JOHN LAING'S efforts to sell off its contracting division suffered an embarrasing setback this week when it announced the discovery of £40M in previously undiscovered losses at the division.
The news comes just three months after senior Laing Construction executives said the business had been put up for sale after working through loss making contracts (NCE 23 November 2000).
Laing said the contracting business had since run into problems at the National Physical Laboratory contract and on several construction management jobs.
'Laing Construction is . . .
obliged to make full provision for any residual uncertainty over the financial outcome on poorly performing projects, specifically those secured before the tendering procedures were tightened in January 1999, ' said Laing in a statement on Monday.
'John Laing's profit before tax for 2000 will, accordingly, suffer a material downgrading and it is likely to be approximately £40M worse than expectations held ahead of the decision to sell.'
Laing shares fell 27.5p to 399.5p on Monday following the announcement.
A Laing spokesman told NCE that the company had been approached by several potential bidders for its construction business. Shortlisted bidders have access to the contractor's accounts and details of contracts.