John Laing Infrastructure's promise of a stable and growing income stream, which would rise with inflation, proved enticing enough to help it raise £270m last November - making it 2010's second largest fund launch. Only three months on and the company has returned to shareholders for an additional £26m, which has been ploughed straight into four more income-producing infrastructure assets.
The group came by these investments thanks to its preferential relationship with John Laing Group, which also provided the original portfolio. The fund has first call on certain Laing-owned infrastructure assets when they come up for sale. These are sold as mature income-producing assets with most of the income linked to inflation. So, for every 1 per cent rise in the retail price index (RPI), the fund sees a 0.6 per cent rise in income.
Higher inflation rates also have the potential to boost net asset value (NAV), but that's only significant if the fund increases its long-term inflation assumption from 2.75 per cent, which is already above the Bank of England's long-term 2.5 per cent forecast. However, rising government bond yields have a negative impact on valuations and this could prove a noteworthy headwind if interest rates start rising this year.
| JOHN LAING INFRASTRUCTURE FUND (JLIF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 105p | MARKET VALUE: | £ 312m | |
| TOUCH: | 104-105 | 12M HIGH | 109p | LOW: 100p |
| DIVIDEND YIELD: | 0.5% | |||
| PREMIUM TO NAV: | 4% | NET DEBT: | 54% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010* | 101 | 4.17 | 1.42 | 0.50 |
| % change | - | - | - | - |
Ex-div: 02 Mar Payment: 07 Apr *For the period since flotation on 29 November 2010 | ||||
