Babcock & Brown Public Partnerships Announcements

RNS Number : 1399I Babcock&Brown Public Ptnrships Ltd 13 November 2008  
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Babcock & Brown Public Partnerships Ltd

Interim Management Statement 
For the period 1 July 2008 to 12 November 2008
Babcock & Brown Public Partnerships Limited is a Guernsey incorporated closed ended investment company. The Company offers shareholders an exposure to investments in infrastructure assets, particularly those with a public or social character such as those developed under public bodies through private finance initiatives or public private partnership procurement.

At 12 November 2008, the portfolio comprised economic interests in 50 projects with a geographical split as detailed below:

Location
Number of projects

Sector
12 November 2008
%1
30 June 2008
% 1
United Kingdom
36
Health
Govt accommodation
Courts
Police Authority
Education

59%
57%
Australia
7
Health
Roads/Tunnels
Health/Custodial
Entertainment

19%
23%
Canada
2
Education
Courts

4%
1%
Belgium
1
Transport
9%
9%
Germany
1
Transport
6%
6%
Ireland
1
Courts
3%
3%
France
1
Health

%
Italy
1
Health

1%

This breakdown is based on the fair value market valuation of the Group's investments calculated utilising discounted cash flow methodology, adjusted for European Private Equity and Venture Capital Association (EVCA) guidelines. 
  
New Investments in the period

Angel Trains
On 5 August 2008, the Group finalised the acquisition of a 4.63% interest in the UK business of Angel Trains for approximately £25 million as announced on 17 June 2008.

Angel Trains UK is a leading provider of railway rolling stock in the UK and is one of three rolling stock companies and provides approximately 4,100 passenger train vehicles and 280 freight locomotives to UK passenger and freight operators. Angel Trains customers include 18 of the 20 train operating companies with significant fleets placed with South West Trains and Virgin West Coast in respect of which Angel Trains benefits from government guarantees.

Alberta Schools

On 15 September 2008, the Group was awarded a 32 year contract for the provision of 18 new schools in Edmonton and Calgary, Canada.

Alberta Schools is BBPP's second Canadian "P3" (Public Private Partnership) project and was commissioned by the Alberta Government through Alberta Infrastructure. The contract is for the design, construction, finance and maintenance of 9 schools in Edmonton and 9 schools in Calgary. The schools are scheduled to complete construction in July 2010. The concession period is 32 years, including a 22 month construction period.

BBPP is investing 75% of the equity, with Gvest, an affiliate of Graham Construction, providing the remaining 25%. Graham Construction and Bird Construction are the two contractors to the project. Construction will be undertaken under a typical fixed-price, fixed-time contract. Honeywell will provide the facilities management and maintenance services for the period of the concession.
Interim Distribution

The interim dividend of 2.7 pence per share was paid on 3 October 2008. This was for the period 1 January to 30 June 2008. Distribution guidance for 2009 will be announced in December.
Management Update

On 22nd September 2009 the Company announced that it had noted the uncertainties affecting Babcock & Brown Limited in Australia (which is the ultimate parent company of its investment adviser). The Company also confirmed that it had no loans with or shareholdings in Babcock & Brown or any other Babcock & Brown managed fund, and that accordingly any events effecting Babcock & Brown Limited in Australia had no material implication for the strategy, direction and operation of BBPP, all of which have remained consistent since IPO. This remains the case.
Since that time the Company has continued to develop its contingency plans and is confident that, notwithstanding the continued possibility of further adverse changes in the financial position of the Australian entity, the Company will continue to receive the long term support and benefit of the existing personnel within the portfolio management team dedicated to the operation of BBPP. As such, we believe there will be minimal disruption to BBPP's operations and for BBPP shareholders in the event of further adverse changes.
Outlook

The Company's asset portfolio continues to perform well and the Company continues to receive a regular flow of investment proposals both internally from the Babcock & Brown network as well as via external advisors and vendors.  
  
The Board believes that the Company is in a strong position to weather the current economic downturn and to continue to provide long term attractive returns to shareholders. Further to this, the Board will be providing distribution guidance for 2009 in December.
Review for the period

Top Ten Investments of the Group based on indicative Net Asset Value (NAV) as at:

12 November 2008

30 June 2008

Investment
%
Investment
%
Royal Children's Hospital, Victoria, Australia
9.2
Royal Children's Hospital
10.8
Hereford & Worcester Magistrates Courts
9.9
Hereford & Worcester Magistrates Courts
10.2
Northamptonshire Schools
8.4
Northamptonshire Schools
8.3
Diabolo Project
8.4
Diabolo Project
7.9
Strathclyde Police Training Centre
7.4
Strathclyde Police Training Centre
7.6
Angel Trains
6.5
BeNEX
5.5
BeNEX
5.7
Tower Hamlets Schools
4.6
Tower Hamlets Schools
4.3
Norfolk Police HQ
2.6
Alberta Schools
3.8
Orange Hospital Project
3.0
Orange Hospital Project, NSW, Australia
3.1
Dublin Criminal Courts Project
2.9
Key performance measures
12 November 2008
30  
June 
2008
Share Price
89.75 pence
108.75 pence
Total number of shares
374,714,645
374,714,645
Weighted average discount rate1
7.82%
8.06%
Drawn corporate debt facility2
£58m
£25m
Uncommitted cash2
£31m
£45m
BBPP performance vs. FTSE ALLSHARE since IPO
+24.1%
+19.4%
BBPP performance vs. FTSE ALLSHARE since June 2008
+9.1%
-

1.     The discount rate has been adjusted after calculating the change in risk-free rates between 30 June
        2008 - 12 November 2008 in all geographies in which BBPP operates. No adjustment has been 
        made to the risk premiums that were applied at 30 June. Risk-premium adjustments are only 
        considered every half year. 

          2.            The increase in the level of funds drawn from the corporate facility represents the acquisitions of
          Angel Trains and Alberta Schools in August and September respectively.  The reduction in the cash 
          balance is a result predominantly of the payment of the half-yearly distribution in October.

 

For further information, please contact:
 
Babcock & Brown:            +44 (0)20 7203 7300
Investors:     Bianca Francis     
Media:        Anthony Kennaway     
This interim management statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules and the interim management statement should not be relied on by any other party or for any other purpose.

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