Interim Update Statement

Key Highlights

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Portfolio performance in line with expectations, with capex programmes across HICL's growth assets continuing to drive EBITDA growth.

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Completed the acquisition of a further 6.65% interest in Cross London Trains for approximately £52m, increasing HICL's ownership to 13.13% which is expected to add over 1.0p in NAV per share accretion while enhancing the Company's governance position in a high-quality operational transport asset.

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Capital Markets Seminar held in July outlining HICL's continued strategic evolution, which builds on the Company's high-quality portfolio and strong balance sheet position. The evolved strategy targets a 10%+ total return over the medium term alongside the selective introduction of 'enhancer' assets, which are higher returning and have a route to value realisation through disposal, while maintaining the Company's progressive dividend policy and core infrastructure positioning.

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Dividend outlook reaffirmed, with the Company remaining on track to deliver its target dividend of 8.50p per share for the year ending 31 March 2027 and new guidance of 8.65p per share for the year ending 31 March 2028.

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Improved management terms agreed, moving to a 100% market capitalisation fee basis and a step-down in the notice period to 2 years, enhancing alignment with shareholders.

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The Company will hold a biennial continuation vote from the 2028 AGM if the Company's shares trade at an average discount to NAV per share of more than 10% over the preceding financial year.

Capital Allocation

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The Company maintains a balanced approach to capital allocation, encompassing progressive shareholder distributions, share buybacks and investment opportunities that support the Company's medium-term total return objective.

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During the period, HICL completed the acquisition of an additional 6.65% interest in Cross London Trains ("XLT") for approximately £52m. The Board regards the transaction as an attractive deployment of capital, which is expected to provide NAV accretion, enhanced long-term cash generation and increased governance influence within a high-quality operational asset.

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The Company continued to repurchase its own shares during the period with 32.8m shares purchased between 1 April and 31 July 2026 for an aggregate consideration of £42.0m and at an average discount of 17.1%. The Board will continue to undertake buybacks where they represent an attractive allocation of capital compared with alternative uses, in the context of the return available and the ability to enhance portfolio construction. The Board assesses all investment opportunities relative to the return available from share buybacks.

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The Company's balance sheet remains strong. The £400m revolving credit facility is undrawn and other available liquidity amounts to £238m, net of existing investment commitments. This liquidity position provides flexibility to pursue selective investment opportunities, share buybacks and dividend growth within the Company's self-funded capital allocation framework.

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HICL continues to selectively progress an advanced pipeline of investment opportunities in line with the portfolio construction framework outlined at the Company's Capital Markets Seminar. The Company is advancing a number of live opportunities which, if completed, are expected to offer attractive risk-adjusted returns, enhance portfolio diversification and support the Company's strategic evolution.

Portfolio Performance

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Operational performance across the portfolio in the period was in line with expectations, demonstrating the resilient nature of the underlying assets. NAV performance and cash generation remain in line with forecasts.

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HICL's growth investments continue to perform well, progressing significant expansion capex programmes and delivering EBITDA growth in line with expectations. Notable updates are included below:

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o  At Affinity Water, the planned CEO transition was completed, with Mark Garth joining in June. Hot, dry weather over the period resulted in Affinity introducing a hosepipe ban in its Central region from 17 July 2026, in line with measures adopted by neighbouring water companies. This is not expected to have a material operational or financial impact on the business.

o  More generally, recent changes in UK government leadership have the potential to influence the timing and implementation of expected water sector reforms. Nonetheless, the Investment Manager continues to expect the recommendations of the Cunliffe Review, which were widely welcomed and reflected in subsequent Government proposals, to be supportive of strong-performing water companies such as Affinity Water.

o  Fortysouth continued to execute its growth-oriented business plan, notably through progressing tower deployments and upgrades, which have supported EBITDA growth in line with expectations. The management team has also secured additional co-location agreements with mobile network operator customers during the period, further increasing the utilisation of its tower portfolio and expanding contracted revenue streams.

o  London St. Pancras High Speed continued to perform strongly, with international rail traffic exceeding assumed levels in the period, supporting EBITDA performance. Progress towards the introduction of a second international operator advanced during the period, with the Office of Rail and Road now considering Virgin's Framework Track Access Agreement following the conclusion of the consultation process on 27 May 2026.

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Cash generation from HICL's PPP portfolio remains consistent with expectations and continues to support the Company's dividend guidance. During the period the Southmead Hospital PPP successfully refinanced its £500m senior debt facilities. The refinancing is accretive for HICL and simplifies the project's funding structure.

Financial Performance and Valuation

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The Company remains on track to deliver its target dividend of 8.50p per share for the financial year ending 31 March 2027 and reiterates the recent guidance of 8.65p per share for the financial year ending 31 March 2028.

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Current forecast data suggests that inflation will be ahead of HICL's assumptions for the year ending March 2027. Inflation indicators are, however, highly volatile and the Company will formally reassess the impact of inflation during the September reporting cycle. HICL's cash and earnings generation both have strong inflation linkage.

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Long-term government bond yields in relevant jurisdictions have moved only modestly since 31 March 2026. The Board and Investment Manager will continue to assess the appropriateness of discount rates as part of the Company's established valuation process, weighing both changes in risk free rates in those jurisdictions as well as market pricing data for high-quality comparable core infrastructure assets.

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Following the completion of the XLT transaction in May 2026, the price at which the stake was acquired is expected to increase the Company's NAV per share by at least 1.0p when the asset is re-valued at 30 September 2026. The purchase price reflects the minority position being divested and HICL's rights through its existing shareholding in XLT. 

Market and Outlook

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As outlined at the Capital Markets Seminar, HICL intends to continue its strategic evolution, building on the progress made over recent years. This strategy seeks to capture the substantial structural growth in the underlying infrastructure market, with over $100tn of global infrastructure investment required by 2040; and deliver a higher total return profile for investors over the long term, while maintaining HICL's core infrastructure positioning and progressive dividend policy.

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The Board believes HICL is well positioned to benefit from the expanding infrastructure investment opportunity, supported by long-term infrastructure megatrends and the increasing role of the private sector in infrastructure delivery. The selective introduction of higher-returning 'enhancer' investments, alongside HICL's existing yield and growth assets, is expected to broaden return drivers and increase exposure to these long-term trends, while maintaining the Company's focus on high-quality infrastructure assets with resilient cashflows, defensive market positioning, and strong long-term fundamentals.

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The Company's self-funded c.£1.6bn five-year capital allocation framework, supported by operating cashflows and capital recycling, provides flexibility to fund dividends, selective investment opportunities and share buybacks while maintaining balance sheet discipline.

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Supported by a resilient portfolio, growing earnings generation, a strong balance sheet and significant capital allocation flexibility, the Board remains confident in HICL's ability to deliver an attractive combination of progressive income and long-term capital growth for shareholders.