Infrastructure comes out of intensive care

THE high-profile collapse of outsourcing giant Carillion earlier this year meant that infrastructure investments fell out of favour fast. Their problems were compounded by speculation about what a Corbyn-led government could mean for the industry. John Laing Infrastructure may have turned things around for the sector. The investment company owns and runs everything from hospitals and service stations to street lights. It manages these on long-term contracts, often negotiated with the Government, under which it agrees to operate the service or building for a set period before parting with the asset at the end of the contract.

It’s a reliable business model that attracts income-hungry investors, who receive a tidy dividend from the money the company receives for its work.

John Laing Infrastructure has received a £1.4 billion takeover offer, backed by management, which sent its share price soaring. Midas recommended the stock when the firm was floated at 100p a share in 2010. It tipped them again in 2016 when the shares were 117p – but factoring in the dividends the overall return was 50 per cent. Today they are 145½p. Midas verdict: Buy a rival. It is probably too late for investors to benefit from this takeover bid, but experts have suggested it could trigger offers for other infrastructure investment trusts. Those invested in its peers could reap rewards and pick up a handsome dividend while waiting.