John Laing, the support services group that abandoned housebuilding to chase the more lucrative public/private pound, yesterday posted a sharp rise in interim profits, beating City forecasts.
The company, which has slashed its debt since selling its homebuilding arm to George Wimpey two years ago, said all three of its core accommodation, rail and roads investment businesses had performed well. Its pre-tax profit for the six months to 30 June more than doubled to £13.1m.
Andy Friend, the chief executive, said the group's bottom line had been boosted by its rail division, which operates Chiltern Railways. Revenues, from one of the UK's most reliable lines surged 16 per cent during the period, although Mr Friend said the group had benefited from disruptions to the West Coast line. The company also banked a £2.9m profit from the sale of a development site at Aylesbury, helping it to report stronger-than-expected profits, Mr Friend added.
Since June, it has won another three projects, increasing the number of public finance initiatives or public-private partnership projects it is working on to 40. Laing also reiterated its intention to focus on the European road-construction sector, worth some €34bn (£23bn) over the next three years. It set up a joint venture with the Commonwealth Bank of Australia to target European road projects, each pledging to invest £150m.
Mr Friend said: "We are seeing a much better-organised, better-managed pipeline of opportunities across Europe, led by the Treasury." He said Laing would aim to win one-tenth of the projects across Europe.
Geoff Allum, an analyst at Investec, said: "Laing's markets continue to show very good growth. Many investors now appreciate the potential of John Laing's strategy, as demonstrated by the strong rise in its share price over the past year."
Laing's shares, which have risen 30 per cent this year, climbed yesterday 4p to 235p.Reuse content