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Laing O'Rourke says outlook “challenging”

Laing O’Rourke has said market conditions remain “challenging” in the UK and Europe, as it posted its results for the year to 31 March 2014.

Both turnover and pre-tax profit were flat at the UK’s largest privately-owned construction group.

Group pre-tax profit was up slightly at £41.9M (2013: £41.1M), while turnover stood at £4.41bn (£4.39bn).

Laing O’ Rourke’s Europe Hub, which comprises operations in the UK, Canada, and the Middle East, contributed £2.6bn of revenue.

The group order book stood at £7.4bn, of which the Europe Hub accounts for £5.5bn.

The firm ended the financial year with net cash of £409M, down from £440M.

Anna Stewart, reporting on her first full year as group chief executive, said: “Although there are signs in some of our markets of an increasing number of project opportunities, they are not consistent across all of our geographies. We expect the next two years to be challenging for our industry and for us, as we complete projects secured in recessionary times while at the same time balancing labour and material price recoveries.

“We are fortunate that we control much of the costs with our self-delivery model and are less exposed to the external supply chain, but inevitably we will all be affected by inflationary pressures.

“In the UK, we are definitely experiencing an improvement in the opportunities now available and in the pipeline. Inflationary pressures and resource shortages are being felt, but these are not immediately translating into adjustments to customers’ budgets or bidding prices. We are carefully navigating this risky territory and expect modest work-winning success until the market adjustment is more consistent. Encouragingly, we are seeing improvement across the whole of the country but confidence is still fragile.”

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