TIDMJLG
RNS Number : 9790S
John Laing Group plc
29 June 2018
JOHN LAING GROUP plc
PRE-CLOSE UPDATE
John Laing Group plc ("John Laing" or "the Group"), the
international originator, active investor and manager of
infrastructure projects, today issues a pre-close update for the
six months ending 30 June 2018.
Investment activity
-- Investment commitments weighted towards the second half and
full year guidance for 2018 maintained at approximately GBP250
million
-- Strong pipeline of future opportunities as described in March 2018 rights issue
-- Following record investment commitments in 2017, bidding
activity was lower in the early part of 2018 but is now very active
in each of our core markets: Europe, North America and Asia
Pacific
-- Currently part of:
o One preferred bidder PPP position in Europe with a potential
investment opportunity of approximately GBP7 million
o 12 shortlisted PPP bids due to reach financial close in the
next two years, of which 10 are in North America and two in Europe,
representing a total potential investment opportunity of
approximately GBP360 million
o Seven exclusive renewable energy positions, representing a
total potential investment opportunity of approximately GBP240
million
-- Total investment commitments of GBP40 million in 2018 to date (see Appendix I):
o PPP: MBTA Automated Fare Collection System (US): GBP18
million
o PPP: A16 road (Netherlands): GBP22 million
Realisations
-- Sale of remaining 15% shareholding in Intercity Express
Programme (IEP) (Phase 1) completed for consideration of GBP232
million (GBP228.4 million after costs). As already stated, this was
in excess of the valuation at 31 December 2017
-- Sale of 50% shareholding in Lambeth Social Housing project,
announced in late 2017, now completed with proceeds of GBP9.5
million
-- With further sale processes currently underway, full year
guidance for 2018 maintained at approximately GBP250 million
Investment portfolio
We are pleased with the performance of our investment portfolio
in 2018 to date.
Our asset management team actively monitors and manages each
project we invest in. A number of these projects are large,
sophisticated infrastructure assets, and therefore delays and other
issues do occur. In all instances, a judgement as to potential
outcomes is taken into account when John Laing's portfolio
valuation is prepared.
IEP (Phase 2)
-- The first trains for the East Coast mainline, which have the
same design as IEP (Phase 1), are scheduled to be accepted into
service in Q4 2018
Denver Eagle P3
-- The project company has made good progress in H1 2018 to
obtain the necessary approvals for the level crossings on the "A"
and "G" lines. Subject to final certification, full revenue service
is expected to be achieved in Q3 2018
Optus Stadium, Perth
-- The stadium has performed well during a number of high
capacity, high profile events in H1 2018, with over 500,000
spectators to date. The project was announced winner of the 2018
Australian Construction Achievement Award.
Sydney Light Rail
-- As stated in our 2017 results announcement the programme is
approximately 12 months behind schedule, but remains within the
overall long-stop date. Part of the delay is attributable to the
presence of below ground utility equipment not identified before
construction commenced. This has led to various claims by the
principal contractor, which are currently the subject of
negotiations between the contractor and the public sector client,
facilitated by the project company.
New Royal Adelaide Hospital
-- As stated in our 2017 results announcement, the project
company continues to monitor the performance of the facilities
management services provider. While this performance has been
improving, the project company and the South Australian government
are currently in discussions about the application of the abatement
regime resulting from service under-performance.
Pension fund
-- The deficit as calculated in accordance with IAS 19 at 31
December 2017 of GBP35.2 million was estimated to have moved to a
surplus of GBP19.8 million at 31 May 2018. This was due principally
to a scheduled cash contribution of GBP26.5 million in March 2018
together with a small increase in the discount rate used to value
the liabilities.
Outlook
-- The pipeline of new investment opportunities remains strong
in both PPP and renewable energy in each of our three core
markets
-- Current guidance of approximately GBP250m for investment commitments in 2018 maintained
-- As previously stated, we continue to assess (i) other
infrastructure asset classes that might fit our business model (ii)
new geographies where we see potential opportunities to invest
alongside established partners at appropriate returns
-- The market for secondary assets remains strong
Olivier Brousse, John Laing's Chief Executive Officer, said:
"Following our rights issue in March and the sale of our
interest in IEP (Phase 1), we have the financial flexibility to
take advantage of our strong pipeline of opportunities. Our focus
is to continue to grow in a managed way by ensuring we select the
projects with the best risk-adjusted returns and that we work with
the best partners. John Laing is steadily becoming renowned
internationally for active independent greenfield infrastructure
investment, and is well positioned for further growth."
The Group's results for the six months ending 30 June 2018 will
be announced on 23 August 2018.
A call for analysts and investors will be held at 8.00am (London
time) today.
Conference call details:
Number 0800 358 9473
US number +1 855 85 70686
Pin code 54161582#
Further information
Analyst/investor enquiries:
Olivier Brousse, Chief
Executive Officer +44 20 7901 3200
Patrick O'D Bourke, Group
Finance Director +44 20 7901 3200
Media enquiries:
James Isola, Maitland +44 20 7379 5151
www.laing.com
Appendix I: details of investment commitments and
realisations
Investment commitments Region PPP RE Total
GBPm GBPm GBPm
------------------------ --------------- ------ ------ ------
MBTA Automated Fare
Collection System North America 17.5 --- 17.5
------------------------ --------------- ------ ------ ------
A16 road Europe 22.0 --- 22.0
------------------------ --------------- ------ ------ ------
Total 39.5 --- 39.5
----------------------------------------- ------ ------ ------
Realisations completed Shareholding Purchaser Total
(gross proceeds) GBPm
------------------------ ------------- ------------ ------
IEP (Phase 1) 15% Third party 232.0
------------------------ ------------- ------------ ------
Lambeth Social Housing 50% JLIF 9.5
------------------------ ------------- ------------ ------
Total 241.5
----------------------------------------------------- ------
JLIF = John Laing Infrastructure Fund
Appendix II: exchange rates at 30 June 2017, 31 December 2017
and 31 May 2018
Exchange rate 30 June 2017 31 December 31 May 2018
vs Sterling 2017
------------------- ------------- ------------ ------------
Euro 1.1382 1.1252 1.1397
------------------- ------------- ------------ ------------
US dollar 1.2986 1.3527 1.3289
------------------- ------------- ------------ ------------
Australian dollar 1.6921 1.7311 1.7575
------------------- ------------- ------------ ------------
New Zealand
dollar 1.7742 1.9055 1.8983
------------------- ------------- ------------ ------------
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END
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