Thursday, July 06, 2006
John Laing plc, the infrastructure investor, developer and operator, is issuing this update ahead of the announcement of results for the six months ended 30 June 2006 (scheduled for 24 August 2006).
A detailed update on current trading was last issued on 19 May 2006 at the time of the AGM. During the intervening six week period, Equion, our PFI/PPP accommodation division, achieved financial close on the £319 million South Lanarkshire schools project where we are partnering Amec and Innisfree and in which we will invest £8.4 million. We are also pleased to say that, following the Hospital Review announced by the Department of Health last December, we have now reached agreement with the Hospital Trusts on the scope of affordable PFI projects for both the North Staffordshire and the Leicester schemes, on which we are preferred bidder.Equion has recently been short listed for the Hastings Further Education College project.
The Group’s operational Road and Accommodation projects continue to perform well, and we anticipate that the trading results for these businesses will be in line with market expectations for the current year. Construction works in these divisions remain broadly on programme to meet our client’s expectations.
The level of bidding activity has increased, particularly in the international markets, as part of the Group strategy for growth. We will shortly be opening an office in Canada followed by one in Central Europe to give us access to these emerging markets. This increased investment in bidding activity will be reflected in the Income Statement for the first half of 2006 and beyond.
We are pleased to report that the operating performance on Chiltern Railways has been good during the first six months of the year, with 94% of trains running on time. With regard to the Gerrards Cross tunnel collapse we have now submitted our formal claim for compensation to Tesco, and have thereby commenced proceedings towards arbitration. We have previously reported on the revenue shortfalls resulting from the tunnel collapse in our AGM statement.
In joint venture with MTR, we are pleased to have been taken through to the next stage as one of four bidders for the London Rail Concession by Transport for London, comprising Silverlink Metro and the East London line.
Adrian Ewer is now fully engaged in the role of Chief Executive and is continuing to implement the Board’s strategy of expanding our PFI/PPP activities in the UK and internationally. The recruitment of a Finance Director to replace Adrian has commenced and we expect to make an announcement shortly.
While the reported results from Chiltern will be disappointing, the core PFI/PPP portfolio continues to perform well and international market opportunities remain encouraging. We are committed to growing the value and scope of our PFI/PPP portfolio and are confident that we will continue to achieve progress on this in the second half of the year.
Contacts:
John Laing plc
Adrian Ewer
Tel: 020 7901 3200
Finsbury Group
Faeth Birch/Robin Walker
Tel: 020 7251 3801