Several analysts have reiterated their ‘buy’ recommendation for digital infrastructure trust Cordiant Infrastructure (CORD ) after positive annual results made its 30.2% discount to net asset value seem harsh.

The £595m company delivered a NAV total return of 10% over the 12 months to the end of March, with key drivers including positive operating performance across the portfolio of three companies in the UK, North America and Europe and favourable foreign exchange movements.

Over the period, Polish digital infrastructure platform Emitel was added to the portfolio, which now comprises 1,260 mobile and broadcast towers, seven data centres, 4,368km of fibre optic network, two national broadcast networks and two national networks of active internet-of-things sensors.

Upgrades at the portfolio level saw a boost to inflation-linked revenues, which rose 7.8%. Earnings covered the 4p per share dividend 1.5 times, or £30.9m, after costs, allowing the company to reinvest the excess cashflow into its ‘buy, build and grow’ strategy.

Performance since launch

Source: Morningstar

Emitel upgraded its broadcast infrastructure for digital terrestrial TV and continues to roll out new products to leave it well positioned for future growth. US-based data centre Hudson invested in sales and marketing over the year, resulting in the signing of two telecoms firms amid an increased level of interest from potential customers.

At the period end, the portfolio valuation including the €200m Eurobond raised over the year, totalled £872.3m, representing a £50m gain in the second half of the year. This was split between Emitel, reflecting cash generation, and Czech company CRA, which reduced net debt. An 81 basis point rise in discount rates to 9.6% to reflect the risk of future cashflow offset further portfolio gains.

CORD had a total potential liquidity position of £254m, consisting of aggregate cash at the company and platform level of £122m, and undrawn balances of £132m within the Eurobond facility, all of which has been drawn subsequent to the year end.

Analysts pointed to the strength of CORD’s balance sheet, particularly compared to sector peer Digital 9 Infrastructure (DGI9 ), the Triple Point-managed trust that listed a month earlier and is yet to fully cover its dividend. The 8.8%-yielder has been beset by problems since the shock departure of its two managers last November, with its shares trading at a 46.3% discount.

CORD’s management initiated a £20m share buyback programme in February to narrow the discount. Year to date, the shares have fallen 4%, according to Numis data.

‘Buy’ ratings

Investec analyst Alan Brierley said the structural drivers at the underlying platforms put CORD in a good position to provide investors with a respectable 5.2% yield, as well as attractive total returns. He reiterated his ‘buy’ recommendation.

Stifel analyst Sachin Saggar said that while the results were ‘solid’, he believes the narrative needs to be much clearer as the dividend yield is insufficient to lead to a rerating of the shares without a clear revenue growth story.

Numis’ Colette Ord said company disclosure continues to improve, showing a strong cash generating portfolio with a healthy level of dividend cover and access to funds to support accretive growth capex. The trust has been on Numis’ ‘recommended’ list since January.

Liberum’s Shonil Chande retained a ‘buy’ rating with a target price of 131p, noting ‘digital is one of the best areas to be in within core-plus given the tailwinds, long-term contracts, the potential for accretive growth capex, capital growth potential, and the potential to unlock value through sales of entire businesses or carve-outs of segments’.