RM Infrastructure Income Reports Half-Year Results with NAV Decline Amid Managed Wind-Down

RM Infrastructure Income half-year results: NAV dips as wind-down gathers pace

RM Infrastructure Income (RMII) has posted its Half-Year Report for the six months to 30 June 2025. The managed wind-down is progressing, with sizeable capital returned via tender offers, but the Net Asset Value (NAV) slipped as income fell and certain loans were marked down. Below I break down the key numbers, what moved the dial, and what to watch into 2026.

Snapshot: the scorecard at 30 June 2025

NAV total return includes income and capital moves. The discount narrowed during the period (from circa 14% to circa 12%) as the share price was relatively steady, opening at 73.50p and closing at 70.50p.

Capital returns: tenders at a premium, and more cash coming

RMII’s wind-down continued to plan. Two big tender offers have now been completed:

• September 2024: £17.48 million returned via 19.73 million shares at 88.59p – a 21.86% premium to the pre-tender price.
• H1 2025: £17.41 million returned via 21.62 million shares at 80.52p – a 10.68% premium to the pre-tender price.

The Board and Investment Manager reiterate guidance to have returned over 50% of shareholder capital by year end 2025, and say they are on track. That is the right priority in a wind-down, and the tender pricing is a clear positive for sellers. The flip side is a smaller portfolio with higher concentration risk, which showed up in the NAV volatility this half.

Separately, 89,044 shares were bought into treasury at an average 72.50p under the incentive mechanism tied to realisations, taking total treasury under this scheme to 358,639 shares. This aligns the manager to crystallising value, although it does modestly increase per-share gearing to outcomes on the remaining loans.

Portfolio progress: repayments, delays, and a couple of sore spots

RMII held 18 investments at period end. The first half saw a mix of repayments and valuation moves:

Repayments and refinancings

• Hotels (Loan refs 66 and 67): early February brought a material repayment of £11.5 million versus a circa £12 million year-end 2024 mark – roughly a 96% cash recovery – with the balance novated and now secured against the operational hotel at Loan ref 99. A good outcome in a tricky sector, albeit with the remaining sale pushed back pending external façade surveys.
• Trianco (Loan ref 62a): preference shares previously carried at zero were marked up to par by the valuation agent, reflecting strong trading. That helps offset some of the drags elsewhere.
• Voyage Care: a long-standing holding, scheduled to be divested in the latter part of H2 2025.

Watchlist and write-downs

• Beinbauer (Loan ref 39): a German auto parts maker. Trading was ahead of budget in H1, but the loan remains marked lower given a cautious outlook and its structurally subordinated position. Maturity is extended to H1 2026.
• Empowered Brands (Loan ref 76): stabilisation continues under the new management team. Interest is accruing as Payment-in-Kind (PIK) – interest added to the loan rather than paid in cash – to preserve flexibility, likely for the rest of 2025.
• Cambridge hotel junior loan (Loan ref 73): marked down to zero after weak market feedback in a consensual sale process. Disappointing, and a visible contributor to the -4.87% NAV total return.

Notably, after the imminent repayment of Loan ref 88 (post period), Loan refs 39 and 76 each represent just under one-third of the invested portfolio NAV. That’s a lot of idiosyncratic risk for a shrinking fund, so updates here will be big movers.

Real estate-backed exposures: 36% of NAV, 2026-heavy timetable

• Glasgow student accommodation (Loans 12 & 58): sale process expected to start in late Q3 2025 with completion likely in H1 2026.
• Regional Travelodge (Loans 99 & 66): marketing paused for façade surveys; expected to resume end-2025/early-2026, with repayment targeted in 2026.
• Coventry student accommodation (Loan 68, wholly owned): a tough 2024/25 trading year, but bookings are improving for 2025/26. Energy efficiency upgrades and a move to allow young professionals alongside students aim to boost occupancy. Exit forecast in H2 2026.

My take: the manager is prioritising consensual exits over enforcement to balance cash back now versus value leakage. That feels sensible, but it does lean the timeline towards 2026 and raises interim valuation risk.

Income, NAV and dividends: smaller pool, skinnier yield

Revenue fell to £1.9 million (H1 2024: £4.7 million), reflecting the smaller portfolio and more PIK-heavy remaining loans. In line with a conservative approach, about 66% of PIK income was written down in the balance sheet due to recoverability and timing risk. Capital losses on investments were £3.689 million, contributing to the -4.87% NAV total return.

RMII has shifted from quarterly to semi-annual dividends to save costs and match the reduced income base. A 0.625p interim dividend for H1 2025 was approved on 29 August 2025, payable on 26 September 2025 (record date 12 September 2025), funded from the revenue reserve. Earlier in April, another 0.625p was paid in respect of 2024. Sensible housekeeping, but investors should expect modest income while the rump portfolio works through.

There was also a useful housekeeping note: a factsheet accounting error had understated current year revenue by 1.36p per share as at 31 March 2025; the corrected figure for March was 0.26p per share of net revenue. Importantly, NAV was not affected.

Market backdrop and risk: some tailwinds, but refinancing is key

Base rates moved down during the period (from 4.75% to 4.25%), and credit spreads tightened after a volatile spell – both helpful for refinancings. Even so, the Board flags three big risks into the second half:

• Interest rate risk: SONIA remains elevated and the forward curve rises over the next 12 months, potentially straining borrower interest cover and refinancing.
• Collateral risk: real estate values look softer than headline indices suggest, which could weigh on recovery values.
• Availability of credit: lenders are choosier, making third-party refinancing harder to secure.

The accounts are prepared on a basis other than going concern, as is standard in a managed wind-down. No material valuation policy changes arise from that, and assets are recognised on a realisation basis.

What this means and why it matters

The good: RMII is delivering on the core promise to return cash, and has done so at meaningful premia in tenders. The share price discount narrowed, and the manager remains aligned through the incentive structure. The hotel loan repayment in February shows that consensual solutions can work in this market.

The bad: a -4.87% NAV total return, a zero on the Cambridge junior loan, and visible concentration in two watchlist names. Income is down sharply, with PIK accruals being written back conservatively – the right call, but it keeps the