Laing O’Rourke moves to quell credit insurance jitters

Aaron Morby 1 year ago
Share

Laing O’Rourke is acting to calm subcontractor concerns after some underwriters have refused to issue fresh trade credit cover.

Britain’s biggest private contractor is telling firms experiencing difficulties with credit insurers to contact them directly.

One subcontractor told the Enquirer: “We have been told that no new cover is available on Laing O’Rourke although all existing policies are being held.”

Another firm said its previous cover had been reduced and now brokers were struggling to improve the limits.

A director said: “We have been told the underwriters are awaiting an update on forecasts for 2016 before cover will be written.”

The move follows a testing time at the firm which saw the UK and European division rack-up a £58m pre-tax loss in the year to March 2015.

It also conceded that 2016 would be a “challenging” year and chief executive Anna Stewart stood down for health reasons in December.

The credit insurance market hiatus comes as Laing O’Rourke is understood to be entering into final negotiations with a buyer for its profit-making Australian business.

Several multinational contractors including French construction giant Bouygues and Spain’s Ferrovial are understood to have approached Laing O’Rourke about its Australian business late last year.

The business, which reported a post-tax profit of £76m in the 12 months to March 2015 from sales of £1.5bn, could fetch over £350m.

Insiders said a sale is now imminent, which would reassure underwriters and lead to cover being reinstated.

A source said: “It has been a rocky time recently but the Australian sale will allow us to invest more in the UK business.”

A Laing O’Rourke spokesperson said: “Laing O’Rourke cannot account for how the insurance companies determine their credit risk ratings for the construction sector.

“We continue to annually procure over £1bn worth of goods and services to fulfill our highest-ever-quality secured order book of £9.2bn.

“We would advise any of our suppliers who wish to discuss their trading relationship with the Group to contact us directly.”

Latest news

London’s Camden Council to strip cladding from five towers

Tests reveal Chalcots Estate fitted with polyethylene core cladding
14 hours ago

First tests reveal combustible cladding on other towers

Up to 600 towers need to be checked
18 hours ago

Two killed in crane collapse on Crewe construction site

Tower crane comes down on Seddon site
1 day ago

Berkeley cleared to fast-track scheme for Grenfell survivors

Homes and Communities Agency strike deal to buy Kensington Row luxury apartment scheme
2 days ago

Buckingham Group targets £500m revenue in 2018

Profits soar as firm eyes swelling pipeline of stadium projects.
1 day ago

Five more Edinburgh schools found with building defects

Investigation reveals more schools in Edinburgh suffered wall-tie defects
21 hours ago

Galliford/Lagan jv wins £135m RAF Marham hangar

New hangar will house a dozen F-35B vertical take-off jets
1 day ago

CIOB sets up commission to probe control of build quality

Paul Nash to lead urgent review into behaviour that undermines quality in construction
2 days ago

Barratt names new finance boss

Barratt promotes Jessica White to top financial executive
21 hours ago

Opinion: Construction must say never again to another Grenfell

The industry must break with its lowest cost culture
2 days ago

Profits soar at Berkeley despite housing market uncertainty

Berkeley worried about Brexit impact on skills as half its site labour comes from EU
2 days ago

Hewden sell-off raises £120m but trade creditors get pennies

More than £41m was owed to plant hire giant's trade creditors
2 days ago

New Bovis Homes boss buys extra £2m shares

Greg Fitzgerald raises his shareholding to around £3.2m
2 days ago

Kier and Bouygues look for London subcontractors

Major meet the buyer event in the capital next week: Register now
3 days ago

Croydon council to retrofit 25 towers with sprinklers

Council to start £10m sprinkler programme in tallest housing blocks
2 days ago

Yorkshire builder’s MBO deal sowed seeds of own demise

George Hurst & Sons never recovered from an MBO a decade ago saddling the business with debt
2 days ago

Queensferry Crossing to open on August 30

End in sight for contractors who have battled against high winds for six years
3 days ago

Councils ordered to check rainscreening on all buildings

Government to fund fire rating tests on all aluminium composite material clad buildings
4 days ago

Morgan Sindall infrastructure boss to join Lagan

Nick Fletcher to return to Lagan as Chief Operating Officer
3 days ago

Architect makes loss as construction market peaks

Aukett Swanke struggling for commissions as market hits "bottom of the cycle"
3 days ago

Final concrete poured on Mersey Gateway

Bridge project on course to be completed this autumn
3 days ago

Willmott Dixon wins £20m medical school

University works swell to £320m with new Anglia Ruskin School of Medicine in Chelmsford
3 days ago

Worker trapped between roof and work platform

Contractor Pyeroy fined £130,000 for lack of MEWP training
3 days ago

Bristol Uni plan for £300m Temple Meads campus

Construction work is scheduled to get underway on 900,000 sq ft scheme in 2019
4 days ago

Morgan Sindall secures Midlands power network deal

Western Power Distribution two year contract extension worth £60m
3 days ago

Specialists named for £290m SW highways work

21 firms awarded specialist works on new South West England asset delivery model
4 days ago

Vital Energi wins Ardmore package at Ram Brewery

Specialists latest success with main contractor
3 days ago

Experts focus on rapid fire spread up exterior clad columns

Building columns clad in 'flammable' rainscreening allowed Grenfell fire to spread rapidly
4 days ago

Bechtel posts £2.3m UK operating loss

Project management specialist hit by problem contracts
4 days ago

Third of firms dropped from £1bn-plus London housing deal

Notting Hill Housing Trust names 23-strong line-up of favoured contractors
4 days ago

Contractor services