Though chancellor Phillip Hammond has abolished the use of private finance initiative and PF2 contracts to fund future infrastructure projects, opportunities are still opening up simply through sheer necessity and the roll-out of new technologies. So, despite stalled infrastructure investment in some regions, John Laing (JLG) more than doubled operating profits to £311m, as it widens its addressable markets both geographically and through the competencies it offers.
The change in geographic focus means the group has been reducing its exposure to European investments as its projects have matured in recent years. As a result, the UK now accounts for just 24 per cent of the portfolio, down from 58 per cent in 2014. Correspondingly, investments in North America and the Asia-Pacific region have picked up substantially.
With the rise in 'green' technologies, wind and solar farms grew to 42 per cent of the portfolio, from 31 per cent in 2017, while the project pipeline in the renewable energy sector increased by around a third in 2018 to £830m. Overall, the group’s investment pipeline currently stands at £2.37bn, of which 65 per cent is still public-private partnerships – somewhat at odds with the budget statement – and the group is still bidding on UK projects such as the Silvertown Tunnel project for a river crossing near London City Airport.
Peel Hunt increased its forecast net asset value (NAV) per share following the results announcement and now expects 361p for 2019, from 323p in 2018.
| JOHN LAING (JLG) | ||||
| ORD PRICE: | 389p | MARKET VALUE: | £1.91bn | |
| TOUCH: | 388.8-389.2p | 12-MONTH HIGH: | 391p | LOW: 225p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 323p | NET DEBT: | 4% | |
| Year to 31 Dec | Income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014* | 207 | 120 | 37.2 | nil |
| 2015* | 161 | 98.0 | 25.9 | 4.44 |
| 2016* | 261 | 192 | 48.1 | 5.14 |
| 2017 (restated) | 198 | 126 | 31.9 | 8.92 |
| 2018 | 397 | 297 | 63.1 | 9.50 |
| % change | +101 | +135 | +98 | +7 |
| Ex-div: | 18 Apr | |||
| Payment: | 17 May | |||
| * NB: per share figures adjusted for March 2018 1-for-3 rights issue. | ||||
