International Public Partnerships Limited (INPP) Earnings Call Transcript & Summary

Welcome to the International Public Partnerships Results Presentation for the 6 months ending 30 June 2025. Thank you for joining us today. I'm Erica Sibree, Head of Capital Solutions and Investor Relations at Amber, Amber being the investment adviser to INPP. It's been a strong 6 months for the company with good continued overall portfolio performance and progress on the company's disciplined approach to capital allocation. The team that's outlined on the slide will be taking you through these details shortly, but I wanted to set the scene that today's results reflect both strategic consistency and continued growth in areas that matter to our shareholders. I'm pleased to be joined today by Jamie Hossain, who you may have already read about in a recent RNS that we issued. Jamie has been appointed to lead the investor-facing engagement for INPP on behalf of Amber alongside the wider team. Jamie will succeed Chris Morgan, who some of you may remember from previous presentations. Chris recently left Amber to pursue an opportunity outside our organization. And while personally, it's very sad to see Chris go, and we wish him every success, we'd also like to thank him for his valuable contribution to the company over the last 13 years. For those of you who joined our recent Sizewell C announcement presentation, Jamie will actually be familiar to you as he led that transaction with other senior members of the origination team here at Amber. For additional background, Jamie is a Senior Investment Director at Amber, having been with the team since 2006. He spent the majority of his time working on INPP. And in addition to Sizewell C, he's led our OFTO valuations -- sorry, OFTO transactions, which now form around 20% of the portfolio by investment fair value. Prior to his work with the origination team, Jamie actually led INPP's valuation and analysis. So he's very familiar with the portfolio, and I might add roadshowing alongside me with investors. Jamie, together with Muhammad Anwer, INPP's long-standing CFO; and Dan Watson, the Head of Sustainability, will present today's results. As usual, the whole team will be available to take questions at the end of the presentation. So please do use the Q&A chat to register any questions that you might have, and we'll address that then. I'll also direct you to the website where a copy of this presentation is available, and that's internationalpublicpartnerships.com. But in the meantime, I'll hand over to Jamie to take you through the results. Thanks so much.

Thanks, Erica, and good afternoon, everyone. So before we dive into today's results, I wanted to just take a moment to step back and reflect on what it is the company seeks to achieve. So INPP is an investment company focused on delivering long-term value for shareholders through responsible investment in social and public infrastructure. Our portfolio and our investment strategy are guided by a few core principles, which remain highly relevant and attractive to investors. These include a focus on essential infrastructure that is cash generative, benefits from inflation linkage and carries a high proportion of contracted or regulated revenues. Together, these features support a clear dividend policy focused on long-term growth. We also believe strongly in active asset management. By making accretive investments and carefully considered divestments, we optimize portfolio performance, maintain diversification and create the potential for capital appreciation. As such, I'm thrilled to step into this role with the INPP team, which will continue working hard to achieve our investment objectives in the short and the long run. So on the next slide, I wanted to highlight what the investment case for the company currently looks like. Based on the end of August share price, the projected net return of 10.2% is, we believe, a compelling one. Compared against the 30-year gilt yield, the premium for investors is around 4.6%. We think that's attractive when you consider what else is available across the broader equity market with a similar risk and duration profile and also considering 30-year gilt yields are at their highest level in almost 3 decades. It's important to highlight that most of this 10.2% net return comes from the current dividend yield of 7.1%. IPP has grown its dividend by at least 2.5% every year since inception, and we project these fully cash covered dividends to continue growing at this rate for at least the next 20 years. Inflation linkage also remains an important and attractive feature of the company. What the 0.7% means is that if inflation were to run 1% above our forecast assumption, we would expect to see a 0.7% increase in returns. We think this inflation linkage provides investors with strong protections against rising inflation rates, particularly those we are currently seeing in the U.K. The portfolio currently has over 140 different investments. They are spread across 9 stable developed OECD member countries and can be broadly grouped into 3 segments: regulated assets, PPP projects and operating businesses, all creating a diversified portfolio of low-risk infrastructure assets backed by contracted or regulated revenues. Finally, the company's focus on active asset management that I mentioned a moment ago has yielded very strong operational performance of our assets and the ability to further optimize the performance of individual investments could result in outperformance of the portfolio's projected returns going forward. So moving on to some of the key developments of the portfolio over the first half of the year on Slide 7. Firstly, I'm pleased to report the net asset value or NAV per share has increased by 2.8% to 148.7p, the first increase in almost 3 years. This was driven primarily by strong portfolio performance and successful execution of asset realizations at a premium to NAV. As you will see in subsequent slides, this NAV growth has not come from a reduction in the portfolio's weighted average discount rate, which remains stable at 9%. So this NAV growth has been very much driven by the underlying performance of the company's investments and the active steps undertaken by the company to enhance shareholder value. It's also worth noting that the NAV is stated post dividends paid in the period, which were 4.19p per share. If added back to the 4p per share of NAV growth, this provides investors with a total return of 5.7% for the first 6 months of this year. On dividends, the company previously announced an increase in the frequency of dividend payments from semiannual to quarterly payments in order to provide investors with a more regular income stream. This change took effect earlier this year. The company has a strong track record of delivering consistent dividend growth. And once again, we've targeted a dividend increase for 2025. The target dividend for this year is 8.58p per share, which is a 2.5% increase on last year's dividend. The company has increased its dividends by at least 2.5% per annum since its IPO in 2006, and we see this consistent progressive dividend as an attractive feature of the company. In addition, we've consistently maintained a fully cash covered dividend since the IPO. For this H1 period, cash dividend cover was 1.1x, which is comparable to the first half of last year. The ongoing charges for the company have reduced from 1.17% for the first half of last year to 1.12% for the first half of this year. We expect the ongoing charges to come down further as the changes to the management fees, which we've previously announced flow through, generating greater value for shareholders. And as the UN Sustainable Development Goals remain a really important part of demonstrating the nonfinancial contribution of the portfolio, we've presented some of the key statistics at the bottom of this slide. Moving on to Slide 9. As noted earlier, the company invests or investments have delivered strong underlying performance during the period, which has been a key driver of the NAV growth we are reporting today. Investors are increasingly recognizing the long-term benefits of the infrastructure asset class, particularly its ability to deliver resilient and stable returns in a complex market environment. This reinforces our view that the opportunity for long-term investors remains highly compelling. Although the company's share price, like much of the sector, continues to trade at a discount to NAV, INPP's discount has been among the narrowest in the market. We see this as an encouraging sign of investor confidence, although we continue to believe the shares remain undervalued. Looking ahead, our priority is to build on the proactive steps we have taken already to reduce the discount and enhance shareholder value. A significant amount has been achieved to date, including during the first half of this year, and we remain committed to taking further action where it can make a meaningful difference. On divestments, since June 2023, the company has realized over GBP 345 million of capital, which is about 13% of the portfolio. Encouragingly, the value realized from these transactions have been either in line or above their most recently published valuations, which we think strongly supports the company's approach to valuation and its NAV. This includes circa GBP 90 million of realizations announced this year, including the recently announced minority divestment in Angel Trains, which has realized circa GBP 32 million at an attractive premium to its December 2024 valuation. It has also enabled the continued return of capital to shareholders through a share buyback program of up to GBP 200 million to March 2026. With the shares trading at a discount to NAV, buying back our own shares can be an attractive use of capital. We started the buyback program early in 2024. And to date, we've bought back over GBP 90 million worth of shares, which has driven an extra 1.1p per share of additional value for shareholders. Where it makes sense to do so, though, we have reinvested or intend to reinvest some of the realized capital into new investment opportunities instead of just buying back shares alone. This is because the strategic benefits and the projected returns from these new investments are expected to be greater than those implied by our share buyback and ultimately should deliver enhanced returns to shareholders. The company is currently preferred bidder on 2 strategic opportunities. These are the Moray West offshore transmission asset and the Sizewell C nuclear project. I'll speak to this in a bit more detail shortly. As mentioned earlier, the company has delivered consistent dividend growth since its IPO on a fully cash covered basis and further dividend growth is expected with a 2.5% increase targeted for 2025 and a further 2.5% increase targeted for 2026. As also mentioned, we have increased the frequency of dividend payments from semiannual to quarterly in order to provide investors with a more regular income stream. And finally, just to highlight, we've undertaken other value-add initiatives, which have included fully repaying the company's corporate debt facility, restating the company's target return for new investments to explicitly consider the returns implied by share buyback and creating further cost savings as well as closer alignment with shareholders through amendments to the management fee, which now captures an equal weighting of NAV and market capitalization. We believe the actions we have already undertaken together with our ongoing capital allocation program, place the company in a strong position to deliver on its long-term strategy and growth. And with that, I'll now hand over to Muhammad, who will step through the financial performance during the period in a bit more detail.

Thank you, Jamie. As Erica mentioned in the opening remarks, I'm Muhammad Anwer, CFO, INPP and also have oversight of the valuation process. I have been at Amber for over 13 years and have been in this role for a significant portion of this time. Although I've previously been involved in post presentation Q&As, this is the first time I'm presenting at INPP's results session. Let me begin with the NAV bridge that is Page 11 in the pack, which shows the key movements in the NAV over the 6 months period. As Jamie noted earlier, the NAV has increased by 4p during the period. The first item to call out is the impact of share buybacks. As the shares were repurchased at a meaningful discount to the NAV, the program has been NAV accretive on a pence per share basis, adding circa 0.5p per share to the NAV in the period or circa 1.1p per share since commencement. However, in absolute terms, it resulted in a reduction in the NAV of approximately GBP 37 million in the period. Since the period end, shares worth GBP 13 million have also been repurchased, bringing the cumulative total, including prior periods to around GBP 93 million or roughly 46% of the stated buyback target. We are making good progress against our stated goals. Moving to the impact of discount rate movements, I would look at the changes in government bond yields and investment risk premium blocks together as they are the 2 key inputs to our discount rate assumption. Since the shift in monetary policy around 3 years ago, we have consistently increased discount rates. These movements have primarily been driven by changes in underlying gilt yields as well as our observations of live market transactions. Over the past year, the increase in yields have typically flown through to higher discount rates rather than being fully absorbed through a compression in the risk premium. However, over the last 6 months, we have seen a moderation in this trend with less direct correlation between changes in gilt rates and transaction level discount rates. Therefore, the discount rate has remained flat at 9% in the 6 months to 30 June 2025. We continue to monitor the market conditions and assess whether this represents a sustained shift. The next item on the NAV bridge is the reduction of circa GBP 78 million due to dividend payments as the cash generated from investments is distributed to our investors. The dividend payments are in line with INPP's dividend targets. We will cover INPP's dividend policy in a bit more detail later in this presentation. Moving to FX and macroeconomic assumption changes. Although FX has broadly been neutral, a circa GBP 30 million uplift into the NAV has arisen from updates to inflation assumption. The change represents our assessment of inflation outlook as well as observation of valuation assumptions by market participants and insights from our M&A activity. Final element of the NAV bridge is the NAV return block. NAV return reflects the change in investment value driven by passage of time, together with updates to underlying cash flow assumptions compared to the previous period. The NAV return in the period is broadly in line with our expectations. Changes in investment level cash forecast assumptions broadly net out, which means that the net position is largely an unwind of the discount rate. I'll now move to Page 12 of the pack, which provides an overview of INPP's dividend targets. We have a strong history of delivering consistent and growing dividends. Dividends have increased by at least 2.5% in all periods since 2007, including uplifts of 5% in 2023 and 3% in 2024. Based solely on distributions from existing portfolio, we expect to sustain a growing dividend for more than 20 years. As we move to the next page, you can visually see the portfolio distributions, which help service the growing dividends. In addition, as noted in our updates on Sizewell C, once fully invested, this transaction enhances our ability to service growing dividends for over 25 years. In the current year, we are also transitioning from semiannual to quarterly dividend payments, giving investors smoother and more predictable cash flows. Looking ahead, our dividend targets of 8.58p per share for 2025 and 8.79p per share for 2026 reflect the continuation of that disciplined 2.5% annual growth rate. I should also add that at current share price, our dividend equates to a strong annual yield of around 7%, underlining the attractiveness of our income proposition. As noted earlier, our strong portfolio distribution helps sustain a growing dividend for more than 20 years, as clearly depicted on Page 13. The graph on this page sets out our projected distributions from PPP, regulated and operating investments for the next 30 years. These cash flows are largely inflation linked and several continue beyond 2055. The red line is an illustrative NAV runoff using today's valuation basis, it shows a circa GBP 1 billion NAV after 30 years. You will notice some lumpiness in certain years. The first thing to call out is that as PPP projects approach end of life, once senior debt is fully repaid, reserve accounts unwind and excess cash can be distributed. That creates a one-off spike in those years. A second driver sits in the OFTO portfolio. OFTO's earn availability revenue for keeping the transmission asset available to transmit renewable electricity from offshore wind platforms to onshore grid. So they are not exposed to power price or volume risk. The asset's economic lives are typically 30 to 35 years, while the initial license is 20 to 25 years. Although we can model the revenue beyond the initial license, our base case recognizes our residual value as a lump sum at the end of license, which appears as a spike. Stepping back, the chart shows a robust, well-diversified distribution profile across the next 3 decades with significant value beyond the chart horizon illustrated by circa GBP 1 billion NAV in 2055. On this trajectory, the portfolio can support a growing dividend for more than 20 years. As we will highlight later in this presentation, Sizewell C further enhances the robustness of these attributes. Turning to valuation discount rates, which you will find on Page 14 of the pack. As we largely use a DCF approach, the discount rate applied is a key driver for our valuations. We determine discount rates through a detailed bottom-up process, starting with government bond deals and layering in appropriate risk premiums. These are then cross-checked against market evidence, both from our own M&A activity and from publicly available transactional data. In addition, our valuations are subject to external review, giving Board the assurance on both discount rates and underlying cash flow assumptions. Importantly, in the last 6 months, we have seen several large ticket transactions in the sector. Together with other recent market announcements, these suggest that most deals are being executed at or above NAV. These are encouraging signs, and we have cross-checked the data against our own deal activity to validate the discount rates we're applying. Consistent with these developments, we observed signs of stabilization in the discount rate. The weighted average discount rate has, therefore, been kept flat at 9%, the first time in around 3 years that we haven't applied an increase. We are monitoring closely to assess whether this reflects a more sustained shift. This page also provides some color around discount rates applied across different subsectors within our portfolio. I would highlight that discount rate net of costs and adjusted for share price implies a double-digit net return. When combined with cash use of circa 7%, this underlines the attractive overall proposition INPP is offering its investors. With that, let me hand over to Dan, who will take us through the ESG updates.

Great. Thanks, Muhammad. Good afternoon, everyone. Now some of you may have noticed we've made a slight reordering of the presentation for these results. And I actually think it's helpful to cover responsible investment before moving on to the investment update since our approach really runs through everything we do from origination through to asset management. Hopefully, that comes through clearly in our most recent sustainability report, which was released during the period. And alongside the usual EU taxonomy, SFDR and TCFD disclosures, we've provided a deeper dive into the progress made against our own ESG KPIs. The area where we probably put most efforts in is in relation to our net zero KPIs, where we have been supporting our public sector clients in delivering their net zero policy objectives. A good example is the collaboration between INPP and Ryburn Valley High School, which is part of the Calderdale Schools portfolio. Together with the school project company and facilities management company, we installed 250 kilowatts of solar PV on the school's rooftop. And that system is expected to generate around 235 megawatt hours of clean electricity every year. And most of it will be consumed on site, cutting the school's reliance on grid electricity. And based on 2023 tariff rates, the school anticipates annual savings of around GBP 40,000 with a payback period of just 6 years. Now clearly, this is beneficial to investors with net zero commitments, but by making financially prudent interventions to decarbonize the company's portfolio, it will also result in more efficient investments over time. Moving on to origination activities. We've spent a considerable amount of time assessing the ESG risks and opportunities associated with the Sizewell C project. The positive environmental and social characteristics of this investment will be accretive to INPP's ESG indicators, as Sizewell C is expected to avoid 9 million tonnes of CO2 emissions every year. At peak construction, it will create 10,000 new jobs, 1,500 new apprenticeships and provide opportunities across the supply chain. It will also deliver a 19% net gain in biodiversity with 250 hectares of new habitat created. And through its role in the consortium with Board-level representation, INPP via Amber will participate in ongoing oversight of ESG policies, compliance and reporting. Now looking ahead to the next period, we will continue to progress our ESG KPIs and aim to identify further investments where we can roll out the interventions delivered at Ryburn Valley High School. We will prioritize projects for net zero engagement based on factors, including local authority net zero commitment and ambition, handback dates and facilities management company capability. We're also planning to update the climate risk review we undertook in 2023, and that review concluded that the company's investments were at low risk from the physical impacts of climate change, which is all very positive. Now we plan to test that against updated models working with our third-party provider, RMS Moody's. And once complete, we'll provide an update in the next round of financial reporting. And finally, and hopefully, as a neat segue back to Jamie, we're pleased to share that Tideway has issued the U.K.'s first Blue Bond. Now Blue Bonds are a new addition to sustainable finance and aim to finance projects that benefit marine environments and water resources. The project has already diverted over 7 million cubic meters of wastewater ahead of becoming fully operational at the end of 2025, which is all really positive stuff. And with that, I will hand over to Jamie.

Great. Thank you very much, Dan. I'll now go through some updates on our assets during the period, starting with the regulated assets, which make up 50% of the portfolio and comprise of 13 different investments, including Tideway, Cadent and a portfolio of 11 OFTO assets. Starting with Tideway, which is the new 25-kilometer super sewer built beneath the River Thames. Major construction work was completed in 2024. And in February of this year, the system was fully connected, allowing it to start preventing sewage from entering the river. The asset is now in its commissioning phase and is expected to be fully operational by the end of 2025. As a reminder, Tideway is funded through the regulated asset base or RAB model. Reaching this commissioning stage is a strong demonstration of the RAB model's effectiveness in delivering large and complex infrastructure. The fixed return and construction protections built into the framework make it a powerful way to attract private capital into essential assets that deliver lasting benefits for both stakeholders and the wider economy. This is one of the key reasons INPP has committed to the Sizewell C nuclear project, which also uses the RAB model. Like Tideway, it provides similar protections and clear visibility of returns. I'll come back to Sizewell C in a bit more detail shortly. Before moving on, I wanted to reiterate our confidence in the statutory and the regulatory protections that supports Tideway in the event of any change in circumstances at Thames Water, which is responsible for collecting Tideway's revenues from customers. Even if Thames Water's status were to change, this is not expected to have a material impact on Tideway. Moving on to Cadent. So Cadent is a gas distribution business that facilitates the distribution to around 50% of the U.K. population, including over 11 million residential homes and businesses through its extensive network of 130,000 kilometers of gas pipelines. The business has continued to perform strongly during the period, delivering stable cash generation and supporting distributions in line with expectations. In July 2025, Ofgem published its draft proposals for Cadent's next 5-year regulatory period, which will run between April 2026 and March 2031. These proposals outline how much revenue Cadent can earn. And while still subject to consultation, they are broadly in line with the company's expectations. Ofgem has also reemphasized that the regulatory framework will remain stable with protections in place to balance the interest of both consumers and investors. A final decision is due in December 2025. Turning now to the offshore transmission or OFTO assets, which transmit renewable electricity generated from offshore wind farms to the onshore National Grid. In April 2025, we reported that the Beatrice OFTO asset was operating at half of its physical capacity due to an offshore cable outage. This was repaired in July this year and evidence gathered to date indicates that the cable outage was likely beyond the reasonable control of the OFTO. Assuming Ofgem agree with this assessment, the OFTO can expect to be fully protected against the revenue penalties caused by the outage through the regulatory protections in its transmission license. A quick word on Ofgem's consultation around extending OFTO revenue periods beyond usual 20 to 25 years. In July of this year, Ofgem confirmed its aim is to align the lifetimes of generation and transmission assets where it makes sense to do so. They see incumbent OFTOs as best place to operate in any extension period with a preference for bilateral negotiations with those incumbent OFTOs. This is very much in line with our expectations and therefore, supports further revenue potential for the company beyond the initial contracts. So moving on to PPP assets, which are our public-private partnership projects, which deliver a lot of the social and some of the transport infrastructure projects the company has invested in. So these include things like schools and community hospital projects. INPP has invested in over 120 PPP assets, which make up 37% of the portfolio, and they continue to perform very well. PPP asset availability for the period was 99.7% and performance deductions were only 0.2%. Any deduction is typically passed to a third-party facilities management contractor. So these limited deductions are not something that would typically impact the company directly anyway, but it is a helpful tool for us to monitor how our assets are performing. During the period, the company announced 2 capital recycling transactions relating to its PPP portfolio. The first includes the divestment of the company's minority interest in 7 U.K. education PPPs to an existing co-shareholder for roughly GBP 8 million. This was contractually agreed in March and is expected to reach full financial close shortly. Secondly, we announced a debt financing to release GBP 49 million of capital from a portfolio of education assets comprising of assets from the Priority Schools Building Aggregator Program and 13 Building Schools for the Future or BSF investments. This transaction reached financial close in July 2025. Both realizations were in line or above their respective December 2024 valuations. I also just wanted to touch on handbacks, which we've talked about before. But as a reminder, when a PPP comes to its contract end, it is typically required to hand back the asset to the local authority in a certain condition. The company's first PPP handback is the Hereford and Worcester Courts project, which is progressing well and is underway to being handed back later this year. It's worth noting that the rest of INPP's PPP concessions span the next 25 years. So these handbacks will be spread over a considerable period of time. Moving on to the third segment of assets within the portfolio, the operating businesses, which comprise of 4 different investments and represent 13% of the portfolio. On Angel Trains, which is a leading U.K. rolling stock leasing business, INPP recently announced a small divestment of 1.6% at a sales price at an attractive premium to the December valuation. Following the disposal, the company retains an 8.4% stake in the business and access to Board representation through its investment adviser, Amber. On BeNEX, which is our German rail business, during the 6 months to 30th of June, BeNEX safely transported approximately 60 million passengers serving over 740 stops. BeNEX now has services across 14 of the 16 German states, providing a total of approximately 65 million train kilometers of transportation services per annum. Finally, on INPP's investments in digital assets, of which there are 2, which represent 3% of the portfolio. These are toob and Community Fibre. Both continue to perform well, building out their respective fiber networks in different areas of the country, with toob now connecting over 93,000 customers across England and Community Fibre connecting over 390,000 customers making it London's largest 100% full fiber broadband provider. Importantly, both businesses are also achieving higher rates of customer sign-up, reflecting strong demand for their services. Moving on to the next slide. Perhaps one of the most exciting developments for the company and the demonstration of its disciplined approach to capital allocation was the announcement of being appointed preferred bidder on the Sizewell C nuclear project. A dedicated webinar of the investment was run shortly following the public announcement on the 22nd of July, a recording of which can be found on the company's website. As has been well reported, Sizewell C is a key component in the U.K. government's policy to strengthen energy security. Once operational, Sizewell C will generate approximately 3.2 gigawatts of baseload, low-carbon electricity, forecast to meet 7% of the U.K.'s electricity needs. INPP's appointment as preferred bidder is the outcome of a decade-long consultation process, during which we have helped shape Sizewell C's financing model to suit INPP's investment criteria and private investors more broadly. INPP benefits from enhanced protections through a negotiated government support package, which insulates the company from remote material risks associated with nuclear generation and given the complexity of greenfield construction, also protects against material construction and cost overruns. These protections have helped create a robust regulatory and contractual framework in which INPP can invest in Sizewell C with a license granted for 60 years of operations following construction. We have deliberately structured the Sizewell equity commitment over 5 years at approximately GBP 50 million per annum, representing a total equity commitment of approximately GBP 250 million. This provides a 3% shareholding along with suitable governance rights and Board representation. INPP's commitment will be funded through semiannual cash payments, principally using cash proceeds from ongoing divestments, which remain well on track. This investment is designed to deliver a powerful combination of immediate cash yield during construction and significant capital growth as the project matures through construction and into operations. The returns profile during the construction period is highly compelling with a fixed regulated equity return in real terms of 10.8%. This means once you add a reasonable assumption for CPIH, which is the inflation index used by Sizewell, you can derive a return in the low teens. It's worth noting that CPIH is currently running at 4.2%. So this regulated equity return is fixed for the duration of the construction period and into early operations, which is projected to be in the early 2040s based on the regulatory construction case. When assessing the investment case for Sizewell C, the Board has diligenced the returns profile relative to a share buyback in line with the target return policy introduced last year. To confirm, the return profile I've just mentioned is significantly above the return implied by a share buyback. And with the opportunity to take the project through construction, we also expect to see additional NAV growth over time. This compelling combination of cash yield and capital growth speaks to the heart of what Sizewell C for INPP is all about, providing INPP with attractive regulated risk-adjusted returns significantly above the equivalent IRR generated on a share buyback. We have included some further details on the investment in the appendix on this deck, including a projected cash flow graph forecast NAV profile and a projection of the impact on INPP's key metrics. As mentioned, a replay of the initial webinar is available on our website for those who would like more detail. We will continue, of course, to update the market as the project progresses, including following financial close, which is expected in quarter 4 this year. Moving on to the next slide, which gives a summary of the company's approach to capital allocation. As I've touched on most of these points already, I won't dwell too long here, but let me just reiterate a few key points. First, the divestment program, which since June 2023 has realized more than GBP 345 million of capital at valuations either in line or above previously recorded NAV. Second, the share buyback, increased the target up to GBP 200 million by March next year and which has already repurchased over GBP 90 million of shares to date, adding 1.1p per share to the NAV. And third, the investment commitments the Board has made, which will continue to be principally funded through divestments and capital recycling. Finally, the Board remains confident in delivering the already well-progressed divestment pipeline with the investment adviser progressing multiple opportunities that remain well on track. And with that, let me turn to the final slide, which summarizes the company's investment case and why it is well positioned to deliver. Firstly, it has a projected net return of over 10% at the current share price, supported by both income and capital growth. This represents a premium of more than 4.5% above the 30-year gilt yield. Second, a dividend yield of over 7%, fully cash covered and underpinned by a long-dated infrastructure portfolio that gives clear visibility on cash flows. Third, meaningful inflation linkage, providing natural protection against macroeconomic volatility. Fourth, a consistent dividend growth rate. At least 2.5% per annum is targeted over the next 20 years, continuing the company's track record since its inception in 2006. And underpinning all of this is a portfolio of low-risk essential infrastructure with income derived largely from contracted or regulated revenues. That ensures resilient and predictable cash flows. Finally, this is complemented by a robust pipeline of new investments expected to deliver double-digit returns with strong cash yields and NAV growth, enhancing long-term value for shareholders. And with that, I'll now hand back to Erica for some Q&A. Thank you.

Fantastic. Thanks, Jamie. And I'll invite my colleagues back on the line as well. I can see a range of Q&A, some of them pre-submitted and others have been coming in during the presentation. So thanks so much. There are a number, so we'll endeavor to crack on and get through as many as we can. Also just like to apologize, we had a bit of a technical issue, and I think the slides were flicking around, which was annoying to us, I'm sure to you as well, but apologies for that. I think we sorted it out in the end. So Jamie, just turning to the first question that's been asked around our investments in Australia, not only why we have investments in places that have so far flung as my home country, a shout out to all the Australians out there as well. But given the distance and time zones, are we spreading ourselves quite thinly as a team? How do we monitor and manage this properly? And how is that really offering value to investors? I'm taking some liberties with the question because it's quite long.

Sure, certainly. So it's interesting to note that actually INPP has been invested in Australia since its inception in 2006 and has continued to grow its portfolio in Australia and indeed globally as well with 7 other countries outside of the U.K. And we see this geographic diversification as a really strong component to the company's offering, providing access to attractive assets that meets the company's core objectives of providing resilient long-term inflation-linked cash flows. In terms of addressing the point as to are we stretching ourselves thinly, well, the short answer is no. The company's investment adviser, Amber, actually has one of the largest dedicated infrastructure teams in the sector with over 180 professionals and with a presence in 12 countries or more than 12 countries, including Australia. So this provides a very much local presence and allows us to actively manage the assets in Australia and indeed in other parts of the world. So we're able to monitor and manage the investments closely. And crucially, the investment adviser is paid through a management fee, which I mentioned, which is based on an equal weighting of its -- of the investment value, so it's NAV and the company's own market capitalization. So the location of any assets does not affect the fee that is paid by the company to its investment adviser. So overall, I think we see this as a -- we see this geographic diversification as a really strong part of the portfolio.

Fantastic. Thanks, Jamie. Maybe one for Dan. A question around how we're actively managing the environmental sustainability of our investments. I think you gave a really nice pray of what's been happening during the year, but you might like to just elaborate on that a little more, Dan?

Sure. Thanks, Erica, and thanks very much for the question. I think probably the way I'll answer this is just to sort of work through the -- how we view things here. I think fundamentally, we view the company's investments as really positive from an environmental perspective. You may look at the impact that Tideway is having on the Thames and removing wastewater spillages, looking at the OFTOs transmitting clean energy to the U.K. and supporting from that perspective. So we do try and look at that and quantify it in line with the UN Sustainable Development Goals. But I think that the company has always taken the approach of this one thing investing in things which are positive for the environment, but also we want to manage them in an environmentally responsible way as well. So we look at environmental sustainability through various lenses. I think the EU taxonomy is a really good one. So EU taxonomy, you have to demonstrate a substantial contribution to, for example, climate change. But then to be fully aligned with the EU taxonomy, you need to pass a number of tests in terms of doing no significant harm, and that includes on the environment and that various policies and processes are in place. Now we have our own view on what environmental sustainability stewardship should look like. And so we've developed some ESG KPIs, which I mentioned in the presentation. And that looks at things like net zero physical climate risk, looks at environmental management systems that are in place, looking at a range of other aspects. So I'd encourage you to have a look at that. And I think some of the examples I was trying to bring out in the presentation, I think, are ones that we're quite proud of. So PFIs are -- have traditionally been quite tricky to retrofit things like solar onto because of the various parties involved, but we're really pleased with the progress that the asset management team have made in working with various stakeholders to make that happen. So that's something we're committed to doing in line with shareholder interest. So I'll probably pause there, but do have a look at the sustainability report. And if you have further questions, then feel free to follow up after this.

Thanks for that. And yes, the main report is definitely worth a read. Just on a query around the sorts of investments we're making and whether we would invest in energy efficiency and energy storage projects as we've seen some of our peers in the market do, particularly given the tailwinds in that market. Jamie, perhaps a good one for you to cover.

This storage are very key areas that we see opportunities in, and we follow those areas very closely. Having said that, to date, the company hasn't invested in any of those specific opportunities. And that's really because the investment opportunities we have seen have for whatever specific reasons have looked more attractive. But that doesn't mean to say that we might -- we may not invest in those areas in the future. And it might just be worth adding that whilst the company has not invested in those projects to date, its investment adviser, Amber has got a very active working knowledge on those sectors, having developed a number of energy efficiency and storage projects.

That's great. Definitely other more interesting opportunities from our perspective, but certainly something we keep an eye on. There's a question around the recent Angel Trains divestment and whether we might sell the residual holding in Angel Trains to fund Sizewell C commitment. I just wondered, Jamie, perhaps you can take that in the first instance.

Sure. Thanks. So yes, we're pleased with the divestment, the small divestment stake we've made in Angel, but that doesn't necessarily mean we will divest the rest. I think what we're keen to say is we consider divestment opportunities for the company very carefully. It's important for us to continue delivering on INPP's core mission of delivering those kind of long-term stable cash flows and delivering on the yield we pay to shareholders. And therefore, when we do consider divestments, we need to think about how they impact the portfolio and how that capital is reinvested. And so for Sizewell C, we are working on multiple divestment and capital realization work streams. So we don't envisage any issues in meeting the capital commitments for Sizewell and indeed, it is one of the key reasons why we did, as part of our negotiations with the government, structure the investment profile to be over 5 years to give INPP the opportunity to have clear visibility over those investments and therefore, to size and manage that divestment work stream to meet those investments. I might just add one other thing, which is just to say the dividend is cash covered, something I noted earlier, at 1.1x. So that 0.1 or 10% means that cash coming from underlying investments that isn't distributed directly to shareholders through dividends is being used to reinvest as well. And that's why it's not just divestments that will drive the investments into upcoming opportunities like Sizewell.

The second part of that question relates to the discount to NAV that the shares continuing to trade at and what our expectation is to the extent that this environment continues for longer, i.e., the higher interest rate environment and the implications for our capital allocation program, which you obviously stepped through in some detail. So maybe we can deal with that briefly.

Yes. Thanks. I think there was a slide, I think I covered off a few of the -- or some of the key activities that the company has undertaken, repaying its corporate debt facility, undertaking a divestment capital realization program and returning that capital to shareholders through share buybacks, but also looking for accretive new investments that beat the implied return of a share buyback alone. And as also mentioned, that is explicitly part of the Board's consideration when they are thinking about new investment opportunities. And so very much there is a cycle of divestments or realizing lower returning assets and investing those into higher-returning assets like Sizewell, which is projected to provide a return in the low teens. And that really is how we are looking to drive shareholder value and narrow the discount to NAV.

I would also say that from an Investor Relations perspective, and this is a question that comes up a bit later. People are asking around the sort of the composition of our investor base and how much retail component there is. We have an active Investor Relations program and really trying to tap into new pools of capital to support interest in the share -- in the company and therefore, the share price as well. So I would say that the company is taking active measures on a range of different fronts to support the share price. I think that one covers off a couple of different questions that have come up, and we're trying to aggregate some of your questions just for time. There's a question around -- and again, I think this is somewhat implicit in terms of your recent response, Jamie, but can investors assume that the implied return of a share buyback is 10.1% and the same as the stated projected net return to investors at the current share price? I think the investors is trying to get at whether returns that we're generating from new investments are higher than that of a buyback, which I think is indeed the case.

Yes. I think just to be explicit or just confirm, yes. So new investments that the Board and the company consider is in relation -- the projected returns are in relation to that of a share buyback and those projected returns beat the share buyback alone, and that's certainly the case in Sizewell C. As mentioned, it's a -- we're projecting a low-teen return, which is fixed during the period of construction into early operations projected to be early -- in the early 2040s.

There's a question on the composition of the share register and how much of it is retail. And I guess related to my comment earlier about tapping into new pools of capital, we have made active measures to reach a range of different capital sources, including institutional. But certainly, our Board is very focused on engaging in a meaningful way with retail investors, both through intermediated agencies, but also through platforms and retail investors directly. And I would say that as a proportion, that's increased of late. I think due to those efforts and also due to sort of the attractiveness of the asset. I would say just over half is probably either coming through private wealth channels or that -- those sort of platform and/or direct channels to give you a feel for the composition of the register. There's a question around what our USP is relative to some of our direct competitors. I think this is a bit of a tricky one for us to answer directly. But Jamie, would you like to have a little bit of a stab at what you think our USP relative to our most direct competitor might be?

Sure. So well, look, I think from INPP's perspective, I think the key thing for us is that the theme that runs through our investments is that government-backed protections and in many cases, revenue as well. And I think that's perhaps the key thing. I don't think there is a great deal of demand-based revenue in our portfolio, and it's generally either contracted or is backed by regulated revenues. And we think that's a key reason why we can be very confident in our cash flow projections over the next 20-plus years as we've provided in our share graph -- sorry, our cash flow graph, I should say. I mean beyond that, I think we do have an attractive mix of assets that we've outlined. And I would also say the dividend growth to date, 2.5% at least every year since its IPO and the projected dividend growth fully cash covered, I should add, over at least the next 20 years. And as mentioned, once Sizewell is within the portfolio, we project that to increase to 25 years into the future. So yes, I'll probably highlight those key features.

Fantastic. Thank you. I'm conscious of time. We might take one more question. There's been a last-minute flurry of questions, so we may not get around to answering all of them. I would say a few questions that have popped up been around dividend timings assumptions that we're making in our model. Most of that information is either in this pack or on the website, so I direct you there in the first instance. But just perhaps to cover off a question that's come up a couple of times about the assumptions we're making on the useful life of the OFTO assets, Jamie, and the value that might be there from a NAV perspective depending on the outcome of that consultation.

Yes. Thanks. So on the OFTO residual value point, so the -- it's first worth pointing out that INPP is a significant investor in OFTOs with about 20% of the portfolio. And we see these as really attractive and core assets to INPP's mission with those inflation-linked projected cash flows for the long term. We do assume a residual value at the end of the contracted period. And that is a very balanced view on the -- where we expect the continued use of the transmission assets. And indeed, given our position as a key investor in the sector, we've been engaging heavily with Ofgem through its multiyear and multi-round consultation process as it shapes the regime following the end of the contracted period on these OFTOs. And I'm pleased to say, actually, things are moving very much in the right direction for us, supporting the expected extended use of these assets and therefore, extended revenue from these assets. Ofgem has recognized that the incumbent OFTO, so that would be INPP, is likely to be best placed to continue operating the asset. And therefore, it, as I mentioned earlier in the presentation, expects to engage in bilateral negotiations with the incumbent OFTO to agree the future revenue forecast. I think it's worth pointing out that the contracted revenue period for these -- the OFTOs tend to be 20 to 25 years. But the technical life of a lot of the assets, both on the wind farm itself that's generating as well as the OFTO transmission assets extends significantly beyond that. So from a technological perspective, we don't expect any issues in continuing to manage and operate the asset. And clearly, given the transition to net zero and the general tailwinds that support that, we see a very compelling case for Ofgem to agree suitable extensions for the use of those OFTOs. And we, therefore, are very confident in the -- in realizing those residual values.

Thanks so much, Jamie. Now we've kind of really peaked over the hour. So we may well leave you to your afternoons, but thank you so much for joining us, and I'll hand back to Investor Meet if there's anything additional that they would like to advise.

That's great. Well, thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of International Public Partnerships, we'd like to thank you for attending today's presentation, and good afternoon to you all.