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Interim Results

John Laing net asset value up

24 August 2017 07:50

John Laing Group's net asset value per share rose to 284p in the six months to the end of June - up from 277p at the end of December and 263p a year ago.

Net asset value increased to £1,040.4m - up from £1,016.8m at the end of December and £963.7m a year ago.

Pre-tax profits fell to £36.6m - down from £108.3m a year ago.

The board has declared a dividend of 1.91p per share - up from 1.85p last time.

Chief executive Olivier Brousse said: "It has been an active year so far and I am pleased to report growth in NAV, after taking into account the reduction in value on our two Manchester Waste investments.

"We have made good progress on investment commitments and disposals and are on track to achieve our full year guidance on both fronts.

"As regards our portfolio, the New Royal Adelaide Hospital reached a key milestone with its commercial acceptance by the Government of South Australia in June, and our team was instrumental in getting to this stage.

"Looking to the second half and beyond, our teams continue to bring forward a steady stream of new investments, while the asset management teams are actively managing projects through the construction phase.

"We continue to see strong opportunities for attractive growth in our business by scaling up our model in our three core regions: North America, Asia Pacific and Europe."

Separately, the group also announced that agreement had been reached on the recycling and waste management private finance initiative contract relating to Manchester Waste VL Co (VL Co), which is jointly owned by John Laing (50%) and Viridor (50%).

An update said: "Manchester Waste TPS Co (TPS Co), which is jointly owned by John Laing, Viridor and Inovyn, is contractually linked to VL Co; the thermal power station owned by TPS Co burns refuse-derived fuel from VL Co's waste processing facilities.

"Discussions have been continuing with the GMWDA since 2 May 2017 and have now culminated in legally-binding heads of terms between the GMWDA, VL Co and its shareholders, and the operator, Viridor Waste, which were entered into on 23 August.

"The heads of terms envisage a number of transactions which are intended to complete by the end of September 2017 and which would result in termination of the PFI contract, as well as acquisition of VLCo, by the GMWDA.

"As part of the same set of transactions, it is also intended that certain changes will be made to the long term contractual arrangements between TPS Co (in which John Laing has a 37.4% interest) and the GMWDA.

"TPS Co would continue to be held by its three existing shareholders.

"The transactions are subject to strict confidentiality arrangements and a number of conditions and consents.

"The estimated financial effect of the transactions on John Laing in the investment portfolio valuation at 30 June 2017, taking into account certain compensation receivable in respect of VLCo, is a reduction in the valuation of the two Manchester Waste investments by £25.5 million from their valuation at 31 December 2016.

"In arriving at its decision to enter into the heads of terms, the Company's view was that the alternative could have been long and costly legal proceedings with an uncertain outcome for the valuation of its two investments.

"As previously stated, taken together, the fair value of the two investments represented 8% of John Laing's investment portfolio of £1,176 million at 31 December 2016.

"Like all John Laing's investments, the two investments are made on a non-recourse basis."

Story provided by StockMarketWire.com

Related Company: JLG

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