PRE-CLOSE UPDATE
John Laing Group plc ("John Laing" or "the Group"), the international originator, active investor and manager of infrastructure projects, today issues a pre-close update for the half-year ending 30 June 2016.
Highlights
· Total investment commitments to date of £76 million
· Full year guidance for investment commitments maintained, namely in line with £180.5 million achieved in 2015
· Investment realisations to date of £57.7 million
· Full year guidance maintained, namely proceeds of approximately £100 million, excluding £19.5 million transaction agreed in February 2016
· Sale of UK activities of Project Management Services announced on 21 June 2016
Investment Activity
· Strong levels of bidding activity in each of our core markets: Europe (including the UK), North America and Asia Pacific
· Investment commitments year to date:
o A6 PPP road project (Netherlands): £9 million
o Hornsdale Wind Farm phase 2 (Australia): £6 million
o Llynfi Wind Farm (UK): £24 million (contractual close)
o Intercity Express Programme ("IEP") Phase 1 (UK - increase in shareholding): £37 million
· PPP: Exclusive / shortlisted positions totalling approximately £80 million on opportunities with the potential to be committed in H2 2016
· Renewable energy: Exclusive / shortlisted positions totalling approximately £130 million on opportunities with the potential to be committed in H2 2016
Realisations
· As agreed in February 2016, two investments sold in first half to JLIF for combined proceeds of £19.5 million:
o British Transport Police (54.17% holding)
o Oldham Housing (95% holding)
· Disposal of investment in Dungavel Wind Farm (100% holding) to JLEN announced today for gross proceeds of £38.2 million
· Other realisations in progress
Investment Portfolio
· New Royal Adelaide Hospital: construction close to completion but contractor incurring delays in achieving commercial acceptance; the impact on John Laing's portfolio valuation is not expected to be material.
· Other major projects under construction progressing according to schedule: five trains are now undergoing testing in the UK for Phase 1 of IEP
· Operational projects performing in line with expectations
· Two investments have moved from the primary to the secondary investment portfolio in the year to date: Rammeldalsberget Wind Farm (Sweden) and New Albion Wind Farm (UK)
Pension Fund
· £18m cash contribution in first half
· Reduction in estimated IAS 19 discount rate: 3.25% at 31 May 2016 versus 3.75% at 31 December 2015
· Actuarial valuation at 31 March 2016 underway, but not expected to be concluded until late Q3 or Q4
Corporate Banking Facility
· Increased funding flexibility through increase in facility from £350 million to £400 million in June 2016
Outlook
· John Laing remains well positioned for future growth
· Strong pipeline of new investment opportunities in PPP, renewable energy and selected other closely-linked infrastructure sectors
· Market for disposal of secondary infrastructure investments remains strong