TIDMJLG
RNS Number : 7363D
John Laing Group plc
28 June 2019
JOHN LAING GROUP plc
PRE-CLOSE UPDATE
John Laing Group plc ("John Laing" or "the Group"), the
international originator, active investor and manager of
infrastructure projects, today issues a pre-close update for the
six months ending 30 June 2019 ahead of the Group's interim results
on 22 August 2019.
Realisations on track to reach c.GBP1 billion between 2019-2021,
in line with three-year guidance
-- GBP131 million of proceeds from realisations completed to date in 2019 including:
o Sale of our 50% shareholding in Optus Stadium, completed in
March 2019. This sale represents our first realisation of an
operational asset in Australia.
o Sale of our 95.3% shareholding in Rocksprings wind farm in
Texas and our 92.5% shareholding in Sterling wind farm in New
Mexico. Proceeds are subject to customary post completion
adjustments. These sales represent our first disposals in the
US.
-- Aggregate prices achieved are in line with portfolio valuation.
Investment activity in line with three-year guidance underpinned
by strong pipeline
-- GBP7 million of investment commitments completed to date and
advanced negotiations on two investments for more than GBP130
million, expected to complete in Q3 2019.
-- Additionally, the pipeline includes other exclusive and
shortlisted positions with an investment opportunity of
approximately GBP340 million due to close within the next 18
months.
Investment portfolio performance
Mixed operational performance of certain renewable energy
assets.
-- In Europe, we faced operational performance issues, mainly
driven by low level of wind, on some legacy assets in Germany and
Ireland, which together represented 7.5% of the investment
portfolio at 31 December 2018.
-- In Australia, in line with industry peers, we experienced
transmission issues relating to marginal loss factors ("MLFs").
MLFs are defined as the portion of energy that is lost when
electricity is transmitted across the transmission and distribution
networks, due to resistance. MLFs for operational assets are
published annually by the Australian Energy Market Operator
("AEMO"). In May 2019, AEMO published MLFs for the 2019 - 2020
financial year. Based on these and draft MLFs for assets still
under construction, there were unfavourable results for three of
our assets, which together represented 11.0% of the investment
portfolio at 31 December 2018.
We are currently assessing the full impact of these issues on
our portfolio value and this will be reflected in our interim
results. Furthermore, we have already identified a number of
opportunities to mitigate any impact.
Positive developments on several PPP projects:
Denver Eagle P3
-- The A line and the B line have been operating successfully
since 2016 and have achieved above 97% on-time performance.
-- Substantial completion for the third line, the G line, achieved in March 2019.
-- Full revenue service of the overall project was achieved on 26 April 2019.
Sydney Light Rail
-- On 7 June 2019 a settlement was agreed by all parties. As
part of this, we invested an additional AUD $12 million (GBP6.5
million) equity capital. The settlement also includes a revised
project completion timetable.
-- As stated in our 2018 full year results announcement, while
the programme is running behind schedule, it remains within the
overall long stop date.
-- All track work has been completed and daytime testing of the
light rail vehicles is now underway, with operation on a certain
segment of the line expected by December 2019.
New Generation Rollingstock
-- The number of accepted trains is now 57 out of a total of 75
and the project recently achieved Partial Fleet Acceptance.
-- The final train is due for delivery in Q4 2019, in line with
the re-baselined train delivery schedule agreed with the State of
Queensland.
-- The programme for undertaking various retrofitting and
rectification issues is progressing well.
Full Year outlook unchanged
-- Net asset value at 31 December 2019 is projected to be
broadly in line with management expectations on a constant currency
basis.
-- The pipeline of new investment opportunities remains strong
in both PPP and renewable energy, especially in the US and
Australia.
-- As previously stated, we continue to assess (i) other
infrastructure asset classes that might fit our business model (ii)
new geographies where we see opportunities to invest alongside
established partners at appropriate returns.
-- The market for secondary assets remains strong.
- ENDS -
A call for analysts and investors will be held at 8.00am (London
time) today.
Conference call details:
Number 0800 358 9473
US number +1 855 85 70686
Pin code 75437447#
Further information
Analyst/investor enquiries:
Luciana Germinario, Chief Finance Officer +44 20 7901 3200
Tejal Patel, Investor Relations & Finance Manager +44 20 7901 3200
www.laing.com
Media enquiries:
Matthew Denham / Camilla Cunningham, Teneo +44 20 7420 3186
Appendix I: Exchange rates at 31 December 2018 and 31 May
2019
Exchange rate vs 31 December 31 May 2019
Sterling 2018
Euro 1.1134 1.1321
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US dollar 1.2748 1.2619
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Australian dollar 1.8096 1.8205
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New Zealand dollar 1.9000 1.9336
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END
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