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Earnings-flat Infratil still growth-hungry

NZ Newswire logoNZ Newswire 28/03/2017 Paul McBeth

Infratil is anticipating flat earnings in the 2018 financial year but is confident it can keep boosting returns to shareholders, and is still on the prowl for new acquisitions.

The Wellington-based investment firm expects underlying earnings before interest, tax, depreciation, amortisation, and fair value movements of between $470 million and $510m in the year ending March 31, 2018, largely unchanged from 2017's forecast for earnings of $485m to $505m.

The firm is holding its annual investor day, where it provides greater details of its operations to the investor community, and reaffirmed its goal of increasing dividends, "which remains on track given the outlook for the year ended 31 March 2017".

It paid 14.25 cents per share in 2016, up from 12.5 cents a year earlier.

The earnings guidance doesn't account for any new investments or asset sales and relies on long-run average hydrology and wind volume forecasts for its energy businesses, the roll-out of new council contracts in Auckland and Wellington under negotiation for NZ Bus, later care asset development at RetireAustralia, and new growth strategies bedding in.

Infratil reported a 7.1 per cent decline in first-half earnings as its Perth Energy division struggled in tough retail conditions, leading to a downgrade in the annual earnings forecast, and has been overhauling its investment portfolio after sales of Z Energy, Lumo and iSite left it flush with cash.

Some of that capital has been poured into new investments including Canberra Data Centres, Australia National University student accommodation, and US renewable business Longroad. Infratil on Wednesday said it still has $380m of cash and available facilities and "significant near-term opportunities" in renewable energy, eldercare and data infrastructure sectors.

Presentation slides to the briefing show the firm's "explicit focus" for the 2018 year will be to get the most from its existing portfolio by addressing the performance of core assets and injecting capital into the highest development opportunities.

The shares last traded at $2.91 and have gained 5.8 per cent so far this year.

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