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Mon October 26 2020

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Laing O'Rourke turnover plunges 15% as thousands of staff are axed

24 Aug 10 Laing O'Rourke's turnover has fallen by 15% to £4.3bn for the financial year ending 31 March 2010.

Laing O'Rourke's turnover has fallen by 15% to £4.3bn for the financial year ending 31 March 2010.

However, earnings before tax and exceptional items only dipped slightly, from £115m to £110m.

In a troubled year for the construction group, 3,537 staff were let go, most of them in the Middle East, with total employee numbers dropping to 19,688 globally.

The redundancy costs, which totalled £16.7m, formed part of a “comprehensive efficiency review” which Laing O'Rourke said would save the group £63m a year.

Chief operating officer Tony Douglas and finance director Iain Ferguson were among those who left during the reporting period.

The firm also posted an exceptional provision of £8.3m to cover the impairment charge of plant assets in Dubai, and has taken a further £16.4m exceptional provision to cover writedowns on development projects in the UK and Ireland.

Laing O'Rourke's order book shrunk by almost a fifth from the £10bn reported a year ago to £8.2bn at year end. This is chiefly due to the removal of future workload from the ALDAR-Laing O’Rourke joint venture in Abu Dhabi, which is being wound down.

Net cash grew by 56% to £270m.

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The Europe and Middle East arm of the business suffered a £800m drop in turnover to £3.4bn, and delivered earnings of £89m, a fall of 5%. In the Middle East, revenue more than halved to £423m (2009: £903m).

The position was healthier in Australia and South East Asia, with turnover rising by 8% to £921m. Earnings before interest and tax were £21m.

Despite the overall reduction in revenue and profit, Laing O'Rourke remained positive about its business strategy.

Chairman Ray O'Rourke said: “2009-10 demonstrated the benefits of a diverse business and project portfolio, as we maintained headline profit levels at the previous year’s run rate. We delivered a co-ordinated response across the Group to the global financial crisis, with prudent housekeeping ensuring we have a strong platform in place to respond when the current volatility subsides.

“We have had a good start to the 2010-11 trading period with revenue and profit targets in line with expectations. A number of important project wins in sectors like rail, mining, energy and social infrastructure demonstrate the tangible progress we are making to transform the intent of our 10-year strategy into bottom line value.

“With a robust balance sheet, sufficient investment headroom and our much coveted private company approach, we will be selective but decisive in the opportunities we pursue. We have positioned ourselves conservatively in anticipation of a more favourable business cycle which will benefit our industry.”

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