John Laing Environmental Assets Group – Life extensions to boost NAV?

John Laing Environmental Assets Group (JLEN) says its NAV per share at the end of December 2018 was 102.8p, up 2.4p over three months. The dividend remains on-track to match the target of 6.51p for the year. Revenue generation was on budget, reflecting above-budget power generation from JLEN’s anaerobic digestion and solar power assets. This offset the impact of low wind speeds on its wind farms.

In advance of its 31 March year-end, JLEN is examining the possibility of extending the economic lives of its wind and solar assets and suggests that this could positively impact on the NAV. In addition, JLEN is engaged in refinancing activity across its portfolio which could help improve returns. Also, Ofgem is engaged in a consultation, its ‘Targeted Charging Review’, looking at the embedded benefit revenues that make a small contribution to JLEN’s returns (see page 7 of our last note for an explanation).

Progressive dividend from investment in environmental infrastructure assets

JLEN aims to provide its shareholders with a sustainable dividend, paid quarterly, that increases progressively in line with inflation. It also aims to preserve the capital value of its portfolio on a real basis over the long term. It invests in environmental infrastructure assets with predictable, wholly or partially index-linked cash flows, supported by long-term contracts or stable regulatory frameworks.

wdt_ID Year ended Share price total return (%) NAV total return (%) Earnings per share (pence) Dividend per share (pence)
1 31/03/15 12.6 6.4 5.85 6.00
2 31/03/16 (2.5) 3.1 3.01 6.054
3 31/03/17 16.5 10.2 9.31 6.14
4 31/03/18 (1.8) 6.0 5.70 6.31

JLEN: John Laing Environmental Assets Group – Life extensions to boost NAV?