Digital 9 Infrastructure shares plummet by 40% as turnaround hopes slump

investmentweek.co.uk:

Peel Hunt, DGI9’s corporate broker, downgraded its rating from ‘outperform’ to ‘under review’.

The share price plunge followed the board scrapping its 6p dividend target for the 2023 financial year and not declare a dividend for the second quarter, due to ongoing liquidity and balance sheet pressures.

In light of this, the board said it would begin a formal consultation with its shareholders, starting on 2 October, which would engage on the dividend policy and the future direction of the trust.

The trust also said it had made significant progress in the syndication of one of its holdings — Verne Global — with the terms expected to be announced in the fourth quarter of the year. 

Digital 9 Infrastructure withdraws 2023 dividend target as balance sheet pressures mount

Given the «wide range» of possible outcomes across near term events such as the syndication and medium-term outlook «uncertainty» on operating cash flows and dividends, Peel Hunt, DGI9's corporate broker, downgraded its rating from ‘outperform' to ‘under review'.

Pietro Nicholls, portfolio manager at RM Funds, a DGI9 shareholder, said the trust had «destroyed» its credibility with investors after scrapping the dividend target less than three months after the board said it could be maintained. 

«The fact they have just done this now after the board confirmed they would not need to, I think really has undermined confidence,» he said. 

«For some investors, this was probably the straw that broke the camel's back. Not just because of the suspension of the dividend, but because there is material uncertainty around aspects of the company as well.»

Nicholls argued there are questions regarding DGI9's ability to executive its future strategy, and that more