John Laing Group plc Pre-close Update (7573Y)

TIDMJLG

RNS Number : 7573Y

John Laing Group plc

08 December 2017

8 December 2017

JOHN LAING GROUP plc

PRE-CLOSE UPDATE - INCREASED ACTIVITY IN 2017

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 year ending 31 December 2017.

Investment activity

-- Total investment commitments to date of GBP340 million, well ahead of our original guidance for 2017 of approximately GBP200 million

-- This demonstrates the strength of our pipeline of investment opportunities across our three regions: Asia Pacific, Europe and North America

   --     Investment commitments in 2017 so far (see Appendix I for full list): 

o New Grafton Correctional Centre (Australia): GBP79.3 million

o Buckthorn wind farm (North America): GBP47.6 million

o Rocksprings wind farm (North America): GBP62.9 million

o I-66 managed lanes (Transform 66 P3) project (North America): GBP118.0 million

o Two other renewable energy investment commitments in France and Australia totalling GBP32.0 million

   --     Melbourne Metro project anticipated to reach financial close before 31 December 2017 

-- John Laing consortium appointed preferred bidder on MBTA fare collection project in Massachusetts due to reach financial close in Q1 2018

Realisations

-- Total realisations announced in 2017 to date of GBP256 million, well ahead of our original guidance for 2017 of approximately GBP200 million

-- Other realisation processes underway, some of which have the potential to reach completion before year end

   --     Realisations in 2017 to date (see Appendix I for full list): 

o Sale of 30% holding in M6 road, Hungary (GBP22.7 million)

o Sale of 29.69% holding in A1 motorway, Poland (GBP120.4 million)

o Sale of 50% holding in Croydon & Lewisham street lighting project (GBP8.2 million)

o Sale of five UK PPP investments to John Laing Infrastructure Fund, including further 9% interest in Intercity Express Programme (IEP) (Phase 1), for total of GBP104.6 million, of which GBP1.9 million is deferred

   --     Aggregate prices achieved in line with portfolio valuation 

Investment portfolio

   --     Our investment portfolio as a whole is performing in line with expectations. 

IEP (Phase 1)

-- The first ten trains have now been accepted into passenger operations, achieving a key milestone for the project (Minimum Fleet Acceptance) with all trains scheduled to be in operation in late 2018.

Other investments

-- 15 projects have reached or are due to reach construction completion during 2017 and as a consequence move from our primary to our secondary investment portfolio.

Pension fund

-- As at 30 November 2017, using unaudited asset values the IAS19 pension deficit for the John Laing Pension Fund was estimated at GBP22 million based on an IAS 19 discount rate of 2.7% and long term RPI of 3.2%.

Other

-- In October 2017, the Group increased its committed corporate banking facilities from GBP400 million to GBP475 million.

Outlook

-- Net asset value at 31 December 2017 projected to be in the range of management expectations, assuming constant exchange rates and no change in the IAS19 pension deficit as at 30 November 2017

-- We expect the special dividend for 2017 to be based on realisations to date of GBP256 million, and on any other realisations which complete before 31 December 2017. In arriving at the appropriate percentage within the 5% - 10% pay-out range, the Board plans to consider all relevant factors, including funding needs for new investments

-- The pipeline of new investment opportunities remains strong in both PPP and renewable energy, especially in Australia, the US and Canada.

-- John Laing is currently part of nine shortlisted PPP bids due to reach financial close in 2018 or 2019, of which five are in North America and four in Europe

   --     The market for secondary infrastructure investments remains active 

Olivier Brousse, John Laing's Chief Executive Officer, said:

"In 2017 we have continued to scale up our business: both our investment commitments and our realisations are well ahead of the guidance we gave earlier in the year, while we are managing our cost base and our risk profile. We are confident that the quality of our local teams, together with the strength of our partnerships with global infrastructure players, will continue to feed our pipeline of opportunities in 2018. "

The Group's results for the year ending 31 December 2017 will be announced on 6 March 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    [phone] 
 Pin code     82354937# 
 

Further information

Analyst/investor enquiries:

 
 Olivier Brousse, Chief 
  Executive Officer           [phone] 
 Patrick O'D Bourke, Group 
  Finance Director            [phone] 
 

Media enquiries:

 
 James Isola, Maitland    [phone] 
 

www.laing.com

Appendix I: details of investment commitments and realisations

 
 Investment commitments          Region        PPP     RE     Total 
                                               GBPm    GBPm    GBPm 
--------------------------  ---------------  ------  ------  ------ 
 New Grafton Correctional 
  Centre                      Asia Pacific    79.3     ---    79.3 
--------------------------  ---------------  ------  ------  ------ 
 Hornsdale 3 wind farm        Asia Pacific     ---    10.0    10.0 
--------------------------  ---------------  ------  ------  ------ 
 Solar House                     Europe        ---    22.0    22.0 
--------------------------  ---------------  ------  ------  ------ 
 Buckthorn wind farm         North America     ---    47.6    47.6 
--------------------------  ---------------  ------  ------  ------ 
 Rocksprings wind farm       North America     ---    62.9    62.9 
--------------------------  ---------------  ------  ------  ------ 
 Transform 66 P3 managed 
  lanes                      North America    118.0    ---    118.0 
--------------------------  ---------------  ------  ------  ------ 
 
 Total                                        197.3   142.5   339.8 
-------------------------------------------  ------  ------  ------ 
 
 
 Realisations completed     Shareholding    Purchaser    Total 
                                                          GBPm 
-------------------------  -------------  ------------  ------ 
 M6 road, Hungary               30%        Third party   22.7 
-------------------------  -------------  ------------  ------ 
 A1 motorway, Poland           29.69%      Third party   120.4 
-------------------------  -------------  ------------  ------ 
 Croydon & Lewisham 
  street lighting               50%           JLIF         8.2 
-------------------------  -------------  ------------  ------ 
 Lambeth social housing         50% 
-------------------------  -------------  ------------  ------ 
 Coleshill Parkway              100% 
-------------------------  ------------- 
 Aylesbury Vale Parkway         50% 
-------------------------  ------------- 
 City Greenwich Lewisham 
  (DLR)                          5% 
-------------------------  ------------- 
 IEP (Phase 1)                   9%           JLIF       104.6 
-------------------------  -------------  ------------  ------ 
 Total                                                   255.9 
------------------------------------------------------  ------ 
 

JLIF = John Laing Infrastructure Fund

Appendix II: exchange rates at 31 December 2016, 30 June 2017 and 30 November 2017

 
 Exchange rate        31 December   30 June 2017   30 November 
  vs Sterling             2016                         2017 
-------------------  ------------  -------------  ------------ 
 Euro                   1.1708         1.1382         1.1344 
-------------------  ------------  -------------  ------------ 
 US dollar              1.2329         1.2986         1.3512 
-------------------  ------------  -------------  ------------ 
 Australian dollar      1.7094         1.6921         1.7841 
-------------------  ------------  -------------  ------------ 
 New Zealand 
  dollar                1.7754         1.7742         1.9735 
-------------------  ------------  -------------  ------------ 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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December 08, 2017 02:00 ET (07:00 GMT)