Monday, June 28, 2004

John Laing, the infrastructure development and operations group, is issuing this trading update ahead of its half-year results, scheduled for August 31st 2004.

Highlights

• Results anticipated to be in line with market expectations
• 5 projects reached financial close in the first half, bringing total group investments to 37
• 15 projects at preferred or sole bidder stage, with 6 expected to close in the second-half
• Excellent growing pipeline of future bidding opportunities in the UK and Europe
• Acquisition of the remaining shares in the UK M40 from Carillion for £19.65 million
• Formation of a new 50:50 joint venture with Commonwealth Bank of Australia to review up to £300 million of new project equity on a case-by-case basis in UK hospital and European roads opportunities

Trading Update
The Group has made good progress during the half-year and expects to announce half-year results which will support consensus analysts' expectations for the full year.

5 new PFI/PPP projects have reached financial close during the half, and further projects are expected to reach contract signature shortly. Of the 37 project investments in the portfolio, 21 have reached the operational yield stage. Generally good progress has been made with projects in the construction phase, and completion of the Ministry of Defence Main Building is imminent. 

Chiltern Railways has performed strongly in both a financial and operational respect: punctuality currently stands at 91% (moving annual average) and year to date passenger revenues are running 14% ahead of 2003 levels.   Notwithstanding oil prices and other cost pressures, Laing Rail is expected to benefit from improved profitability in the first half.  

Following recent project closings and successful bids, John Laing has a further 15 projects at preferred or sole bidder stage, of which up to 6 are expected to reach financial close during the second half.  These include the £97 million Swindon Schools project where Equion was selected as preferred bidder in May.

The market outlook for development of privately financed public service infrastructure remains strong in both the United Kingdom and the wider European Union.   This is reflected in the emergence of new procurement pipelines in a number of countries and is enabling John Laing to access new opportunities in its chosen sectors through the formation of consortia appropriate to the markets and sectors involved.

The company has been short-listed for a range of potential projects during the half, including the M1 Belfast Westlink with Mowlem (value £100 million: Laing share 50%), and is supporting Vinci's short-listed bid for the £300 million Hungarian M6 motorway.

In addition John Laing is pursuing a number of significant project pipelines in association with its chosen partners. These include:

• the Portuguese hospital programme, where bidding for Cascais Hospital, the second of ten programmed hospitals, will begin shortly
• the Limerick Southern Bypass, a £200 million project in the Irish Republic's road programme, in association with Hochtief & Laing O'Rourke
• the German A Model road programme where Laing will support Bilfinger Berger & WalterBau in consortium
• the E18 Finnish road project in association with Skanska and Lemminkainen

John Laing announces today that it has formed a 50:50 joint venture with the Commonwealth Bank of Australia to co-invest in UK Hospital and European Roads projects.   John Laing selected the Commonwealth Bank as a partner after a competitive process involving an international field.   The Commonwealth Bank of Australia has for many years played a leading role in infrastructure financing and investment in the highly developed Australian market and is entering the joint venture as a key part of its European expansion strategy.  The new joint venture will be called Laing Commonwealth Bank.  Further detail is set out in a separate announcement.

John Laing also announces today that it has assumed full ownership of the operational UK M40 PFI Road project, following purchase of Carillion Plc's matching 50% interest in the project company for £19.65 million.  Further detail is available in a separate announcement.

There will be an analysts’ presentation at 10.00am today at the Presentation Suite, Floor 24, Tower 42, 25 Old Broad Street, London, EC2 1HQ.

Enquiries:

Andy Friend, Chief Executive, John Laing plc                    020 7901 3200
Adrian Ewer, Finance Director, John Laing plc

Ed Orlebar/ Faeth Birch/ Robin Walker, Finsbury Group  020 7251 3801

Notes to Editors

John Laing is the UK’s listed market leader in PPP/ PFI infrastructure projects.  It is currently invested in 37 PPP/ PFI projects in the rail, roads and accommodation sectors, 21 of which are fully operational. Preferred or sole bidder status has been reached on 15 further projects of which up to 6 are expected to reach financial close in the second half of the financial year.

Laing’s portfolio currently includes road projects such as the Severn River Crossings, the UK M40 DBFO road, the E39 road in Norway and the A55 in Wales. Laing also owns Chiltern Rail, one of the UK’s most successful train operating companies. Accommodation investments include the MOD main building, two police firearms training centres, four hospitals, two LIFT healthcare projects and six schools projects.