IFT - Infratil

[BlackPeter]

I get it that discussions around terminal growth rates are beyond most people's understanding and most people think valuers cannot be influenced. (I was naïve like that for a long time too).  Its a big call going from a DCF valuation with a 2.5% terminal growth rate to a 3.5% and affects the DCF valuation considerably.
https://site.financialmodelingprep.com/discounted-cash-flow-blogs/Terminal-Growth-Rate-in-DCF-A-Comprehensive-Guide

I am sure there are many big valuation calls in valuing IFT assets and I am sure Morrisons have had a lot to say about them, that's what the vested interest of earning hundreds of millions in performance fees does to any company.

For what its worth, Forsyth Barr in their recent valuation of KPG, (a property company that you would think would grow in line with the economy and inflation at circa 2-3% per annum) used a 1.5% terminal growth rate in their DCF valuation and a risk free 10 year rate of 5%.  Those are very different numbers to what was used in Wellington airport's valuation. 

For those that this DCF valuation stuff is far above your head, maybe just sit back and think.  In an extremely slow economy, how plausible is it that the value of airport assets suddenly jumps 50% in just one year ?  Hmmm.

... and that's what just playing with a few innocent parameters can do to valuations.

On top of that come the biggies:

How will the future value of airports look like? If people don't know what I mean, they should maybe check the importance (and with that comes value) of railway stations 1900 - 1950 - 2000 - Now. Hint: Its not a straight line upwards (no matter, whether 2.5% or 3.5% pa, but a mole hill - decades up and then decades down..
 
How will the need for data centers develop? Hardly any around 25 years ago and currently a booming industry. But, what will be the next big thing in data storage and what will be the need?

Ah yes ... and how will the value of telecommunication companies develop? In the past there is hardly any technology (and supporting company) I can think of peaking with what they did for more than a generation or so. All these valuation specialists tend to forget to plan for the trend change and the long way down ...

Anybody able to tell me, how Infratils valuers are able to predict what the next big thing will be in telecommunication, energy generation and travel and how Infratils companies will benefit? Clearly - they are not, but they are paid for making up big numbers, and hey - this is what they are doing.

And hey - the valuers win - they are never hold responsible for their past valuations, but they get paid well for pleasing their clients today with big numbers.

The clients win because they get paid big bonusses for big valuations, not for realistic valuations

... and the shareholders? Well, who cares?

Always follow the money ...

[LoungeLizard]

I guess if you don't believe in independent valuations, industry specialists and technology experts, then clearly IFT isn't for you.

[Dolcile]

Although I do have some concerns about the MCO fee structure, IFT looked too cheap to me yesterday - so I purchased a few with the spare cash I had sitting in my brokerage account. 

I did observe a couple of things before i purchased:
1. IFT has outperformed the S&P500 over the last 10 years
2. Since the tariff debacle the IFT stock price hadn't bounced back in the same why that the S&P500 has, and looked oversold.
3. heavy insider buying at below $10.50

I've also got an exposure to IFT in my NZX50 tracker so a few more won't hurt.

Nice to be up 4% today.

[Left Field]

Speaking of index inclusion bumps.

IFT heading for ASX50 inclusion later this year.....possibly Sept according to CFO of Morrisons at a recent S/Holders meeting.

Quite a big deal apparently.

[Dolcile]

CEO buying more

[Left Field]

Speaking of index inclusion bumps.

IFT heading for ASX50 inclusion later this year.....possibly Sept according to CFO of Morrisons at a recent S/Holders meeting.

Quite a big deal apparently.

For those wanting to DYOR here's a link re make up of ASX100
https://www.marketindex.com.au/asx100

...and the same for ASX50
https://www.marketindex.com.au/asx50

Interesting to note IFT already in ASX100 with IFT's current mkt cap cited as circa $A9.7 Bill..... so when will the ASX50 be next for IFT?

In the meantime good to see the IFT CEO buying more last week.

https://api.nzx.com/public/announcement/454224/attachment/446557/454224-446557.pdf

[Dolcile]

I picked up a few more yesterday at $10.51

Still only <1% of the portfolio.

[Left Field]

CDC Independent Valuation – 30 June 2025

04/07/2025, 09:58 NZST, MKTUPDTE

The 30 June 2025 independent valuation of Infratil's investment in CDC shows an increase of A$148 million over the three months since the 31 March 2025 valuation.
 
 The increase reflects the completion of the Transaction announced in February 2025, with Infratil acquiring a 1.58% stake in CDC for A$220 million (including typical completion adjustments), increasing its shareholding from 48.17% in March 2025 to 49.76% in June 2025. This was slightly offset by a 1% decline in the assessed equity valuation of CDC on a 100% basis from A$13,701 million in March 2025 to A$13,560 million as at 30 June 2025.
 
 Infratil's 49.76% investment in CDC is now valued at between A$6,208 million to A$7,363 million (with a midpoint of A$6,748 million), compared with A$6,066 million to A$7,208 million (with a midpoint of A$6,600 million) based on Infratil's 48.17% shareholding at the end of March 2025.
 
 The growth forecast underpinning CDC's build capacity to FY2034 remains consistent with the March 2025 update. During the period CDC commenced additional construction in Melbourne and Canberra, increasing capacity under construction to 453MW. CDC also increased operational capacity by 54MW in Auckland, to reach a portfolio total of 372MW. With the progression of these developments, CDC continues to demonstrate its strong track record of delivering projects on time and to budget.

[bulltrap]

For those wanting to DYOR here's a link re make up of ASX100
https://www.marketindex.com.au/asx100

...and the same for ASX50
https://www.marketindex.com.au/asx50

Interesting to note IFT already in ASX100 with IFT's current mkt cap cited as circa $A9.7 Bill..... so when will the ASX50 be next for IFT?

I've DYOR'ed enough to know that the S&P DJI indexes aren't based on a simple market cap ranking.

Since IFT has a primary listing in NZ, only some fraction of its free-float market cap (itself some fraction of total market cap) will get counted towards ASX index ranking.

This is the flipside of ANZ and WBC, which have secondary listings in NZ, but are large enough that the small fraction counted towards NZ index rankings is enough to put them in the NZX50.

And then there's a hurdle to clear for inclusion, as the index favours retaining existing entrants for stability.

While I haven't looked into the numbers for IFT / ASX100 yet, I'm not getting too excited.

[Left Field]

Crikey, CEO still buying.....

https://api.nzx.com/public/announcement/454659/attachment/447055/454659-447055.pdf

[Dolcile]

The CEO isn't messing about, he's purchased another $1.25m worth.

That's nearly 1 million shares / $10m YTD.

[Left Field]

The CEO isn't messing about, he's purchased another $1.25m worth.

That's nearly 1 million shares / $10m YTD.

And he got part of his reward today....comfortably back above $11.00 (with a strong finish in ASX.) Next stop $12.00.

[LaserEyeKiwi]

Businessdesk has an article discussing details of a Jarden report saying the "big beautiful bill" that passed was much friendlier than initially anticipated for Infratil/Longroad in the USA.

They just need to start construction on all their projects before July next year (even if that projects takes a long time to complete) because any project that starts construction by then is grandfathered into the tax credits etc.

[Left Field]

Businessdesk has an article discussing details of a Jarden report saying the "big beautiful bill" that passed was much friendlier than initially anticipated for Infratil/Longroad in the USA.

They just need to start construction on all their projects before July next year (even if that projects takes a long time to complete) because any project that starts construction by then is grandfathered into the tax credits etc.

This also confirmed at the recent investor road show meetings. Seems IFT's Longroad has worked hard to ensure 99% of its pipeline projects are exempt from any of Trumps proposed taxes until at least 2030.

[Left Field]

IFT official confirmation of the above two posts

IFT/Longroad now 'materially better off' under Trump's Big Beautiful  Bill than previously anticipated.

https://www.nzx.com/announcements/454796