John Laing makes IPO treble for retail investors

An anticipated stampede to list on the London Stock Exchange ahead of the General Election in May is in full flow. There could be as many as 40 this quarter alone, according to Interactive Investor, but unlike the flood of floats last year, the latest have all been open to retail investors.

John Laing, the infrastructure investment business, has just announced its return to the stockmarket after an eight-year absence as part of a plan to raise £130 million. The company, which worked on the M1 motorway, Sizewell B nuclear power station and Coventry Cathedral, had a proprietary portfolio worth £781 million at the end of September 2014 generating annualised returns of 23-25%. It's got a stake in the UK Department for Transport's Intercity Express Programme, the Manchester Waste projects, New Royal Adelaide Hospital and Denver Eagle P3.

Income hungry investors are set to have their share of a £20 million base dividend for the financial year ended 31 December 2015, reduced pro-rata to account for the float date. It intends to grow the dividend at least in line with inflation, and a promise to special dividends of 5-10% of gross proceeds from the sale of investments on an annual basis is attractive.

In the nine months to 30 September, John Laing generated operating income of £166.5 million, with £120.6 million of profit from operations. It had an investment pipeline of £1.4 billion and net assets of £630 million, with third party assets under management of just under £1 billion, up from £265 million in December 2010.

Founded by James Laing in 1848, the then-construction company listed on the London Stock Exchange in 1953 and launched its first governmental public-private partnership (PPP) investment in 1990. Laing was taken private in 2007 by two funds managed by Henderson, where it sold Chiltern Railways, launched its infrastructure fund and its environmental assets arm (JLEN), expanded into the renewable energy market and sold its management business facilities.

As predicted earlier this month, there has been a flurry of companies coming to market as they try and list before any General Election jitters, with Trainline, HSS Hire and now John Laing open to retail investors. Not all of the upcoming floats will be, however. Interactive Investor chief executive Adam Seale advises companies to make the most of the retail route to market.

"Listing companies should not ignore the retail investor; IPOs are a golden opportunity for companies to create genuine interest in investing for people who may not have invested before. There's real appetite among our investors to be included in IPOs, and we're encouraged to see companies returning after the market jitters of late. We expect to see an uptick in flotations in the first half of the year, as companies aim to list before any potential election-induced market doldrums."

Any application to participate in these Offers must be based solely on the information contained within the Prospectus.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.