Cordiant Digital Infrastructure Ltd (LSE:CORD), a leading investor in digital infrastructure, reported strong operational performance and financial health in its latest trading update, saying it has a "number of opportunities to deploy growth capex in the existing portfolio" that it believes will be accretive to returns.
The company's ‘Buy, Build & Grow’ strategy has led to a 6.4% increase in aggregate portfolio company EBITDA to £99.4 million and an 8.2% rise in revenue to £217.4 million for the nine months ending 31 December 2023.
This growth is attributed to strategic contract wins, effective cost control, and inflation's positive impact on revenues.
Key developments include the acquisition Norkring Belgïe, included on pro-forma basis as was completed in January 2024 and of Speed Fibre, which added fibre network capabilities in Ireland.
In the Czech Republic and Poland through České Radiokomunikace (CRA) and Emitel SA have secured fresh contracts to broadcast digital audio broadcasting (DAB) radio.
Opportunities to deploy growth capex include the construction of a large data centre in Prague on land owned by CRA and build-out of DAB networks in Czech Republic and Poland on the back of recent contract wins.
Both the board and investment manager believe “this is a very good time to add mid-sized growth platforms or highly accretive bolt-on acquisitions to the company’s portfolio but will remain extremely selective”.
The company reaffirmed its dividend target for the fiscal year to 31 March 2024 at 4p, which is well supported by its portfolio's performance, with dividend coverage of 4.5 times by EBITDA and 1.6 times by free cash flow.
Shonaid Jemmett-Page, chair of the board, remarked: "The board continues to be encouraged by the company's progress in the three years since its IPO.
“Operational performance across the portfolio is strong and we are seeing the results of the investment manager's hands-on expertise coming through in revenue and EBITDA growth.
“We remain disappointed with the share price performance, as we believe the discount to NAV at which the company trades is not warranted by the company's performance.
“We remain confident that the company's progress and achievements will be better reflected as current market conditions improve."