Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Industrials
John Laing Group (JLG) posted strong growth in FY18 with the principal benchmark, NAV per share, up 15% (18.2% including dividends paid). JLG can now point to a compound growth rate in NAV per share (with dividends) of 15.8% since its IPO in 2015. With a strengthened balance sheet and a geographically diversified business, JLG remains well placed to exploit the growth opportunities provided by a strong global market for infrastructure assets.
Written by
John Laing Group |
JLG beats expectations |
FY18 results |
Investment companies |
7 March 2019 |
Share price performance
Business description
Next events
Analyst
John Laing Group is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||
John Laing Group (JLG) posted strong growth in FY18 with the principal benchmark, NAV per share, up 15% (18.2% including dividends paid). JLG can now point to a compound growth rate in NAV per share (with dividends) of 15.8% since its IPO in 2015. With a strengthened balance sheet and a geographically diversified business, JLG remains well placed to exploit the growth opportunities provided by a strong global market for infrastructure assets.
Year end |
NAV (p) |
EPS* |
DPS* |
P/NAV |
P/E |
Yield |
12/17 |
281 |
31.9 |
8.9 |
1.3 |
11.8 |
2.4 |
12/18 |
323 |
63.1 |
9.5 |
1.2 |
6.0 |
2.5 |
12/19e |
360 |
47.7 |
10.2 |
1.0 |
7.9 |
2.7 |
12/20e |
402 |
53.1 |
10.3 |
0.9 |
7.1 |
2.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Strong activity and NAV increase above forecast
Recent updates (16 January) already highlighted the significant level of activity that had taken place within the business in FY18, with investment commitments (£302m) and realisations (£296m all UK) both exceeding initial FY18 guidance of £250m. The FY18 results also demonstrated growth (beyond our forecasts) of JLG’s two principal benchmarks, NAV per share (+15% to 323p; Edison FY18e 318p) and DPS (+6.5% to 9.5p, including special DPS; Edison FY18e 9.2p). The growth in the NAV per share was achieved thanks to a strong increase in the fair value (72p/share) boosted by continuing growth in ‘embedded value’ (29p/share) and by a significant rise in ‘value enhancements’ to the portfolio (+27p/share) derived from the above book value disposal of Intercity Express Programme Phase I and the subsequent impact on IEP Phase 2. The fair value growth was achieved despite an additional non-recurring pension charge of £21.3m (not in our forecasts). The special dividend of 4.1p/share was based on 6.8% of investment realisations.
Strong outlook continues
Investment capacity has been bolstered by last year’s rights issue and the investment pipeline now stands at an all-time high of £2.4bn. JLG remains confident of the outlook, despite the loss of fee income from John Laing Infrastructure Fund, and has issued guidance for investment commitments and disposals to c £1bn over the next three years. Global appetite for infrastructure assets remains strong and we believe JLG’s track record and geographic capabilities should allow it to exploit these opportunities. We have revised our FY19e NAV per share to 360p, from 355p.
Valuation: Strong share price recovery
JLG’s share price has performed strongly during the last year, recovering from the lows of early 2018. JLG now stands at a c 20% premium to its last reported NAV, towards the top of its historic trading range.
Exhibit 1: Financial summary
Accounts: IFRS, Yr end: December, GBP: Millions |
|
|
2017A |
2018A |
2019E |
2020E |
Total revenues |
|
|
196.7 |
397.4 |
312.7 |
349.9 |
Cost of sales |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Gross profit |
|
|
196.7 |
397.4 |
312.7 |
349.9 |
SG&A (expenses) |
|
|
(58.6) |
(65.6) |
(64.9) |
(66.2) |
Other income/(expense) |
|
|
0.0 |
(21.3) |
0.0 |
0.0 |
Depreciation and amortisation |
|
|
(0.3) |
(0.1) |
(0.1) |
(0.1) |
Reported EBIT |
|
|
137.8 |
310.5 |
247.8 |
283.7 |
Finance income/(expense) |
|
|
(11.8) |
(13.9) |
(14.4) |
(19.1) |
Other income/(expense) |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Reported PBT |
|
|
126.0 |
296.6 |
233.4 |
264.6 |
Income tax expense (includes exceptionals) |
|
|
1.5 |
(0.3) |
(0.2) |
(0.3) |
Reported net income |
|
|
127.5 |
296.3 |
233.2 |
264.3 |
Basic average number of shares, m |
|
|
367.0 |
466.9 |
491.5 |
493.0 |
Adjusted EPS (p) |
|
|
31.9 |
63.1 |
47.7 |
53.1 |
|
|
|
|
|
|
|
EBITDA |
|
|
138.1 |
331.9 |
247.9 |
283.8 |
Adjusted NAV (p/share) |
|
|
281 |
323 |
360 |
402 |
Adjusted Total DPS (p) |
|
|
8.9 |
9.5 |
10.2 |
10.3 |
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
Property, plant and equipment |
|
|
0.1 |
0.1 |
0.1 |
0.1 |
Goodwill |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Intangible assets |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Other non-current assets |
|
|
1,346.9 |
1,700.5 |
1,928.3 |
2,208.4 |
Total non-current assets |
|
|
1,347.0 |
1,700.6 |
1,928.4 |
2,208.5 |
Cash and equivalents |
|
|
2.5 |
5.7 |
2.0 |
2.0 |
Inventories |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Trade and other receivables |
|
|
7.6 |
7.9 |
8.6 |
9.6 |
Other current assets |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Total current assets |
|
|
10.1 |
13.6 |
10.6 |
11.6 |
Non-current loans and borrowings |
|
|
0.0 |
0.0 |
75.0 |
125.0 |
Trade and other payables |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Other non-current liabilities |
|
|
41.3 |
41.6 |
14.9 |
1.5 |
Total non-current liabilities |
|
|
41.3 |
41.6 |
89.9 |
126.5 |
Trade and other payables |
|
|
17.3 |
20.0 |
17.3 |
17.3 |
Current loans and borrowings |
|
|
173.2 |
65.7 |
58.4 |
91.6 |
Other current liabilities |
|
|
1.4 |
0.4 |
1.4 |
1.4 |
Total current liabilities |
|
|
191.9 |
86.1 |
77.1 |
110.3 |
Equity attributable to company |
|
|
1,123.9 |
1,586.5 |
1,772.0 |
1,983.3 |
Non-controlling interest |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
|
|
|
|
|
|
|
Cashflow statement |
|
|
|
|
|
|
Profit before tax |
|
|
126.0 |
296.6 |
233.4 |
264.6 |
Net finance expenses |
|
|
11.8 |
13.9 |
14.4 |
19.1 |
Depreciation and amortisation |
|
|
0.3 |
0.1 |
0.1 |
0.1 |
Share based payments |
|
|
3.2 |
2.7 |
0.0 |
0.0 |
Fair value and other adjustments |
|
|
(270.6) |
(323.7) |
(312.1) |
(357.7) |
Movements in working capital |
|
|
2.9 |
2.5 |
(0.0) |
(0.2) |
Cash from operations (CFO) |
|
|
(126.4) |
(7.9) |
(64.4) |
(74.4) |
Capex |
|
|
(0.1) |
0.0 |
(0.1) |
(0.1) |
Cash transf. from inv. Held at FV |
|
|
77.4 |
12.4 |
55.1 |
63.4 |
Portfolio Investments – Disposals |
|
|
79.1 |
(46.0) |
0.0 |
0.0 |
Cash used in investing activities (CFIA) |
|
|
156.4 |
(33.6) |
55.0 |
63.3 |
Net proceeds from issue of shares |
|
|
0.0 |
210.5 |
0.0 |
0.0 |
Movements in debt |
|
|
11.0 |
(106.5) |
67.7 |
83.1 |
Other financing activities |
|
|
(40.1) |
(59.3) |
(62.0) |
(72.1) |
Cash from financing activities (CFF) |
|
|
(29.1) |
44.7 |
5.7 |
11.1 |
Currency translation differences and other |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Increase/(decrease) in cash and equivalents |
|
|
0.9 |
3.2 |
(3.7) |
0.0 |
Currency translation differences and other |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Cash and equivalents at end of period |
|
|
2.5 |
5.7 |
2.0 |
2.0 |
Net (debt) cash |
|
|
(170.7) |
(60.0) |
(131.4) |
(214.6) |
Movement in net (debt) cash over period |
|
|
(10.9) |
110.7 |
(71.4) |
(83.1) |
Source: Company data, Edison Investment Research
|
|
Research: TMT
1Spatial continues to make good progress on its transition plan. The final months of FY19 saw further large contract wins and growth accelerate. This was achieved despite the uncertainty created by the US government shutdown. Adjusted EBITDA ‘at least in line’ with market expectations suggests a minimum of £1.1m, over 12% ahead of our estimate, but we leave our forecasts unchanged for now. Executing the plan offers scope for a re-rating and further upgrades, in our view.