International Public Partnerships — Extending the horizon of dividend growth

International Public Partnerships (LSE: INPP)

Last close As at 30/03/2026

GBP1.26

0.60 (0.48%)

Market capitalisation

GBP2,267m

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Research: Investment Companies

International Public Partnerships — Extending the horizon of dividend growth

International Public Partnerships’ (INPP’s) results for the year ended 31 December 2025 show continuing strong operational performance, underpinning fully covered dividend growth. DPS has increased every year since listing in 2006, at a rate of at least 2.5% per year. Projected portfolio cash flow is sufficient to cover future growth, at the same rate for at least the next 25 years, without any need for further investment. The predictability of these cash flows is underpinned by a diversified portfolio of lower-risk assets, where 98% is generated by government-backed, availability-based or regulated revenues, with strong inflation linkage.

Martyn King

Written by

Martyn King

Director, Financials. Property and Insurance

Investment companies

Infrastructure

31 March 2026

Price 126.00p
Market cap £2,266m
Total assets £2,756m
1Total assets as at 31 December 2025.
NAV 151.5p
1NAV as at 31 December 2025.
Discount to NAV 16.8%
Current yield 7.0%
1Yield based on FY26 target DPS of 8.79p.
Shares in issue 1,798.1m
Code/ISIN INPP/GB00B188SR50
Primary exchange LSE
AIC sector Infrastructure
Financial year end 31 December
52-week high/low 134.0p 96.3p

Fund objective

International Public Partnerships is an infrastructure investment company that listed in 2006. It invests in a diversified portfolio of global public infrastructure assets and businesses, with a focus on availability-based or regulated revenues. It aims to provide investors with a consistent and predictable return from assets that meet societal and environmental needs, both now and in the future.

Bull points

  • Operates in a structurally supported sector.
  • Financial returns are consistent and predictable, with good inflation linkage.
  • Established, specialist, well-resourced manager with a global presence.

Bear points

  • Higher capital costs are a headwind to new portfolio investment.
  • Sector has de-rated with higher interest rates.
  • Differing risk-return strategies and discount rates across the sector are difficult for investors to compare.

Analyst

Martyn King
+44 (0)20 3077 5700

International Public Partnerships is a research client of Edison Investment Research Limited

In line with the pre-close update provided by the company, the portfolio delivered strong operational performance and this is expected to continue. FY25 DPS of 8.58p (+2.5% vs 2024) was 1.1x covered by net operational cash flow. INPP is specifically targeting a similar rate of growth over the next two years (8.79p in 2026 and 9.01p in 2027). Including Sizewell C on a fully invested basis from 2030, the horizon for predicted cash flow and dividend growth increased to at least 25 years from 20 years previously.

NAV per share increased by 6.8p to 151.5p versus end-2024, an increase of 4.7%. Including DPS paid, the 2025 NAV total return was 10.6%. Portfolio valuations benefited from continued strong asset performance, favourable foreign exchange and changes to macroeconomic assumptions, primarily for near-term inflation, partly offset by increases in government bond yields. The portfolio weighted average discount rate increased from 9.0% to 9.1%, principally reflecting capital recycling from lower-returning to higher-returning assets. Share buybacks are also having a positive impact on NAV per share. The size of the programme was increased to up to £225m during the year and runs until March 2027. Over £135m of shares have been repurchased to date, generating an estimated 1.6p per share of NAV accretion.

Share buybacks form part of a broader capital allocation strategy, with proceeds from the sale of mature, lower growth assets also being recycled into compelling opportunities with the potential for higher returns in support of the longer-term investment objectives. Realisations of over £385m since June 2023 have all been at or above valuations, with new commitments of £345m over the same period, including the c £254m equity commitment to the regulated company that is financing the Sizewell C nuclear power plant, to be deployed over up to five years. Through construction and early operations to the early 2040s, INPP expects its investment to generate an annual cash yield of 6% and a low teens return, based on a real allowed return on equity of 10.8% plus inflation. INPP has also been selected as preferred bidder on its 12th OFTO investment (Moray West OFTO) requiring an estimated c £65m equity commitment expected in H226. The Moray West OFTO is expected to be accretive to inflation linkage, dividend cover and ESG metrics.

The discount to NAV has narrowed but remains at c 17%, providing an opportunity to invest at an implied total return, based on projected future portfolio cash flows, of 10.3% per year, well ahead of the UK 30-year gilt yield of c 5.5%. INPP’s low-risk investment strategy has a strong track record of providing stability during turbulent times, generating predictable cash flows that are mostly uncorrelated with the economic cycle. There is a high level of positive inflation linkage, well protected against the impact of interest rate fluctuations on equity returns.

Not intended for persons in the EEA.

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