John Laing Infrastructure Fund Regulatory News (JLIF)

JLIF

INTERIM MANAGEMENT STATEMENT

JLIF, the international PPP infrastructure investment company, today announces its Interim Management Statement (IMS) for the period 1 July 2013 to 11 November 2013[1].

HIGHLIGHTS

Quarterly results

· The Portfolio showed good underlying growth of 5.8% for the nine month period ended 30 September, equivalent to 7.8% on an annualised basis

· Portfolio Value increased by £164.5 million to £701.9 million over the same period predominantly through acquisitions 

· The Net Asset Value[2] (NAV) was £573.0 million[3] as at 30 September 2013 (after the dividend of £17.1 million allocated to be paid on 18 October 2013)

· NAV per share was 104.6 pence ex-div (107.6 pence cum-div) as at 30 September 2013, due to the dividend of 3.125 pence per share and underlying growth over the period

Key events

· Raised £277.3m of new equity during the period

· Completed £157.1 million of acquisitions since 1 July 2013

· Agreed a further £78.5 million of acquisitions

· Paid a dividend of 3.125 pence per share in October 2013

· Scrip dividend alternative taken up by 15.2% of shareholders

Paul Lester CBE, Chairman of JLIF, said:

 "The Directors are pleased with the continued strong performance of the Company. Of particular note was the acquisition of Investors in the Community's portfolio of 11 assets for £123 million, the agreement to acquire £103 million of assets from John Laing and the raising of £277.3 million of capital. JLIF is actively seeking suitable new opportunities in the UK and overseas."

Andrew Charlesworth, Director of John Laing Capital Management Limited (JLCM), Investment Adviser to JLIF, said:

 "JLIF's growth on the rebased portfolio value this year demonstrates the value JLIF offers to its investors. We have identified opportunities relating to economies of scale and driven further efficiencies in the Portfolio through value enhancements. We attribute this performance to our detailed knowledge of the assets, infrastructure and our relationship approach to transactions and holding investments."

Capital Raising

In early July 2013 30,567,685 new Ordinary Shares were issued at a price of 114.5 pence per share via a shareholder tap issue. JLIF received gross proceeds of approximately £35 million of new equity which was used to repay debt drawn to fund the acquisition of a 30% stake in Peterborough Hospital in April 2013.

In October 2013, JLIF announced the successful placing of 218,291,103 new Ordinary Shares, at an issue price of 111.0 pence per share via an Open Offer, Offer for Subscription and Placing. This resulted in gross issue proceeds of £242.3 million, representing JLIF's single largest raise of new equity since launch. The issue was oversubscribed at the top end of the price range and the net issue proceeds will be used to repay debt drawn to fund acquisitions and to acquire a portfolio of three new projects from the John Laing Group.

Acquisitions

On 23 August 2013, JLIF acquired a portfolio of 11 yielding, operational UK PPP assets from Investors in the Community LP (the "IIC Portfolio") for approximately £123 million. The portfolio comprises high quality, robust social infrastructure projects in the education, healthcare, social housing and street lighting sectors. This acquisition represented the largest acquisition since launch.

On 28 August 2013, JLIF completed the acquisition of an additional 5% stake in the LUL Connect (CityLink) from co-shareholder, Motorola Solutions UK Limited. This increases JLIF's shareholding in the asset to 33.5%.

On 6 September 2013, JLIF signed an agreement with John Laing and a separate agreement with John Laing Pension Trust to acquire three assets: Barnsley BSF, North Staffordshire Hospital and Kelowna & Vernon Hospitals (Canada) for £102.9 million. The acquisition of Barnsley BSF completed on 14 October 2013 increasing the number of assets in the portfolio to 50.

Portfolio Performance

The Portfolio continues to perform well, demonstrating strong underlying growth of 5.8% for the nine months to 30 September to a value of £701.9 million, a strong increase in absolute terms of £164.5 million since 31 December 2012. Growth has been driven by acquisitions in the year of £161.2 million which has been offset by negative exchange rate movements of £1.9 million, as well as distributions received from the assets of £33.5 million. While the Euro strengthened against Sterling, this was outweighed by a weakening of the Canadian Dollar.

Dividends

On the 28 August 2013 JLIF announced a dividend of 3.125 pence per share for the period 1 January 2013 to30 June 2013. JLIF's shares started trading ex-dividend on 4 September 2013. On the 18 October 2013, a total dividend of £17.1 million was paid, of which 15.2% was taken up as scrip dividend alternative resulting in the issue of 2,275,702 new shares.

Hedging

JLIF continues its policy of not hedging balance sheet values of its portfolio. JLIF has hedged its Euro cash flows for 2013. JLIF did not hedge its Canadian income in 2013 in anticipation of acquiring a Canadian asset. The remaining cash required for the Canadian asset was swapped upon signing the SPA to ensure a fixed price for JLIF.

Gearing

JLIF has utilised its £150 million revolving credit facility on several occasions throughout 2013 for acquisitions. As reported in JLIF's interim accounts, the amount drawn as at 30 June 2013 was £22.7 million, which was drawn in relation to the acquisition of Peterborough Hospital. This was repaid fully with the proceeds of the shareholder tap issue in early July, before being re-drawn in August to fund the acquisition of the IIC Portfolio and the additional stake in the LUL Connect (CityLink) project. The balance was again repaid to zero in early October with the net issue proceeds from the capital raise.

The ability to utilise the facility in an efficient manner places JLIF in a strong position when bidding for new assets with timetable and deliverability constraints often being of vital importance to vendors. It also allows JLIF to be more efficient with shareholder funds by using the facility which can quickly be repaid using capital raised in the market rather than holding large amounts of unused shareholder capital.

Outlook

2013 has been an active year in the secondary PPP market with JLIF selectively identifying investments opportunities in over 50 PPP projects, both in the UK and overseas including Canada, Belgium, Hungary and Australia.

JLIF anticipates that the rest of 2013 and next year will continue in a similar vein. While the recycling of equity by primary market participants will continue to provide the greatest source of investment opportunities, a second source of increasing significance is infrastructure funds with finite lives reaching maturity. We anticipate several portfolios coming to market over the next few years. Indeed, JLIF's recent acquisition of the IIC Portfolio typifies this developing trend.

Note:

This IMS aims to give an update of material events and transactions that have taken place during the period from 1 July 2013 to 11 November 2013 and their impact on the financial position of the Investment group. This update reflects the Investment Adviser's and the Board's current views. They are subject to a number of risks and uncertainties and could change. Factors which could cause or contribute to such differences include, inter alia, general economic and market conditions and specific factors affecting the financial prospects or performance of individual investments within the portfolio of JLIF.

This IMS contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and JLIF's actions to differ materially from those expressed or implied in the forward-looking statements.

This IMS has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the FCA's Disclosure and Transparency Rules and this IMS should not be relied on by any other party or for any other purpose.

David Marshall Tel: + 44 (0) 20 7901 3326

Email: david.marshall@jlcm.co.uk

Andrew Charlesworth

Email: andrew.charlesworth@jlcm.co.uk

RLM Finsbury Tel: + 44 (0) 20 7251 3801

Faeth Birch

Philip Walters

Nidaa Lone