Laing O’Rourke has recorded a pretax loss for the second year in succession despite claiming a “substantial improvement” in its UK performance in 2017.
In a delayed results announcement for the year to March 2017, the company reported a loss from operations of £63.6M, with the bulk of its losses coming from continued exposure to the CHUM Hospital joint venture in Canada.
Overall losses from JVs were £86.2M, with the first phase of the Canadian hospital project accounting for around £83.2M of this. The hospital was completed last October.
The group initiated a turnaround programme in 2016. It has also taken further steps to reduce its remaining exposure to the CHUM Hospital JV and has continued to dispose of underperforming assets and investments.
The results showed an improvement on an equivalent loss of £242.7M for the 2015/6 financial year. Underlying profit for the year was £35M, compared with an underlying loss of £82M in 2015/16.
Revenue also grew from £2.51bn in 2015/16 to £3.17bn.
Laing O’Rourke chief executive Ray O’Rourke said the group had responded “strongly” to recent challenges by restructuring the UK business and introducing new processes and controls on project selection, operational delivery and risk assurance.
“We have set a new strategic mission and are absolutely aligned with the UK government’s Industrial Strategy, which calls for construction to demonstrate productivity in line with the aviation and automotive engineering sectors by 2025,” said O’Rourke. “Indeed, our aim is to outperform that timetable, with our ongoing investments in advanced manufacturing leading a step-change in safety, quality and efficiency.”
He said the market had already responded to its design for manufacture and assembly, offsite manufacturing capability which had led to a “robust” growing global pipeline of projects.
“It has been a difficult time for our sector, and recent events have only reinforced the importance of Laing O’Rourke’s early actions to redefine the business,” he said. “Our leadership team across the group has been steadfast and their achievements remarkable.”