Laing O’Rourke announces third straight year of losses as refinancing details revealed
Construction firm Laing O’Rourke has finally announced the details of a long-awaited refinancing deal, at the same time as reporting its third straight year of losses.
The firm said it has refinanced its UK operations with a £177m revolving credit facility which will see it through to the end of 2021.
Read more: Construction output drops sharply in December
Finance director Stewart McIntyre said finalising the deal was behind the delay in filing its accounts, which should have been made public knowledge by the end of September, according to Companies House.
The figures
Laing O’Rourke narrowed its losses after tax to £46.5m for the year ending 31 December 2018, after taking a £60.6m hit in 2017. Meanwhile revenue was down 8.5 per cent to £2.9bn from £3.2bn last year.
The firm said it had net funds of £89.1m, up 36 per cent on last year’s £65.5m.
As well as delaying the full-year results, putting together the refinancing deal cost the firm £8.2m in 2018, on top of the £11.6m it spent on it in 2017.
Why it’s interesting
O’Rourke took significant losses on a Canadian PFI hospital job which has dogged it for several years. In 2017 it cost the firm £83.2m, a blow which softened to £26.4m in 2018.
Construction firms have come under sustained pressure in recent months, with output dropping sharply in December, according to Office for National Statistics (ONS) figures.
Overall output fell 2.8 per cent month-on-month in December, driving a longer-term stagnation of 0.3 per cent in the final quarter.
What Laing O’Rourke said
Chairman John Parker said: “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is no question that government, financial institutions and industry must work together to correct systemic barriers and outdated practices to revitalise an industry that would benefit greatly from progressive thought and action.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.”
Read more: Regional construction activity booms despite Brexit gloom
The company also talked down fears about Brexit. It said it has “not identified any material direct negative impact on the UK construction market either in the traditional built environment or infrastructure sectors”.
“The business has not seen any deterioration to forecast revenues on its existing contracts due to Brexit, and reports a steady reduction in voluntary staff attrition over the last 12 months with strong retention of the EU nationals employed in our business.”