Laing O’Rourke cuts losses and says “no direct negative impact” from Brexit

UK contractor Laing O’Rourke’s delayed annual accounts for the 2017/18 financial year today have revealed a reduction in losses and a successful refinancing deal.

The company’s total revenue fell 8% to £2.9bn, down from £3.2bn the year before, and its losses after tax narrowed from £61m in the 2016/17 financial year to £47m in 2017/18. It also announced a gross profit in 2017/18 of £171.6m, making the firm’s gross margin 5.9%. 

The firm said it had not seen "any deterioration to forecast revenues on its existing contracts due to Brexit", and added that it had analysed the challenges that may result from the UK’s withdrawal from the EU and, to date, had not "identified any material direct negative impact on the UK construction market either in the traditional built environment or infrastructure sectors".

The company explained that the delay in filing its accounts was driven by "extensive assessments" on all contracts, warranties, claims and Brexit implications by banks and other financial stakeholders and their advisors EY and Grant Thornton "against the background of the recent severe changes faced by the construction sector". 

It also confirmed that it had completed its three-year financing arrangements for the UK, as of 15 February. The full audited accounts are expected to be filed at Companies House today. 

Sir John Parker said: "In my first year as chairman of Laing O’Rourke, I have experienced first-hand the mounting challenges to the construction industry, which only increases the resolve of the board to continue to drive innovation, build strong relationships with all of our stakeholders, and influence realistic risk and reward policies in public sector procurement.  

"There is no question that government, financial institutions and industry must work together to correct systemic barriers and outdated practices to revitalise an industry that would benefit greatly from progressive thought and action. Perhaps never before has strong leadership been needed as much as it is needed now."

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