5 August 2024
After prime minister Kier Starmer’s priorities for government were set out, construction and infrastructure-focused companies could be in line for a boom, according to wealth manager RBC Brewin Dolphin.
Labour has pledged to “turbocharge the building of houses and infrastructure” in its new Planning and Infrastructure Bill, which was announced as part of the King’s Speech on 17 July. The party campaigned on a pledge to build 1.5 million homes over five years, while streamlining planning and fast-tracking major infrastructure projects.
As a result, large sums of investment are expected to kickstart the delivery of new projects such as renewable energy infrastructure, roads, electricity pylons, data centres, and hospitals, alongside vast amounts of new housing.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “A lot of what has been set out by the new government will likely take years to develop. But there are some ambitious aims and, as the King’s Speech set out, there is already action being taken to put these plans into practice.
“Infrastructure is clearly a priority for the Labour government and these types of projects tend to have a high ‘velocity of money’ – in other words, they make money move around between different organisations and, in turn, tend to create a lot of jobs directly and in the supply chain. The hope will be that this translates into economic growth. “There will be a lot of change over the next year or two, but we would always suggest speaking to a financial adviser before making any investment decisions based on current events. Professional advice will ensure you build a portfolio of assets that is set up to support your long-term financial objectives, with an appropriate level of risk.”
UK-focused infrastructure companies:
Segro – John Moore said: “Segro might not seem like the obvious choice as a real estate investment trust, but it is increasingly exposed to data centres and many of its future projects will be taken up by occupiers delivering the picks and shovels for the building boom. It has raised money well over the last six months to grow its portfolio in the UK and support its plans in Europe and has clients like Equinix, Netflix, and Virtus Datacentres in the technology market.”
Greencoat UK Wind – John Moore said: “Greencoat is the sort of business Labour should want to see double in size over the next few years, as renewables make up a larger proportion of the UK’s energy mix. Greencoat and other long-term capital-backed owners, create demand for assets moving through to completion. In Europe, the likes of Iberdrola and others have quite successfully aligned themselves with their respective states’ energy policies and you could see something similar happening here with Greencoat and others.”
National Grid – John Moore said: “It’s the first time in decades we’ve seen utilities in the UK, Europe, and the USA announce in relatively close proximity their intentions to invest heavily in their assets. National Grid surprised the market when it recently announced its plans to do so in far larger scale and raised equity to part finance this, but its strategy should pay off over time and the utility still offers a relatively generous, albeit rebased, dividend in the interim.”
Supply chain companies:
Ashtead – John Moore said: “Ashtead is the company behind Sunbelt Rentals, which leases out plant and construction equipment across the UK, USA, and Canada. Energy companies, utilities, rail companies, and data centre developers – whether public or private sector – will more than likely have to use equipment provided by Ashtead for construction.”
CRH – John Moore said: “CRH owns well-known brands like Tarmac and Blue Circle; although the company recently changed its listing from the UK to the USA, this has not impacted its market presence. CRH provides construction materials for major infrastructure projects and should be in line to benefit from a boom in building, whether it is infrastructure-related or housing.”
Amphenol – John Moore said: “Amphenol is one of the world’s largest producers of electronic and fibre optic connectors, as well as cables. Its main markets include construction, utilities, and IT, meaning it has a high level of exposure to the types of infrastructure projects that are likely to move forward in the next few years.”
Disclaimers
The value of investments can fall and you may get back less than you invested. Neither simulated nor actual past performance are reliable indicators of future performance. Performance is quoted before charges which will reduce illustrated performance. Investment values may increase or decrease as a result of currency fluctuations. Information is provided only as an example and is not a recommendation to pursue a particular strategy. We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
RBC Brewin Dolphin is a trading name of Brewin Dolphin Limited. Brewin Dolphin Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register reference number 124444) and regulated in Jersey by the Financial Services Commission. Registered Office: 12 Smithfield Street, London, EC1A 9BD. Registered in England and Wales company number: 2135876. VAT number: 365345640.
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PRESS INFORMATION
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NOTES TO EDITORS
About RBC Brewin Dolphin
RBC Brewin Dolphin is one of the UK and Ireland’s leading wealth managers and traces its origins back to 1762. With £57.1bn* billion in assets under management, we offer award-winning, bespoke wealth management services, including discretionary investment management and financial planning.
Our qualified investment managers and financial planners are based in 33 offices across the UK, Jersey and Republic of Ireland. They are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients’ needs at the core.
As part of Royal Bank of Canada (RBC), we are now able to draw on the strength of a global financial institution to continue to improve the service we provide to our clients and drive further innovation across our business.
*as at 30th April 2024.
Disclaimers
The value of investments can fall and you may get back less than you invested.
RBC Brewin Dolphin is a trading name of Brewin Dolphin Limited. Brewin Dolphin Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register reference number 124444) and regulated in Jersey by the Financial Services Commission. Registered Office: 12 Smithfield Street, London, EC1A 9BD. Registered in England and Wales company number: 2135876. VAT number: 365345640.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 94,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada’s biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
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