LAING SERIOUSLY underestimated losses on its Cardiff Millennium Stadium contract, group finance director Jim Armstrong admitted this week.
Laing set aside £26.1M last year to cover the cost of redesigning the stadium's complex sliding roof (NCE 25 March).
But Armstrong confirmed that the Group's construction division had made another £5M loss for the first half of this year due to the continuing negative impact of the fixed price project.
Armstrong claimed the mistakes at Cardiff would act as a 'catalyst for change' and would 'eventually pay dividends' to shareholders if the company could become a best practice contractor. He said there would be no further losses from the Cardiff contract.
The finance director added: 'We will be looking more closely at who we work with, how we price and when we give a guaranteed maximum price. We will also be formalising our risk analysis process.'
KPMG's change management team has been working with Laing Construction's directors to reshape the company since June. They are expected to complete their work by the end of the month.
Armstrong said Laing would now place equal emphasis on its homes, property and investments divisions, rather than being seen largely as a traditional contractor.
Overall group profit before tax was down 12% on the same period last year to £16.2M, with turnover down 5% to £771.6M.