But Australian part of the business reports 拢25m profit after two years of losses
Laing O鈥橰ourke鈥檚 profit across its European operations nearly halved last year to 拢36m after the firm wrote off 拢23m from the value of its land and property assets.
However, the firm鈥檚 Australian business bounced back into the black after two years of losses, reporting profit of 拢25m, helping the overall group to more than double pre-tax profit compared with last year.
In its results for the year to 31 March 2013, published last week, the firm reported total revenue, including share of joint ventures, of 拢1.95bn in its European business. This was up 11% from 拢1.75bn the previous year.
But operating profit in the European business, which includes the Middle East and Canada, fell 46% to 拢36m (2012: 拢66.6m), after the deduction of 拢15.4m in exceptional items, with an operating margin of 1.8%.
In the notes to the accounts the UK鈥檚 largest private contractor said the exceptional items across the group included a 拢23.3m write down on the value of its residential and mixed-use development assets, following a review. The majority of the write down is within the European business.
The firm, which is building the Cheesegrater in the City of London (pictured), said the valuations of the assets had 鈥渋ncorporated forecast selling prices based on recent market conditions鈥� and that the directors of the firm had 鈥渁ssumed appropriate planning consents will be granted鈥�.
We expect Australia to be a rich market of opportunity for the group
Anna Stewart, Laing O鈥橰ourke
Laing O鈥橰ourke said it was 鈥渃ontinuing to monitor its exposure to land and development鈥�.
However, the firm鈥檚 Australian business, which includes South-east Asia and New Zealand, bounced back from losses in 2011 and 2012, with an operating profit of 拢24.5m, up from a loss of 拢34.5m the previous year, and an operating margin of 1.6%.
Total revenue in the Australian business was up 16% to 拢1.6bn (2012: 拢1.38bn).
The performance of the Australian business helped the group to increase its pre-tax profit from 拢23.4m the previous year to 拢57m, while total revenue across the group edged up from 拢3.54bn last year to 拢3.57bn.
Operating profit across the group was 拢59m, up from 拢9.4m in 2012.
The number of staff across the group also rose over the period from 14,858 last year to 15,351.However, this is still a fall of 57% on the overall headcount of 35,753 in 2009.
The group鈥檚 order book remained flat at 拢8.2bn, of which 拢5.6bn is in the European business and 拢2.6bn is in the Australian business (see pie charts).
Writing in the accounts, Laing O鈥橰ourke chief executive Anna Stewart said the firm was 鈥渄elighted鈥� about the 鈥渞ecovery enjoyed by our Australian business this year鈥�.
She said: 鈥淲e expect Australia to be a rich market of opportunity for the group over the next few years.鈥�
She added: 鈥淭he construction sector in the UK continues to decline in terms of market volume and, although there has been a shift from building to infrastructure, spend overall is down.
鈥淲e do not expect this trend to change materially and foresee few signs of significant stimulus prior to the 2015 general election.鈥�
鈥淲e will continue to reinforce our prudent practices of recent years while focusing on offering innovative engineering solutions as the best opportunity for an acceptable return at an affordable
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