好色先生TV

Two years of major losses at Laing O鈥橰ourke鈥檚 European division have made the heavyweight contractor a takeover target, industry insiders have told 好色先生TV.

Two days before Christmas the firm鈥檚 founder and chief executive Ray O鈥橰ourke (pictured) wrote to clients and staff admitting the firm had slumped to an overall 拢246m loss for the financial year to March 2016. O鈥橰ourke blamed the loss on problem jobs - including huge losses on a Canadian PFI hospital job, as revealed by 好色先生TV last month.

Laing O鈥橰ourke鈥檚 European division, which made a 拢58m pre-tax loss the previous year, incorporates the Canada business, as well as the UK and Middle East. The extent of this division鈥檚 loss in the most recent financial year will be disclosed when full accounts are made available at Companies House, expected in the coming days.

In his letter, O鈥橰ourke said the firm would return to profit in the current financial year to this March, but commenting on recent losses, said: 鈥淲e all know that when recession starts, our industry 鈥� enters a race to the bottom - regrettably Laing O鈥橰ourke joined in.鈥�

Multiple sources told 好色先生TV they believed that the troubled period of trading had made the firm a takeover target, with a Chinese contractor thought to be the most likely bidder.

One acquisitions specialist said: 鈥淸Laing O鈥橰ourke] has been a takeover target, certainly. The Chinese would be a natural fit.

鈥淭he UK has long been a potential area of interest to Chinese builders, they want a route into our major infrastructure projects.鈥�

Laing O鈥橰ourke is the UK鈥檚 largest private builder with revenue of around 拢3bn and has enabling works roles on huge projects including Hinkley Point C and HS2.

When asked about becoming a takeover target, a Laing O鈥橰ourke spokesperson said: 鈥淎s a privately owned group, we never comment on market speculation,鈥� and added: 鈥淎s we stated in the group鈥檚 recently released trading update, the group returned to profit at the half year and is on track to report a profit for the full year [鈥�] as it completes legacy projects secured during the recession and commences delivery of its highest-ever quality 拢10bn order book.鈥�

The contractor announced plans to sell its 拢1.5bn-turnover Australian business last January but has not issued any update since last April, fuelling further speculation that plans may have moved on to selling the whole company.

Commenting on the Australia division sale process, the spokesperson said: 鈥淭here is nothing further to report at this stage. As ever with such processes, it鈥檚 essential that the time is taken to ensure the proper steps are taken by all parties involved.鈥�

This week it emerged Ray O鈥橰ourke, who took over as chief executive after Anna Stewart stepped down 13 months ago, has moved to Jersey - known as a tax haven - and is managing the business at least in part from the Channel Island.

The Laing O鈥橰ourke spokesperson said: 鈥淚n his leadership role as executive chairman and CEO, Ray O鈥橰ourke travels extensively across all our international operations and is managing the business in a hands-on way, supported by an extremely capable senior leadership team. The chair鈥檚 choice of residence is very much a private matter for him and his family, and therefore we will not be commenting further.鈥�

In his letter last month, O鈥橰ourke also set out plans for the firm to become a 拢4bn-turnover business within four years and restated the firm鈥檚 commitment to investing in off-site manufacturing.

He added: 鈥淚 want to assure all our stakeholders that our company is adequately financed, has returned to profit in FY17 and is 鈥� well-positioned to move forward from these less than satisfactory results.鈥�

Despite its European division loss in the 2014-15 financial year, Laing O鈥橰ourke posted an overall 拢12.4m pre-tax profit for that year thanks to 鈥渟trong鈥� trading in Australia.