Despite ongoing challenges and global turbulence, the country’s biggest private contractor got overheads under control to turn its fortunes around and deliver an £18m pre-tax profit.
Laing O’Rourke ended the year to March 2024 with revenue up 18% to £4bn and a record order book worth £10.8bn.
Cathal O’Rourke, who succeeded his father Ray to become chief executive in July, said: “I am delighted to confirm a return to profit for our business. This provides stability and a platform from which we can keep building certainty and resilience.
“This improved performance was driven by a refreshed and strategic approach to work winning, gross margin recovery, and tight control of overhead spending.
“I’m particularly pleased that we continue to win work in our priority sectors in both operating hubs – it assures me we have the right strategy in place to de-risk our portfolio and achieve long-term sustainable growth.”
During the turnaround year, particularly at the Europe Hub, pre-exceptional earnings before interest and tax recovered to £76m compared to a £79m loss previously. Despite the return to profit net cash slipped 3% to £279m.
Group-wide operating margins recovered to 1.9% before exceptional provisions of £36m. These provisions included an extra £20m for legacy fire safety works and nearly £6m in redundancy payouts after streamlining focused on the Europe hub.
The Australian Hub incurred £7m of legal costs relating to Laing O’Rourke’s ongoing big contract dispute, which blew a hole in the 2023 accounts after a provision of £144m relating to work on cryogenic gas tanks on the Ichthys LNG project in Darwin.
O’Rourke added: “The historical contract dispute that we made provision for in 2023 remains in arbitration and we expect it to be settled from mid-2025. “
The firm’s auditors warn in its latest accounts that resolution of the claim remains subject to a high degree of estimation uncertainty.
O’Rourke also announced group chief financial officer, Rowan Baker, will leave at the end of this month to take up a CFO role at a FTSE 250 company.
She will be succeeded by Paul Teasdale, who joined Laing O’Rourke in 2018 from Lendlease, to work at the Australia Hub.
Looking ahead O’Rourke said: “As we seek to build certainty and resilience, we are focusing on six priority sectors in the Europe Hub: healthcare, nuclear and green energy, rail, defence, science and research, and data centres.
“In Australia we remain focused on defence, rail and road infrastructure, energy, and water, and are focusing how best to bring our unique skills to the country’s climate challenge.”
