New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Infratil (IFT) FY22 Result – Initial Impressions</h2>
Infratil (IFT) reported FY22 proportionate EBITDAF of NZ$514m, in-line with our estimate due to lower contribution from Longroad Energy (not important) and higher contribution from Vodafone NZ (important). CDC guidance was for +40% FY23 growth, in-line with our expectations and a key deliverable, in our view. Vodafone NZ is somewhat “messy” due to the changed accounting rules for SaaS capitalisation which impact EBITDAF negatively by -NZ$30m (previously guided). Excluding this impact and a NZ$7m cost “in relation to the potential passive mobile tower sale” EBITDAF was up +17% versus FY21, +4% ahead of our estimates. Overall, we consider this a solid result. The one area of slight disappointment relates to potential asset sales where the time schedule appears to have been pushed out a few months, at least versus our expectations.
Key points of interest
<ul>
<li>Vodafone: Very strong underlying result (+17% versus FY21). Slightly weaker guidance than our expectations (NZ$505m midpoint vs FB of NZ$513m). Our expectations reflect a meaningful contribution from roaming, which may not be in included in Vodafone’s guidance.</li>
<li>CDC guidance: This was the single most important number in the release. IFT guided for FY23 EBITDA of A$220m–230m, up +40% YoY at the midpoint. Our current forecast is for A$229m.</li>
<li>Asset sales: Limited (new) news. IFT expects to have an update on potential Vodafone Tower sales and an update on a potential Longroad minority investor by its half year result − this is somewhat later than we had anticipated. IFT expects an update on Retire Australia by calendar year end.</li>
<li>Balance sheet: Net debt came in at NZ$623m, -NZ$20m below our estimate.</li>
<li>Incentive fees and CDC valuation: Incentive fees for the year was a total of NZ$221m, +NZ$75m above our estimate due to a substantial re-valuation of CDC, now NZ$3.1bn For context in our price target we value CDC at NZ$2.35bn</li>
</ul>
Investor briefing – 10am NZT
Register&nbsp;<a href="https://infratil.cmail19.com/t/y-l-bdtkjtk-ikydhyjujh-j/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://infratil.cmail19.com/t/y-l-bdtkjtk-ikydhyjujh-j/&amp;source=gmail&amp;ust=1653006506215000&amp;usg=AOvVaw0Rb2faRWG9kFS8r1epaV7a" rel="noopener">here</a>
FY22 result summary
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Proportionate EBITDAF Breakdown (NZ$m)
</td>
<td style="width: 77.95pt; height: 12.75pt;">
FY20
</td>
<td style="width: 35.45pt; height: 12.75pt;">
FY21
</td>
<td style="width: 70.85pt; height: 12.75pt;">
FY22
</td>
<td style="width: 49.65pt; height: 12.75pt;">
FY22E FB
</td>
<td style="width: 42.5pt; height: 12.75pt;">
Diff
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Manawa Energy adj
</td>
<td style="width: 77.95pt; height: 12.75pt;">
95
</td>
<td style="width: 35.45pt; height: 12.75pt;">
102
</td>
<td style="width: 70.85pt; height: 12.75pt;">
108
</td>
<td style="width: 49.65pt; height: 12.75pt;">
104
</td>
<td style="width: 42.5pt; height: 12.75pt;">
4%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
WIA
</td>
<td style="width: 77.95pt; height: 12.75pt;">
68
</td>
<td style="width: 35.45pt; height: 12.75pt;">
24
</td>
<td style="width: 70.85pt; height: 12.75pt;">
37
</td>
<td style="width: 49.65pt; height: 12.75pt;">
37
</td>
<td style="width: 42.5pt; height: 12.75pt;">
0%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
CDC
</td>
<td style="width: 77.95pt; height: 12.75pt;">
60
</td>
<td style="width: 35.45pt; height: 12.75pt;">
76
</td>
<td style="width: 70.85pt; height: 12.75pt;">
82
</td>
<td style="width: 49.65pt; height: 12.75pt;">
84
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-2%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Vodafone adj
</td>
<td style="width: 77.95pt; height: 12.75pt;">
238
</td>
<td style="width: 35.45pt; height: 12.75pt;">
224
</td>
<td style="width: 70.85pt; height: 12.75pt;">
259
</td>
<td style="width: 49.65pt; height: 12.75pt;">
250
</td>
<td style="width: 42.5pt; height: 12.75pt;">
4%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Longroad
</td>
<td style="width: 77.95pt; height: 12.75pt;">
19
</td>
<td style="width: 35.45pt; height: 12.75pt;">
0
</td>
<td style="width: 70.85pt; height: 12.75pt;">
15
</td>
<td style="width: 49.65pt; height: 12.75pt;">
30
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-50%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Diagnostic imaging (Qscan and Pacific Radiology)
</td>
<td style="width: 77.95pt; height: 12.75pt;">
0
</td>
<td style="width: 35.45pt; height: 12.75pt;">
11
</td>
<td style="width: 70.85pt; height: 12.75pt;">
67
</td>
<td style="width: 49.65pt; height: 12.75pt;">
69
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-3%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Retire Australia
</td>
<td style="width: 77.95pt; height: 12.75pt;">
9
</td>
<td style="width: 35.45pt; height: 12.75pt;">
10
</td>
<td style="width: 70.85pt; height: 12.75pt;">
17
</td>
<td style="width: 49.65pt; height: 12.75pt;">
15
</td>
<td style="width: 42.5pt; height: 12.75pt;">
13%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Corporate and other
</td>
<td style="width: 77.95pt; height: 12.75pt;">
-36
</td>
<td style="width: 35.45pt; height: 12.75pt;">
-48
</td>
<td style="width: 70.85pt; height: 12.75pt;">
-71
</td>
<td style="width: 49.65pt; height: 12.75pt;">
-72
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-2%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Underlying EBITDAF excluding incentive fees
</td>
<td style="width: 77.95pt; height: 12.75pt;">
453
</td>
<td style="width: 35.45pt; height: 12.75pt;">
399
</td>
<td style="width: 70.85pt; height: 12.75pt;">
514
</td>
<td style="width: 49.65pt; height: 12.75pt;">
517
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-1%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Tilt/discontinued
</td>
<td style="width: 77.95pt; height: 12.75pt;">
96
</td>
<td style="width: 35.45pt; height: 12.75pt;">
53
</td>
<td style="width: 70.85pt; height: 12.75pt;">
n/a
</td>
<td style="width: 49.65pt; height: 12.75pt;"></td>
<td style="width: 42.5pt; height: 12.75pt;"></td>
</tr>
<tr>
<td style="width: 212.65pt; height: 15pt;">
International Portfolio Incentive fee
</td>
<td style="width: 77.95pt; height: 15pt;">
-125
</td>
<td style="width: 35.45pt; height: 15pt;">
-223
</td>
<td style="width: 70.85pt; height: 15pt;">
-221
</td>
<td style="width: 49.65pt; height: 15pt;">
-146
</td>
<td style="width: 42.5pt; height: 15pt;">
52%
</td>
</tr>
<tr>
<td style="width: 212.65pt; height: 12.75pt;">
Underlying EBITDAF from continuing operations
</td>
<td style="width: 77.95pt; height: 12.75pt;">
424
</td>
<td style="width: 35.45pt; height: 12.75pt;">
228
</td>
<td style="width: 70.85pt; height: 12.75pt;">
293
</td>
<td style="width: 49.65pt; height: 12.75pt;">
371
</td>
<td style="width: 42.5pt; height: 12.75pt;">
-21%
</td>
</tr>
</tbody>
</table>
Source: Forsyth Barr analysis, Company reports

Infratil (IFT) FY22 Result – Initial Impressions
Infratil (IFT) reported FY22 proportionate EBITDAF of NZ$514m, in-line with our estimate due to lower contribution from Longroad Energy (not important) and higher contribution from Vodafone NZ (important). CDC guidance was for +40% FY23 growth, in-line with our expectations and a key deliverable, in our view. Vodafone NZ is somewhat “messy” due to the changed accounting rules for SaaS capitalisation which impact EBITDAF negatively by -NZ$30m (previously guided). Excluding this impact and a NZ$7m cost “in relation to the potential passive mobile tower sale” EBITDAF was up +17% versus FY21, +4% ahead of our estimates. Overall, we consider this a solid result. The one area of slight disappointment relates to potential asset sales where the time schedule appears to have been pushed out a few months, at least versus our expectations.
Key points of interest

Vodafone: Very strong underlying result (+17% versus FY21). Slightly weaker guidance than our expectations (NZ$505m midpoint vs FB of NZ$513m). Our expectations reflect a meaningful contribution from roaming, which may not be in included in Vodafone’s guidance.
CDC guidance: This was the single most important number in the release. IFT guided for FY23 EBITDA of A$220m–230m, up +40% YoY at the midpoint. Our current forecast is for A$229m.
Asset sales: Limited (new) news. IFT expects to have an update on potential Vodafone Tower sales and an update on a potential Longroad minority investor by its half year result − this is somewhat later than we had anticipated. IFT expects an update on Retire Australia by calendar year end.
Balance sheet: Net debt came in at NZ$623m, -NZ$20m below our estimate.
Incentive fees and CDC valuation: Incentive fees for the year was a total of NZ$221m, +NZ$75m above our estimate due to a substantial re-valuation of CDC, now NZ$3.1bn For context in our price target we value CDC at NZ$2.35bn

Investor briefing – 10am NZT
Register&nbsp;here
FY22 result summary




Proportionate EBITDAF Breakdown (NZ$m)


FY20


FY21


FY22


FY22E FB


Diff




Manawa Energy adj


95


102


108


104


4%




WIA


68


24


37


37


0%




CDC


60


76


82


84


-2%




Vodafone adj


238


224


259


250


4%




Longroad


19


0


15


30


-50%




Diagnostic imaging (Qscan and Pacific Radiology)


0


11


67


69


-3%




Retire Australia


9


10


17


15


13%




Corporate and other


-36


-48


-71


-72


-2%




Underlying EBITDAF excluding incentive fees


453


399


514


517


-1%




Tilt/discontinued


96


53


n/a






International Portfolio Incentive fee


-125


-223


-221


-146


52%




Underlying EBITDAF from continuing operations


424


228


293


371


-21%




Source: Forsyth Barr analysis, Company reports

Infratil (IFT): FY22 Result – Initial Impressions

Infratil Ltd

Infratil (IFT): FY22 Result – Initial Impressions