Contractor decides to sell arm and streamline European business
Laing O’Rourke group chairman and chief executive Ray O’Rourke has decided to put the firm’s £1.5bn turnover Australian business up for sale following a strategic review of the business.
The review - carried out in the fourth quarter of 2015 – was partially triggered by “unsolicited approaches from a number of parties” interested in acquiring parts of the business, including its Australian arm, O’Rourke said in a statement to staff.
A formal sale process of the Australian business will now be led by HSBC Investment Bank supported by the firm’s other advisors. The business is currently run by Ray O’Rourke’s son Cathal O’Rourke, who assumed the role in 2013.
The statement said Laing O’Rourke, which reported revenue of £3.85bn in the year to March 2015, also concluded from the review that to its growth strategy will require further UK investments to be made.
It said this meant its European business is to “streamline its organisation and align its structures, processes and overheads” in order to focus its business on off-site construction and “advanced digital engineering” – an area where the group plans to “maintain its leadership position and maximise its competitiveness”. O’Rourke said this investment would allow it to “capture the operational efficiencies and cost benefits” which will come from this investment.
The decision follows a tough year for the European business, which posted a loss of £57.5m against a profit of £91m for the Australian business.
The revelation also follows the announcement late last year that Laing O’Rourke chief executive Anna Stewart was stepping down from her role due to illness.