John Laing hails premium realisation values, investment commitments 'strong'

(Sharecast News) - John Laing Group expressed confidence in the outlook as governments around the world prepared to rebuild their economies stronger and better after the pandemic and reiterated its target for full-year underlying net asset value growth.
"I am particularly pleased with the momentum in investment activity achieved in the period, with investment commitments to date ahead of plan. The secondary market continues to be buoyant, and during the period we delivered a number of strong realisation results," chief executive officer Ben Loomes said.

"Importantly, each realisation was achieved at a premium to book value."

In its first quarter trading update, the global infrastructure investor said its Net Asset Value growth was restrained by a stronger pound, but still grew a little versus where it stood at year end 2020.

Net asset value is calculated by subtracting a firm's operating expenses from the estimated underlying value of its assets.

Investors were also continuing to put money to work, with investment commitments for 2021 already ahead of John Laing's full-year target of at least £100m, at roughly £107m.

A "good" investment pipeline was also awaiting, with the company having already been named a preferred and short-listed bidder on 'greenfield' Public Private Partnership projects for roadways in Australia, the Netherlands and the US.

Over the three months to 31 March it completed three realisations for approximately £110m, including two renewable energy projects.

It also completed the sale of its Australian wind farm portfolio.

Those realisations were in line with the firm's stated strategy of reducing its exposure to renewable energy generation and hence its portfolio's exposure to volatile merchant power prices.

Since the start of 2020, John Laing had fully divested from 12 renewable energy assets, thus de-risking and repositioning its portfolio.

Over that same time frame, the proportion of renewable energy assets in its portfolio had fallen from 34% to 21%.

Strong liquidity and balance sheet

The company described its liquidity position as "strong" with £69m net cash on hand at quarter's end.

That was on top of £650m in committed revolving credit facilities.

"Our permanent and flexible balance sheet capital is a key competitive strength, and enables the Group to actively manage its portfolio, realising assets where this maximises value, whilst providing the flexibility to retain assets which contribute attractive returns over the longer term," the investor said.

Thanks to the "strong" realisations to date, total proceeds eligible to be included in the 2021 special dividend calculation amounted to approximately £460m.