Edison Issues Initiation on John Laing Group (JLG)

Aug 31, 2016, 11:08 ET from Edison Investment Research

LONDON, August 31, 2016 /PRNewswire/ --

John Laing (JLG), listed in February 2015, has a diversified portfolio of investments, by sector and geography, and with an even split of operational projects and assets under construction. We believe that JLG is well placed to capitalise on the future demand for infrastructure and renewable investment and we forecast a total return (NAV and DPS growth) of c 17% (2015-20). This growth should lead to a reduction in JLG's valuation discount.

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UK-listed infrastructure and renewable energy funds currently trade at a weighted average premium to NAV of c 19%. JLG stands at a conservative 4% discount. The discount may in part reflect market indigestion following the distribution of Henderson Equity Partners' (62.6%) shareholding (October 2015), and in part a cautious attitude towards the valuation of primary portfolio assets by the market. Given the growth that we forecast in JLG's NAV and DPS, in particular due to the attractive returns made in the primary investment portfolio, and the diminishing impact over time of the share distribution, we expect this valuation gap to close.  

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Graeme Moyse          
Edison Investment Research        
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Roger Johnston          
Edison Investment Research        
+44(0)20-3077-5722
industrials@edisongroup.com

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SOURCE Edison Investment Research