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Infratil investors sit on $1b war chest

NZN 17/05/2016 By Paul McBeth

Infratil investors are waiting to see what the listed investment firm will do with the $1 billion war chest it's built up since selling its Z Energy, Lumo and iSite holdings in the 2016 financial year.

The Wellington-based company is sitting on cash of almost $730 million and unused credit lines of about $270m which it plans to invest both within its existing units and in new opportunities.

Chief executive Marko Bogoievski told a briefing in Wellington that Infratil's focus is on renewable energy, the retirement sector, social infrastructure such as housing, telecommunications infrastructure, and waste management.

"Some sectors are represented in our portfolio today, and there are some we hope to have in the near future," he said.

Infratil has lifted annual underlying earnings by 2.5 per cent as its aged care investments delivered bigger contributions and says it is still looking for assets to buy.

Underlying earnings from continuing operations before interest, tax, depreciation, amortisation and financial derivative movements (ebitdaf) rose to $462.1m in the 12 months to the end of March from $450.87m a year earlier, it said.

The bulk of that came from Infratil's controlling stake in electricity generator Trustpower, while its retirement village investments, NZ Bus, and Wellington International Airport units all delivered increased earnings.

Infratil affirmed 2017 earnings guidance of between $475m-$515m.

"Last year saw satisfactory creation of value for Infratil's shareholders and a great deal of preparation for future investment," chairman Mark Tume and chief executive Marko Bogoievski said in the annual report.

"We would have liked the $728.6m on deposit with our banks to have been deployed to more productive investments, but this is an environment that will reward patience and discipline."

The board declared a final dividend of 9 cents per share which takes the annual dividend to 14.25 cents, up from 12.5 cents a year earlier.

Net profit, which includes gains on the sale of assets and unrealised movements in the value of its portfolio, rose to $495.5m from $466.3m.

The shares last traded at $3.31, and have increased 1.1 per cent this year.

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