Firm puts impact of pandemic behind it but losses on Canada hospital continue to edge up
Profit at Laing O’Rourke’s largest division jumped more than threefold last year as the firm began to recover from the impact of the pandemic.
In its accounts, filed this week at Companies House, the contractor said it had “made continued progress towards delivery of its strategic targets” with revenue up 20% to £1.8bn in the year to March 2022 – and was higher still at close to £2bn once its share of joint ventures was included. Pre-tax profit was £16.2m from £4.9m last time.
With profit at Laing O’Rourke plc moving into double figures, the number beat the £10.5m it posted in the year to March 2020 – before the pandemic struck – but was still half of the £32.7m it filed in 2019.
The accounts show it was not hit by any exceptional items during the period although it said the costs on a disastrous PFI hospital contract in Canada had edged up again – by £5.3m to a cumulative figure of £219.3m.
The hospital opened in October 2017 and O’Rourke said its only role now was “responding to any residual obligations on phase 1”. The second phase, which opened last April, was carried out by another firm.
In the accounts the business said a £35m revolving credit facility with sole lender HSBC was extended by six months to April 2024 while a £13m property loan was also extended to the same date.
Last year Ray O’Rourke, the firm’s chief executive, and younger brother Des, its group deputy chairman, agreed to allow £58.3m of loans to be turned into equity – although the £13m figure the pair handed the business through the property loan was retained.
Laing O’Rourke plc said it had secured 97% of its 2023 revenue and 85% of the following year’s number. It added that its order book at the end of August this year was £7bn.
The accounts show it was also handed a £4.7m R&D tax credit and spent £33m on R&D, up from £30m last time. Staff numbers at the business edged up 4% to just under 6,600 people.
Laing O’Rourke plc covers its operations in Europe, Canada and Abu Dhabi and includes dozens of subsidiaries such as M&E arm Crown House, piling business Expanded, plant hire firm Select as well as shares in PFI hospital schemes including Liverpool children’s hospital Alder Hey.
The firm has not yet released its 2022 group accounts which include its Australia business. Last time, group revenue edged up 2% to £2.5bn in the year to March 2021 although pre-tax profit slipped 9% to £41.4m.
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