Allied Minds — NAV lagging the tangible progress made

Allied Minds (ALM)

Last close As at 21/06/2024

22.60

−0.60 (−2.59%)

Market capitalisation

54m

More on this equity

Research: TMT

Allied Minds — NAV lagging the tangible progress made

Allied Minds’ interim results showed progress at four of its seven portfolio companies – BridgeComm, Orbital Sidekick, Federated Wireless and Spin Memory – together c 95% of portfolio fair value. Despite progress, there was no uplift in fair value as top-up funding was committed at valuations established in 2018/19 funding rounds. This leaves latent value as, in order for deeptech companies progressing to plan, we would expect a doubling in valuation between funding rounds 12 to 18 months apart. ALM reported H120 parent cash of $29.9m, with our estimated fully diluted portfolio fair value of $175.3m. Adjusting for $5.5m of investments post period end, and three months of central costs, we estimate a fully diluted NAV per share of 62.7p. The shares trade at a 40% discount to this estimate of NAV.

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Written by

TMT

Allied Minds

NAV lagging the tangible progress made

H120 results update

Investment companies

19 October 2020

Price

37.6p

Market cap

£91.0m

US$1.30/£

Parent cash ($m) at 30 June 2020

29.9

Shares in issue

242.1m

Free float

91%

Code

ALM

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

4.4

9.9

4.0

Rel (local)

6.6

14.1

24.0

52-week high/low

44.8p

20.8p

Business description

Allied Minds is an IP commercialisation company with a concentrated investment portfolio predominantly focused on early-stage technology companies. Its portfolio companies are spinouts from US federal government laboratories and universities.

Next events

FY20 results

April 2021

Analysts

Richard Williamson

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5700

Allied Minds is a research client of Edison Investment Research Limited

Allied Minds’ interim results showed progress at four of its seven portfolio companies – BridgeComm, Orbital Sidekick, Federated Wireless and Spin Memory – together c 95% of portfolio fair value. Despite progress, there was no uplift in fair value as top-up funding was committed at valuations established in 2018/19 funding rounds. This leaves latent value as, in order for deeptech companies progressing to plan, we would expect a doubling in valuation between funding rounds 12 to 18 months apart. ALM reported H120 parent cash of $29.9m, with our estimated fully diluted portfolio fair value of $175.3m. Adjusting for $5.5m of investments post period end, and three months of central costs, we estimate a fully diluted NAV per share of 62.7p. The shares trade at a 40% discount to this estimate of NAV.

Period end

Portfolio fair value (US$m)

Parent-level net cash (US$m)

NAV
(US$m)

NAV/share
(p)

P/NAV
(x)

12/18

226.7

50.6

277.3

88.8

0.42

06/19*

266.1

31.3

297.3

100.2

0.38

12/19*

209.0

31.9

240.8

79.2

0.47

06/20*

175.3

22.7

197.9

62.7

0.60

Note: NAV is calculated as fair value plus net cash at the parent level and is based on our estimate of fair value as this is no longer disclosed by the company. *H119, FY19 and H120 net cash and NAV include post period-end adjustments.

H120 interim results

H120 revenues decreased to $0.1m (H119: $1.5m) following the deconsolidation of Federated Wireless in FY19. R&D decreased by $9.8m, to $2.5m for H120 (H119: $12.3m). The group reported a total comprehensive loss for H120 of $15.0m (H119: income of $9.0m), a fall of $24.3m. The group had a net cash outflow from financing activities of $38.4m in H120 (H119: $8.0m) reflecting, in part, the cash special dividend of $39.7m from the sale of Allied Minds’ share in HawkEye 360 in 2019. Net cash and investments at 30 June 2020 stood at $34.2m (FY18: $90.6m), of which $29.9m is held at parent level (FY19: $84.1m).

Portfolio update: Tangible progress made in 2020

Progress across the portfolio looks promising. Federated Wireless may well be building towards a large growth round in FY21. Progress at Spin Memory has been slowed by COVID-19, but the company remains strategically well-placed as the only US-based MRAM developer; newsflow is expected in H121. Orbital Sidekick expects its pilot satellite launch in December 2020, funded by a Series A funding round (matched by funding from the US Air Force). Following its recently announced partnership with Nokia, BridgeComm continues to work closely with both Boeing’s defence division and Nokia; newsflow is expected in H121.

Valuation: over 40% discount to historical NAVs

Despite progress and continuing strong deeptech valuations, the portfolio continues to be held at the largely historical valuations established in 2018/19. We expect material uplifts in NAV (ie new funding rounds) over the next 12 months. In this context, the 40–50% discount to NAV fails to reflect the prospects of the group’s portfolio; we estimate NAV per share of 74.8p (undiluted) or 62.7p fully diluted.

H120 results summary

H120 revenues decreased to $0.1m (H119: $1.5m) following the deconsolidation of Federated Wireless in FY19, with a small revenue contribution from BridgeComm. SG&A expenses fell to $6.6m for the six months ended 30 June 2020 (H119: $15.2m), with the deconsolidation of Federated Wireless together with central cost reductions implemented during FY19. R&D decreased by $9.8m, to $2.5m for H120 (H119: $12.3m). The group reported a total comprehensive loss for H120 of $15.0m (H119: income of $9.0m), a fall of $24.3m.

Non-current assets increased by $3.2m, to $75.9m at 30 June 2020 (FY19: $72.7m). Current assets fell markedly by $57.3m, to $40.6m as of 30 June 2020 (FY19: $97.9m), in large part reflecting the special dividend payable to shareholders following the sale of HawkEye 360.

The net cash outflow from operating activities was $10.8m in H120 (H119: $30.3m). The group had a net cash outflow from investing activities of $7.1m in H120 (H119: net cash outflow of $5.0m), including an investment in Federated Wireless of $6.9m made in April 2020. The group had a net cash outflow from financing activities of $38.4m in H120 (H119: $8.0m) reflecting, in part, the cash special dividend of $39.7m from the sale of Allied Minds’ share in HawkEye 360 in 2019.

Net cash and investments at 30 June 2020 stood at $34.2m (FY18: $90.6m), of which $29.9m is held at parent level (FY19: $84.1m).

COVID-19: Limited impact, some small delays

While COVID-19 has had some commercial impact on the portfolio, with cash reserves sufficient to cover central costs until 2023, COVID19 has had limited direct impact on Allied Minds. However, COVID-19 has led to minor delays in reporting both FY19 and H120 results as travel restrictions affected the audit process. Otherwise, management has noted a small delay in the tape-out process (the final step in the design process for integrated circuits before they are sent for manufacture, when the artwork for the photomask of the circuit is sent to the fabrication facility) at Spin Memory due to travel restrictions, but no other delays have been referenced.

Portfolio: Material progress achieved in 2020

Allied Minds’ portfolio has shrunk to seven assets, of which the top three represent c 94% of fair value. With net cash of $29.9m at 30 June 2020, management expects to have sufficient cash to allow it to continue to invest in existing assets and maximise the value of its portfolio to shareholders over a three- to four-year time horizon.

Progress across the portfolio looks promising, with BridgeComm and Orbital Sidekick now coming into focus alongside Federated Wireless and Spin Memory. Despite continuing strong technology sector valuations and newsflow, there have been no material changes of portfolio fair value in H120, with a series of top-up rounds announced at valuations unchanged from the funding round valuations established in 2018/19.

Other than the top four portfolio companies (further details below), TableUp was sold to TouchBistro, a market-leading pre-IPO candidate for $6m in shares in August 2020. Spark Insights (insurance analytics) continues to make ‘reasonable’ progress and OcuTerra (formerly SciFluor) continues its search for additional funding.

Federated Wireless – ‘significant progress’ since last funding round

In April 2020, Federated Wireless raised $13.7m of additional Series C funding (with funding split equally between Allied Minds and Pennant Investors) to accelerate expansion of its connectivity-as-a-service (CaaS) partnerships through AWS and Microsoft Azure, allowing businesses to deploy their own 4G and 5G private networks. The CaaS use case was an addition to the plan financed in September 2019, requiring separate funding to address the opportunity. Federated Wireless continues to make strong progress with both CaaS and with its 5G shared spectrum CBRS services in the US and may well be building towards a large growth round in FY21.

BridgeComm – ‘significant progress’ since last funding round

BridgeComm provides patented high throughput one-to-many optical wireless communication solutions for space, aeronautics and terrestrial based opportunities. In September, BridgeComm signed a partnership with Nokia to develop ultra-high-speed throughput solutions for 5G networks. BridgeComm also continues to work closely with Boeing, having signed a joint development agreement with Boeing HorizonX for applications of its one-to-many (OTM) technology. BridgeComm secured an additional $2m of convertible debt from Allied Minds, as well as $1.5m of convertible financing from Boeing post period-end. We expect material portfolio announcements over the next 12 months.

Spin Memory – ‘significant progress’ since last funding round

Progress at Spin Memory (radiation-proof MRAM among other applications) has been slowed by COVID-19 (tape-outs with ARM and Applied Materials delayed by three to six months), but the company remains strategically well-placed as the only North-American based MRAM developer with fabrication facilities in the US. In July 2020, Spin Memory raised an additional $8.25m of Series B funding from existing investors, including Abies Ventures, Applied Ventures, ARM and Allied Minds (which contributed $4m to the round). We expect further newsflow in H121.

Orbital Sidekick – ‘significant progress’ since last funding round

Orbital Sidekick (satellite-based hyperspectral imaging) has been awarded a multi-year contract by the US Air Force (AFVentures) as part of its strategic financing (STRATFI) program. Orbital Sidekick will receive $4m of non-dilutive financing in Q420 from AFVentures, to accelerate the launch of its pilot satellite in December 2020, with up to $12m of additional non-dilutive matched funding over the next three years. Orbital Sidekick is in the process of raising a Series A funding round.

Valuation: NAV lags operational progress

Exhibit 1 sets out our NAV estimate (as at 15 October 2020) based on the H120 portfolio fair values.

Exhibit 1: Allied Minds’ portfolio – Edison fair value estimate

Company

Business description

Latest funding round

Latest post-money value (100%) (US$m)

Undiluted value
30/6/20 (US$m)

p/share

Fully diluted value
30/6/20 (US$m)

p/share

ALM holding 15/10/20

ALM fully diluted holding
15/10/20

Date of ALM carrying value

Basis of estimate for fair value assessment

Federated Wireless

Cloud-based SaaS business

Apr 20

215.0

92.7

29.4

78.7

24.9

43%

37%

Sep 19

Valuation of last round (Strategics)

Spin Memory

MRAM Semiconductor memory

Jul 20

180.3

77.5

24.6

61.2

19.4

43%

34%

Apr 19

Valuation of last round (Strategics)

BridgeComm

Optical communications service provider

Aug 20

38.0

30.9

9.8

23.9

7.6

81%

63%

Sep 18

Valuation of last round (Strategics)

TouchBistro
(acquired TableUp)

Restaurant supply chain software provider

Aug 20

6.0

1.9

6.0

1.9

Aug 20

Valuation of last round

Orbital Sidekick

Space-based hyperspectral imaging and analytics

Jul 20

11.7

3.9

1.2

3.5

1.1

33%

30%

Apr 18

Valuation of last round (3rd party)

Spark Insights

Property insurance analytics

Apr 19

3.2

2.3

0.7

1.9

0.6

71%

60%

Apr 19

Valuation of last round

OcuTerra (previously SciFluor)

Developer of a topical eye droplet treatment

Nov 19

130.7

-

-

-

-

63%

54%

Nov 19

Written down to zero

Portfolio fair value (period end)

 

213.2

67.6

175.3

55.6

 

 

 

 

Net cash at parent company (period end)

29.9

9.5

29.9

9.5

Post year-end adjustments

Investments (post period end)

(5.5)

(1.7)

(5.5)

(1.7)

Cash burn (c US$0.5m per month)

(1.8)

(0.6)

(1.8)

(0.6)

Parent net cash (latest) (e)

22.7

7.2

22.7

7.2

Estimated NAV (latest)

 

235.9

74.8

197.9

62.7

 

Estimated NAV (pence per share)

74.8

62.7

Share price as at 19/10/20 (pence per share)

37.6

37.6

Share price discount to estimated NAV

50%

40%

Source: Allied Minds data, Edison Investment Research

Although our headline NAV discount is conservatively based on a fully diluted NAV estimate, our fair value estimate includes valuations on both an undiluted and fully diluted basis; the realisation value of any asset is likely to fall between these two values.

The post year-end adjustments take into account two principal factors: 1) post year-end investments of $5.5m, including investments in Spin Memory ($8.25m of additional Series B funding committed by existing investors, including Abies Ventures, Applied Ventures, ARM and Allied Minds) and Orbital Sidekick ($2m invested by Allied Minds and 11.2 Capital in July 2020); and 2) an allowance for central costs of $1.8m (at a rate of $0.5m per month).

This leads to our NAV estimate of 74.8p per share (undiluted) or 62.7p per share (fully diluted), based on portfolio company fair values, which have not been updated since their last major funding rounds.

40–50% discount to backward-looking NAV

Allied Minds is a deeptech holding company that offers exposure to a concentrated number of emerging technology businesses.

Despite evident progress over the course of 2020, including positive newsflow, top-up funding rounds and continuing strong technology valuations, the portfolio continues to be held at the largely historical valuations established at the time of last major funding rounds in 2018 and 2019. In general, as is seen with other deeptech companies progressing to plan and delivering against core milestones, we would expect an approximate doubling in valuation between funding rounds 12 to 18 months apart, as companies grow and mature and the commercial model crystallises.

As such, we expect material changes in NAV over the next 12 months as new funding rounds are completed. In this context, we believe that a 40–50% discount to NAV materially understates the prospects for the group’s portfolio assuming the investee companies progress to plan. We estimate NAV per share of 74.8p (undiluted) or 62.7p fully diluted.

Despite a largely historical NAV, Allied Minds’ share trades at the bottom of its peer group’s NAV discounts, set out below in Exhibit 2. In our view, this leaves significant scope for share price appreciation.

Exhibit 2: Peer group comparison

 

Price
(p)

Market cap (£m)

NAV (£m)
(last reported)

Cash
(£m)

NAV
premium/
discount (x)

NAV per share (p)

Allied Minds

37.6

91.0

152

17

0.60

62.7

Augmentum FinTech

125.9

147.1

136

14

1.08

116.1

Draper Esprit

592.0

705.7

695

170

1.02

583.0

HgCapital

288.0

1,180.0

1,160

398

1.02

283.1

IP Group

82.1

872.2

1,172

71

0.74

110.6

Mercia Asset Management

21.4

94.2

142

30

0.67

32.1

Oakley Capital

258.3

484.4

692

262

0.70

356.0

Source: Refinitiv data; Edison Investment Research. Note: Priced at 19 October 2020.

Exhibit 3: Financial summary

$'000

2015

2016

2017

2018

2019

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

3,300

2,664

5,001

5,561

2,692

Cost of Sales

(3,925)

(5,563)

(5,242)

(2,827)

(1,433)

Gross Profit

(625)

(2,899)

(241)

2,734

1,259

Normalised operating profit

 

 

(89,372)

(103,925)

(94,542)

(83,583)

(49,997)

Amortisation of acquired intangibles

0

0

0

0

0

Exceptionals

(309)

(1,365)

(2,363)

(545)

(671)

Share-based payments

(7,041)

(8,385)

(7,562)

(7,413)

1,465

Reported operating profit

(96,722)

(113,675)

(104,467)

(91,541)

(49,203)

Net Interest

670

2,318

305

1,313

741

Joint ventures & associates (post tax)

0

0

0

(3,658)

(28,850)

Fair value changes

(1,937)

(17,585)

(6,953)

139,240

127,566

Profit Before Tax (norm)

 

 

(90,639)

(119,192)

(101,190)

53,312

49,460

Profit Before Tax (reported)

 

 

(97,989)

(128,942)

(111,115)

45,354

50,254

Reported tax

0

0

0

0

0

Profit After Tax (norm)

(90,639)

(119,192)

(101,190)

53,312

49,460

Profit After Tax (reported)

(97,989)

(128,942)

(111,115)

45,354

50,254

Minority interests

20,192

32,609

35,337

(7,999)

1,081

Discontinued operations

0

0

0

0

0

Net income (normalised)

(70,447)

(86,583)

(65,853)

45,313

50,541

Net income (reported)

(77,797)

(96,333)

(75,778)

37,355

51,335

Basic average number of shares outstanding (m)

215

217

236

240

241

EPS - basic normalised ($)

 

 

(0.33)

(0.40)

(0.28)

0.19

0.21

EPS - diluted normalised ($)

 

 

(0.33)

(0.40)

(0.28)

0.19

0.21

EPS - basic reported ($)

 

 

(0.36)

(0.44)

(0.32)

0.16

0.21

Dividend ($)

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

(57.2)

(19.3)

87.7

11.2

(51.6)

Gross Margin (%)

-18.9

-108.8

-4.8

49.2

46.8

Normalised Operating Margin

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

92,784

38,232

28,369

83,739

72,695

Intangible Assets

4,384

2,762

1,074

1,221

197

Tangible Assets

34,173

31,882

26,627

5,997

1,485

Right of use assets

0

0

0

0

1,016

Investments & other

54,227

3,588

668

76,521

69,997

Current Assets

 

 

158,427

232,007

184,792

107,034

97,854

Stocks

1,511

2,551

0

0

0

Debtors

7,342

5,900

15,642

6,400

5,702

Cash & cash equivalents

105,555

209,151

158,075

100,234

90,571

Cash at parent*

 

 

N/A

136,700

84,200

50,600

84,100

Other

44,019

14,405

11,075

400

1,581

Current Liabilities

 

 

(108,974)

(155,402)

(200,202)

(69,557)

(13,159)

Creditors

(14,268)

(13,941)

(14,276)

(13,030)

(4,685)

Tax and social security

(395)

(458)

(4,296)

(2,333)

(3,457)

Short term borrowings

(228)

(115)

0

0

0

Subsidiary preferred shares

(94,083)

(140,888)

(181,630)

(54,194)

(5,017)

Long Term Liabilities

 

 

(863)

(720)

(867)

(436)

(4,819)

Long term borrowings

(112)

0

0

0

0

Lease liabilities

0

0

0

0

(2,854)

Other long-term liabilities

(751)

(720)

(867)

(436)

(1,965)

Net Assets

 

 

141,374

114,117

12,092

120,780

152,571

Minority interests

10,631

20,797

59,241

(18,484)

(115)

Shareholders' equity

 

 

152,005

134,914

71,333

102,296

152,456

CASH FLOW

Op Cash Flow before WC and tax

(85,286)

(97,290)

(88,440)

(77,525)

(47,173)

Working capital

2,652

468

(2,477)

6,033

506

Exceptional & other

0

0

0

(1,261)

267

Tax

0

0

0

0

0

Net operating cash flow

 

 

(82,634)

(96,822)

(90,917)

(72,753)

(46,400)

Capex

(23,213)

(4,087)

(1,522)

(9,110)

(3,675)

Acquisitions/disposals

(51,786)

74,816

5,853

(18,884)

25,180

Net interest

716

1,602

138

1,313

741

Payment of lease liability

0

0

0

0

(1,540)

Equity financing

2,443

79,319

1,595

1,594

(10,069)

Dividends

0

0

0

0

0

Other

36,165

48,993

33,892

39,438

25,292

Net Cash Flow

(118,309)

103,821

(50,961)

(58,402)

(10,471)

Opening net debt/(cash)

 

 

(223,524)

(105,215)

(209,036)

(158,075)

(100,234)

FX

0

0

0

561

808

Other non-cash movements

0

0

0

0

0

Closing net debt/(cash)

 

 

(105,215)

(209,036)

(158,075)

(100,234)

(90,571)

Source: Company accounts. Note: *For clarity, cash at parent has been broken out as a separate line from cash & cash equivalents. As a line item, it does not form part of the calculation for current assets.

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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John Laing Group — Sale of Australian wind farm assets

John Laing Group (JLG) has announced the sale of its Australian wind farm assets for A$285m (£157m), a valuation described as a ‘small uplift’ to book value. This news is significant for two reasons: 1) it provides some reassurance that the book value of JLG’s renewable assets is now relatively conservative; and 2) accounting for about a third of its renewable portfolio, the disposal represents material progress on JLG’s strategy to exit this market. We make no change to our numbers ahead of the company’s Q3 trading statement expected next week.

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