The UK’s largest privately-owned contractor, Laing O’Rourke, today said it would not be able to file its annual report until Christmas at the earliest, citing "delays with historic turbulence in the construction sector."
Construction is under "enormous pressure" as a result of the withdrawal of funding and the demise of companies like Carillion, its chief executive Ray O’Rourke said.
Laing O’Rourke also said it now has an outline agreement with its primary banking partners for UK refinancing.
Despite meeting all performance targets, the business was disappointed to have been "defeated by process", with the FY18 accounts delayed, the company said.
"Our industry has witnessed the demise of a number of companies and the withdrawal of significant funding this year. This has put enormous pressure on parties across the sector, and slowed down all regulatory, financial and administrative processes," he said.
"Three million jobs in the UK rely on construction, and we have nation-building infrastructure to deliver. It is a tragedy to see the industry starved of oxygen like this.
"We have built a pipeline of high-quality projects. Laing O’Rourke is committed to play its part, to drive enhanced confidence and investment in the sector."
Nonetheless it said it would post a profit for both its UK operations and globally and had continued to follow its strategic plans successfully during the year, reports Construction Manager.
The firm’s comments today followed its appointment Friday as management contractor to replace collapsed Carillion in finishing the Royal Liverpool University Hospital. Practical completion is expected in 2020.
The company also revealed that its construction business currently takes an average of 53 days to pay invoices. This comprises 24% paid within 30 days, 35% within 31-60 days and 41% in more than 61 days.
The performance makes Laing O’Rourke one of the five slowest-paying main contractors, just ahead of Kier and Balfour Beatty, which both take 54 days according to Build UK figures.
Ray O’Rourke pledged that the company would focus on improving payments to its supply chain during the next financial year now that a turnaround of the business was complete.
But he called on the government to help by resetting "costly and inefficient procurement policies", removing "outdated adversarial contracts and security instruments", and settling its own accounts promptly.
The company also revealed that it now has an outline agreement with its primary banking partners for UK refinancing.
Offering guidance for 2019, the company said all UK business were performing to plan and delivering their forecast margins.
Half-year unaudited earnings before interest and taxation (EBIT) for Laing O’Rourke UK was £29m, while full-year EBIT is forecast to be £70m.
Meanwhile the company has a global pipeline of secured and anticipated work worth £8.6bn.
In the UK, 100% of revenue for the 2019 financial year and 70% of 2020 revenue is already under contract. Cost reduction measures introduced three years ago are exceeding targets, the company said.
Image: Laing O’Rourke chief executive Ray O’Rourke, pictured right (Construction Manager)