John Laing Group — Diversified portfolio continues to deliver growth

John Laing Group (LN: JLG)

Last close As at 27/03/2024

401.80

0.40 (0.10%)

Market capitalisation

1,985m

More on this equity

Research: Industrials

John Laing Group — Diversified portfolio continues to deliver growth

John Laing Group’s (JLG) FY17 results delivered further growth in DPS and NAV and highlighted the increasing internationalisation of the business. The announcement of a rights issue to fund future growth was unexpected, but we see significant opportunity in the global infrastructure market. At the current share price of c 260p, JLG stands at a significant discount to its adjusted NAV per share of 281p.

Analyst avatar placeholder

Written by

Industrials

John Laing Group

Diversified portfolio continues to deliver growth

FY17 results

Investment companies

23 March 2018

Price

256.0p

Market cap

£940m

Net debt (£m) at end FY17

170.7

Shares in issue

367.0m*

* Pre rights issue

Free float

100%

Code

JLG

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

2.2

(3.8)

1.6

Rel (local)

6.0

4.3

5.2

52-week high/low

317.8p

240.0p

Business description

John Laing is an originator, active investor in, and manager of greenfield infrastructure projects. John Laing operates internationally and its business is focused on the transport, energy, social and environmental sectors

Next events

AGM

May 2018

Analyst

Graeme Moyse

+44 (0)20 3077 5700

John Laing Group is a research client of Edison Investment Research Limited

John Laing Group’s (JLG) FY17 results delivered further growth in DPS and NAV and highlighted the increasing internationalisation of the business. The announcement of a rights issue to fund future growth was unexpected, but we see significant opportunity in the global infrastructure market. At the current share price of c 260p, JLG stands at a significant discount to its adjusted NAV per share of 281p.

Year end

NAV
(p)

EPS*
(p)

DPS**
(p)

P/NAV
(x)

P/E
(x)

Yield
(%)

12/17

281

31.9

8.9

0.9

8.0

3.5

12/18e

303

40.6

9.2

0.8

6.3

3.6

12/19e

338

44.4

9.4

0.8

5.8

3.7

Note: *EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **DPS includes interim, final and special payments. The figures have been adjusted to reflect the impact of the rights issue.

FY17 results: NAV growth exceeds forecasts

JLG again posted growth in the key benchmarks of reported NAV per share (+10.5% to 306p versus Edison FY17e of 302p) and DPS (+30.2% to 10.61p, including special). In a year characterised by high levels of activity, JLG disposed of investments worth £289m (initial guidance of £200m) and entered into investment commitments of £383m (£200m). Opportunities for growth remain strong and JLG guides to investment commitments and disposals of c £250m for FY18 and FY19 (before the rights issue). The pipeline of new investment opportunities stands at £2.15bn (2016: £1.86bn).

Rights issue to raise £210m

Alongside the FY17 results, JLG announced a rights issue to raise £210.2m (net of expenses). The rationale for the rights issue is to provide JLG with greater financial flexibility and the necessary resources to exploit investment opportunities in the burgeoning global infrastructure market. Under the terms of the rights issue, JLG will issue 122.32m (one for three) shares at a price of 177p, a discount of 29.2% to the prevailing price before the announcement (274.2p). The rights issue shares include rights to the final and special dividend payments announced at the FY results. The final base dividend of £14m (3.82p/share) will be increased by the shares issued as a result of the rights issue (3.51p/share adjusted), while the special dividend of £17.9m (4.88p/share) will be spread over the increased number of shares (3.66p/share adjusted). As a result of the rights issue, the announced NAV per share for FY17 will be diluted to 281p (adjustment factor of 92%).

Valuation: Discount reflects UK sentiment

The prospects for investment in international infrastructure remain strong. However, JLG’s share price has declined in recent months following the Labour Party’s announced hostility to future PFI projects (September 2017), the collapse of Carillion (January 2018) and the announcement of the dilutive rights issue (March 2018). Given JLG’s reduced reliance on the UK PFI market, we believe the share price weakness offers an attractive entry point for investors. At the current share price of c 260p, JLG stands at a significant discount to its adjusted historic NAV of 281p/share (peers are at a small premium).

FY17 results: Growth in key benchmarks of NAV & DPS

The two key benchmarks of NAV and DPS increased again in FY17. In the period 2014-17 JLG has achieved CAGR in the NAV per share, excluding dividends, of 13.4%.

Exhibit 1: Key figures – FY17 results vs FY16 and Edison FY17 estimates

 

2016

2017a

2017e

2017 (adj)

% growth

NAV per share

(p/share)

277

306

302

281

10.5%

DPS

Interim

(p/share)

1.85

1.91

1.91

1.75

3.2%

Final

(p/share)

3.70

3.82

3.81

3.51

3.2%

Total Base

(p/share)

5.55

5.73

5.72

5.26

Special

(p/share)

2.6

4.88

5.30

3.66

87.7%

Investment commitments

£m

181.9

382.9

340.0

N/A

110.5%

Realisations

£m

146.6

289.0

299.0

N/A

97.1%

Source: John Laing Group, Edison Investment Research

The pipeline of new investment opportunities increased by c 16%, to £2.16bn and, with less than 5% of the total pipeline now focused on the UK, demonstrates the increasing internationalisation of the business. The total portfolio increased by 1.5%, to £1,193.8m, despite the increased level of investment realisations and adverse foreign exchange movements (-£11.0m vs a positive FX impact in FY16 of £74.7m). Once again, the percentage of the portfolio located in the UK declined and now stands at c 34%. At December 2016, c 43% of the portfolio was comprised of UK investments and at the time of the IPO the figure was c 66%. With the post-results-announced disposal of the IEP (Phase I) project for £227.5m, the impending disposal of the Lambeth Housing Project and cash injections for new projects, we believe the UK’s share will decline to c 30%.

The final DPS of 3.82p was in line with our forecasts, but the special DPS of 4.88p fell below our projection of 5.30p/share. The reasons for the shortfall were twofold. First, realisations for the year totalled £289m (versus our assumption of £299m) as the Lambeth Housing project disposal (£10m) did not complete by the year end as predicted. In addition, JLG applied a DPS rate of 6.2% to the disposals total (6.2% of £289m = £17.9m) versus our assumption of 6.5% of £299m = £19.4m. JLG has announced the adjusted figures for the DPS post the rights issue. The final base DPS is reduced to 3.51p/share and the special is reduced to 3.66pshare (see Exhibit 1).

The total retirement benefit obligation fell from £69.3m to £40.3m, helped in large part by a cash contribution to the pension scheme of £24.7m.

Rights issue: Rationale and impact

As we have argued previously, the global market for infrastructure remains strong, buoyed by the trends of population growth, urbanisation and environmentalism. The requirement for infrastructure resulting from these trends is commonly intensified by prior periods of under-investment. While there are notable exceptions to this general trend, such as the UK, JLG’s historic track record and geographical reach indicate that it is well placed to take advantage of a strong global market (as evidenced by the high levels of activity in FY17). While JLG remains committed to its self-funding model (investments = realisations), the scale of activity (and requirement for investment) is significantly greater than envisaged when it floated on the stock market in 2015. JLG believes that the additional funding provided by the rights issue will allow it to take advantage of the market strength without being forced into early, and possibly suboptimal, asset disposals.

Due to the relatively heavy nature of the rights issue (one for three) and the discount offered of c 29%, there is an inevitable dilution to EPS and NAV per share. The important NAV per share is reduced from 306p to 281p using a rights issue adjustment factor of 92% (derived from the “adjustments to final dividend” announcement of 14 March 2018).

Rights issue timetable

Exhibit 2: Rights issue – key dates

Event

Date

Rights issue announced/prospectus published

08/03/2018

Nil paid trading commences

09/03/2018

Announcement of adjustment to proposed final dividend

14/03/2018

Latest date for acceptance and payment

23/03/2018

Announcement of rights issue results

26/03/2018

Ex-dividend date

20/04/2018

Event

Rights issue announced/prospectus published

Nil paid trading commences

Announcement of adjustment to proposed final dividend

Latest date for acceptance and payment

Announcement of rights issue results

Ex-dividend date

Date

08/03/2018

09/03/2018

14/03/2018

23/03/2018

26/03/2018

20/04/2018

Source: John Laing Group

Forecasts and valuation

We have revised our forecasts to take account of the FY17 results, the new guidance and the dilutive impact of the rights issue. We forecast, for now, on the basis of annual investment and disposal (including IEP Phase I) totals of £250m for FY18 and FY19. We expect the special DPS will be based on 7.5% of investment disposals (6.2% in FY17). Our NAV forecasts, revised for the impact of the rights issue, are shown in Exhibit 3. We forecast growth of c 10% CAGR pa in the NAV in 2017-20e (from the rebased value of 281p) and CAGR in the underlying dividend (excluding special) of c 3% pa.

Exhibit 3: Edison NAV forecasts (p/share) using adjustment factor of 92%

2017a

2018e

2019e

2020e

Previous forecast

306

330

365

402

Forecast adj for rights issue

281

303

338

378

Source: Edison Investment Research

Share price restrained by UK newsflow

Despite the strong growth achieved in FY17, JLG’s share price has weakened over the last six months following adverse news flow in the UK. In September the Labour Party indicated that if it were to form the next government it would “abandon PFI as a tool for future infrastructure investment” and “bring in-house existing PFI projects”. By way of reference, JLIF, the independent fund established by JLG in 2010, calculated that if all of its UK projects were voluntarily terminated, it would receive c 86% of its UK portfolio value. More recently (January 2018) the collapse of Carillion has cast a shadow over the outsourcing/infrastructure industry and led JLIF to announce that it expects the liquidation of Carillion to cost it £3m in advisory and transaction costs as it appoints new contractors. JLG has not released equivalent data for its own portfolio but, applying the same percentage (ie 86%) to its total UK assets (including renewables), as stated at the FY17 results and adjusted for the recently agreed disposal of IEP (Phase I), the impact would be c 5p/share. Assuming renewables constitute the same proportion of the UK business as for the business as a whole (30.9%), the impact would be c 1p/share (using the enlarged number of shares).

Valuation

At the current share price of c 260p, JLG stands at a significant discount to its published NAV (c 7-8% based on the current share price). Given the geographically diverse nature of its business, the demonstrable track record of delivery against key benchmarks and the scale of the opportunity in global renewable and infrastructure markets, JLG’s discount to NAV appears very conservative for a company which, based on our estimates, offers the prospect of 10% CAGR in NAV 2017-20e. By way of comparison, JLG’s quoted peers trade at a small premium.


Exhibit 4: Financial summary

Accounts: IFRS, Yr end: December, GBP: Millions

 

 

2017A

2018E

2019E

2020E

Total revenues

 

 

196.7

260.3

289.8

323.0

Cost of sales

 

 

0.0

0.0

0.0

0.0

Gross profit

 

 

196.7

260.3

289.8

323.0

SG&A (expenses)

 

 

(58.6)

(59.9)

(61.1)

(62.3)

Other income/(expense)

 

 

0.0

0.0

0.0

0.0

Depreciation and amortisation

 

 

(0.3)

(0.2)

(0.2)

(0.2)

Reported EBIT

 

 

137.8

200.3

228.6

260.5

Finance income/(expense)

 

 

(11.8)

(10.7)

(11.2)

(14.0)

Other income/(expense)

 

 

0.0

0.0

0.0

0.0

Reported PBT

 

 

126.0

189.6

217.4

246.5

Income tax expense (includes exceptionals)

 

 

1.5

0.0

0.0

0.0

Reported net income

 

 

127.5

189.6

217.4

246.5

Basic average number of shares, m

 

 

367.0

466.9

489.3

489.3

Adjusted EPS (p/share)

 

 

31.9

40.6

44.4

49.9

 

 

 

 

 

 

 

EBITDA

 

 

138.1

200.5

228.8

260.7

Adjusted NAV (p/share)

 

 

281

303

338

378

Adjusted Total DPS (p/share)

 

 

8.9

9.2

9.4

9.6

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

Property, plant and equipment

 

 

0.1

0.4

0.7

1.0

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

1,522.5

1,733.0

1,980.3

Total non-current assets

 

 

1,347.0

1,522.9

1,733.7

1,981.3

Cash and equivalents

 

 

2.5

58.5

75.5

74.1

Inventories

 

 

0.0

0.0

0.0

0.0

Trade and other receivables

 

 

7.6

10.7

11.9

13.2

Other current assets

 

 

0.0

0.0

0.0

0.0

Total current assets

 

 

10.1

69.2

87.4

87.4

Non-current loans and borrowings

 

 

0.0

75.0

150.0

200.0

Trade and other payables

 

 

0.0

0.0

0.0

0.0

Other non-current liabilities

 

 

41.3

16.4

1.0

1.0

Total non-current liabilities

 

 

41.3

91.4

151.0

201.0

Trade and other payables

 

 

17.3

17.3

17.3

17.3

Current loans and borrowings

 

 

173.2

0.0

0.0

0.0

Other current liabilities

 

 

1.4

1.4

1.4

1.4

Total current liabilities

 

 

191.9

18.7

18.7

18.7

Equity attributable to company

 

 

1,123.9

1,482.1

1,651.4

1,849.0

Non-controlling interest

 

 

0.0

0.0

0.0

0.0

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

Profit before tax

 

 

126.0

189.6

217.4

246.5

Net finance expenses

 

 

11.8

10.7

11.2

14.0

Depreciation and amortisation

 

 

0.3

0.2

0.2

0.2

Share based payments

 

 

3.2

0.0

0.0

0.0

Fair value and other adjustments

 

 

(270.6)

(254.8)

(286.3)

(314.6)

Movements in working capital

 

 

2.9

(1.5)

(0.1)

(0.8)

Cash from operations (CFO)

 

 

(126.4)

(55.8)

(57.6)

(54.7)

Capex

 

 

(0.1)

(0.5)

(0.5)

(0.5)

Cash transf. from inv. Held at FV

 

 

77.4

52.6

59.3

66.8

Portfolio Investments - Disposals

 

 

79.1

0.1

0.1

0.1

Cash used in investing activities (CFIA)

 

 

156.4

52.2

58.9

66.5

Net proceeds from issue of shares

 

 

0.0

210.2

0.0

0.0

Movements in debt

 

 

11.0

(98.2)

75.0

50.0

Other financing activities

 

 

(40.1)

(52.4)

(59.4)

(63.1)

Cash from financing activities (CFF)

 

 

(29.1)

59.6

15.6

(13.1)

Currency translation differences and other

 

 

0.0

0.0

0.0

0.0

Increase/(decrease) in cash and equivalents

 

 

0.9

56.0

16.9

(1.3)

Currency translation differences and other

 

 

0.0

0.0

0.0

0.0

Cash and equivalents at end of period

 

 

2.5

58.5

75.5

74.1

Net (debt) cash

 

 

(170.7)

(16.5)

(74.5)

(125.9)

Movement in net (debt) cash over period

 

 

(10.9)

154.2

(58.1)

(51.3)

Source: John Laing Group, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by John Laing Group and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by John Laing Group and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on John Laing Group

View All

Latest from the Industrials sector

View All Industrials content

Industrials

ACWA Power — Record results for FY23

Industrials

Dowlais Group — Motoring forward

Research: Financials

JDC Group — Muted Q417 does not spoil FY18 outlook

JDC Group has been successful in implementing its fintech strategy so far and continues to acquire new insurance portfolios, as illustrated by the recent deals with Albatros and Artus Gruppe. This is confirmed by JDC’s preliminary FY17 numbers, with revenues and adjusted EBITDA improving by 7.6% and 62.5% y-o-y, respectively. However, even adjusted for one-off items, FY17 EBITDA was below management target (€3.9m vs €5-6m), while revenues (€84.5m) missed guidance (€85-95m) by a small margin. Despite a weaker Q417, management remains confident in strong growth in 2018 driven by new business acquired in 2017. JDC’s shares are trading at a 2018 P/E ratio of 55.3x, c 192% ahead of the peer group.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free