International Public Partnerships (INPP) reported a 1.3% increase in net asset value (NAV) per share to 153.4 pence for the first half of 2026, driven by improved dividend cover and strategic capital recycling. The total NAV remained broadly unchanged at approximately GBP 2.7 billion, with an annualized NAV return of 8.2% including dividends paid.
Dividend cover improved to 1.3 times on an operating cash basis, up from 1.1 times a year earlier. Management expects it to normalize back toward the historical range of 1.1 to 1.2 times over the full year. The 2026 target dividend is set at 8.79 pence per share, up 2.5% year-on-year, with the first quarterly interim dividend declared at 2.19 pence, payable on September 15. The 2027 target dividend is 9.01 pence per share, also up 2.5%.
INPP's ongoing charges ratio stood at 1.11% of NAV, with the weighted average discount rate unchanged at 9.1%. The inflation protection/linkage strengthened from 0.7% to 0.8%, meaning if long-term inflation runs 1% higher than assumed, returns rise by 0.8%, or NAV per share increases by about 12 pence.
The company repurchased GBP 27.7 million in shares during the half-year, part of an overall program of up to GBP 225 million extending through September 30, 2027. Approximately GBP 150 million has been used to date, generating about 1.9 pence of NAV accretion. INPP also has a GBP 350 million corporate debt facility, recently upsized on existing terms.
Capital recycling over the past three years realized over GBP 440 million, representing about 17% of the portfolio. Over GBP 480 million was reinvested or committed at an average projected return of more than 11%, achieving an uplift of more than 200 basis points over the 9.1% portfolio discount rate. Specific realizations included the sale of a minority stake in the Moray East Transmission project for around GBP 40 million and an agreement to sell nine school projects for around GBP 58 million, expected to complete in Q4.
INPP's portfolio scope includes 135 investments across nine countries, with a weighted average life of around 41 years. The portfolio's revenue quality is high, with 99% of revenues being long-term, secure, government-backed, or independently regulated. Asset availability is strong, with PPP assets availability at 99.8% and offshore transmission (OFTO) portfolio availability at 99.4%.
Specific asset updates include the completion of the Tideway handover in August, which has diverted 21.7 million tons of sewage from the River Thames since August 2024. Sizewell C construction is progressing with more than 2,000 people on site daily, and Cadent performed strongly against RIIO-2 objectives. Angel Trains traded in line with expectations, and BeNEX won two further concessions. The decision was made post-period end not to commit further capital to toob due to structural headwinds in the UK AltNet market, with the equity interest to be transferred to debt holders for a de minimis amount. Community Fibre remains a digital infrastructure holding with positive operating cash flows and scale.
Jamie Hossain, Lead Portfolio Manager, noted that the NAV per share increased by 1.9 pence to 153.4 pence at the end of June. He described the selective selling of mature assets at prices implying a return below the portfolio's 9.1% discount rate and redeploying that capital into new investments with projected returns of more than 11% as creating an uplift of more than 200 basis points on every GBP recycled.
Mohammed Anwar, CFO and Head of Valuations, highlighted the low-risk profile of the portfolio, noting that even with a challenging outcome on toob this period, the portfolio has continued to grow its NAV and service its growing dividend.
