HICL Share Offer

[ReformedCharacter]

Received details from my broker this morning:

1 New Ordinary share for every 22 Existing Ordinary shares held at an Issue Price of GBP1.59 per New Ordinary share.

More details here:

http://citywire.co.uk/money/hicl-share- ... um/a995398

FWIW I intend to take up the offer.

RC

[kogsawelly]

RC
Not much of a discount on current share price of GBP1.65
Having said that, it has been a good solid performer for me and may have considered it.
However, It currently ranks 33rd out of 35 in my HYP top up spreadsheet.
regards
Kogsawelly

[PeterBill]

I'm also looking at this, as you said not much of a discount but infrastructure projects, (United Kingdom, Australia, Canada, France, Ireland and the Netherlands) may be on the way up.

Like the yield ... hopefully it will not crash and burn when Brexit actually takes place.

[ReformedCharacter]

RC
Not much of a discount on current share price of GBP1.65
Having said that, it has been a good solid performer for me and may have considered it.
However, It currently ranks 33rd out of 35 in my HYP top up spreadsheet.
regards
Kogsawelly

I only have a half-median holding and I'm happy to add a little more given the steady increase in dividends and the inflation linked returns of the business. I can get more excitement from some of my other holdings such as Carillion and Cobham A little more diversification from a 'boring' but steady performer doesn't seem like a bad option.

RC

[Minesadouble]

I hold and will probably take up.
I seem to recall it was a Luniversal favourite across in the old place.
Does my memory deceive me?

[ReformedCharacter]

I hold and will probably take up.
I seem to recall it was a Luniversal favourite across in the old place.
Does my memory deceive me?

A little perhaps, he owned HICL (and no doubt still does!)...

Date: 28/10/2013

The trouble with these British infrastructure funds is that they have behaved perversely. They were pitched as having safe, quasi-indexed income streams-- long-term deals and top-quality covenants with revenue from governmental organisations-- which would make up for not being as exciting on the capital front as a wildcat property developer.

Date: 12/06/2014

I have little appetite for infrastructure funds despite owning HICL.

Date: 26/08/2014

Infrastructure funds were marketed on the probability that income would at least keep up with inflation, which by and large since the crisis they have not: e.g. Primary Health Properties, HICL.

Date: 15/01/2015

Dividend growth is slow at HICL...

RC

[Minesadouble]

RC

Quite right! Hardly glowing from Luniversal on HICL.

Anyway I purchased HICL in one hit in April 2015, I thought I'd held much longer.
I have an IT portfolio, but this sits in my HYP.
It provides some diversification, a fair yield of 4.5% and capital growth of a modest 5.7%, to date.
It feels quite bond like in performance terms and for me justifies its position.

MAD

[Arborbridge]

RC


I have an IT portfolio, but this sits in my HYP.
It feels quite bond like in performance terms and for me justifies its position.

MAD

If it's "bond like" then it sounds like it doesn't fit with a HYP's requirement for growing income.
Since you have an IT portfolio, why put it in your HYP, especially as you view it as bond-like?
You can do what you like, of course , but if it were me, I'd leave in where it belongs - in an IT portfolio.
I prefer not to muddy the waters by mixing concepts.

[Minesadouble]

Arborbridge,
There's a case for that.
HICL sits in my HYP currently and I tend to regard it sectorally alongside British Land.
It resides within my SIPP with all my other HYP shares.
In running an IT portfolio, I do see some overlaps, the most obvious being that GSK and AZN are in my HYP, Worldwide Healthcare WWH and Biotechnology BIOG are in my IT Portfolio.
It doesn't cause me any bother and it's straight in my head

MAD

[TahiPanas]

HICL has cash calls every year by issuing new shares. The offers are very close to NAV for the following reasons. They have to do this as previous cash received is invested in "wasting" investments with 20 to 30 year lifespans. That is their business. They contract to finance and run infrastructure projects for a fixed term at the end of which they are valueless. I have previously described HICL as an honest upfront Ponzi scheme as they need constant new infusions of cash to, ultimately, pay existing and future investors.

Also, it's dividend increase rates are, to my mind, pathetic being in the 1.25% annual range, if memory serves me well.

A further aspect is that the unique nature of the business means that the net asset value of the shares is very much dictated by discounted cash flow. The important result of this is that the NAV is highly dependent on interest rates. It seems world rates are destined to rise which is why HICL's premium on the market is declining from, IRRC, an astronomic 15% to a merely huge 10% -ish at the moment.

HICL's yield is high and looks secure as long as existing investors continue to buy the new shares. I sold my holding some time ago, at about current rates, as I couldn't see much growth and anticipated, like everyone else, that interest rates would have a negative effect on NAV. However, rates are rising almost glacially.