Australian Infrastructure Fund (AIX:ASX)
AIX is an Australian diversified listed infrastructure fund. Its stapled securities combine units in the Australian Infrastructure Fund Trust and shares in the Australian Infrastructure Fund Limited. It is managed by Hastings Funds Management which in turn, is owned by Westpac Banking Corporation.
Transport infrastructure assets account for 100% of the fund portfolio which include; airports, seaports, toll roads and rail. Infact, AIX’s airports represent 94.2% of the portfolio by value.
AIXs primary objective is to offer investors returns through cash yield and capital growth by actively managing a diversified portfolio of transport infrastructure assets for the medium to long term. The main areas of focus are organic growth opportunities, prudent capital management, and acquisition opportunities. The strategic direction to date, is to remain purely in airport infrastructure.
The Australian Infrastructure Fund was badly affected by the Global Financial Crisis but is now on the rebound. We believe that infrastructure can provide a good steady income over the longer term and certainly in the case of AIX there is the potential for decent capital appreciation too.
The final dividend declared for 2010 was 5.0 cents per share, representing a dividend yield of 5.1%. Dividends are paid in February and August each year. The average shareholder return over 10 years has been 7.9% per annum.
Looking ahead, the Company reported that it is well positioned with a track record of passenger growth, relatively conservative gearing and strong interest coverage ratios, as well as a diversity of passenger and airline customers.In the past quarter there has been strong growth in passenger numbers for the AIX airport portfolio. AIX recently announced an 8.3 per cent jump in AIX-weighted passenger growth across its portfolio of Australian and European airports for the quarter ended 30 th September 2010, when compared with the prior corresponding period (pcp). The updated result, which follows AIX’s 25th October 2010 announcement on the performance of its Australian airports during the quarter, includes passenger data for its European airports, which comprise 12.5 percent of the AIX portfolio by value.
AIX Chief Executive Officer, Jeff Pollock, said, “While Athens Airport has been impacted by austerity measures, we are encouraged by the resurgent performance of our German airports – Dusseldorf and Hamburg. “Pleasingly, both German airports achieved double-digit growth in passenger numbers during the month of September.” AIX remains cautiously optimistic towards the short term performance of these assets and is confident of their value over the longer term.
The shares are trading on a low P/E of 6.63 at the moment. We believe they represent good value and a steady and secure yield. At their height the shares traded at over $3 in September 2007. With the current price below $2 per share, there is plenty of upside potential in addition to the decent dividends.
Buy Australian Infrastructure Fund (AIX:ASX)up to $2.05