Infratil boosts dividend as full-year earnings beat forecast

BUSINESSDESK: Infratil, the infrastructure investment firm whose founder Lloyd Morrison died this year, has lifted its full-year dividend after earnings beat expectations.

Earnings before interest, tax, depreciation, amortisation and unrealised changes in fair value (EBITDAF) rose to $520.2 million in the year ended March 31 from $470.9m a year earlier, and beat guidance in March of $500m, the Wellington-based company said.

Infratil will pay a final dividend of 5 cents per share, taking the annual payout to 8 cents, up from 6.75 cents in 2011.

The company expects 2013 EBITDAF to rise to between $530m and $560m.

"Infratil's strong current position and earnings momentum reflects how the group has prioritised capital to deliver disciplined growth in difficult commercial and financial markets," the company said.

"Infratil's businesses are operating well and are well placed to grow."

Net profit attributable to shareholders fell to $51.6m, or 8.6 cents per share, from $64.5m, or 10.7 cents a share, a year earlier.

Last week, Infratil's biggest investment, TrustPower, lifted underlying profit 16% as it achieved wider margins on its power prices, even as it shed customers in a tight retail market.

TrustPower contributed $300.2m to Infratil’s group earnings, followed by $206.2m by Z Energy, $76.3m from Wellington International Airport, $49.8m from Infratil Energy Australia and $46m from NZ Bus.

Infratil's Glasgow Prestwick and Manston Airports contributed an after-tax loss of $37.4m in the year. The airports’ operating loss widened to $11.9m from $11.3m, and the value of the assets was written down by $26m, on top of the $34.4m impairment charge in 2011.

That puts their fair value at $64.7m as at March 31, down from $92.7m a year earlier.

The company flagged its intention to sell the airports at an investor day in March after holding the Glasgow airport since 2001 and the Kent Manston gateway since 2005.

Both are expected to be sold this year.

Earlier this month, the Herald Scotland reported the number of passengers travelling through the Glasgow Prestwick airport slumped to a decade low after budget airline Ryanair reduced its services.

The paper reported Infratil selected PricewaterhouseCoopers to undertake the sale and that talks were progressing positively.

Infratil paid an $18.3m management fee to Morrison & Co Infrastructure Management though it didn't pay an incentive fee in the year. In 2011, the management fee was $17.7m and the incentive fee $5.9m.

The company spent $246m on capital investment, which is expected to rise to between $240m and $280m in the 2013 financial year, before including TrustPower's SnowTown II initiative in Australia.

The shares were unchanged at $2.03 and have gained 8.5% this year.