Accounts for contractor’s plc arm show pre-tax profit fell by two-thirds last year
Profit at Laing O’Rourke’s largest division slumped by two-thirds last year, with the firm admitting covid-19 began to have an impact on its 2020 numbers even before the effect of the pandemic fully took hold.
The divisional performances of the £2.4bn business are now emerging and the results for its biggest, Laing O’Rourke plc, show that pre-tax profit fell to £10.5m from £32.7m in the 12 months to March 2020. Revenue was down 15% to £1.65bn.
In its accounts, filed earlier this week at Companies House, the firm said it had “delivered a solid performance in FY20 despite the impact of covid-19 in the final month of its financial year”. The UK went into its first lockdown on 23 March, eight days before the end of O’Rourke’s financial year.
Laing O’Rourke plc covers its operations in Europe, Canada and Abu Dhabi and includes dozens of subsidiaries including 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 accounts reveal the firm racked up exceptional pre-tax costs of £6.3m which was made up of £2.4m in restructuring costs and a £3.9m loss on the liquidation of its Irish building and civils business Henry O’Rourke last January.
It said losses on a disastrous PFI hospital contract in Canada had edged up again – by £5.4m to £209m but added: “The project is nearing completion and the group is not expecting any further losses.”
Following its year-end, Laing O’Rourke plc was forced to furlough around 1,000 staff for four months from last April, claiming £9.5m from the government’s Coronavirus Job Retention Scheme.
It said it had axed around 150 staff from the business, adding that it had paid a PAYE tax bill of £31.2m, which was deferred by the government because of the pandemic, at the beginning of last July while a VAT liability of £28.5m would be paid in 11 equal monthly instalments from this April.
It said that only one site, believed to be the £850m Edinburgh St James Quarter mixed-use scheme, was facing “potentially irrecoverable covid-19 costs” which it blamed on the extended lockdown in Scotland last year.
Despite the problems caused by the pandemic, the firm said it had secured or anticipated 82% of its 2022 revenue, having put the figure for its 2021 financial year, which finishes at the end next month, at 98%.
The firm said it was hoping to tie up a refinancing deal “well ahead” of the £177m deal, agreed in 2019, running out this December.
In its 2020 accounts, Laing O’Rourke group turnover fell 14% to £2.4bn although pre-tax profit was up 39% to £45.5m thanks to an improved performance at its Australia business.