John Laing Infrastructure Share Discussion Threads

[dual313] 12/2/2015 07:23

Could someome post a link to the new thread once its up

[daveofdevon] 12/2/2015 07:20

Time for a new thread I think, but in the meantime the price is set at 195p with allotment in full upto £5,000 and 75% of any extra applied for over that

[wirralowl] 11/2/2015 09:47

jonwig, it was on my broker's website, idealing.

They've issued a further update this morning, advising the offer is now closed, please see below:

The John Laing Group plc Share Offer closed for acceptances on Tuesday 10th February at 11.59pm. The Allocation Announcement and Offer Price are due on Thursday 12th February at 7.00am. Conditional dealings in John Laing plc shares are expected to commence on Thursday 12th February at 8.00am.

Trading Symbol: JLG

[jonwig] 10/2/2015 17:14

Where did you find that, Wirral? I can't find it anywhere!

One broker I spoke to said there was plenty of interest. That was a week ago. Of course, institutional opinion will dictate the price.

I've applied today, but for a lot fewer than I originally planned. There's a possible problem with the two Manchester Waste projects which I've been looking at, and I'm not sure they've been provisioned enough.

[wirralowl] 10/2/2015 16:05

I note the price range guidance has been narrowed and moved to the lower end, to 195 pence to 210 pence (giving a Market cap of: £715.5m to £760.5m). I've decided to apply for some.

[wirralowl] 30/1/2015 16:41

Many thanks for your thoughts, jonwig, as always, I appreciate you sharing your knowledge. It would seem from your comments above re: NAV its even more keenly priced than I was thinking, especially with the likely future uplift.

Will have a good study of the prospectus over the weekend, but as I've done well out of both JLIF and JLEN too, I'm leaning towards applying for some.

[jonwig] 30/1/2015 16:14

Wirral - NAV £630m at 30 Sept 2014, but increased since according to directors, and add £130m capital raise (new money) should give you about £760m.
That's above the min price MCap, below the max.

Yield is low because most projects are early-stage (ie. under construction). Then if they're sold on they command an uplift with special dividends of 5% to 10% of proceeds, as you say.

Look at the graph on p67 of the prospectus (printed, p60) showing NAV uplift on completion of construction phase. If it's roughly to scale, that's a doubling.

More-or-less debt free looks good. The fact that JLIF and JLEN have been successes so far is down to management by JL.

PE is messy, as stated earnings include revaluation uplifts, not cash earnings alone.

[skinny] 30/1/2015 16:03

Some info , prospectus etc.

[wirralowl] 30/1/2015 15:52

Thanks jonwig, would appreciate that..

Just trying to get a handle on the value of the IPO here. By my quick calcs, on a NAV basis it looks expensive, with the mid point of the price range implying a premium rating with a mkt cap of £790.5m v stated NAV of £630m. However on an earnings basis it looks cheap, with a PE in the region of 6 or 7?

Dividend of £20m suggests a low yield of around 2.5%, but they intend to operate a progressive dividend policy and will pay out additional special dividends 5-10% of gross proceeds from the sale of investments (presumably some of these will go to JLIF and JLEN ?!).

Would be interested in anyone else's thoughts...

[jonwig] 29/1/2015 07:20

John Laing Group, more detail on offer.
Includes:

Expected Offer price range set at 195 pence to 245 pence per Share (the "Price Range"), implying a market capitalisation on Admission of between £715.5 million and £865.5 million



So well short of the £1bn press suggestions. And the top end looks rather high to me.

Will start a thread when I know the ticker, though JL. looks obvious.

[jonwig] 24/1/2015 07:42

A couple of days ago, BBY issued a revaluation of its investment portfolio to £1,300m against a directors' valuation of £766m in May 2014, and a willingness of JLIF to pay £1,000m in December.

If JLIF bides its time, BBY could still be forced into partial or full sale at a discount.

[skinny] 22/1/2015 07:52

JLIF, the FTSE 250 listed infrastructure investment company, is delighted to announce it completed yesterday the acquisition of the remaining 20% stake in the Kirklees Social Housing project, following the fund's initial acquisition in December 2014. This takes JLIF's total shareholding in the asset to 100%.

Andrew Charlesworth from John Laing Capital Management ("JLCM"), Investment Adviser to JLIF, said:

"Today's announcement further demonstrates JLIF's focus on creating value for investors, through opportunities in acquiring additional stakes in projects following the initial investment. As we noted back in December, this asset is low risk and fully operational, in line with our investment criteria."

[skinny] 19/1/2015 14:07

I can see his point about a name change!

[jonwig] 19/1/2015 13:53

Comment on JL:

[jonwig] 19/1/2015 12:43

Equity of JL at 30 June 2014 was £627m. Add £130m of new money and that could be £750m (netted off costs) post-IPO.

Suggestion in Telegraph that it could be floated at £1bn looks a bit high, given that it has Investments at fair value through profit or loss of £740m though virtually no debt or intangibles.

I'm trying to value it as though it were a straight infrastructure fund, when a 20% premium might be applied, but since it has projects under construction there's a provision needed for cost overruns, and that pension deficit.
When JLIF and JLEN buy the assets from JL, they are scrubbed clean of these factors.

I see that Henderson will be selling a proportion of its holding, so there will be more shares on offer, and we will be able to see what profit they are making!

[jonwig] 19/1/2015 11:06

As a sort of rule of thumb, a 100bps rise in long gilt yields could reduce a pension deficit by about 10% of the fund (via the discounting), so we'd need to know the size of the pension fund.
It's probably in the annual report, which they've published*:



And of course, if interest rates are to stay low for the foreseeable future, the problem won't vanish automatically that way.

* EDIT: £765m at 31 March 2013.

[skinny] 19/1/2015 10:55

From the information leaflet.

Net Assets are lower than the Portfolio Book Value because John Laing has other assets and certain financial liabilities, principally a pension fund deficit. At 30 September 2014, the pension deficit stood at £190m.*
* Upon completion of the IPO, we will transfer assets with an aggregate value of £100m to the Trustee of the John Laing Pension Fund in order to reduce the pension deficit as well as future cash contributions.

[jonwig] 19/1/2015 07:12

JL, Intention to float:



PIs can apply through an intermediaries offer, but only £130m gross being raised, so might be difficult to get a decent holding.

The RNS mentions a pension deficit. Tends to be a red flag for me, but need more details.

[jonwig] 18/1/2015 08:08

John Laing itself, currently owned by a group of Henderson funds:

Infrastructure investment group John Laing is expected to announce on Monday that it plans to return to the public markets in a flotation that could see it valued at up to £1bn.



Nearest UK-listed comparators would be BBY and CLLN, I think. The former a basket case, the latter well-run.

[skinny] 22/12/2014 07:35

JLIF, the FTSE 250 listed infrastructure investment company, is pleased to announce that it has completed the acquisition of two further assets from John Laing. These are:

· A 50% stake in the Surrey Street Lighting project; and
· An 80% stake in the Kirklees Social Housing project.

The combined consideration for the two assets is £21.6 million. These most recent acquisitions will take the number of stakes in street lighting assets owned by JLIF to eight and the number of stakes owned in regeneration and social housing assets also to eight. Overall, JLIF's total number of assets will increase to 56 with the total value of assets acquired from John Laing and the John Laing Pension Trust in 2014 totalling approximately £61 million[1].

David Marshall from John Laing Capital Management ("JLCM"), Investment Adviser to JLIF, said:

"We are very pleased to announce the completion of these two acquisitions from the John Laing portfolio. Both assets have very similar characteristics to the rest of JLIF's existing portfolio being low risk, availability based and operational."

[jonwig] 06/12/2014 11:29

BBY either brave or foolish to reject the offer:



It seems likely that in the new year BBY will value its infra division at double the figure of four months ago.
No way will JLIF chase it, given that they will rely on shareholders to provide the funding.

[jonwig] 05/12/2014 16:51

Fast FT, just now:

John Laing Infrastructure Fund is clearly a bit miffed that Balfour Beatty has rebuffed a £1bn bid for some of its assets.

Balfour has been buffeted by problems in recent years, and investors had reacted positively to JLIF tabling a £1bn offer for its investment portfolio. Yet the contractor decided to shun the bid, arguing that it undervalued the PPP assets.

JLIF countered with a statement on Friday afternoon, saying:

Without access to the project data, any discussions with Balfour Beatty or further information, it is difficult to understand the basis on which Balfour Beatty is anticipating a substantial increase in valuation. The Balfour Beatty announcement this morning appeared to use the price of the recent sale of one asset for £61.5 million as evidence to support a substantial uplift in valuation for the entire Portfolio. JLIF believes this is overly optimistic, considering the evidence from the many transactions in which JLIF has been involved over the intervening months.

The FTSE 250 investor in roads, schools and hospitals said it is now awaiting "with interest" Balfour Beatty's revised valuation of its investment portfolio.

[fardistanthills] 05/12/2014 14:44

Wow, I got in yesterday at 120.46, not like me to get lucky like that - usually buy on a spike pointing the other way! I must admit I thought it a 'cheeky' bid - my worry was they would up it. But I couldn't really see BBY agreeing to anything other than an outlandish offer they absolutley couldn't refuse, given they have a new CEO coming in Jan 1st and a KMPG report on their construction division problems due withing weeks. And I couln't really see JLIF wanting to risk their reputation for sensible deals - difficult thereafter to tap the market for funding. DoD - many thanks for the list - there are always far too many options, but I do enjoy looking at new ideas.

[jonwig] 05/12/2014 07:32

So BBY doesn't want to play. Perhaps as well - the plan was a bit grandiose.

[jonwig] 02/12/2014 07:20

You can do some interesting sums on what happens if they pick up the BBY portfolio for different amounts.

Suggested value is £1.1bn.
If they can get away with £1bn, they market will be keener to support: say 112p per new share: 895m new shares.
If they need to pay £1.1bn, market might be willing to pay only 108p per new share: 1020m new shares.
That's quite some leverage.
At some price the market might say "No support". So they have to play hardball.