John Laing Infrastructure's profit rises but expects short-term slowdown

Property development fund John Laing Infrastructure expects to see a slowdown in market activity due to the Brexit vote, though the company reported a rise in half-year profits due to international expansion and project divestments.

For the six months ended 30 June, profit before tax soared to £72.3m from £14.5m last year, due to an increase in the company’s portfolio, positive exchange rate movements, a reduction in discount rates and profits from disposals of two projects.

Chairman Paul Lester, said: “In the aftermath of the EU referendum vote, we expect to see a slowdown in market activity while investors take stock of the political and economic situation. However, given that there remains an oversupply of capital seeking investment in UK infrastructure and limited supply of projects, we do not expect this to last long.

“We also expect to see dual pressure on asset pricing with non-sterling denominated investors seeking to take advantage of a weakened sterling, offset by the 'wait and see' attitude likely to be adopted by some investors in the short term.”

Lester added that the UK was a challenging market due to the imbalance between supply demand and was increasingly considering overseas markets as result.

In June, the FTSE 250 company sold the Newham hospital and Barnsley BSF projects to Equitix Investment Management for a combined £43.43m, a 35% increase on the value of the investments.

The company also made investments of £178.6m during the period, including its first investments in Spain and the US.

John Laing's portfolio value increased by nearly 20% to £1,038.1m at 30 June compared to 31 December 2015.

Net asset value at 30 June of £1,022.2m, up 15.7%, due to acquisitions and unrealised exchange rate movements during the period. Net asset value per share was 113.8 pence, an increase of 5% from 31 December 2015.

The company reported a 12.6% total shareholder return in the period. A dividend of 3.41p per share was declared, which is payable in October 2016.