IFT - Infratil

[allfromacell]

IFT's SP is up over 40% so far this calendar year..... so yes some profit taking.

Also if I recall correctly, the last big announcement re CDC hinted at another big contract by 26 May and there may be short term disappointment re that not being announced.....yet.

For long term holders, no worries. The FY27 projected 22% revenue increase looks good and likely understated.

Reading through the words of Jason he hinted strongly that the entire 1.6GW pipeline will be contracted and we'll soon be hearing about further acceleration or extending the pipeline for growth delivered early next decade.

I think some concerns of the market are a bit spooked by the scale of capex.

[Mos]

A bit to unpack in that update. Aggressive plan. Points that stood out to me...
- CDC (49.7% owned) EBITDAF forecast to increase from $A393m in FY26 to $A1b+ by FY28 and then $A2b based on current contracted demand when 1GW of capacity fully deployed. Current pipeline taking CDC to 2.9 GW suggests EBITDAF could grow to $A5.8b when current pipeline built out and operational. Wow and gulp!
- Longroad (42.5% owned) Opco EBITDAF forecast to increase from $US367m in FY26 to $US1b+ by FY29. Plus management commentary in the Q&A's on the new idea to use their energy builds to supply their own/partners data centres "We make $70,000 of EBITDA per megawatt roughly from a Long Road Energy project. That's pretty much what our averages say. You would be making more like $1 million of EBITDA on a data center if you added that to it. So, pretty interesting kind of step up in the NPV that's potentially available to Long Road or its partners. That's how we're thinking about it."
- Guidance proportionate capex of $NZ 3.8b to $4.4b in FY27 alone. Not sitting on their hands!
- Pretty much every asset they own part from CDC, Longroad, Gurin Project Vanda could be up for sale to fund energy & data centre growth and create a more focused narrative for capital markets. Good bye Wellington Airport, Contact, RHCNZ, and other smaller businesses that don't fit the narrative and/or aren't scalable to say $1b+ EBITDA in pretty short order?

I don't think we have ever seen something this ambitious from a NZ listed company. Will be an interesting and quite possibly very rewarding white knuckle ride over the next 5-10 years. Massive value creation or risky overreach? Personally, will continue to hold and buckle up for the ride.

 

[allfromacell]

There is execution risk and the investment profile is certainly more risky, but it's strongly mitigated by very long term contracts at both CDC and Longroad.

I feel a lot more comfortable knowing how much of Jason's Bs own money is invested. I'll be watching his disclosures carefully.

[LoungeLizard]

A bit to unpack in that update. Aggressive plan. Points that stood out to me...
- CDC (49.7% owned) EBITDAF forecast to increase from $A393m in FY26 to $A1b+ by FY28 and then $A2b based on current contracted demand when 1GW of capacity fully deployed. Current pipeline taking CDC to 2.9 GW suggests EBITDAF could grow to $A5.8b when current pipeline built out and operational. Wow and gulp!
- Longroad (42.5% owned) Opco EBITDAF forecast to increase from $US367m in FY26 to $US1b+ by FY29. Plus management commentary in the Q&A's on the new idea to use their energy builds to supply their own/partners data centres "We make $70,000 of EBITDA per megawatt roughly from a Long Road Energy project. That's pretty much what our averages say. You would be making more like $1 million of EBITDA on a data center if you added that to it. So, pretty interesting kind of step up in the NPV that's potentially available to Long Road or its partners. That's how we're thinking about it."
- Guidance proportionate capex of $NZ 3.8b to $4.4b in FY27 alone. Not sitting on their hands!
- Pretty much every asset they own part from CDC, Longroad, Gurin Project Vanda could be up for sale to fund energy & data centre growth and create a more focused narrative for capital markets. Good bye Wellington Airport, Contact, RHCNZ, and other smaller businesses that don't fit the narrative and/or aren't scalable to say $1b+ EBITDA in pretty short order?

I don't think we have ever seen something this ambitious from a NZ listed company. Will be an interesting and quite possibly very rewarding white knuckle ride over the next 5-10 years. Massive value creation or risky overreach? Personally, will continue to hold and buckle up for the ride.

 

Good summation there, Mos. The numbers are hard to get one's head around. Scary in terms of the level of investment required but then so are the returns - scary in a good way.
I go back a way with IFT and it has been my best, most consistent and now easily my biggest investment. Never thought about selling and have followed the tried and true "buy in the dips" method. Seems to work. Incredible that it was only $3.30 10 years ago!

[Left Field]

That capex of $NZ 3.8b to $4.4b in FY27 is mind bogling stuff......it does my head in trying to imagine what the resulting NTA figs and contracted revenue will mean in SP appreciation etc.

Like LL IFT is my biggest holding and I'm strapping in for the ride.

(Also v happy to see FPH doing so well today as well.)

[Mos]

Good points LL and LF. 9.3% of portfolio for me and generated strong returns over the past decade as you have experienced. will probably get to 20%+ of portfolio without me buying another share over the next 5 years if IFT gets anywhere close to achieving their growth plans and EBITDAF targets! Buckled up.