3i Infrastructure delivers 8.5% return and raises dividend target for FY27

3i Infrastructure FY26 results: solid return, rising dividend and a big asset sale doing the heavy lifting

3i Infrastructure has delivered exactly the kind of update income-focused investors usually want to see – steady net asset value growth, a fully covered dividend, and a higher payout target for next year. For the year to 31 March 2026, the company reported an 8.5% total return on opening NAV, which sits neatly inside its long-standing 8% to 10% annual target range.

The headline numbers are good. But the real story is a bit more mixed underneath. A very successful sale of TCR has created a lot of value and improved liquidity, while the write-down of DNS:NET shows not every investment in the portfolio is behaving itself.

Key 3i Infrastructure results for FY26 retail investors should know

Metric	FY26	FY25
Total return	£295 million	£333 million
Total return on opening NAV	8.5%	10.1%
NAV	£3,737 million	£3,562 million
NAV per share	405.2p	386.2p
FY26 dividend per share	13.45p	12.65p
FY27 dividend target	14.30p	Not applicable
Net debt	£531 million	£256 million
Total liquidity	£669 million	£644 million

3i Infrastructure dividend looks strong – and importantly, it was covered

The dividend side of this results statement is genuinely encouraging. 3i Infrastructure delivered its FY26 target dividend of 13.45p per share, split between an interim dividend of 6.725p and a proposed final dividend of 6.725p.

Better still, management says the dividend was fully covered. In plain English, that means the cash coming in from the portfolio was enough to pay the dividend without relying on financial engineering or asset sales. Total income and non-income cash came in at £208 million, while operating and finance costs were £75 million, leaving £133 million against dividends of £124 million – a surplus of £9 million.

That matters because investment trusts live and die by dividend credibility. Anyone can promise a higher payout. It is far more reassuring when the cash generation backs it up.

The company is now targeting a FY27 dividend of 14.30p per share, another 6.3% increase. On the face of it, that keeps the progressive dividend story intact, and it is one of the clearest positives in the update.

TCR sale is the star of the show – and it validates the portfolio value

The standout event in FY26 was the agreed sale of 3i Infrastructure’s 71% stake in TCR, its largest investment. The transaction is expected to generate net proceeds of approximately €1,140 million and represents a c.50% premium to TCR’s March 2025 carrying value before the sale process began.

That is a big deal for two reasons. First, it crystallises value for shareholders rather than leaving it as a paper gain inside the portfolio. Second, it gives third-party evidence that the company’s NAV is not just optimistic spreadsheet work. In a sector where many listed infrastructure funds trade at persistent discounts to NAV, proof matters.

The expected return on TCR is also impressive. 3i Infrastructure says the sale should deliver a gross internal rate of return, or IRR, of 20% and a gross money multiple of 3.6x. That is a very strong outcome and shows the value of active management when it works well.

DNS:NET write-down is the bad news investors should not ignore

Now for the weaker bit. DNS:NET was written down to zero. That is as blunt as it sounds.

The problem was not disclosed as an operational collapse in the business itself. Instead, the issue was financing. 3i Infrastructure said lending appetite for German fibre roll-out businesses worsened materially in late 2025, and without the right mix of new equity and debt funding, the value of the existing equity was judged to be zero.

This is clearly negative. The write-down knocked £220 million off value in the year and was one of the biggest drags on performance. It is also a reminder that infrastructure investing is not risk-free, especially when an asset is still in build-out mode rather than already producing long-term contracted cash flows.

SRL was another disappointment, with a £72 million negative value movement and a portfolio return of negative 24.4%. Local authority spending constraints and tougher competition held it back.

Most of the rest of the portfolio looks resilient

The more reassuring read-across is that the broader portfolio held up pretty well. Strong performers included Oystercatcher, Future Biogas, Tampnet, FLAG and Infinis, while Joulz and ESVAGT also continued to attract further investment.

That diversification helped. The total portfolio return for the year was 9.6%, and without the DNS:NET collapse the overall result would have looked much cleaner.

Management also committed capital to new and follow-on investments, including approximately €301 million for Lefdal Mine Datacenter in Norway. That gives 3i Infrastructure exposure to digital infrastructure and data centre demand, which is a hot area thanks to cloud computing, artificial intelligence and high-performance computing.

Balance sheet, debt and liquidity: better shape after TCR completes

One thing investors should watch with any investment trust is balance sheet flexibility. At 31 March 2026, 3i Infrastructure had £535 million drawn on its £1.2 billion revolving credit facility, up from £260 million a year earlier. So net debt rose to £531 million from £256 million.

That looks worse at first glance, but the context matters. The company used the facility as a bridge ahead of TCR sale proceeds. Once TCR completes and the Lefdal Mine Datacenter investment is funded, 3i Infrastructure expects a pro forma cash position of £201 million.

That is important because it gives the group room to back existing assets, pursue selective deals and potentially consider share buy-backs if appropriate. In other words, the company should move from a more stretched-looking position to a more comfortable one.

What 3i Infrastructure shareholders should make of these annual results

My view is this is a good set of results, even if it is not spotless. The positives are meaningful: an 8.5% return, NAV per share up to 405.2p, a fully covered 13.45p dividend, a 14.30p target for FY27, and a major TCR exit at a chunky premium.

The negatives are real too. DNS:NET has gone to zero, SRL disappointed, and the shares still traded at a discount to NAV throughout the year. That last point matters because discounts can weigh on sentiment even when the underlying portfolio is performing reasonably well.

Still, if you strip it back, 3i Infrastructure is showing why it has built a strong reputation in listed infrastructure. It is selling mature assets well, recycling capital, and still growing shareholder income. For retail investors who want a blend of income and long-term asset growth, this update keeps the investment case very much alive.

Important dates for the 3i Infrastructure final dividend

• Ex-dividend date: 11 June 2026
• Record date: 12 June 2026
• Expected payment date: 10 July 2026
• AGM date: 2 July 2026

The bottom line: this was a resilient year rather than a flawless one. But in a choppy market, resilient with rising dividends is not a bad place to be.