IFT - Infratil

[Basil]

The covid period doesn't really change any of the underlying figures, which seem to get lost on some with  all the talk about a potential bubble. IFT has a 10 year total shareholder return of 22%. In the last THIRTY years it's 18.7%. That's one hell of a bubble!

Yeah, I've had a look at their long-term returns before and there is no argument, they are very impressive. To be clear, I'm not the one calling it a bubble. I'm happy Kingfish have a decent stake, and I was busy buying more Kingfish at a ~ 10% discount to NTA this week. 

[Left Field]

Dividend hounds often overlook IFT because its shareholder returns come in a mix of dividends and SP appreciation.

I've posted this chart before but here it is again showing IFT's returns from 1994 to present in 5 yr bands compared to NZX50   (I guess the NZX 50 would be a close to a proxy to Basil's Kingfisher funds??)

Nuff said.

[Basil]

Kingfish have been beating the NZX50 and at times you can buy them at up to a 10% discount to NTA.
Some dog's are value investors and have also done extremely well over the long run, just like IFT have.  More than one way to skin a cat leftie, enough said.

[KW]

I think what you may be saying as that one has to be vigilant about one's investments. I can agree with that at least. But everything I have read indicates to me that data centres will be in increasing demand for at least the sort of time frame I invest in (5-10years). The vast majority of industry boffins and investment houses would agree. Data-centres will evolve and be more energy efficient and the technology within them will change, but they are not going away any time soon. If you have any ideas on what might replace them in the next, say, 20 years, I'd be genuinely interested to know.

You have still completely missed my point.  Its not about the increasing demand.  Its about the increasing supply.  If supply increases ahead of demand (as everyone rushes to build them) then they all go broke due to under utilisation or inability to profitably price.  Of course demand will increase, just like demand for the Internet and mobile phone networks increased.  Yet, there were many spectacular collapses in those industries due to over supply and price competition driving operators out of business.

Mobile phone usage has increased dramatically.  Yet how many mobile network operators do we have?  Internet bandwidth demand is still voracious, yet how many fibre network providers per area do we have?  What would happen if we had 10  mobile networks, and 10 fibre providers?  How many of them would make money?  How many would survive?  That is the exact issue that DC operators are now facing with so many new entrants to the market, and the massive expansion of floor space from existing operators.  I think it took like 20 years or something before demand finally caught up with the massive overbuild of internet networks by the telcos during the 90's. 

I've seen it all before.  That being said, the trend is your friend, so ride it so long as its up.  But when the trend turns (and it will) dont fall in love with the stock and ride it all the way back down again.  Thats what you need to be vigilant about.

[LoungeLizard]

You have still completely missed my point.  Its not about the increasing demand.  Its about the increasing supply.  If supply increases ahead of demand (as everyone rushes to build them) then they all go broke due to under utilisation or inability to profitably price.  Of course demand will increase, just like demand for the Internet and mobile phone networks increased.  Yet, there were many spectacular collapses in those industries due to over supply and price competition driving operators out of business.

Where do get your idea about the potential for oversupply from? Apart from some completely erroneous analogy from the distant past that is.  Everything I have read from industry and objective analysts say that the demand for data centres is going to increase at a rapid pace and supply is struggling to keep up and is likely to do so for some time.. The training and use of generative AI is going to compound that demand. That's why they are being built and some of the biggest investment houses (eg Blackstone) are getting on board. So where on earth do you come up with the idea that supply will increase ahead of demand and "they all go broke." Who will go broke? Amazon? Google? Microsoft? The banks? All the major telco's around the world? Because that's who's is building and using them at a rapidly expanding rate.

And my  point that you've missed is that IFT are pretty good at building infrastructural assets and then, when they see an opportunity to sell, they do so. If datacenters do reach peak supply, I'd expect IFT to have seen that coming and moved on accordingly.

However, stick with your decision not to buy IFT. I'm sticking with mine to accumulate in the dips (of which there are precious few). Re-convene in 5 years.

[KW]

Where do get your idea about the potential for oversupply from? Apart from some completely erroneous analogy from the distant past that is.  Everything I have read from industry and objective analysts say that the demand for data centres is going to increase at a rapid pace and supply is struggling to keep up and is likely to do so for some time.. 

LOL.  Do you not think they said the exact same thing about internet and mobile networks?  Then everyone builds at the exact same time, and "suddenly" there is 20 times the required amount available. 

[LoungeLizard]

LOL.  Do you not think they said the exact same thing about internet and mobile networks?  Then everyone builds at the exact same time, and "suddenly" there is 20 times the required amount available.

Really strange logic you're employing.

On the one hand you seem to be saying there is massive demand for data storage and you don't seem to deny that it will increase exponentially in the coming years. But instead of saying, well there's a real growth opportunity for visionary companies (IFT bought a half share in CDC 8 years ago and it's value has gone through the roof since), you seem to be foretelling (in an unspecified timeframe) oversupply and boom and bust.

Very curious considering EBITDA for CDC alone has gone from 147m in 2021 to 271m in 2024. Guidance is set at a further 20% growth to 320m in 2025. It's a strange world you occupy where sustained growth and forecasts like that can be interpreted as a portent of doom

[Left Field]

Very interesting........ data centres and now more power.

https://www.nzx.com/announcements/437789


Infratil, which owns 51% of Manawa Energy, will support Contact Energy's proposed acquisition of Manawa pursuant to a Scheme Implementation Agreement, subject to certain conditions.
 
 Manawa today announced that it has entered into a Scheme Implementation Agreement where Contact will acquire 100% of Manawa via a scheme of arrangement, if approved by Manawa's shareholders (Scheme). Manawa shareholders will receive cash consideration of $1.16 per share[1] and 0.5719 Contact shares for every Manawa share they hold prior to implementation of the Scheme. A copy of the Manawa announcement is attached.
 
 Infratil CEO Jason Boyes said Infratil has entered into a binding Voting Agreement with Contact under which Infratil has committed to vote its 51% stake in Manawa shares in favour of the Scheme subject to certain conditions.
 
 "The total offer price of $5.95 - based on the 5-day volume-weighted average price of Contact's shares prior to announcement - represents around a 48% premium to the Manawa share price prior to the announcement."
 
 "If the Scheme proceeds as announced, and subject to any pre-completion dividends, Infratil's gross cash proceeds from the sale will be approximately NZ$186 million and following completion we will own approximately 9.5% of Contact."
 

[winner (n)]

And IFT get about $180m cash on the deal

[Bev]

From email sent to BOP residents who benefit from TECT

Proposed aquisition of
Manawa Energy
by Contact Energy


Manawa Energy Limited announced to the NZX this morning that it has agreed to accept an acquisition offer, to be made by Contact Energy Limited through a Scheme of Arrangement.

TECT is a 26.8% shareholder of Manawa (formerly Trustpower) and this shareholding has been a core investment for the Trust since 1993. TECT, alongside Infratil (51% shareholder of Manawa), supports the proposed acquisition.



The price from Contact is $5.95 for each of Manawa's shares. That represents attractive value to Manawa's shareholders with an uplift of approximately 50% on the Manawa share price in the last month (which has ranged between $3.94 and $4.16).



TECT believes this is a compelling proposal that will deliver significant value to our future asset base. TECT also foresees positive impacts for our community long term, by way of sustained and potential increases to grant funding.



If the acquisition proceeds, TECT will become a shareholder in one of New Zealand's leading energy companies (Contact), and receive a cash payment. The increased liquidity as well as an exposure to arange of energy assets nationally, will diversify TECT's investment portfolio.



This acquisition is conditional on approval from the Commerce Commission and the High Court and requires at least 75% of Manawa shareholders to accept, following regulatory sign off. 

[LoungeLizard]

Very interesting........ data centres and now more power.

https://www.nzx.com/announcements/437789


Infratil, which owns 51% of Manawa Energy, will support Contact Energy's proposed acquisition of Manawa pursuant to a Scheme Implementation Agreement, subject to certain conditions.
 
 Manawa today announced that it has entered into a Scheme Implementation Agreement where Contact will acquire 100% of Manawa via a scheme of arrangement, if approved by Manawa's shareholders (Scheme). Manawa shareholders will receive cash consideration of $1.16 per share[1] and 0.5719 Contact shares for every Manawa share they hold prior to implementation of the Scheme. A copy of the Manawa announcement is attached.
 
 Infratil CEO Jason Boyes said Infratil has entered into a binding Voting Agreement with Contact under which Infratil has committed to vote its 51% stake in Manawa shares in favour of the Scheme subject to certain conditions.
 
 "The total offer price of $5.95 - based on the 5-day volume-weighted average price of Contact's shares prior to announcement - represents around a 48% premium to the Manawa share price prior to the announcement."
 
 "If the Scheme proceeds as announced, and subject to any pre-completion dividends, Infratil's gross cash proceeds from the sale will be approximately NZ$186 million and following completion we will own approximately 9.5% of Contact."
 

Yep, data centres and renewable energy. Who'd have thought there would be a future in it?

[Left Field]

No one loves IFT it seems..... I had to dive 3 pages deep to find this thread.

This just to say...... yay another all time high today as the SP climbs above $13.

Thank you IFT!

[LoungeLizard]

Wow! There it is - $12. IFT continues to be the best performing stock that hardly anyone talks about.

6 weeks on and now $13. 11 weeks ago it was $11. Absolutely relentless.

[Dolcile]

I've got a swag in my nz share fund, very happy holder.

[Left Field]

MSCI NZ index......SPK out....... IFT in.

https://app2.msci.com/eqb/gimi/stdindex/MSCI_Nov24_STPublicList.pdf