HICL Infrastructure PLC ($HICL)

Good morning, everyone, and thank you for joining HICL's Annual results presentation for the financial year 2026. I'm Mohammed Zaheer, I lead the InfraRed listed Investor Relations team here, and I'll start with a few brief housekeeping points before we begin. Joining me today are Ed Hunt, Mark Tiner and Ross Gurney-Read, the usual team, you'll be familiar with who will take you through the group's results for the year, covering financial performance, portfolio development and the broader market context. We will run through the formal presentation, first, after which we'll take questions from those in the room and those online. If you are joining via the webcast, you can submit questions through the platform. Please note that today's presentation is being recorded, and the presentation slides and recording will be on the company's website. There is no fire drill planned. So in the event that the alarm does sound, please do follow the marshals out of the building. With that, thank you again for joining us, and I'll now hand over to Ed.

Thanks very much, Mo. Good morning and a very warm welcome to this set of annual results for HICL Infrastructure PLC. Starting on Slide 4, as we do with an important restatement of HICL's proposition. HICL sources high-quality infrastructure assets in private markets and offers them to listed investors in a diversified and liquid vehicle. We focus on core infrastructure, essential assets differentiated by their long-term cash flows, inflation protection, barriers to entry and growth potential. The portfolio is actively managed, ensuring each and every asset plays its role and that value is crystallized at the right times through selective asset rotation, and all delivered by InfraRed's 25-plus year track record as a specialist infrastructure investor, leveraging its international capability across the infrastructure risk spectrum. With that as the anchor, Slide 5 puts that into context with HICL now having delivered for over 20 years since IPO. HICL was originally listed in 2006 as the first infrastructure investment company on the main market of the London Stock Exchange. And since then, it's a story of resilience, of consistency and of evolution. From its pure PPP portfolio in 2006, the decision to extend into broader core infrastructure in 2016, and it's roughly 50% allocation to these growth assets now in 2026. Over that 20 years, the company has delivered a NAV return of 8.5% per annum, encompassing almost 150p in dividends and 60p in NAV growth. That's through all market cycles and the full spectrum of macroeconomic and geopolitical shocks. These are strong numbers, and they differentiate HICL from its peer group. As well as marking the occasion, the slide reinforces what HICL has been designed to do, to provide exposure to resilient long-term infrastructure assets at attractive total returns through the cycle, enhanced by active management and importantly, involving with the underlying infrastructure market. And these attributes are at the heart of this year's annual results as set out on the next slide, Slide 6. This is a strong annual result, underpinned by a pleasing operational performance, effective portfolio rotation and enhanced cash generation. Moving left to right on this slide. First, on the left, the slide shows a total NAV return of 10.3% with NAV growth of 7.1p in the year. The return from the underlying portfolio was 12.2%, materially ahead of expectations, driven by the excellent performance from the company's growth portfolio with EBITDA improving 9% year-on-year as well as outperformance from accretive asset rotation. That takes us to the middle column with GBP 536 million of accretive asset sales achieved in the year, well in excess of the GBP 200 million target and taking the total divestments over 3 years to over GBP 1 billion at a weighted average premium to NAV of 11%. This is almost half HICL's market capitalization, evidencing the quality of the NAV, the importance of asset rotation in the business model and the manager's execution capability. In the year, this activity added 2.2p to our performance before taking into consideration the use of that capital, including the GBP 103 million of share buybacks completed in the year, taking the overall spend on share buybacks to date to a sector-leading GBP 189 million. Finally, on cash generation, the dividend cash cover target was met with cash cover of 2.38x, including disposals or 1.10x excluding disposals. That was alongside a 1.59x funds from operations or FFO dividend cover, supporting today's new dividend guidance of 8.65p for FY '28 and highlighting the healthy level of reinvestment in the underlying portfolio. One point to reemphasize on this slide is that the company's payout and reinvestment settings now consistently support NAV growth. All things being equal, steady-state portfolio earnings are now comfortably in excess of the level of the dividend even before our performance. This underpins steady period-on-period NAV progression, and we'll unpack this as we go through the slides as well as other elements of the result. But the year in summary, selective rotation, strong operational performance and cash flow that supports continued dividend progression and NAV growth. On Slide 7, we set out further key metrics to illustrate this annual performance. Going clockwise from the top left, we've seen that NAV growth of 4.6% in the year to 160.2p. Top right, total shareholder return of 13.1% as a result of share price appreciation and HICL's strong dividend offering since period end, we've seen a further 8% share price increase up to Friday, a little bit more this week. Bottom right, we examine expected future returns. The discount rate of 8.5% is the best guide to the expected gross return at NAV, which at Friday's discount to NAV, this translates to an expected net return after costs of 10% with a 6% plus down payment on that total return through the dividend alone. And finally, bottom left, this net return will only be improved by the continued downward trend on the expenses ratio. This declined to 1.03% in the year due to fee reductions taken last year. And on the basis of the further fee revision announced today to 100% market cap, this represents a peer-leading pro forma OER of 90 basis points. Moving on now to strategic portfolio construction on the next slide, Slide 8. This slide revisits HICL's portfolio construction and the balance between the company's cash generative and growth-oriented assets, adjusting for the recent portfolio rotation. At a high level, the story is consistent. HICL seeks to complement its yielders those cash generative, shorter-duration assets with its growers, those earnings generative longer-duration assets to provide an attractive total return proposition with a meaningful and progressive income component. This slide sets out the key characteristics of each segment. The yielders are delivering a cash yield of around 11% long-term, while the growers delivered EBITDA growth of around 9% year-on-year and an assumed longer-term growth profile of around 6% per annum. The design here is straightforward. The yielders will continue to throw off significant cash as they approach maturity while the growers will continue to compound through growth CapEx and operational delivery, and as they mature, will increasingly contribute to the portfolio's cash generation. As active managers, our job is to continue to balance both sides of this equation through timely acquisitions and disposals to solve for that compelling total return for shareholders long-term. Importantly, this chart assumes that all cash is paid out. The reality is that the dividend cash cover will be reinvested, providing valuable future funding for organic growth and an even stronger long-term portfolio valuation versus the line that you can see set out on this page. That's a good point to pause. I'll now hand over to Mark for the financial results.

Thank you, Ed. Good morning, everyone. I'm pleased to present to you the review of HICL's financial performance for the year today. On Slide 10, we present a NAV per share bridge for the year to 31st of March 2026. And this year, we have split the movement into 3 sections to show the different types of return. The gray blocks totaling 1p represents steady state NAV growth generated by HICL's portfolio. This comprises the unwind of the discount rates used to value the portfolio assets, less company expenses and the dividends paid in the course of the year. Absent any outperformance or change in macroeconomic assumptions, investors can expect that the NAV should increase year-on-year as the discount rate unwind covers expenses and the payment of the dividend. Next, we have the results of active management by InfraRed and the Board, adding 5.3p of NAV per share in the year. Share buybacks of GBP 103 million at an average discount to NAV of about 24% added 1.6p to the NAV per share. Value enhancement of 3.7p was driven by InfraRed's portfolio management and asset rotation activities and 2.2p of this gain was the gain realized on the sale of the A63 Motorway for a 21% premium to carrying value. Finally, the effective changes to macroeconomic assumptions totaled 0.8p. There was no increase in reference discount rates used to value assets in the year. Risk-free rates did begin to increase towards the end of March, which placed upward pressure on discount rates. Offsetting this was the powerful evidence of asset transactions taking place in our market sector, especially the GBP 536 million of assets sold by HICL in the year at an average 11% premium to NAV. Modest net foreign exchange gain after hedging was 0.8p, leading us to the year-end NAV per share of 160.2p. On the right-hand side, some headline metrics. As Ed mentioned, the pro forma OER has reduced to 90 bps on a go-forward basis, assuming the new fee regime. Fund level gearing was 7.1% at year-end and net debt was GBP 62.3 million, reflecting the GBP 150 million private placement notes less the cash balance of GBP 87.7 million. Liquidity available to HICL at the year-end was GBP 304 million, being the Topco cash of GBP 87.7 million and net disposal proceeds held down in the group of GBP 333 million less investment commitments of GBP 117 million. The RCF remains undrawn, with GBP 395 million of further liquidity available. Moving the lens to the company's portfolio during the year and picking out some key movements on Slide 11. Acquisitions of GBP 51.8 million represent the commitment to acquire a further stake in Cross London Trains, which closed last week. Divestments of GBP 527.8 million, comprised the sale of 7 PPP assets to APG and the sale of the A63 French Motorway. Strong cash distributions from the portfolio of GBP 223 million led to the year's increase in dividend cash cover to 1.1x. Gross portfolio return of GBP 323.5 million was 12.2%, the weighted opening portfolio valuation, showing outperformance over the unwind of the weighted average discount rate. And finally, we add to the net disposal proceeds that are retained down in the portfolio to get to a total portfolio of fair value of GBP 3.1 billion or GBP 3.2 billion, including future commitments. I move now to analyze the underlying cash generation of the portfolio and how it supports the company's strategic objectives. As last year, we show here the cash generation of each part of the portfolio. The yielders, which represent 53% of portfolio value and the growers, which represent 47%. On the left, yielders which largely comprised the PPP portfolio, generated GBP 164 million of cash after debt service, tax and life cycle costs paid. On the right, we show the growth portfolio cash flows. EBITDA of GBP 272 million was a 9% increase on the prior year. Deducting debt service, tax and maintenance CapEx, the growth assets generated GBP 139 million of cash before growth CapEx. So together, yielders and growers generated GBP 303 million of operational cash flow for the company. On Slide 13, we then present 3 perspectives on cash cover. Going left to right. Firstly, we introduced a funds from operations or FFO metric. This captures cash generated by the portfolio after payment of all obligations but before capital allocation decisions. To calculate funds from operations, we deduct company expenses to get GBP 256 million available for capital allocation decisions. Portfolio FFO amply covers the dividend 1.59x. Next, we look at traditional dividend cash cover. To calculate this, we take FFO and deduct the growth CapEx deployed in the year predominantly at Affinity Water, Fortysouth, Altitude and TNT. This CapEx adds to the portfolio asset base, increasing the revenue that can be earned from it and hence increasing EBITDA and ultimately, yields. Deducting the year's growth CapEx of GBP 79 million gives distributable cash from the portfolio of GBP 177 million, which covers the annual dividend 1.1x. And finally, we look at the company's earnings cover. The increase in portfolio value, partly driven by the deployment of growth CapEx in recent years, less company expenses results in earnings covering the dividend 1.66x. Taking just the discount rate unwind minus expenses, shows that earnings cover of dividend is positive at around 1.2x, indicating that we should expect the NAV to grow each year on a steady state basis. Turning to the divestments in the year, Page 14. HICL's returns have been underpinned by the active rotation policy operated by the manager. Highly selective divestments based on rigorous disposal criteria have been made at an average premium to NAV of 11%, validating the company's portfolio valuation approach, earning 2.2p of NAV outperformance and creating GBP 536 million of proceeds for redeployment or capital returns. From a portfolio composition and risk perspective, the divestments have achieved a couple of targets, reducing the company's exposure to healthcare assets and to life cycle risk, reducing political risk by selling an asset in France, and improving the portfolio's inflation correlation to 0.8x. Ross will speak in more detail about the disposal of the A63 Motorway shortly. Let me move to Slide 15. Here, we take a closer look at the portfolio debt profile and a selection of portfolio sensitivities. On the left, all portfolio debt is non-recourse to the company. And as you can see from the donut, only 0.6% of the overall balance is due for refinancing in the next 2 years. Indeed, only 17% of the debt is due to be refinanced that's all, as the remainder is fixed-term concession debt on the PPP portfolio. As a result of planned debt amortization in the PPP portfolio, gross portfolio gearing reduces from 65% today to under 50% in 2040. And this effectively matches the average gearing of those assets, which do have refinancing requirements, 46% at 31st of March. The year has also seen debt refinancings successfully completed on Affinity Water, TNT, Altitude and Fortysouth on accretive terms. And on the right, we present here key portfolio valuation sensitivities. Due to the nature of the long-term contracts in our portfolio, higher inflation has a positive correlation to NAV increased since the divestments, reflecting the portfolio's 0.8x inflation correlation and acting as an offset to any increases in the discount rate. The other sensitivity I would like to comment on here is a slight positive correlation of interest rates, considering interest income on cash and interest payable on debt. This reflects the large interest-earning cash balances in the PPP portfolio, especially and the fact that practically all interest on the portfolio debt is fixed in nature. With that, I'll now hand over to Ross to take you through the portfolio performance section.

Thanks very much, Mark. Good morning, everyone. So as usual, I'll start with a reminder of HICL's core infrastructure framework on Slide 17. And this sets out the attributes that we're looking for when we make new investments, so namely high-quality cash flows, defensive market positioning and a strong social license to operate. Ed will come on and talk about the pipeline. When we're renewing new opportunities and reviewing opportunities, we guided by this framework, which applies across different sectors and return profiles. Turning to Page 18. You can see the familiar snapshot of HICL's diversified portfolio. The charts have moved around a little bit compared with last year as a result of the transaction activity, but the geographic split hasn't changed too much with the disposals in the U.K. and France broadly offsetting. The 10 largest assets are around 55% of the portfolio by value, and the weighted average asset life is now up at over 34 years. So let's dive into portfolio performance. I'll run through the 6 largest assets, cover the PPPs as a whole, and then talk about the A63 at the end. So starting with Affinity Water on the left-hand side of Page 19. This is HICL's largest investment at 13.6% of the portfolio value. Affinity continues to perform well financially, finishing its first year of the regulatory period with EBITDA slightly ahead of our forecast. This solid in-year performance is underpinned by a stable and resilient capital structure as well as continued growth in the regulatory capital value of the business, which is indexed to CPI inflation. To support the ambitious AMP8 investment plan, HICL executed its GBP 50 million incremental equity investment during the year. And this also set the foundation for the resumption of dividends with HICL receiving its first distribution from Affinity in over 5 years, in line with our forecast. This was another key milestone for the business, which following PR24 is now on a stable footing and delivering a mix of income and capital growth. To reflect the improved cash flow certainty, we reduced the discount rate by 10 basis points and contributed to another increase in valuation. Operational performance is still a key focus area for the company and will continue to be under the leadership of incoming CEO, Mark Garth, who joins from United Utilities. Was pleasing to see Ofwat recognizing the company as a top performer in several areas, albeit customer experience remains an area for improvement. Affinity will draw on Mark's proven track record here at UU. More broadly and notwithstanding the potential for political change in the U.K., we expect the Cunliffe Review and subsequent white paper to be broadly supportive. Recent transactions in the sector have also demonstrated there is appetite from investors for water companies in public and private markets, and particularly those that are well-performing water-only companies with resilient capital structures. Moving on to Texas Nevada Transmission. So as a reminder, this asset actually comprises 2 electricity transmission networks, which are co-owned and operated by LS Power. Cross Texas Transmission is a regulated utility, 1 Nevada transmission has a long-term availability contract with NV Energy, an A-rated Berkshire Hathway subsidiary. As you can see, both continue to perform very well operationally. In October 25, CTT concluded its regulatory settlement with the Public Utility Commission of Texas. This settlement process is slightly more straightforward than next size that we have in the U.K. The regulation operates under a cost of service delivery model, and therefore, the key output is the allowed return on equity. This was confirmed at 9.6%, which was in line with our valuation forecast and demonstrates the need for the regulator to appropriately incentivize investment in the network. And this need for investment is only going to get larger. This was the conclusion of a third-party study, which was incorporated into the valuation but more broadly, the regulator has only just started to come to terms with the massive need for power to fuel AI. In Texas, massive data centers now dominate the interconnection queue, making up over 70% of requests. It's estimated that the state could have over 40 gigawatts of data centers by 2028, and this could reach 150 gigawatts within the next 5 years. And just to put that into context, that's double the U.K.'s total energy generation capacity. For our investment in TNT, this means that the focus is likely to be on growth CapEx for the foreseeable future to support more interconnections and a more resilient network. Turning on to Page 20, we provide some detail on HICL's 2 large transport assets. So starting with LSPH. International train path bookings grew by 4% year-on-year. Retail income outperformed our forecast by 9%. On the domestic side, revenues were still at the contractual underpin level, albeit the level of top-up from the DfT is now minimal. Southeastern trains continue to add additional services during the year. In fact, from the May '26 timetable, which kicked in a couple of weeks ago, Southeastern are now back at the underpin. While this doesn't have a direct valuation impact, it is encouraging to see sustained and growing demand across the user base. And this dynamic is really important in the context of a second international operator, which is the #1 priority to unlocking the full growth potential of our investment. Once again, there's been a lot of good progress in the year. Most notably the ORR awarding depot capacity to Virgin Trains in October '25, which was not challenged by Eurostar, was supported by a detailed and credible operating strategy. The ruling doesn't preclude other operators from launching services. In fact, Trenitalia continues to progress its own plans using existing rolling stock and depots in France. Shortly after the period end, Virgin and LSPH jointly applied to the regulator for approval of a framework track access agreement, which would provide Virgin with access rights to the line. This is conditional on ordering rolling stock within the coming months. And as I've always said, this will be the trigger for us to have another look at the valuation. However, we have slightly reduced the discount rate, and we've also incorporated the latest estimates for the significant station expansion works required at St. Pancras to support a step-up in international services. Moving on to Cross London Trains, which is now HICL's fifth largest asset, if you include the 6.5% stake we acquired in March. Because this transaction completed on the 20th of May, which is after the year-end, the valuation of the new stake is currently based on the commitment of the original acquisition cost of just over GBP 50 million. At the next reporting period, we intend to revalue the incremental investment in line with the approach taken for the current stake and this is expected to result in a substantial uplift in valuation adding over GBP 0.01 to NAV per share, reflecting the off-market price achieved for a minority stake and HICL's favorable rights as an existing shareholder. This is an asset we know well and has pulled consistently since our first acquisition around 4 years ago. Cash flow visibility is particularly strong for the next decade, given the availability-based contract provided by the Secretary of State for Transport and the fact that maintenance obligations are retained by Siemens and directly contracted with the operator. From 2036, the fleet will be relet on commercial terms. Our assumptions are based on partial inflation catch-up and a useful asset life of 45 years, which we think is reasonable based on historical data and the unique nature of this fleet. Turning to Slide 21. We cover HICL's 2 digital assets. So starting with Fortysouth, where EBITDA grew by over 10% for the second consecutive year and slightly outperformed our valuation assumption. Although most of this was driven by CapEx, the long-term anchor tenancy contract did also capture the benefit of higher-than-expected inflation. At the year-end, Fortysouth had delivered over 230 new towers since the business was carved out of One NZ. This demonstrates the successful execution of the build-to-suit program, under which new towers are first developed to meet One NZ's specific 5G coverage requirements and then capacity to accommodate additional tenants is increased over time. Building on this expanded capacity, Fortysouth side, 60 new co-location contracts during the year, around 3/4 of which were with the Emergency Services Network. In March, the management team also reached agreement with Spark on a structured 75-site co-location program to be rolled out over 5 years. Crucially, this deal significantly extends the contract duration and inflation protection of the co-location contract which improves revenue quality and supports the long-term financeability of the company. Moving on to Altitude Infra, where our valuation remained broadly stable over the year despite EBITDA being behind our forecast assumption. This primarily reflected short-term softness in the Business Services segment, counterbalanced by supportive regulatory guidance, which will enable an increase in excess tariffs payable by ISPs. This really highlights the importance of investment discipline in a sector as diverse as fiber to the home. Altitude Infra benefits from France's attractive rural market framework, which is underpinned by national deployment targets. The company earns inflation-linked wholesale revenues from all the major ISPs under a regulated tariff structure. During the year, the company achieved a substantial completion of the rollout of the network. And as to result, the most important long-term valuation driver is the take-up or penetration of fiber regardless of the Internet service provider. Penetration increased to 63% from 56% in the prior year. This was in line with our forecast, and we expect this to continue to increase as the copper network is decommissioned over time. Turning to Slide 22. We cover the PPPs, which represent 57% of the portfolio by value. These assets benefit from availability base, contracted revenues, which tend to be linked to inflation and fixed rate long-term debt structures. From an operational perspective, the vast majority of HICL's PPPs performed well during the year, with aggregate availability above 99%. In the portfolio of this size, flare-ups do happen from time-to-time. We recognized a provision against Lewisham hospital during the period to reflect an ongoing contractual dispute with the trust. More broadly, this demonstrates the importance of maintaining collaborative working relationships, particularly as assets approach the end of their concession life. During this year, 3 assets were successfully returned to the public sector ownership, 2 roads and a police training center. And this provides an excellent model as handback starts to ramp up over the coming years. The clients receive their assets in good condition and HICL slightly outperformed its financial projections. As well as managing the assets themselves, InfraRed continues to manage the composition of the PPP portfolio through active rotation. During the year, HICL sold 7 U.K. PPP assets for a combined GBP 225 million. And that's with previous disposals, these assets were targeted. The sale was accretive to key metrics such as inflation correlation and asset life and it reduced our exposure to U.K. healthcare. It also further reduced the PPP portfolio sensitivities, most notably to life cycle costs, as you can see on the right-hand side of the slide. It would be remiss of me not to mention the other significant disposal in the year. We have a case study on A63 on Page 23. This is an asset which HICL owned for 9 years, but InfraRed has been involved with for 15. Between 2011 and 2016, InfraRed developed, built, stabilized, refinanced and successfully exited the project, which gave us a unique vantage point to acquire a state HICL in 2017 as one of the first non-PPP assets in the portfolio. We subsequently took the opportunity to make further incremental investments, leveraging our shareholding position to achieve favorable terms, much like the acquisition of XLT this year. Traffic has proven to be extremely resilient even in the face of COVID-19. As you can see on the page, a steady 1.2% growth per year on average when you layer on inflation-linked toll increases and value enhancement activities, this resulted in revenue growing by over 40% during HICL's ownership period. Much like Northwest Parkway, this put us in a great position to exit to a strategic buyer, realizing a 14% IRR and 2.2p of NAV outperformance for shareholders. And these numbers are pretty compelling. But just to finish off, I'll try and demonstrate the potential value which can be created by managing these assets across their full life span. If HICL had brought its 24% stake back in 2011, on the same terms as InfraRed's unlisted fund, it would have paid GBP 49 million. Now just looking at the disposal price alone, that equates to a multiple of over 7x. When you include all the distributions received over the 9 years that increases to over 10x. So on that note, I'll hand back over to Ed, who will take you through the outlook.

Thanks, Ross. Back to me to round off today's presentation. And I want to do that by providing a little bit of commentary on how we're seeing the infrastructure market today and how we see it developing going forward. As we've highlighted in many of these presentations, we're in the midst of an infrastructure super cycle and the numbers on the page speak for themselves. Over $100 trillion of global infrastructure investment is needed by 2040, spanning transport, energy, communications and social infrastructure. All sectors in which HICL has already made investments and we're seeing this growth come through in the results already. We've talked a lot about the key megatrends driving infrastructure development, energy resilience, digitalization, demographic shifts. These drivers are only becoming more acute as energy security takes center stage, AI transforms the way we live and work and in aging and increasingly urban populous strains have infrastructure systems. This is not a one cycle story. It's a structural multi-decade tailwind, and HICL is positioned to benefit substantially from it. So let's unpack this a little bit more on Slide 26. On Slide 26, we're stepping back to frame what we see as the evolving infrastructure landscape, a market that's evolving in scale, in shape and in return characteristics. There are 4 structural elements to highlight. First, the role of the private sector is increasing materially. This is beyond simply funding and extends to the increasing role of the private sector in sponsoring and procuring new infrastructure. We see this already in HICL through assets such as Fortysouth and Texas Nevada Transmission. This dynamic materially broadens the infrastructure sponsor landscape versus dealing with governments alone. Successful investors will be those that can match this across sectors and across geographies with an international multi-strategy platform with the network with the relationships and expertise to originate across that broader universe. Second, infrastructure systems are becoming more interconnected as energy and digitalization are increasingly interdependent and permeate transport utilities and social infrastructure more broadly. The energy intensity of digitalization, the decarbonization of heat and transport and the drive for efficiency across our utilities all play to this. And as these sectors become more intertwined, it reinforces the need for a diversified approach across sectors and across systems to fully capture those megatrends. Third, the number of investable assets is increasing markedly with megatrends driving new sectors and asset types. As these sectors mature and derisk, they cascade down into HICL's investable universe. Managers with expertise across the full asset life cycle will be better positioned to have sharpened expertise in these new sectors and to position earlier for assets as they derisk. Both play directly to HICL's construction experience and InfraRed's long-term track record across both core and higher risk, higher returning infrastructure strategies. And fourth, dynamics within core infrastructure itself are evolving. As mature assets are impacted by these megatrends, they're becoming more CapEx intensive, reducing near-term yields, but supporting stronger growth and more attractive long-term returns. This increasing complexity demands a more active management capability, playing to HICL's active business model and InfraRed's high-touch approach, supported by over 160 professionals and large dedicated asset management team. So stepping back, these elements point to a broader, more interconnected, more dynamic and more attractive infrastructure market for those that have the attributes to capture it. These dynamics play firmly to HICL's and to InfraRed's strengths, creating the conditions to continue to improve HICL's growth profile and total return over time while preserving the portfolio's core attributes. On Slide 27, we show the practical expression of this positioning. We're seeing a large volume of opportunities in the market, but the key point is really around the discipline and selectivity within that. The funnel on the left-hand side of the slide sets that out. A broad universe of over 80 opportunities screened recently narrowed through disciplined filtering to a small number that we're actively progressing and ultimately just the one executed across London Trains. Looking at what we're progressing, the composition reflects the themes we've discussed. So it's across sectors with strength in utilities, transport and digital infrastructure, across geographies with a continued focus on markets that we know and understand well and at returns that are accretive to HICL's portfolio on a risk-adjusted basis. And that's an important consideration. We're not simply chasing return up the risk spectrum, but selecting particular situations in high-quality assets where these offer attractive risk-adjusted returns and compare favorably to the ongoing buyback program. In the current environment where some dislocation remains in private markets, we're seeing opportunities that meet these criteria more readily, spanning both new investments and more proprietary opportunities such as the recent Cross London Trains investment. And just to reiterate, this is about deploying capital highly selectively where it enhances the portfolio while maintaining strong investment discipline set against alternative uses of that capital. Now finally, on Slide 28, we bring that positioning together. HICL is designed to capture what we see as a long-term structural opportunity in infrastructure investment, not tactically, but through a consistent and strategic approach. This approach is underpinned by HICL's portfolio construction, yielders and growers as well as its approach to diversifications across regions, sectors and megatrends. The portfolio is positioned to grow with these megatrends as the GBP 600 million of growth CapEx over the next 5 years illustrates as well as the attractive pipeline of opportunities linked to these trends that we see in the market. Of course, disciplined capital allocation remains at the forefront through the continuation of selective asset recycling, a discerning approach to new investments and the continuation of HICL's sector-leading buyback program where it represents the best use of capital. And finally, supported by the platform itself, which provides the capability and track record to execute and to actively manage in a more complex and more exciting market. And on that note, and also to plug that we are lining up a Capital Markets Day in early June, I think the 2nd of June -- sorry, July, where we can spend more time on the market and HICL's strategy within it. So with that, that concludes the presentation and very happy now to go to Q&A. June would have been a bit of a push.

Joe Pepper, RBC. I think just 3 from me, already linked to Slide 27, actually. Just when you mentioned the 4 live opportunities, in terms of how we think about that in terms of where you are currently in the sale process and when we could perhaps expect updates on any of those, that would be of interest. And also secondly, in terms of that pipeline opportunity, how do you think about that in terms of the balance of growers versus yielders in the portfolio and how that could potentially impact key metrics such as dividend cover going forward and the longer-term outlook for dividend growth there if you were to focus perhaps more on the yielders. And then finally, on the balance sheet, it's clearly in a very good place now with the RCF fully repaid. I would be curious to know just in terms of what kind of willingness you have to draw on that, both in terms of quantum and then also for how long as well? Or should we start to think of these as a kind of one-in, one-out policy with disposals supporting reinvestment?

Thanks, Joe. So I'll take the first 2 and then ask Mark to talk to balance sheet utilization. I think the first thing to say on '27 is that this is a snapshot in time in terms of how we're seeing the pipeline right now. So as the days and weeks go on, we'll be adding and subtracting opportunities from this mix. In terms of the live opportunities, what I will say is that there's a focus on more bilateral situations, so ones that we can unearth through relationships or through existing positions in the portfolio. So that's a key focus rather than gravitating towards processes, which are going to be more competitive. So a real focus on less competitive situations. And in terms of that sort of split of balance between growers and yielders, I would say that within that, there's a particular focus on opportunities that deliver both, have a minimum yield contribution, but also a total return that sits as a favorable use of capital versus, say, buybacks. So beating that buyback threshold. That's only really -- generally, there is a trade-off between yield and growth, as you've highlighted right here. But where we can unearth these situations that are less competitive, we find that we're able actually to deliver on both fronts. But certainly, right now, we continue to focus on both elements of the equation. In real assets, it's difficult to fine tune that exactly over time. So it's likely that we'll pull a lever in one direction, and we'll need to compensate in the other direction. But right now, in terms of those 4 live opportunities, I'd say they're quite balanced in that respect. And Mark, on RCF utilization.

Yes. Thanks, Joe. So your question is, we will [ to draw ] the RCF to do investments. I believe.

Yes actually and also its how long?

Yes. And we see it primarily as a bridge to disposal. The days of having it as a bridge to equity haven't returned yet. Bridge to disposal, we've proved that we can sell assets. We've proved that we can sell assets for good premium, GBP 1.5 billion since HICL was founded. So we have confidence in our ability to sell assets if we see opportunities that come before or sale closes, then we would certainly use the RCF just as we have done in the past year. So the average drawing on the RCF during the course of the last year was between GBP 30 million and GBP 40 million, while we were undertaking last year's buyback program, and we bridge to the disposal proceeds for APG and also A63. Just taking a step back a little bit, looking at the overall fund gearing level, it's 7.1% at the moment. Fairly low, I think. Obviously, that's slightly exaggerated by the large amount of cash, and we've got that at a portfolio level. But if you think of a steady-state level of maybe 7% to 8%, does that leave scope for a little bit more fund leverage in order to increase investment cadence? Possibly. It's not something we've ruled out, but it's probably not our first port of call. We've been successful selling assets, we would look to improve NAVs and improve active management through doing that and use the RCF to bridge if necessary, and the pipeline.

It's [ Ian Schuler ] from Canaccord. I've got 3 as well, if I may. Just starting on the NAV bridge on Page 10. The gains from the disposals, is that figure included within the 3.7p via enhancement? And if so, how much of it is from disposals? The second one is just can you tell us what the current up-to-date cash debt position is taking into account all the disposals? I think there's a figure there of GBP 87 million of cash, but obviously, you've got loan notes on the other side in terms of net debt. And then I think there are GBP 333 million of disposal proceeds held outside the group. Can you just explain why it's structured in that way? And then the final question is on the dividend cover. We're up from 1.07x to 1.1x. Obviously, that's reflecting Affinity, but Affinity is 13% of the portfolio. So it just seems a bit surprising that the increase in the dividend cover isn't a bit higher given that, that's now come on stream. Does that mean that there's a revenue gone down from some of the other investments in the portfolio?

Thanks, Ian. So on your first question, yes, if you look on Page 10 and the value enhancement block of 3.7p and 2.2p generated by the sale of the A63, the gain on disposal is in there. So you've got 1.5p of other value enhancement. On your second question, yes, net debt at the year-end was GBP 62 million. If you add in the GBP 333 million, which is kept down in the corporate group at year-end, you get to a net cash position of more like GBP 270 million. And the reason for that cash being down there, that's obviously primarily the A63 proceeds. They arrived in euros, and they arrived into the holding vehicle, and the cash is on deposit, it's earning a yield, some of it's being turned into sterling. We need to keep euros because we have euro commitments later on in the year. But there was no operational benefit moving it up to the topco just for the sake of moving it. So the cash is ready and available to be deployed. It sits in a holding company just below the limited partnership. And your final question about dividend cover. Yes, we're very pleased that Affinity paid a dividend this year, slightly ahead of budget, a very strong contributor to the overall cover. And yes, we hit our target of 1.1x. 1.1x target was assuming that Affinity would distribute. The PPP portfolio generated a lot of cash, 11% yield this year. And we do have, for some of the assets that are focusing more on CapEx like TNT, Altitude and Fortysouth, lower distributions. And so while those assets work through their CapEx programs to build out their asset bases, there is less cash coming from them, made up for by the likes of Affinity being a core infrastructure business, we have very good visibility over future cash flows, and we're building a level of safety accordingly.

It's Ben Newell from Investec. A couple for me. One on the GBP 600 million of growth CapEx over the next 5 years. How is that split between the growth assets and sort of how you're planning to fund that? Is that internal or will you expect to put more equity in? And then on the handback, how many are upcoming in the next couple of years? And just how that process has gone over the last year with the 3 that you've done?

So I'll start with the CapEx. Thanks, Ben. So the growth CapEx of GBP 79 million. As we have said in the prior year, the majority of that maybe 70%, 75% is at Affinity Water, and we're perfectly comfortable with that situation that the regulatory framework there allows you to earn a return on money that you put into the ground. And so there's a direct link between the CapEx that's deployed there, the revenue that's generated and the EBITDA and the yield that it throws off. And the remaining balance is split between Fortysouth, which is building out its tower network, as Ed mentioned -- as Ross mentioned, TNT, which is improving and increasing its connections both to data users like data centers in Texas and energy sources. And then Altitude as well in the last year. Altitude, more or less finished building out its network, it's backbone fiber network. And so a lot of CapEx receives there and also to complete that work. In terms of funding, all of that is internally funded. So we put GBP 50 million into Affinity earlier this year. That was part of the regulatory settlement in order to bring the gearing down to 70% at the start of the AMP. And all the CapEx that we've discussed is internally paid for by the companies by cash generated.

Yes, happy to take the handback question, Ben. So I guess, yes, you're right to highlight the 3 that went back this year. And I guess the way we're looking at that is it's really the firing starting now on the handback program ramping up. HICL has handed back a couple of assets to date, but this is really the start of every subsequent year going forward, there will be assets returning. So if we look at the kind of short-term, generally, it is a handful of assets per year, and they're generally small. They're generally in the education sector or kind of small roads PPPs. The first major handback, I'd say, is the home office, which handback in 2031. So that's an asset that we're clearly monitoring and is already in its kind of 5-year review process with NISTA and with the client. Interestingly, that's an asset where obligations for life cycle delivery are passed down to the FM contractor. So again, there's some protection inherent there in terms of that process, but all going well. And then I think the stat that we've got in the slide is 18.2% of the portfolio is going back over the next 10 years. So you can start to see the real ramp-up over the kind of medium-term. And I think what we've seen in the 3 that have gone back this year is it's been a very smooth process, frankly. The clients have been happy with the assets that they've got back. The contractual frameworks were relatively clear and were followed. And I think some of the work we've done over the last 3 or 4 years in trying to get ready for handback a little bit earlier has really helped because it's meant that -- there hasn't been any kind of unwelcome surprises cropping up at the end of the contract. They've gone back. We're effectively just waiting for the handback certificate to be signed off. But effectively, the distributions associated with the return of the asset are effectively in our bank account now. So yes, things have gone pretty well for those first 3.

Any further questions from the room? If not, we'll move to those online.

Okay. Thank you. So starting with one for you, Mark. Is the Cross London Trains accretion in the March NAV?

It is not, no. So 31st of March, Cross London Trains. The transaction was signed in March and completed on the 20th of May. So the valuation event that Ross spoke about will take place in September, and we will own about 13% of that.

Perfect. And Mark, maybe sticking with you for a question on dividend cover. Are you comfortable with the headroom in the dividend cash cover? Should it be closer to 1.2, 1.3x as a target?

So the dividend cash cover that we disclosed at 1.1x, we've targeted that number because we think that gives sufficient comfort to investors that the dividend is well covered. We've also disclosed this year fund some operations metric which looks at your dividend cover before deployment of growth CapEx and which takes place -- capital allocation decision that takes place down in the portfolio of companies. And that's 1.59x, and we think that quite comfortably covers the dividend given that some of that growth CapEx is by its nature, discretionary. So no, I think 1.1x, we think, is appropriate. You can see from the increasing cash graph on Page 8 that goes out 25 years or so, that forecast cash balances generated by the portfolio are increasing over time. And that gives us comfort that the dividend we expect should grow over time, and it should be amply covered at 1.1x minimum.

And Mark, just on a similar theme, but from the opposite angle. Can you explain why the dividend has only increased from 8.5p per share to 8.65p share given the strong coverage?

Okay. So in looking at the dividend guidance that we're giving, we're weighing a couple of things. So the portfolio behaves with complementarity between it. We've got our yielders, which generates a very strong yield, 11% and the cash that comes off those yields funds the dividend as you can see from the disclosure that we've produced. We've got half of the portfolio, which does generate a yield but has a stronger capital growth element there as well. And so when we're looking to give dividend guidance, we're looking at the portfolio we have, and we're looking at HICL's strategic objectives. And we are mindful of a dividend that is increasing, increasing over time, but not a dividend that uses all available cash, which doesn't leave enough cash to be able to stoke the other side of the equation, which is capital growth in the growth assets, most of which is internally generated. But if it wasn't internally generated, we will be able to take the cash out. In order to have a portfolio that pays a good dividend, a growing dividend that's well covered, but also is generating capital growth. This is the balance that we've alighted on.

Perfect. Thanks, Mark, and we'll give you a bit of a break there. And Ross, a number of questions on Affinity. So I'll do this one at a time. But Affinity Water, we've seen UU utilize Ofwat's reopener mechanism and also Severn Trent indicating opportunities, is Affinity pursuing any reopeners? And what would the potential impact be on RCV growth?

Yes. So it's a good question. Nothing immediately targeted by Affinity Water in terms of these kind of large reopening opportunities. Clearly, UU and Severn Trent much bigger companies. Affinity does have a significant capital expenditure program, but I guess, multiple smaller than the very large water and sewerage companies. But clearly, what Affinity is looking at, as Mark has suggested, is continuing to explore areas where it can improve the resilience of its network. RCV is projected to grow by 30% this AMP. So that is clearly a decent level of investment in the network, and that is all able to be funded by capital sources from within the business. Obviously, there was a GBP 50 million equity investment that HICL made. And we've now got that balance between distributions to shareholders and continuing to invest in the network. So we think Affinity is in a relatively comfortable and stable position now on that front.

And sticking with the Affinity. Can you share what your RCV premium is? And are you comfortable with this relative to listed peers?

Yes. So the RCV premiums 1.26x, and that's pretty consistent with the RCV premium last year. Yes, we are comfortable with that. If you look at the peer group, that sits broadly within the range. Some of them are slightly lower than that, but we think for a company like Affinity that's a water-only company with a relatively healthy non-appointed business, which sits outside the regulatory framework and also a very clean capital structure, no significant holdco gearing. Yes, we're very comfortable, that is an appropriate premium at this time.

And there's another question which you've dealt with elements of on the CapEx front. But the extension is, given Affinity's strong performance and the CapEx outlook, does this affect your expectations for the holding period for the Affinity Water stake?

I mean that's a very good question because as we've said in the past, there's no asset within the HICL portfolio that is sacred to us that we would always have to hold the entire stake in our asset for the duration. HICL is set up as a long-term investor and our forecast to assume that we hold Affinity for the long-term. But like any asset in the portfolio, we remain open and alive to potential situations for divestment. Clearly, we're at the point in the regulatory cycle now where we've received PR24. We've actually received the CMA findings for those companies that did appeal to the CMA, and we've also had the Cunliffe Review, and we've had the subsequent white paper that followed that. So what we've seen in the past is that if there are transactions in the water sector, they do tend to occur in the second, third, potentially fourth years of the regulatory cycle. So nothing off the table. We'll keep paying attention to what happens in the market, and we'll assess the opportunity like we would any other that crops up in the portfolio.

Thanks, Ross. Ed, a few questions on the pipeline of opportunities. So would your utilities bucket potentially include existing assets? Or is it predominantly new?

So on the utilities, it's predominantly new. So we're not looking at new incremental investments within existing holdings. It would be new third-party assets.

On a similar kind of theme, after the market's response to the last attempt of consolidation, are you content with the critical mass of your trust? Or do you feel the need to seek further options?

Yes, it's an interesting question. I think we are very focused on HICL as a stand-alone proposition, I think the results speak for themselves in terms of the quality of the portfolio we have, the growth drivers within the positioning of the vehicle to continue to benefit from its broader market. We continue to keep an eye out for opportunities for new investments, be that in private markets or public markets. Right now, the pipeline that we've laid out is very much focused on private assets and more broadly, we're comfortable with the scale of the business where we're continuing to grow assets organically as well as actually having a market-leading buyback program. So yes, very, very comfortable with the current stance of the company.

And then how do you see your FFO cash cover evolving over the next few years if you were to secure your preferred assets in the pipeline?

Yes, it's a good question. It comes back to the question that Joe raised around the balance between yields and growers. So to the extent that we're acquiring assets that have a yield component, but also a growth component, I think you can expect to see the recycling of capital in those assets into CapEx and into maximizing their market position within their chosen field. So I think I wouldn't expect that the FFO would deteriorate with those investments, but I think there's potential for it to continue to grow with the earnings of the potential opportunities.

Perfect. And then another question on portfolio construction. So whilst the yield model is clear, however, the growth allocation, one might argue that fiber and towers are no longer considered as such as demonstrated in low exit values and challenges, particularly in fiber. Could you please comment?

Yes. I mean fiber is an interesting one. There's fiber assets and there's fiber assets. And I think we've been really discerning around where HICL plays in the relative market constructs around those assets. So we saw a lot of enthusiasm around fiber, in particular, in the U.K. and in, say, Germany, which I pull out as examples of markets that are highly competitive that don't have a lot of structure to the market, certainly not a lot of regulation and a retail-oriented businesses. So we've seen a lot of overbuild. We've seen a lot of people rushing to get customers. And when HICL made its investment in fiber, it deliberately stayed away from those types of market structures, and we looked purely at the French rural market because of the market structure that sits around it. So it's a regulated market. It's concession-based. The regional monopolies. There's no overbuild risk. The tariffs are regulated, and there's a lot more structure to it. And we decided that was a better home for HICL. We looked at a number of businesses in that space before we alighted on Altitude infrastructure. And hence, we're very comfortable with the growth prospects for that business as we've, a, rolled out the physical infrastructure to actually deliver the network, and now that's substantially completed, as Ross highlighted, but also as that penetration rate continues to go up. And that's backstopped by the fact that there's a national target on the decommissioning of the existing copper network. So France has quite high natural broadband penetration on the copper network. As that's phased out, that will transition over to fiber. So in our portfolio, these assets are continuing to grow. In the towers business, I won't go on quite as much, but New Zealand is a market that's still very much developing around the 5G opportunity. Data usage is continuing to grow. You're seeing in the raw stats, the level of both organic new tower build as well as the opportunity in increased co-location on our towers that there's actually a lot of growth there. So it's not right to take sort of international comparators in Europe or the U.S. and say, well, that applies to our portfolio. You really need to look at the market specifics around the assets that we've acquired.

Thanks, Ed. And final question we have here. There are a number of questions that -- or a number of comments that congratulate on the strong results. One has a question in it as well, though, and it reads, however, the question is, how do you plan to get on to a justified premium to issue new shares and grow? Is it just time and hard work? CMD in July should help.

Yes. No, I agree. Looking forward to the CMD. I think what are we looking to do? It's really -- we can't control the broader macro market, and that's obviously shown to be quite volatile, either geopolitically or from a macroeconomic perspective, and we can only control the controllables in terms of HICL's performance. And I think we've done a pretty good job of that. So the base level is putting the company in a position where it can deliver stable period-on-period NAV progression. And I think we've got the settings right in terms of the payout ratio, the level of reinvestment and the earnings cover that we're getting from the portfolio in steady state, added to which we're applying a lot of active management, either in pushing some of the assets, Ross was talking about to new opportunities like a second operator on London's [indiscernible] speed or through rotating assets and crystallizing value selectively. And ultimately setting out our store for investors in terms of capital allocation that combines the various levers available to us, an increase in the dividend, strong buyback program and selective investment like XLT so that we can continue to drive the strategy forward and really bring investors in behind us. And hopefully, that will translate into a share price rating.

Great. Thanks, Ed. We've gone slightly over. So thank you for everyone for bearing with us. That's all of the questions in the room and all of the questions online. So that concludes our formal presentation. Please do contact the Investor Relations team if you have any further questions. And thank you again for joining us.