Let’s face it, most people hold John Laing shares for the dividend and the company is confident it has the balance sheet strength to justify paying the final divi it announced in respect of 2019
(), the investor in infrastructure, said it expects only modest value creation from project delivery in the first half of 2020.
In a trading update that coincided with the announcement of Ben Loomes, formerly the head of infrastructure at InfraRed Capital Partners, as its new chief executive officer (CEO), Laing said two of the 16 projects under construction in its primary portfolio have experienced complete site closure during the lockdown period and even those are preparing to reopen.
Elsewhere, construction works have continued albeit with some delays due to reduced staffing levels and availability of materials. The group’s largest asset, IEP East remains on track with 53 out of 65 trains having achieved qualified acceptance.
The secondary portfolio, consisting of operational assets, is “well-positioned given its bias towards availability-based PPPs [public/private partnerships] as well as wind and solar projects, the majority of which have long term off-take agreements in place”, John Laing said.
Only two of its 32 assets are volume-based – the I-77 Managed Lanes project in the US and the A130 in the UK (roughly 50% of revenue exposed to volume) – so as such the impact of the lockdowns in both countries has not been as severe as might be imagined.
Although both volume-driven assets have seen significant reductions in traffic, the valuation for the I-77, in particular, is based on a long concession period which means it is insulated from short-term effects.
The investment group said it is too early to fully understand the impact of the coronavirus (COVID-19) on secondary markets but ventured that the combination of a weak macro-economic outlook and lower interest rates should serve to highlight the attractions of its assets.
The group’s balance sheet and liquidity position remain strong, with financial resources of around £340mln available at 1 April to deploy into investment opportunities, the group revealed.
In view of this position and the board’s continuing confidence in the business’s prospects, the board has opted not to cancel the already announced final dividend of 7.66p in respect of 2019.
“I am delighted to announce we have appointed Ben as our new CEO. He brings strong leadership and business development capabilities, as well as a solid investment track record and extensive experience in the infrastructure sector,” said Will Samuel, the chairman of John Laing.
At InfraRed Capital Partners, Loomes was responsible for managing a global infrastructure investment business with more than US$9 billion of assets under management, largely in greenfield and operational PPP and renewable energy projects.
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