Country鈥檚 biggest private builder nosedives to a 拢267m loss
Losses on a PFI hospital contract in Canada, problems with its offsite manufacturing business, compensating blacklisted workers and restructuring costs all helped send Laing O鈥橰ourke plc further into the red last year with the firm plunging to a 拢267m pre-tax loss.
The country鈥檚 biggest private builder had already flagged up a grim set of results before Christmas when its chairman Ray O鈥橰ourke said the group had made an overall 拢246m loss.
The divisional performances of the 拢3bn business are now emerging and results for the largest division Laing O鈥橰ourke plc 鈥 which covers its operations in Europe, Canada and Abu Dhabi and includes 126 subsidiaries such as its plant hire firm Select as well as shares in PFI hospital schemes including Liverpool children鈥檚 hospital Alder Hey 鈥 show losses in the 12 months to March 2016 increased threefold.
In a letter sent to staff and clients last month, Jersey-based Ray O鈥橰ourke (pictured) confirmed his firm was taking a hit on a number of problem jobs, including a PFI hospital in Montreal which he said was 鈥渁 particularly difficult large project in Canada鈥 with the losses believed to be close to 拢80m.
In its results filed at Companies House, the plc arm said it had racked up 拢43m of contract losses on three jobs carried out by its Design for Manufacture and Assembly (DfMA) business 鈥 the offsite arm of the company.
The company said: 鈥淭hese projects were substantially redesigned in order to demonstrate the benefits of DfMA. Significant lessons have been learned.鈥
Laing O鈥橰ourke plc also shelled out 拢23m in restructuring costs which it said included redundancy payments, the cost of hiring consultants and money spent on refinancing.
And the firm said it had paid out 拢5.1m compensating blacklisted workers under an initiative called the Construction Workers Compensation Scheme set up by contractors in 2014 to deal with claims.
In a statement signed off just before Christmas by group finance director Stewart McIntyre, Laing O鈥橰ourke plc admitted: 鈥淒elivery of legacy contracts during the next year is not with challenges.鈥 But it added: 鈥淒irectors are confident in returning to operating and pre-tax profits.鈥
The firm said the number of people employed by the business at the year end was up 500 to 8,650 鈥 although its wages bill actually fell 拢1m to 拢400m. The salary of the highest-paid director, who is not named, fell 拢300,000 to 拢700,000.
It said the 拢267m pre-tax loss was made up of a 拢194m operating loss along with 拢73m of exceptional items. Turnover at the business slipped 3% to 拢1.6bn.
Earlier this week, in separate results the firm鈥檚 UK construction arm posted a 拢141m pre-tax loss. This UK business is called Laing O鈥橰ourke Construction Ltd and is part of Laing O鈥橰ourke plc.
Laing O鈥橰ourke plc is a member of Laing O鈥橰ourke Corporation which operates out of Cyprus.
In his letter last month, O鈥橰ourke said group revenue this year would be 拢3bn, adding that this would rise to 拢4bn in 2020. Its up-for-sale Australian business, O鈥橰ourke added, had continued to perform well.
No comments yet