Laing O’Rourke quits Australia
Laing O ‘Rourke has put its Australia business up for sale following a review of operations.
The privately-owned company’s last reported accounts show hefty losses in Europe but record profits in Australia.
Laing O’Rourke’s Australia business made a profit after tax of £76.5m in the year to 31st March 2015 (2014: £43.5m) on revenues of £1.5bn.
By contrast, the European division lost £58m, largely due to huge investment in offsite construction and fabrication facilities. Total group revenues were £3.85bn.
The decision to sell the Australian business is prompted by a desire to raise funds to prop up the European arm and exploit opportunities available.
Chairman and chief executive Ray O’Rourke said: “During the fourth quarter of 2015 the Laing O'Rourke Group Executive carried out a strategic review of its business portfolio, including options as to the allocation of capital over the remainder of this decade. This review was partially triggered following unsolicited approaches from a number of parties expressing interest in acquiring parts of our business, including our very successful Australian business.
“This is reflective of both the strength and attractiveness of this element of the group which, having performed well in recent years, is now strongly positioned in the emerging infrastructure market with blue-chip clients, a solid pipeline, a talented leadership team and great people. Accordingly a formal sale process will now commence, led by HSBC Investment Bank and supported by our other advisors.
“Another key conclusion of the review was that the European business and the UK in particular was very well placed for strong growth potential, which will be further fuelled by the government’s renewed focus on infrastructure and new housing.
“If we are to seize these growth opportunities, further UK investments will be required especially in areas that promote our competitiveness and the attractiveness of our offering to clients.
“Consequently the group and the European business will focus on streamlining its organisation and align its structures, processes and overheads to capture the full operational efficiencies and cost benefits which will flow from the current and future investments in off-site build and advanced digital engineering. This is an area in which the group intends to maintain its leadership position, maximise its competitiveness and continue to provide innovative solutions to its clients.”
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This article was published on 11 Jan 2016 (last updated on 12 Jan 2016).