Trading Statement

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

25 February 2016

John Laing Infrastructure Fund Limited

Trading Update and Dividend

John Laing Infrastructure Fund Limited (the "Company" or "JLIF") today issues a Trading Update in respect of the period 1 January 2015 to date, including key information regarding the unaudited accounts for the 12 month period to 31 December 2015.

Key Highlights

§ Underlying portfolio growth of 8.34% to £867.8 million including new investments

§ Unaudited Net Asset Value ("NAV") as at 31 December 2015 of 108.4 pence per share representing a NAV total return over the year of 5.35% including the two dividends paid in May and October

§ The Board has declared a dividend of 3.41 pence per share, payable in May 2016

§ Acquisitions totalling approximately £99.4 million from 1 January 2015 to date

Portfolio Valuation

The portfolio value increased by £66.8 million to £867.8 million at 31 December 2015 from a rebased valuation as at 31 December 2014 of £801.0 million, which included investments of £14.4 million during the year. JLIF has continued to focus on delivering value through active asset management, generating underlying growth of 8.34%, ahead of expected growth of 8.12% from the adjusted discount rate unwind[1]. 

The portfolio continued to perform well throughout the year with cash distributions of £73.3 million being £4.3m ahead of project forecasts.

Below is a breakdown of the change to the unaudited NAV per share calculated under International Financial Reporting Standards ("IFRS") over the year from 31 December 2014 to 31 December 2015.

Key sensitivities

The portfolio sensitivity to movements in discount rate is set out below:

Of the 57 projects held at 31 December 2015, lifecycle risk is retained by the project company in full on 24 of the projects. The portfolio sensitivity to lifecycle costs is set out below:

The portfolio as at 31 December 2015 has a correlation to inflation of 0.5 and its sensitivity is set out below:

Cash, gearing and hedging policy

As at 31 December 2015 the JLIF Group had cash available of £33.8 million and an amount of £17.0 million drawn on its revolving credit facility. Since the year end, the Company repaid the £17.0 million drawn on its revolving credit facility and completed the purchase of an indirect 40% interest in the Barcelona Line 9 Section II metro project for a Euro equivalent of approximately £85 million. This acquisition was funded through JLIF's existing cash resources and its revolving credit facility at an average EUR/GBP exchange rate of 1.32, resulting in JLIF currently having £84.5 million drawn on its revolving credit facility. 

Strategically JLIF continues not to hedge the capital values of long term assets held overseas in Canada and Continental Europe, however it continues to manage the short term cash flows arising from these projects by hedging them appropriately.

Dividend

The Company announces a dividend of 3.41 pence per share in respect of the second half of 2015, an increase of 1% on the previous dividend of 3.375 pence per share. The "ex-dividend" date is 3 March 2016, and the dividend will be paid in May 2016.

Portfolio today

Including the recent Barcelona metro acquisition, the portfolio currently comprises investments in 58 projects and, using the valuation as at 31 December 2015 and the Barcelona metro acquisition at cost, has a range of discount rates from 7.19% to 10.00%.

The portfolio remains today 100% operational and availability-based with a weighted average remaining concession life of 19.2 years. The key portfolio breakdowns are as follows:

Rolling forward the unaudited NAV as at 31 December 2015 to 23 February 2016 results in a NAV per share of 110.3 pence, which includes a provision for the acquisition fee payable to the Investment Adviser, John Laing Capital Management, on the Barcelona metro asset, and recent movements in exchange rates. It does not adjust for the 3.41 pence per share dividend which goes "ex-dividend" on 3 March 2016. 

Outlook

The secondary PPP market experienced something of an adjustment in geographical focus in 2015. The Company has previously recognised the slowdown in UK deal flow and the increase in activity in Continental Europe, as well as the establishment of pipelines in North America and Asia Pacific, and this became increasingly evident in 2015. There were only a handful of projects in the UK market that changed ownership through auction processes during 2015. The main source of opportunities predominantly came from southern and western Europe, with northern and eastern Europe also showing signs of developing short and medium term pipelines.

JLIF expects Spain, France and, to a lesser degree, Portugal to be active secondary markets in the short to medium term, followed by countries such as Germany and Norway as they boost their infrastructure asset base with large primary pipelines. JLIF continues to nurture existing and new relationships with vendors active in these markets.

Australia and North America continued to show development over the past year, and the Company anticipates these will remain important sources of opportunities for future growth going forward. JLIF has developed existing and new relationships in these regions to support its acquisition activity and continues to review assets as and when they come to market. Canadian provinces, namely Ontario and British Columbia, have large infrastructure programmes and relatively stable governments, that of the latter's having another two and a half years left until re-election. Australia continues to develop its infrastructure pipeline with several new primary transactions reaching financial close in 2015. However, the country is experiencing the effect of some political change which, although not impacting its long term attractiveness as a market for investment, does mean the pipeline for projects may not flow as smoothly as before whilst the new political figures settle into place.

The USA continues to develop its PPP pipeline and 2015 saw the procurement of greenfield projects in several states. These projects are often large scale with longer construction periods, given most are in the transport sector. JLIF remains confident of a pipeline of secondary projects originating from the USA over the medium term and has done substantial amounts of development work to ensure it is well placed when the market for investing equity becomes more fluid. The fruits of this work are already starting to be seen with JLIF being invited to bid for two secondary assets in the US earlier this year.

The two first offer agreements ("FOAs") with John Laing Group plc result in a pipeline of over £500m of projects which fit JLIF's investment criteria over the next five years, although significant acquisitions under the FOAs are not expected in the near term.

JLIF has a strong pipeline and continues to carefully select and target acquisition opportunities from vendors in the UK, the USA and the developed European market. The Company is in advanced discussions on acquisitions totalling approximately £150 million of assets that fit its investment policy. A substantial proportion of these are PPP projects across Western Europe (predominantly availability-based), and the remainder comprise UK availability-based social infrastructure PPP projects.

Given the significant opportunities available to the Company, at the forthcoming AGM in May 2016, the Board intends to seek shareholder approval which, if obtained, would increase the Company's gearing limit in its articles of association and investment policy from 25% to 35% of JLIF's Total Assets.

Base Erosion and Profit Shifting

JLIF values its Portfolio based on current enacted corporation tax rates and tax rules. Changes to these rates or rules in the future could impact the valuation of the Portfolio.

On 5 October 2015, the OECD published its final report on BEPS ("Base Erosion Profit Shifting"). The report recommends member states adopt a 'fixed ratio rule', which limits net deductions of interest to a percentage of EBITDA. Infrastructure investments are particularly at risk from this, by virtue of their high gearing. As with other broad based regulatory initiatives, it is likely much will change before the eventual implementation of the rules, which is expected in 2018. UK HMRC has and continues to consult with UK companies to assess the impact of the recommendations, the most recent consultation taking place in January 2016. The most important of the BEPS recommendations from an infrastructure investments perspective relates to restrictions on the deductibility of interest costs. Whilst it is still unknown exactly how the UK will eventually implement the BEPS recommendations we are encouraged by mention of possible exemptions, such as exclusion from the regime for senior debt related to public benefit projects and the potential to "grandfather" existing arrangements in certain, albeit limited, circumstances. Being an investor in PPP infrastructure projects such as hospitals, schools and social housing projects, these would potentially mitigate against any significant negative impact felt by JLIF from the implementation of the new regime. JLIF continues to monitor and participate in the consultation processes with the UK HMRC as and when they occur and to assess the impact of any proposed new legislation on the Company.

Compliance with Model Code

In accordance with Listing Rule 15.5.1(4), the Company confirms that it is satisfied that (a) all inside information which the Company and its Directors may have in the period leading up to the announcement of the full year results for the 12 months ended 31 December 2015 which will be released on 16 March 2016, has been notified to a Regulated Information Service, and (b) all inside information has been notified to a Regulated Information Service.

For further information, please contact:

John Laing Infrastructure Fund 020 7901 3326

Andrew Charlesworth

Finsbury 020 7251 3801

Faeth Birch

Philip Walters

Or further information can be found on the Company's website at www.jlif.com. 

This Announcement contains (or may contain) certain "forward-looking statements" with respect to certain of the Company's plans and its current goals or expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. Examples of such forward-looking statements include, among others, statements regarding the Company's business strategy, estimates of expenditure, future plans, present or future events, or objectives for future operations that involve risks and uncertainties and are not historic fact. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward-looking statement. No assurance can be given that such forward-looking statements results will be achieved. Factors that might cause forward-looking statements to differ materially from actual results include, among other things, the following: global economic conditions, economic conditions in the UK and other jurisdictions in which the Company operates or invests, the effects of continued volatility in credit markets, exchange rate fluctuations and legislative, fiscal and regulatory developments. The forward-looking statements contained in this Announcement speak only as of the date of this Announcement and the Company assumes no obligation to, and does not intend to update or revise publicly any of them whether as a result of new information, future events or otherwise, except to the extent required by the Financial Conduct Authority, the London Stock Exchange or by applicable law, the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.