Ray O’Rourke predicts 18 months of financial storm

Aaron Morby 13 years ago
Share

Ray O’Rourke predicts the financial storm hitting construction will not ease until April 2012/13.

The chairman of the UK’s biggest private contractor said there was still a long road ahead before recovery in engineering and construction takes hold.

He unveiled pre-profits halved at £25.9m in the year ending 31 March, down from £50m last time.

By comparison total managed revenue dipped by just 6% to £4bn, still 20% below the £5bn peak in 2009.

O’Rourke said: “Looking forward, the engineering and construction sector will continue to face into an economic storm for the foreseeable future.

“While these and a number of other uncertainties remain in the immediate term, our medium-term view of demand growth remains positive, and we will recommence revenue growth from 2012/13.”

He added: “In this environment we will focus on protecting cash reserves and maintaining earnings quality at the individual project level.

“We now have a safer, leaner and smarter business that is in good competitive shape,” said O’Rourke.

Despite the fall in revenue, the Laing O’Rourke’s gross margin edged up 10.2% – its best ever performance.

Tight cost management and efficiencies in project delivery helped to hold up  gross margin throughout the recession.

Over the year Laing O’Rourke’s staff head count fell 23%  to 15,027, due to 5,000 job cuts at the European hub business, mainly in the Middle East.

Staff number grew by more than 500 in Australia. Over the next few years the group predicts the contractor will grow strongly in Canada and Australia.

O’Rourke also said he had set up a R&D think-tank group at the firm, which will steer problem solving, help win major projects and offer external consultancy.

The new Engineering Excellence Group, or EnEx.G as it is known, will work centrally to lead the Laing O’Rourke’s innovation agenda.

Staff within the new group will help the design and delivery businesses, benchmarking design, manufacturing and construction processes.

It is also being tasked troubleshooting operational issues and providing thought-leadership to assist in winning major new projects.

Laing O’Rourke also will offer its service as a consultancy to clients, like central Government and supply chain partners.

Latest news

Morgan Sindall to build former Willmott Dixon leisure job

New contractor appointed on
14 hours ago

Graham consortium wins £400m Manchester job

Equitix consortium to now work up DBFO plans for University of Manchester’s Fallowfield Campus
11 hours ago

Keltbray looking to sell infrastructure business

£378m turnover rail, energy and highways business up for sale
21 hours ago

Innovative viaduct building method used for first time in UK

HS2 contractors will build nine viaducts in Delta Junction using special cantilevered process
22 hours ago

Unite buys London site to fast-track 444-bed student scheme

£800m to be spent on London development pipeline in next five years
22 hours ago

CITB awards £2.5m of contracts to management consultant

Three outsourced deals in the last year for "project leadership and management consultancy"
22 hours ago

Village centre approved for 6,000-home new town plan

Hampshire's Welborne Garden Village plan has been in the pipeline for two decades.
21 hours ago

£3m fine after cherry picker demolition death

Court rules after tragedy during decommissioning of gas rig
22 hours ago

BAM plans wave of job cuts at UK Construction arm

Co-op Live arena plunges Bam Construction to £19.5m first-half loss
2 days ago

Robot tunnel builder goes into administration

Hypertunnel was hoping to revolutionise how underground structures are built
2 days ago

Wates to build £86m Guildford Council housing scheme

40% of the 248 homes will become council homes under partnership deal
2 days ago

“Scrap CITB” say three quarters of construction firms

Payroll giant Hudson Contract calls for CITB to be absorbed into new Skills England training body
2 days ago

£100m Prestwich Village revival approved

Vinci and Willmott Dixon in chase for Muse-led regeneration scheme
2 days ago

Carbon negative asphalt aggregate trialled on M11

Skanska and Tarmac test CO2 absorbing aggregate material on stretch of Essex motorway
2 days ago

Father and son sentenced over covid construction loan fraud

Bristol builders given suspended jail sentences over bogus Bounce Back Loans
2 days ago

Beck Interiors files administration notice

Supply chain has suffered delayed payments from £139m-turnover luxury fit out specialist
3 days ago

Green light for York Central civil service office hub

£60m office project accelerates York Central goods yard redevelopment
3 days ago

Blenheim House Construction enters administration

Administrators looking at options on present projects
3 days ago

Profits rise at Esh Group with more to come

Contractor confident about year ahead as market conditions move in right direction
3 days ago

Piling specialist Van Elle sees housing orders rise 30%

Mark Cutler says firm on course to deliver 10% annual sales growth
3 days ago

HS2 to spend £100m shutting sites where work never started

Remediation of sites no longer needed for cancelled Phase 2 will take three years
4 days ago

Willmott Dixon wins £61m deal for new Army dog unit

Contractor to revamp Kendrew Barracks in Rutland
3 days ago

Stockport advances 4,000-home Town Centre East plan

Council seeks consultants to steer plan for 280-acre area in the city
3 days ago

ISG sale imminent as buyers set-up UK holding company

South African nutrition entrepreneur and Australian partner primed to take over
4 days ago

CR Construction wins £210m Manchester towers

Construction to start next year on four blocks ranging from nine to 34-storeys
4 days ago

Southern Housing to rationalise supply chain following merger

Firms put on alert for £1.7bn construction framework renewal
4 days ago

Decision delayed on 52-storey Isle of Dogs tower

Hong Kong developer plans 460 flats block next to Millwall Inner Dock
4 days ago

Go-ahead for £850m North London estate rebuild

Flagship Edmonton housing estate redevelopment will deliver 2,000 new homes
4 days ago

Mace lands £184m Oxford Science Park contract

Contractor to build trio of laboratory and office buildings
5 days ago

Worker paralysed in 30ft fall during electricity pylon demolition

Specialist firm fined £240,000 after court hears linesman attached lanyard to a loosened steel section
4 days ago

Contractor services