GCP ‘unconcerned’ by Labour PFI threats

Investor GCP Infrastructure has brushed off the UK Labour party’s proposal to bring existing PFI contracts under government control.

The firm said its low rate of exposure to PFI contracts and the vagueness of Shadow Chancellor John McDonnell’s comments at the Labour conference in September to “bring existing PFI contracts back in-house” would do little to affect its finances.

GCP stated: “Given the lack of details as to what this would precisely entail legally, commercially and on what scale, we believe it is difficult to draw useful conclusions as to a theoretical impact of such a policy on the company. In any event, the board takes comfort from the fact that the company invests in debt rather than potentially more vulnerable equity, and has a diversified portfolio that is only 23% exposed to PFI assets.”

The announcement comes as GCP saw its portfolio perform in line with expectations, with 59% of the portfolio comprising renewable energy assets and 16% social housing, on top of PFI schemes.

Net asset value for the group rose from 109.67 to 110.57 pence per share in the last year, while its profit fell to £46.7m compared to £54.4m in 2016.

The group lamented the “scarcity” of infrastructure projects in its target areas, as well as the treatment of private finance from various parties.

“PFI and PF2 are now seemingly largely out of favour across the political spectrum and the support mechanisms for core renewables sectors have either been withdrawn or materially reduced,” GCP said.