John Laing reports steep drop in profit upped its net asset value

Rebecca Smith
John Laing works on infrastructure projects like roads and rails
John Laing works on infrastructure projects like roads and rails (Source: Getty)

Infrastructure investment firm John Laing announced this morning it had bolstered its net asset value by 2.3 per cent compared to the same time last year in its half-year results, despite foreign exchange effects and a £25m hit on its Greater Manchester Waste projects

The figures

For the six months ended 30 June, net assets rose to £1.04bn, an increase of 2.3 per cent since 31 December 2016. The firm reported £111.3m in investment commitments, compared to £76m for the six months ended 30 June last year.

However, pre-tax profit did drop 66 per cent to £36.6m from £108.3m year-on-year, with earnings per share of 10.2p compared to 29.1p last year. John Laing said this was primarily due to the value reduction on the Manchester Waste investments, as well as the strongly positive foreign exchange movement of £49.4m for the same period last year, off the back of the Brexit referendum.

The firm announced an interim dividend of 1.91p per share payable in October 2017, compared to 1.85p this time last year.

Shares dipped 1.20 per cent in early trading to 304.7p.

Why it's interesting

The company said it had reached an agreement on the investments with Greater Manchester Waste Disposal Authority, which resulted in a value reduction of £25.5m compared to their valuation at 31 December last year.

John Laing said it had reached the decision after taking the view "that the alternative could have been long and costly legal proceedings with an uncertain outcome for the valuation of its two investments". The fair value of the two investments represented eight per cent of John Laing's investment portfolio at 31 December 2016.

The firm also said "good progress" had been made on both investment commitments and disposals, and John Laing remains on track to achieve its full-year guidance on these.

What the company said:

Olivier Brousse, John Laing’s chief executive, said:

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.

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