"We have 100 executives in the US looking for infrastructure opportunities."
MIG travelling well, investors assured
November 22, 2005
By Anneli Knight
The Sydney Morning Herald
Copyright 2005
Macquarie Infrastructure Group yesterday confirmed its strong, positive outlook and defended concerns over its profitability at its annual meeting.
The Macquarie Bank specialist fund reaffirmed its distribution guidance of 21c per stapled security for this financial year. It also forecast a 23c a security distribution for 2006-07, based on solid performance by the group's toll-road investments and an outlook for continued growth.
The group owns 14 toll roads in six countries - with an estimated 1.3 million road users worldwide on an average workday - and chief executive Stephen Allen said it was in talks over new toll roads in France and the US states of Virginia, Oregon, Indiana and Texas. The US market accounts for 47 per cent of the infrastructure group's value.
"We think long term the US will be the biggest market for us," Mr Allen told investors at the meeting yesterday. "We have 100 executives in the US looking for infrastructure opportunities."
Mr Allen reassured investors that rising interest rates and petrol prices would have minimal impact on the business's profitability, although the share price has fallen significantly in recent months.
"There has been talk about interest rates going up and concern for infrastructure companies in general, and MIG in particular," Mr Allen said. These concerns would not significantly affect MIG because the group had fixed 86 per cent of its debt over the next two years and had a natural hedge in the longer term.
"As long as inflation and interest rates continue to move together we are quite well hedged," he said, referring to contracts which specify toll-road fares will rise in line with inflation.
Mr Allen said consumers were reluctant to reduce travel despite spikes in the fuel price.
"All the research I have ever seen on the topic says you need a very significant rise in the petrol price before you see a diminution in travel," Mr Allen said. "What I remind people of is that reduction of travel by people in cars is a lifestyle decision … In the current urban planning model the need for personal mode of transport is built in.
"But if the whole economy slows that is a problem because there is a correlation between growth in the economy and travel by car."
He also rejected concerns over the viability of public private partnerships. "If you look at Sydney there are many examples of successful toll-toad PPP projects," he said. "Ultimately governments can build these roads but PPPs have brought them forward and made them happen faster."
MIG's share price rose 2c yesterday to close at $3.67.
Copyright © 2005. The Sydney Morning Herald. www.smh.com.au
November 22, 2005
By Anneli Knight
The Sydney Morning Herald
Copyright 2005
Macquarie Infrastructure Group yesterday confirmed its strong, positive outlook and defended concerns over its profitability at its annual meeting.
The Macquarie Bank specialist fund reaffirmed its distribution guidance of 21c per stapled security for this financial year. It also forecast a 23c a security distribution for 2006-07, based on solid performance by the group's toll-road investments and an outlook for continued growth.
The group owns 14 toll roads in six countries - with an estimated 1.3 million road users worldwide on an average workday - and chief executive Stephen Allen said it was in talks over new toll roads in France and the US states of Virginia, Oregon, Indiana and Texas. The US market accounts for 47 per cent of the infrastructure group's value.
"We think long term the US will be the biggest market for us," Mr Allen told investors at the meeting yesterday. "We have 100 executives in the US looking for infrastructure opportunities."
Mr Allen reassured investors that rising interest rates and petrol prices would have minimal impact on the business's profitability, although the share price has fallen significantly in recent months.
"There has been talk about interest rates going up and concern for infrastructure companies in general, and MIG in particular," Mr Allen said. These concerns would not significantly affect MIG because the group had fixed 86 per cent of its debt over the next two years and had a natural hedge in the longer term.
"As long as inflation and interest rates continue to move together we are quite well hedged," he said, referring to contracts which specify toll-road fares will rise in line with inflation.
Mr Allen said consumers were reluctant to reduce travel despite spikes in the fuel price.
"All the research I have ever seen on the topic says you need a very significant rise in the petrol price before you see a diminution in travel," Mr Allen said. "What I remind people of is that reduction of travel by people in cars is a lifestyle decision … In the current urban planning model the need for personal mode of transport is built in.
"But if the whole economy slows that is a problem because there is a correlation between growth in the economy and travel by car."
He also rejected concerns over the viability of public private partnerships. "If you look at Sydney there are many examples of successful toll-toad PPP projects," he said. "Ultimately governments can build these roads but PPPs have brought them forward and made them happen faster."
MIG's share price rose 2c yesterday to close at $3.67.
Copyright © 2005. The Sydney Morning Herald.
posted by Porkus Maximus Tex: at Tuesday, November 22, 2005
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