John Laing Infrastructure Fund grows profits more than expected

John Laing Infrastructure Fund’s portfolio value climbed in the third quarter, while its underlying profit grew more than expected due to disposals and cost savings during the year.

For the nine months ended 30 September, underlying portfolio growth on the rebased portfolio valuation increased to 5.89%, compared to last year, ahead of expectations from the unwinding of the discount rate, to £62m.

It was ahead of expectations due to profits from disposals in the period and the company's refinancing of senior debt and insurance cost savings, which was offset by the negative impact of lower than forecast inflation, a reduction in long term UK deposit rate assumptions and cost provisions from certain project valuations.

The company's portfolio of 60 infrastructure assets was valued at the end of September at £1.11bn, a 28.3% increase.

While the net asset value was £1.05bn, an 18.9% rise from the end of December 2015, and the net asset value per share was up 7.8% to 116.9p.

In July, the FTSE 250 company bought two stakes in infrastructure projects in Spain for £53.5m, the first a13.5% interest in the Barcelona metro stations line nine section two project, from co-shareholder Acsa Obras e Infraestructuras, a member of the Sorigué Group, and a 13.5% interest in the section four project, which runs further north to section two.

Andrew Charlesworth, director of John Laing Capital Management, investment adviser to JLIF, said: "JLIF's portfolio continues to perform well. While the market remains competitive, the new investments made so far this year show our ability to access new projects on a bilateral basis and at good value."

There have been operational performance issues at the Peterborough Hospital, Roseberry Park Hospital and Edinburgh Schools projects, and provisions have been made within the valuation of the portfolio to reflect the impact.

The company said it is reviewing a number of investment opportunities through bilateral deals from relationships with vendors and through competitive auction processes

A dividend of 3.41p per share was paid in October, which resulting in total dividends paid in the year of 6.82p.