London, UK, 18 February 2021

John Laing Group (JLG): Grow, optimise and enhance

CEO Ben Loomes set out his strategic vision for John Laing Group (JLG) at its capital markets day in November. He intends to accelerate growth by investing in 'core-plus' infrastructure while also enhancing operating and balance sheet efficiency. This note assesses the opportunity. Many of the initiatives will take time to fully realise, but the direction of travel is clear and activity levels look to be rising. The shares have recovered recently, but, at an FY20e P/NAV of 1.02x, the rating remains below its peers.

After staging a recovery over the last six months, JLG's shares now trade at 1.02x our FY20e NAV per share, below both its historical average (1.07x) and that of its peers (1.16x). Recent newsflow has highlighted the strength of its existing PPP franchise and suggests that market activity levels are picking up. As renewable exposure falls and JLG begins to execute on its new strategy, we believe there is scope for NAV growth to accelerate and the re-rating to continue. 
 

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