John Laing lifts pre-tax profit to £44m from on-going operations

John Laing has unveiled a pre-tax profit of £44m from its on-going operations, up from £30m in the previous year.

Laing enjoyed a further contribution to its total group profit from discontinued operations – largely Laing Rail which was sold in March 2008. This former element of the group generated a profit figure of £36m.

Latest results cover the 12 months to 31 December 2008 with turnover in Laing’s on-going operations standing at £240m (comparable figure in 2007: £200m).

The value of Laing’s portfolio of 67 infrastructure assets rose to £700m, up from a previous figure of £610m.

During the year the group reached financial close on eight new PFI/PPP projects on which the investment commitment ran to £80m.

Referring to the current global economic situation, Laing said: “The majority of our 67 investments are largely unaffected since, with few exceptions, the revenues are based on availability rather than usage.”

The three “exceptions” to Laing’s general rule are:

• the Severn River Crossing
• the A1 toll road in Germany
• the Brisbane AirLink

Five other road projects have a revenue flow derived from shadow tolls though there is only a marginal impact on revenues related to usage.

The deal on the remaining 59 of the 67-scheme portfolio is that “projects receive revenues directly from public sector clients on the basis of availability and economic conditions have no effect on project performance.”

UK market

The creation of the new Homes &Communities Agency should result in “an attractive deal flow”

In secondary education, there is a substantial pipeline through the BSF procurement model. However Laing says “these are expensive to bid with long lead times”

Canada

A success in the health sector and a steady flow of new opportunities

USA

The PPP market “has not reached anywhere near its full potential” as the privately-financed model has not yet received general acceptance in “any but a few states”.

Continental Europe

Patchy. Laing is “doubtful that we could achieve our target levels of return in France, Spain and Italy due to the competitiveness of the local market participants.”

Greece, Turkey and Portugal “might be attractive”

Asia

A new office has been established in Delhi and Laing is working with a local partner, Hindustan Construction.

During the year Laing made 28 redundancies at London offices were rationalised.

In total Laing has 356 professional staff in its PFI investment businesses and a further 771 in the facilities management business.

The latter figure has jumped big-time as a result of the TUPE transfer of 247 staff on the outsource service contract for Hounslow Borough Council.

The group’s bid costs during the year ran to £20m – up slightly on the previous figure of £17m.

In the UK, Laing works with various contractors and service providers. The list includes: Carillion, Costain, Indaver, Laing O'Rourke, Skanska, United Utilities, Vinci and Viridor.