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Laing move to sell contracting division a 'high risk' warn analysts

CITY STOCKBROKERS this week expressed surprise over John Laing's timing in putting its loss making contracting division up for sale.

Last week's move to sell Laing Construction, in favour of growing its property and housing arms come as the division's 2000 results are expected to show pre-tax losses for the second consecutive year.

Last year it made a pre-tax loss of £2M on turnover of £1.2bn.

Restructuring costs and losses on contracts pushed pretax losses up to £19M in the six months to June (NCE 14 September).

John Laing Construction chairman James Armstrong said that the contractor had worked through its loss making contracts and that the division's growth was being restricted by competing demands for cash from the housing and property arms.

But analysts described the move as high risk. They warned that if a buyer was not found quickly, senior managers would become disillusioned and leave and the business could fall apart.

'One would have thought the best time to sell was when the division was in profit, ' said JP Morgan analyst Mike Betts.

Armstrong said potential buyers had already approached Laing, although it was not yet in talks with anyone.

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