SEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND LIMITED
(the "Company" or "SEQI")
2021 FINAL RESULTS
HIGHLIGHTS FOR THE YEAR ENDED 31 MARCH 2021
· NAV total return of 13.5% in the year2
· Diversified portfolio of 72 investments across 8 sectors, 31 sub-sectors and 12 mature jurisdictions
- 93% of investments in private debt
- 57% floating rate investments, capturing short-term rate rises
- Short weighted average life of 4.5 years creating reinvestment opportunities
- Weighted average equity cushion of 35%
· Capital raise of £110 million completed during the year
· ESG score of the portfolio is on a long-term and sustainable upward trend
· Share price total return of 17.4% in the year2
· Annualised portfolio yield-to-maturity2 of 9.0% as at 31 March 2021
· Ongoing charges ratio of 0.87%, down from 0.96% in the prior year (calculated in accordance with AIC guidance)2
· Dividends totalling 6.25p per Ordinary Share paid during the year, in line with increased annual target dividend announced in May
DIVIDEND POLICY
In the absence of any significant restricting factors, the Board expects to pay dividends totalling 6.25p per Ordinary Share per annum (increased from 6p per Ordinary Share with effect from the quarter ended 30 June 2019) for the foreseeable future. The Company pays dividends on a quarterly basis.
NAV AND SHARE PRICE PERFORMANCE
Over the financial year, the Company's NAV per Ordinary Share 1 increased from 96.69p to 103.18p, after paying dividends of 6.25p, producing a total NAV return1 of 13.5%, materially in excess of the Company's target return. In large part, this strong performance was the result of credit spreads returning to normalised levels following the sharp deterioration in the financial markets at the end of the previous financial year.
The Company's share price also increased over the year, from 94.0p to 104.2p, a gain of 10.9% and a total share price return1 of 17.4% once dividends are taken into account. This reflects both the underlying NAV performance and the recovery in the Company's premium, which improved from a discount 1 of 2.8% at the beginning of the year, to a premium1 of 1.0% at the end of the year.
DIVIDEND
Pleasingly, despite all the disruption caused by COVID-19, we achieved our target of paying a fully cash-covered dividend of 6.25p per Ordinary Share. We are maintaining the dividend target for the 2021/22 financial year and believe that this will provide scope for our cash cover ratio to strengthen somewhat over the course of the year.