TOP NEWS: John Laing Hikes Payout On Asset Sales Amid Rights Issue (ALLISS)

8th Mar 2018 08:40

LONDON (Alliance News) - John Laing Group PLC hiked its dividend Thursday as sale realisations were ahead of expectations and net asset value rose strongly, as it announced a GBP210.2 million rights issue to take advantage of its investment pipeline.

In 2017, net asset value per share grew 11% to 306 pence from 277p the year prior. This was after net assets advanced 9.8% to GBP1.12 billion from GBP1.02 billion the year before.

During the year, John Laing - an infrastructure investment firm - committed to GBP382.9 million in new investments. This was more than double the GBP181.9 million in new investments at the end of 2016. During 2017, John Laing also sold eight investments for GBP289.0 million up from GBP146.6 million the year prior. This was, the company explained, "well ahead" of its original guidance.

FTSE 250-listed John Laing proposed a 8.70p per share final dividend, made up of a 3.82p base dividend and 4.88p special dividend. This was in line with its policy of paying a base dividend growing at least in line with inflation as well as a special dividend of around 5% to 10% of the gross proceeds from its investment sales.

For the full year, the dividend rose 30% to 10.61p from 8.15p the year prior.

"2017 was a strong year for John Laing," Chief Executive Officer Olivier Brousse said. "We made record investment commitments, driven in large part by our success in our core Asia Pacific and North America markets."

"We continued to grow our pipeline," Brousse added, "95% of which is now made up of opportunities outside the UK, and to scale up our business. We are exclusively focused on investment in greenfield projects that meet our strict criteria, and our strategy remains to generate value for shareholders through growth in NAV and dividends."

In a separate announcement Thursday, John Laing also opened a GBP210.2 million one-for-three rights issue. Funds from the issue will be used to " take advantage of a larger proportion of its growing pipeline of opportunities", the company explained.

Its pipeline stood at GBP2.15 billion at the end of 2017, spread across 84 projects. Of this, GBP1.59 billion was in public private partnerships and a further GBP565 million in renewable energy projects.

The rights issue marks the end of John Laing's self-funding operating model which has been in place since 2007.

"The board believes strongly in the discipline the self-funding model brings," the company explained in a statement. "While the group assesses each investment on a hold-to-maturity basis, it also has to be confident that any investment it makes can ultimately be realised."

Investments, however, have been occurring at a faster pace than realisations due to the construction periods required for its underlying projects. As a result, John Laing will use the rights issue to take advantage of more investment opportunities than would be available to it under the self-funding model.

"Following the rights issue," John Laing emphasised, "the group plans to continue to operate its self-funding model. We plan to retain our disciplined approach as to which investment opportunities we invest in."

The issue will see GBP122.3 million shares issued at 177p per share, a 29% discount to the closing price on Wednesday. Shares in John Laing were 5.2% lower at 260.00 pence on Thursday.

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