Infratil's half-year report reveals its war chest has expanded to $755million cash in hand and acquisition of an Australian target could be concluded by next month.
The sale of Infratil's residual 20% interest in Z Energy realised $480million, and provided a gain on book value of $392million. Cash in hand was boosted to $755million.
Infratil's (IFT) chief executive Marko Bogoievski said for trading period Infratil's operating earnings were ''excellent'' and its asset disposals delivered ''significant value''.
''The challenge now is to continue to provide earnings and value growth by deploying Infratil's substantial available capital,'' he said in a statement yesterday.
IFT shares were up only slightly, at $3.18 after the announcement.
Forsyth Barr broker Suzanne Kinnaird said ''The IFT story at present is all about what will it spend the $755million of cash on''.
IFT had acknowledged there was a ''degree of uncertainty for shareholders at present'' and noted that ''significant active initiatives are under active development''.
IFT did comment on the PacificHydro process and said the sale process was expected to be completed in December.
''Otherwise, investors will have to wait and see,'' Mrs Kinnaird said.
Craigs Investment Partners broker Peter McIntyre said IFT had capacity to spend up to $1.03billion; combining the $755million cash balance and $276million in undrawn banking facilities.
''While opportunities for new investments are under development, achieving the best outcome requires a patient, long-term perspective,'' he said.
The investment company, managed by Wellington-based investment bank Morrison & Co, booked a profit of $392million, and is in the process of raising up to $150million via the sale of eight-year infrastructure bonds paying annual interest of 5.25%, BusinessDesk reported. Australian renewable energy group Pacific Hydro had assets valued at $A1.9billion as at last December.
Mr Bogoievski said $55million of capital was invested over the period, compared with $196 million a year ago An increase in internal capital spending is anticipated in the second half of the year, he said.
Total income, which included operating revenue, dividends and earnings from associate companies, increased 7.3% to $909.5million.
The first-half earnings included a $24million increased contribution from Metlifecare and RetireAustralia in New Zealand and Australia, and an $11million increased contribution from Trustpower.
IFT confirmed its full-year earnings guidance for the 2016 financial year of $500million to $530million, BusinessDesk reported.
