Contractor split into international hubs, identifying Gulf states as target for growth
Contractor Laing O’Rourke this week revealed that profit in the last year rose by almost half to £34m. The news came as Ray O’Rourke, the chief executive, outlined global expansion plans.
The firm’s accounts for the year to 31 March show that pre-tax profit rose 44% as a result of what O’Rourke described as “a balanced performance” after “an escalation of commodity prices hit us last year”.
The results come five years after O’Rourke bought Laing for £1, in which time turnover has almost quadrupled to £2.6bn.
O’Rourke said he intended to develop his business globally by organic growth, rather than through acquisitions.
He has split the company into three hubs: a European centre, an Asian and Middle Eastern hub and an Australian one.
Within its European business, Laing O’Rourke has created a division called Explore Capital to manage development and investment projects, including PFI and commercial and residential property development.
On the firm’s Middle Eastern operations, O’Rourke said it had a big presence in Dubai and a smaller one in Abu Dhabi, which it is looking to expand because of government investment there.
It is the most prestigious project in Europe. It’ll be quite intense, but exciting in terms of innovation
O’rourke on the 2012 Olympics
He ruled out acquisitions in the Gulf, saying growth would be achieved organically, with Oman and Qatar as focuses.
O’Rourke said the company was also planning to expand further in Australia, after its acquisition of contractor Barclay Mowlem for £30m in June. He said: “The Australian government has a huge amount of opportunity because it has had a lot of success exporting minerals.”
O’Rourke also spoke of being part of the winning consortium for the role of Olympic delivery partner. “It’s the most prestigious project in Europe,” he said. “It’ll be quite intense, but exciting in terms of innovation.”
Innovation, he added, had to become “a cultural norm across the organisation, whether it be continuous improvement or major step-change ideas”.
Operating margins rose from 1.3% to 1.8% compared with the previous year, and earnings before interest and tax hit £41m, a rise of 56%. The wages and salaries bill for the year hit £546m, with the highest paid director receiving £404,000. The firm’s best paid staff were project leaders earned an average of £76,000 last year, a 7% increase.
Asked about his plans for the company, O’Rourke said: “I never discuss my ambitions.”