Decaying or deteriorating infrastructure is another theme. A lot of the infrastructure we use on a day-to-day basis is becoming outdated and needs to be replaced. And then that the 2 final Ds are the digitization, the importance of digital networks going forward is creating opportunities for infrastructure and decarbonization. The energy transition is changing how we think about infrastructure and creating investment opportunities. While those are the macro themes, it's important to say, we're a GBP 1 billion company. We don't need to grow significantly. We see lots of opportunities, and it's really about being selective and transacting on the opportunities that deliver best the attributes we're looking for. So there's no shortage of opportunities for us to consider, and we've always been selective and grown in a disciplined manner and we continue that -- we expect that to continue in the future, and that's very much the case as we see it. We're a specialist investor focusing on a niche. We're in an area we know well, and the market knows us well. So we're seeing not only opportunities that are coming to us through processes, but we're also seeing bilateral opportunities. So we're -- there's no shortage of transactions to consider. And our DNA remains the same. We're focused on low-risk opportunities. Our key focus is to have dividends and distributions that are highly predictable, provide defensive sources of cash flow. We want to be a dependable partner for our public sector clients, and we want to be disciplined and be very diligent in any investment opportunities we explore. And on that, I will conclude and just say that BBGI at its core is an investment company that aims to deliver attractive long-term income that's uncorrelated to the broader markets. And we have a very strong track record of increasing our dividends and NAV for over a decade. We're focused on low-risk assets that are immune to business cycles. As mentioned earlier, during COVID, 400-plus listed firms cut or suspended dividends, we weren't affected. We continued on. We're a specialist investor. We're in an area that we know well. Responsible investing is important to us. We are owners ourselves. So we're very much focused on the returns that are provided to shareholders because we are shareholders ourselves. And so I think it's a compelling story. And we're very proud of what we do in the portfolio on a day-to-day basis. We joked that no one ever called a sexy, but hopefully, they call us dependable. And I think that's what we've delivered during this half year period is another not sexy, but dependable set of results, strong income and good inflation linkage. With that, I'll close it and open it up for questions. I see there's a number of questions that have been submitted online, and we'll just take those and move forward.

That's perfect. Duncan and Michael. Thank you very much indeed for your presentation. [Operator Instructions] Duncan, Michael, as you can see, we have received a number of questions throughout today's presentation. And James, if I may now hand back to you to chair the Q&A. I'll kindly ask you to read out the questions where appropriate to do so, and I'll pick up from you at the end.

First question, which you've touched on already to a degree on Slide 13, but it's -- what is being done to close the discount between the share price and the net asset value?

Okay. Good question. And as I sit here, I'm a shareholder as well as is Michael, so we're equally concerned. I think what we've tried to do is a couple of things. We -- when we benefited from inflation, we tried to distribute that back to investors through increased dividends. We did that by increasing the dividend, 6%, 6%, and 2%. So we passed on the upside to our investors. We've tried to operate the portfolio, so it's performing well, and we have happy clients and avoid trouble. We've done that. Our first priority was to pay down our RCF. We bought 2 assets in 2022. We bought the A7 Motorway in Germany, and we bought the John Hart Generating Station. We used RCF. We never were tempted to sort of stretch beyond our means. So we were always disciplined in a very low interest rate environment. It could have been enticing to have large drawings on our RCF, but we always said, let's be disciplined. We were anticipating to come back to the market and do a capital raise and then the sector went to a discount. So what we've demonstrated is that we've been able to pay back the RCF just out of organic cash flows. So if you've been an investor in 2022, you would have had 2 new assets that you didn't have before that have been paid for out of free cash flow. And as I say, we pay down the RCF, we're now in an enviable position, where we're starting to have some free cash flow and we're looking at new investment opportunities, but those are always being considered against the opportunity to buy back shares. We bought some shares in the market to satisfy RSU and internal obligations. And -- but we're not averse to buying back shares. But we're monitoring the share price on a regular basis and trying to be disciplined in our capital allocation. And I think you can see that while we are at a discount, the discount is relatively modest, and I think it's the smallest -- one of the smallest discounts in the entire sector, but we don't want to be at a discount, and we're working hard to alleviate that. And then I guess the final point that I neglected to mention is we're also trying to expand our -- we're talking to broader audiences and trying to get the story out there about the compelling value that we believe BBGI offers currently. Very attractive dividend yield on the current share price. And hopefully, with the passage of time as people learn about our story, that discount will be reduced and we hope to eliminate it.

Thanks, Duncan. Please, can you explain how finite assets will work, such as are the keys to the assets returned? Is there a handover to the cash flow stop at the expiry of the contract. And in practice, is there typically a renewal retendering procedure for the asset after expiry?

Yes. No, it's a good question, and we provided a little more disclosure on it at this time than we have in the past. So of our portfolio, 94% are concession assets. So typically, at the end of the concession period, you would hand back the keys and there would be a handback procedure, but you wouldn't have an entitlement to any future cash flows. 6% of the portfolio, while it may be occupied by government, we own the buildings and the infrastructure. So at the end of the period, we have the ability to release that to the more or extend the contracts. So the question is, well, what happens, does that mean the music all stops in 22.8 years? The reality is we went public in 2011. And at the time, I think our portfolio life was 24 years. And 13 years on, we're 22 years. So what we've been able to do is reinvest and continue to lengthen the duration of the portfolio. So we're not too worried about that. We have a statement in here where we can pay a progressive dividend for the next 15 years without any further investment. So we're very, very confident of our ability to provide a dividend that's increasing over the next years. And we're certainly not planning to sit on our hands for 15 years. The plan is to reinvest the excess cash flow that's coming out of our portfolio to continue to lengthen it. So that hopefully addresses the investment life. But the handback procedures vary depending on jurisdiction. And the way I would describe it is, I would say, in most markets, say, for the U.K., it's like renting a car where you drive back after having rented the car, and if the tank is full of gas and you haven't banged the car up, you handback the keys and you're on your way and everything is fine. And I think that's the way you could describe it for most of our portfolio. The U.K. is a little different in that there's been some concern about handback with some -- one of our peers did a Capital Markets Day where they talked about handback and I think they're probably having a different experience than what we've had. We have very happy clients. So we're not too worried about the handback provisions. We -- on the social -- on the hospitals and the schools, those types of assets, the handback requirements sit with the facilities management company that does that. So it's not to our account. On the roadways, it is to our account, but we typically have a planned intervention like asphalt resurfacing right before handback. So the client will be getting essentially what looks like a brand-new asset. So -- and then in terms of what's coming in terms of handback, we have less than 1% of our portfolio is subject to handback in the next 5 years and it's 11% in the next 10 years. So it's not a near-term problem for us. And the one asset, we have one that's coming up in 2026. It's less than 1% of our portfolio, and we've already started that process, and it's very cordial and we've got happy clients, so we're not anticipating any problems. So I hope that's answered the question.

Thanks, Duncan. And there are a few questions just around what do you mean by inflation linkage of 0.5%, and also, is your inflation linkage infinitely and linearly coupled or are there break clauses or similar in the event that inflation accelerates above a threshold or similar?

Yes. So -- it's a good question. And in terms of what is meant by inflation of 0.5, what that means is if inflation in all regions were 100 basis points, so 1% higher than our expectations. We would see -- for the remainder of the period, we would see a 50 basis points so 0.5% increase in the return. So what it means is if we have periods of high inflation, we participate in that, not one for one, but effectively half for one for any inflation above our expected performance. So it's a metric that others report, and others have slightly higher inflation linkage. It's not unusual to see 0.5 -- we have 0.5, but maybe 0.7% or whatever. So what we really stress is the high-quality nature of our inflation linkage. All of our contracts have some form of inflation linkage that happens at a minimum on an annual basis. Some projects, it's monthly, some it's quarterly, some it's semiannually, but it's no less frequent than annually. It's not one universal factor. It's typically RPI in the U.K. in other jurisdictions that might be CPI. It might be a basket of goods that's meant to reflect what your input costs are. So it's a bit bespoke, depending on the region, but all our contracts have some level of inflation linkage and it's very mechanical. It's not subject to regulatory approval. It's not like we have to go sing for a suffer in front of the regulator every 5 years, and they may or may not allow an increase, which is quite different than, say, regulated utilities. And it's also -- it's not subject to market elasticity. So if you had a demand-based asset you might have the theoretical ability to increase your prices by CPI, but you might find that usage falls off if you -- for instance, on a toll road, you might find that in a high inflationary environment, you might have the ability to pass on inflation, but you might find because it's a high inflationary environment. People drive less on the roads and take alternate routes to save money and you don't get one-for-one linkage. So we're very comfortable with the 50 basis points because it's so mechanical and contracted, and it's paid for by public sector counterparties, it's not paid for by consumers or others that can be higher credit risks. So I hope that's addressed the point.

Thanks, Duncan. Next question. The share price discount makes it impossible for you to issue new capital. How can you keep your staff motivated if you're not investing in new assets?

Well, I think it's a good question. And what I would say there is we're all focused on our day job, which is delivering core infrastructure and -- to our clients. And for our investors, it's delivering the dividends and the strong, stable, predictable distributions that they're relying on. So we control the things that we can control, and it's an opportunity for us right now. We're looking at a lot of opportunities. We're -- while we may not be buying new assets, we're equally comfortable buying our shares back because it's the portfolio we know and understand very well, and we're very confident in it. So I would say that we're -- we haven't lost any staff. There's still lots to do. One of the other things I would say is the purpose -- we're driven by ownership. We're united by purpose. And as I say, 87% of our staff own shares. So we think and act like owners, and we want to do a good job for our clients. We want to do a good job for shareholders. But we also want to do a good job for ourselves because we, in fact, are shareholders ourselves. So the driven by ownership, united by purpose is very relevant in this situation. So I hope that's answered the question.

Thanks, Duncan. Next one, you're often characterized as being at the most conservative end of the risk-reward spectrum in the infrastructure sector. Is that fair? And will that always be the case?

I think we are -- there's well-established -- yes. Sorry. I think there's people -- everyone's definition of infrastructure is slightly different, and you'll hear core, core plus, super core value-add, et cetera, to describe different classes of infrastructure. But I think there's -- a common acceptance is the type of investments that we're focused on, where we're -- we have contractual income. It's paid by creditworthy counterparties, tends to be at the very low end of the risk spectrum. And as an example of that, I would look at the underlying investment-grade ratings of how these projects are financed. So typically if there was project debt on these and they were rated, it would typically be investment grade. So that sort of gives you an indication of the risk profile. But I would say look at our track record. We've delivered stable, predictable returns for over a decade. We went through some pretty dramatic macroeconomic conditions when you think of what's happened with interest rates and inflation in recent years and prior to that, what happened with COVID. And certainly, other parts of the economy went through a lot more turmoil, and we've been very consistent in our ability to produce income. So yes, I would say it's a fair assessment of our risk profile. I'm very comfortable with the look-through to the parties that are paying us. And we have -- if you look at the slide deck, you can sort of see who is paying us, and it's creditworthy governments with typically AA and AAA rated entities, and we've got a diversified portfolio. So I would say it is at the low end of the risk spectrum.

And just a question -- sorry, will that always be the case?

Yes. I mean our focus is very much on creating a low-risk portfolio that delivers stable, predictable returns that are inflation linked. So that's what we think about every day. But we do engage in portfolio construction. There's no one deal that gives you all the attributes you want. So you -- yes. And it's not to say that these are risk-free assets. So We could have an issue with an asset. Fortunately, we report every period whether we have any lockups or defaults. And I believe we're the only ones in the sector to do that, and we don't have any lockups or defaults. So we have happy clients. So that goes a long way, but there -- it's not to suggest these are risk-free assets in any way. But -- so I think you will see the portfolio stay the same in terms of its general theme, but you may see some -- as an example, we bought the John Hart Generating Station in 2022. And someone might say, well, hey, is that -- are you guys going into renewables. And we're saying, it's not really -- yes, it's a renewable asset, but it's availability-style payments where we're paid by a creditworthy government. And we're paid as long as the asset's available, as long as water can flow through the dam -- through the stock pen, and we're not taking hydrology risk. So we're not trying to be renewable people. We're just trying to deliver stable, predictable cash flows from infrastructure. And our definition of infrastructure is such that it might be slightly different than what it has been in the past, but the underlying themes are going to be very much the same. And I would take comfort in the fact that we've got a very diversified portfolio. No one asset is particularly large. The average transaction size is 2% or 3%. So we've always transacted in modest amounts. So if there are any changes to the portfolio, investors will have a lot of visibility to that. And if they don't like what they're doing, I'm sure they will tell us. But so far, when we've made acquisitions, we've never been criticized.

Thanks, Duncan. The next question. Your portfolio is diversified across 7 highly rated countries. Are there any regions where you see particular growth opportunities, or conversely, areas where you might reduce exposure due to geopolitical or other risks?

We're very comfortable in the countries we're in. We try to stay within our circle of competence. We have people in all the countries where we're active. So we're -- we understand the local economies. We understand the landscape there. We're -- so there's no problem there. And it means we're also not dependent on any one market. So it's not like we're overexposed to a market, and if the deal flow in that particular market changes, then it's going to have a big impact on our business. So I think you will see us look at the geographies we've historically been in, but could it change modestly? We're in Australia. We've looked at lots of deals in New Zealand, but we've never transacted there. We'd love to do more in the U.S. We're comfortable in the countries in Europe we're in. We're in obviously the U.K., but we're in Germany, Netherlands and Norway. But I think you're going to see us focusing on similar geographies. We're not going to go to areas that we don't know or don't understand.

Thanks, Duncan. Next question. I believe BBGI is not exposed to termination for convenience clauses in the U.S. Do you see risk for future investments from recent news in Texas and U.S.A. grantors adopting these clauses, capping the upside in future concessions?