International Public Partnerships lifts NAV and dividends

International Public Partnerships (INPP) closed the first half of 2026 with net asset value per share rising 1.9 pence to 153.4 pence. This increase resulted in an annualized total NAV return of 8.2% for shareholders. The growth was primarily driven by portfolio distributions arriving ahead of forecasts and the natural passage of time reducing the discount on future cash flows. Lead Portfolio Manager Jamie Hussein of Amber Infrastructure noted that valuations remained resilient despite volatility in government bond markets.

The company maintained a weighted average discount rate of 9.1% across its infrastructure portfolio. With 99% of revenues regulated or contracted, INPP reported strong operational stability. Management highlighted that the overall performance reflects strong operational results and resilient valuations that align with market expectations. This stability supports the company's long-term income strategy and capital preservation objectives.

Dividend cover improves to 1.3 times

INPP reaffirmed its 2026 dividend target of 8.79 pence per share, representing a 2.5% increase from the previous year. The board also maintained a 2027 target of 9.01 pence per share. The first quarterly interim dividend of 2.19 pence was declared for payment on September 15. This continuity underscores the company's commitment to consistent income growth for its shareholders.

Operating cash flow cover improved to 1.3 times for the first half, up from 1.1 times a year earlier. CFO Mohammed Anwar attributed this increase largely to cash-flow timing rather than structural changes. He noted that cover is expected to normalize toward the historical range of 1.1 to 1.2 times for the full year. Management stated that existing portfolio cash flows support dividend growth of at least 2.5% annually for the next 25 years without requiring additional capital injections.

Capital recycling drives higher returns

Since mid-2023, INPP has realized or committed to realize over £440 million in asset sales. This amount represents approximately 17% of the total portfolio. The company has reinvested or committed more than £480 million in new investments. These new commitments, including the Moray West offshore transmission project where INPP is the preferred bidder, target average projected returns above 11%. This strategy aims to enhance the overall yield profile of the fund.

During the period, INPP sold a minority stake in the Moray East Transmission project for approximately £40 million. It retained a 51% holding and control over the asset. After the period end, the company agreed to sell nine school projects. These transactions reflect the ongoing execution of the capital recycling strategy. The proceeds are being redeployed into assets with higher expected returns compared to the current 9.1% portfolio discount rate.

Portfolio adjustments address market headwinds

Despite strong overall performance, INPP made specific adjustments to its portfolio composition. The company reduced its equity investment in digital-infrastructure company toob to nil. This decision was driven by headwinds in the U.K. alternative-network sector. Management indicated that this exit allows for a more focused allocation of capital toward core infrastructure assets with stronger regulatory protections.

The remaining portfolio maintains high availability across offshore transmission and public-private partnership assets. This diversification provides a buffer against sector-specific risks. According to source material from GN markets/earnings, the company's approach balances income stability with strategic growth opportunities. The focus remains on delivering consistent returns through disciplined asset management and efficient capital deployment.