Firm to go public once successor for 74-year-old founder is secured
Laing O’Rourke founder and chief executive Ray O’Rourke has said the firm is planning a stock exchange listing by 2024, bringing to an end more than 40 years of family control.
O’Rourke founded R O’Rourke & Son in 1977 as a concrete subcontractor but broke through into the main contracting market in 2001 when it caused shockwaves in the industry by snapping up Laing Construction from John Laing for £1, later changing the name to Laing O’Rourke.
The Laing family had initially expected to rake in around £100m for its construction business, which had been put up for sale after being hobbled by a series of loss-making contracts including the Cardiff Millennium Stadium scheme, with the would-be buyer widely expected to be a European giant.
Laing O’Rourke has since grown to become the UK’s biggest private contractor but the impact of the pandemic meant turnover fell 14% to £2.4bn last year although pre-tax profit was up 39% to £45.5m in the 12 months to March 2020.
Although O’Rourke retains the title of chief executive, he is understood to have handed out the day-to-day running of the business to others although the big decisions, such as the negotiations over the Everton FC stadium scheme, remain with him.
But the question of what will happen to the company when O’Rourke, who turns 75 next January, decides to walk away for good seemed to be answered yesterday when he told the FT: “We will float the company in a few years’ time. By 2024 we will be in good shape.”
In recent years, the firm’s results have been blighted by ongoing losses on a disastrous PFI hospital contract in Canada which last year stood at a cumulative £209m.
O’Rourke, who has previously said he has been thinking about a succession plan since 2006, told the FT the firm was working on finding his replacement after which it would float, adding that it might not do a listing in “the traditional way” but declined to provide details.
The possibility of a float was raised in earnest four years ago when Laing O’Rourke appointed FTSE 100 veteran Sir John Parker as chairman with the company playing up his City experience at the time of the announcement in April 2017.
Parker, who sits on the firm’s leadership team, has led five FTSE 100-listed firms as chairman and is also a former chairman of the National Grid.
Several O’Rourke family members are also on Laing O’Rourke’s leadership team including younger brother Des, who turned 72 in May. Ray and Des are the sole shareholders of the firm with Ray holding the majority stake and, according to filings made at Companies House, the brothers’ country of residence is listed as Jersey.
Also on the leadership team is Ray’s son Cathal, the managing director of its Australia business which had been put up for a sale a few years ago but the move was later quietly shelved. Daughter Céire, understood to be behind a series of full-page adverts for the firm in the national press last summer, stepped down as a director at Laing O’Rourke Construction last month after giving up her clients and markets director role in the spring.
Last December, the firm’s chief financial officer Rowan Baker, who is putting together the company’s latest refinancing ahead of the current one running out at the end of the year, said income in the year to March 2021 could be below £2bn because of the impact of lockdown.
Laing O’Rourke is expected to release its 2021 results this autumn.