Pantheon Infrastructure (PINT) has passed an important milestone with the maturing portfolio supporting a covered dividend for the first time since launch in 2021.

In annual results the £494m investment trust said net cash flows, not including £31.4m of investment sales, jumped 77% to £22.5m last year from £12.8m to cover the 4%-yielder’s dividends by 1.1 times. The pay-out was covered only 0.7 times by earnings in 2024.

Dividends rose 3.5% from 4.2p to 4.346p per share and contributed to a total underlying return of 14.4% with net asset value (NAV) of 130.4p per share at 31 December.

The sale of a stake in US power company Calpine, PINT’s first realisation, and, towards the end of the year, the partial realisation of Intersect Power in a sale to Alphabet provided good returns alongside uplifts at Vantage Data Centers and European logistics specialist Primafrio.

An investment in Cartier, an operator of eight district energy systems in the US, was written down by 20% to £25m after a “challenging” start but was now stable with a new business plan.

Shareholders saw a 26.8% total return including dividends as the discount to NAV narrowed from 24.5% to 16.8%.

At 109p, up 3.3% today, the shares stand 16.7% below NAV and 9% above their original launch price. They hit a low of 73p in March 2024 after rising inflation and interest rates made infrastructure yields look unattractive. After rallying to 118.5p at the end of February, they slipped back in response to surging oil prices caused by the US war on Iran which threaten to push up inflation and interest rates.

“This performance, in a continued period of market uncertainty, reflects the resilience of our diversified portfolio and the strength of our investment approach, which continues to deliver returns above our target,” said chair Patrick O’Donnell Bourke.

“While macroeconomic conditions remain uncertain, including continued volatility in global energy markets and supply chains linked to geopolitical tensions in the Middle East, our emphasis on assets supported by long term, contracted revenues, regulatory underpinning and robust counterparties continues to provide meaningful defensive characteristics,” said fund manager Richard Sem.

Our view

James Carthew, head of research at QuotedData, said: “This was a great set of results from Pantheon Infrastructure. In particular, it is great to see that the portfolio has matured to the point where the dividend is covered. It is also good to see that only one (Calpine Energy) of PINT’s 14 investments to date is valued at less than cost. Over the short term, the discount has widened but it isn’t clear to me why. The board is keen to see this reverse and has set aside funds for buybacks if needed.” 

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