Laing O’Rourke suffers massive £246m loss

Aaron Morby 6 years ago

Laing O’Rourke has suffered a £246m loss after being hit by poor performance of its massive £1.3bn joint venture hospital project in Canada and several now completed problem UK contracts.

Ray O'Rourke says the group has returned to profit in the first half of this year
Ray O'Rourke says the group has returned to profit in the first half of this year

In a short statement this morning Ray O’Rourke, group executive chairman, said: “It is with humility that I have to report our first loss in 15 years of trading as Laing O’Rourke.

“As a private company, the responsibility for its performance rests with me as founder.

“We all know that when recession starts, our industry in particular enters a race to the bottom – regrettably Laing O’Rourke joined in.”

He added: “I can reconcile the losses to a number of projects that are now complete and handed over and a particularly difficult large project in Canada, on which I am pleased to announce we are on track to deliver the project in accordance with the mutually agreed revised timetable.”

O’Rourke put its profitable Australian business up for sale nearly a year ago after revealling a £58m pre-tax loss at its European business last year. At the time group performance was salvaged by Australia which helped the group to deliver an overall £52m group pre-tax profit.

It is now rumoured the Australia arm has been taken off the market after Laing O’Rourke failed to find a buyer.

In his statement for the results to March 2016, O’Rourke said: “I want to assure all our stakeholders that our company is adequately financed, has returned to profit in FY17 and is therefore well-positioned to move forward from these less than satisfactory results.”

The group is now forecasting a slow return to revenue growth, with revenue returning to 2015’s level of around £3.8 by the end of 2019 and then reaching £4bn in 2020.

O’Rourke said: “We have continued to invest in our people, manufacturing, digital technology and engineering excellence, based on our firm belief that this is the future.

“I am pleased to say we continue to believe in this strategy as the market in the UK dramatically improves with the advent of the new nuclear programme, High Speed 2, Heathrow runway and terminals, Thames Tideway and the Government’s drive for more living accommodation – 1 million more homes by 2020

“In addition to this, our Australian business has continued to perform well over the past year, securing significant infrastructure projects mainly through collaborative contracts, in markets that also have record spends forecast up to 2020 and beyond.  These welcome developments are reflected in our record order book.”

Detailed results will be released shortly.

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