Cordiant Digital Infrastructure Ltd's (LSE:CORD) interim results showed a relatively muted net asset value (NAV) performance as a positive underlying valuation movement was mostly offset by currency swings and discount rate headwinds, said analysts at Jefferies.
NAV decreased to 112.7p at end-September from 113.4p, as the 8.7% increase in underlying valuation met a -3.8% change in the discount rate on the opening NAV and -2.6% from FX.
If adjusting the NAV to accrue for income, fees and a strong FX tailwind predominately from the Polish zloty following the end of the period, Jefferies said it results in a current estimated NAV of 118p, to which the shares trade on a 39.8% discount.
The operational performance, where aggregate EBITDA grew 5.5% to £111.1 million, does not include Speed Fibre Group, which Jefferies said is expected to contribute an additional £20 million of EBITDA.
As well as the €5.25m acquisition of Norkring Belgie, which has yet to complete, the analysts also noted "increasing inbound enquiries from both competitors and operators in new regions to join CRA".
Fund-level cash was £130.9 million at the end of September, equivalent to 15% of NAV, with €200 million drawn on its Eurobonds.
Adjusting for the SFG and Norkring Belgie acquisitions, cash becomes circa £70 million, or circa 7% of NAV.
"This is potentially enough dry powder for one more material acquisition, but could also provide sufficient flexibility for bolt-on acquisitions, or additional expansion capex, and is on top of the portfolio company level liquidity of £135m, including debt facilities," the analysts said, adding that "syndications are likely key to further diversifying the fund".
Free cash flow dividend cover shortened to 1.2x for the period, but CORD said pro-forma dividend cover has since moved back to 1.5x.