Laing O’Rourke cuts losses to £63m
Contractor Laing O’Rourke, currently on site at Liverpool’s Clatterbridge Cancer Centre Hospital and Manchester’s £150m Henry Royce Institute, has posted an operating loss of £63m in its full-year results, down from a loss of £243m a year earlier.
The contractor, which has its primary North West office off Cross Street in Sale, posted an operating loss of £63.4m for the year to 31 March 2017, compared with an operating loss of £242.7m a year earlier.
The losses for 2017, like in its 2016 results, have been caused by a problematic PFI hospital contract in Canada, which is being delivered by a Laing O’Rourke joint venture.
The company said the Canadian project had contributed £86.2m in exceptional losses to its annual results, but £83.2m of the losses were incurred on the first phase of the project, which completed in October 2017.
Before exceptional items, the group reported an underlying profit of £35m, compared with a loss of £82m a year earlier.
Following the losses, Laing O’Rourke has undertaken a significant restructuring and the company said it had “continued to dispose of certain underperforming assets and investments”.
Major projects the company is working on across the North West include the Clatterbridge Cancer Centre’s new hospital in Liverpool; the University of Manchester’s £150m Sir Henry Royce Institute; and the £350m Trafford Park Metrolink line, in a joint venture with VolkerRail and Thales.
The contractor has also been tipped to take over from collapsed firm Carillion on the £335m Liverpool Royal Hospital, completion of which will be nearly 18 months late.
The scheme is unlikely to be completed before 2019, despite its original handover date of March 2017. Along with the collapse of Carillion, delays have been caused by cracks in concrete beams and extensive asbestos in the ground.
A spokesman for the Royal Liverpool University Hospital Trust told Place North West: “There are advanced discussions ongoing with a new contractor, but nothing further can be said at this stage and nothing has been signed yet.”
Group chief executive Ray O’Rourke said: “The group has responded strongly to recent challenges, not only by restructuring the UK business, but also through new processes and controls on project selection, operational delivery, digital data and risk and assurance.
“We have set a new strategic mission and are absolutely aligned with the Government’s Industrial Strategy, which calls for construction to demonstrate productivity in-line with the aviation and automotive engineering sectors by 2025. Indeed, our aim is to outperform that timetable, with our ongoing investments in advanced manufacturing leading a step-change in safety, quality safety and efficiency.”