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Laing O鈥橰ourke edged back into the black last year with new chief executive Cathal O鈥橰ourke pledging to get the company鈥檚 margins closer to 5% in the long run.

In the 12 months to March 2024, the country鈥檚 biggest private contractor posted a pre-tax profit of 拢18尘 on 拢4.3产苍 turnover, up 19% on last time, after racking up the biggest reverse in its history the year before with a 拢288m pre-tax loss.

O鈥橰ourke, who succeeded his father Ray as chief executive at the beginning of July after returning from Australia last year as chief operating officer, said average industry margins of between 2.5% and 3% were 鈥渘ot sustainable鈥� and added: 鈥淭his acts as a significant handbrake on the sector鈥檚 ability to invest in the transformative technologies that will create step-change.

鈥淭he benefits of modern methods of construction can only be fully realised if we also have modern methods of procurement and contracting.鈥�

He said that the firm鈥檚 business in Australia had managed to turn in margins of 4% and 5% during his time in charge and added that the 5% figure 鈥� often cited many times in the past by contractors 鈥� was not a pipedream.

鈥淔inding a way to get a decent return means getting smarter,鈥� he said. 鈥淲e need to innovate and take costs out of projects.鈥�

The firm has said it won鈥檛 bid single-stage, lump sum work and has increasingly moved into negotiated jobs such as frameworks and public sector deals.

But O鈥橰ourke said it hadn鈥檛 turned its back on commercial schemes after running into problems on several high-profile jobs in the sector in the past few years. 鈥淚t depends what the model is. If it sits within our model of direct delivery, we will look at it.鈥�

One of those problem jobs, a 拢600m mixed-use scheme at Olympia is believed to have been resolved although O鈥橰ourke declined to say whether it had reached an agreement with the client Yoo Capital on costs 鈥� but added that the pair were 鈥渃ompletely aligned to the successful opening of a London icon鈥�.

In the accounts, Laing O鈥橰ourke said its 鈥渃ash management in FY24 was impacted by significant under valuations and ongoing negotiations on one major contract, which have now been resolved鈥� 鈥� believed to be a reference to the Olympia job.

Olympia is expected to be finished late next year while the firm has completed work on another London job believed to have been responsible for some of 2023鈥檚 losses, the mixed-use scheme at the former Whiteleys shopping centre in Bayswater.

The firm鈥檚 biggest business, its Europe hub, which also includes work in Canada and the Middle East, posted a pre-tax profit of 拢17m from a 拢168m loss last time on income up 14% to 拢2.5产苍. The firm said that losses on a PFI hospital scheme in Canada, which has seen it ship 拢219m since 2016, remained unchanged for the second year in a row.

But the Europe arm was blighted by 拢26m of exceptional items including 拢5.2m of redundancy costs, which saw 200 jobs cut last year, and 拢19m in provisions to meet defects for fire safety work as required by new government legislation.

O鈥橰ourke said the firm would consider whether to recoup some of that 拢19m from other firms. 鈥淚f there are obligations due to us and those firms are still around, we will look at that.鈥�

Revenue from the Australia hub was up a quarter to 拢1.5bn with the firm posting a pre-tax profit of 拢40m from a 拢102m loss last time.

Although not named, a pay dispute with its Japanese partner on a huge gas station job in northern Australia cost it a further 拢6.6m in legal costs taking the amount it has shelled out on lawyers鈥� bills over the bust-up to nearly 拢40m since the dispute began seven years ago.

Signed in 2010, the firm was building four cryogenic tanks at the LNG Tanks Project in Darwin for lead construction partner Kawasaki Heavy Industries before its contract was ended in 2017.

After its year-end, the firm made a 鈥渨ithout admission鈥� 拢36m payment to Kawasaki 鈥渋n respect of the ongoing arbitration鈥� with the dispute finally expected to be resolved in September next year. Another post balance sheet event was the sale of a joinery business in the Middle East for AED25m (拢5m).

The firm is due to finish its job to rebuild Everton stadium later this year and O鈥橰ourke said he hoped it would 鈥渃hange the narrative鈥� around stadia jobs, which have long been associated with losing money.

Asked if the company would be prepared to look at any rebuild of Manchester United鈥檚 Old Trafford ground, O鈥橰ourke, who added the firm had not been approached about potential work, said: 鈥淚f they came in with the right terms, we could do it.鈥� The club is expected to decide by the end of this year whether to press ahead with a rebuilding scheme or not.

Laing O鈥橰ourke鈥檚 order book stood at 拢10.8bn, 拢800m more than 2023鈥檚 figure.

Meanwhile, group chief financial officer Rowan Baker will leave at the end of the month after four years at the business. She is being replaced by her deputy Paul Teasdale who joined O鈥橰ourke in 2018 from Lendlease. Baker has joined FTSE 250 firm, components manufacturer Essentra.