Laing O’Rourke reported earnings before interest and tax of £69.9m (2020: £72.9m), delivering pre-tax profit down 9% at £41.4m (2020: £45.5m) on turnover of £2,504m (2020: £2,448m).
The order book was also reduced slightly at £7.9bn (2020: £8.2bn).
The company said that the results “show a business continuing to deliver certainty and technical excellence for clients and stakeholders, and well positioned to achieve sustainable growth in its targeted global sectors”.
Chief executive and major shareholder Ray O'Rourke said that tje company's performance was 'ahead of plan' this year.
Laing O’Rourke reduced its bank debt by £56m during the year to 31st March 2021 (FY21) and by a further £126m since the financial year end, reducing debt-to-equity ratio to 25%. This enabled the business to refinance, terminating a multi-bank financing arrangement in place since 2016 and replace it with an unsecured revolving credit facility for £35m with long-time supporter HSBC, under improved terms.
The new funding arrangement incentivises or penalises Laing O’Rourke depending on its progress against key sustainability metrics: reducing carbon intensity, diverting waste from landfill, and increasing the number of women in project delivery.
During the refinancing process, the shareholders converted £58m in loans and interest to equity, thus demonstrating their confidence in the business, the company said.
Chief financial officer Rowan Baker, who joined the company in September 2020, said: “The year ending 31st March 2021 was a time of unprecedented challenges for our business, the sector, and the world over – as governments, communities and industry responded to the Covid-19 pandemic. Project and productivity impacts affected the first four months of the year, but our people worked tirelessly to keep our sites and supply chain moving.
“There was a significant net cash improvement during the year of £120.9m, and we finished FY21 with net cash of £276.1m. These solid results and strong cash positions enabled us to accelerate the restructure of our debt facilities and set the foundations for future growth.
“The business has continued to perform strongly in the first half of FY22 and is on track to meet management’s expectations of continued revenue and margin growth, as we focus on delivery of our 2025 strategic targets.”
Chief executive Ray O’Rourke said: “The financial year saw us continue to deliver against our commitments to all stakeholders and dedicate ourselves to tackling the limiting factors of our industry; the roadblocks that still shackle construction to out-of-date practices and limit productivity.
“Our performance is ahead of plan in the year to date (FY22), and 96% of our FY22 workload is already secured, anticipated or at the preferred bidder stage.
“The pandemic has triggered the mindset shift that construction needed. It would now be negligent of us not to harness this appetite for change in our sector, which is of national strategic importance and can lead the economic fightback from Covid-19.
“To that end, Laing O’Rourke will invest more time and energy transforming ways of working. Our ‘Trades to Technicians’ approach will provide safe, stimulating and rewarding careers at the frontline of construction. We are developing more inclusive, low risk environments for our people, closer to home, to attract new talent from diverse communities to the world’s most exciting industry.”
Group director and chair of the sustainability committee, Madeleina Loughrey-Grant, added: “It is particularly pleasing to unveil a new financing package that prioritises progress in sustainability and holds us financially accountable to our targets. In April 2021, we committed to achieve operational net zero by 2030 (scope 1 and 2 emissions), become a net zero company before 2050 (including scope 3 emissions), and to have 50/50 gender balance among our global staff by 2033.
“To achieve an absolute reduction in carbon emissions from our directly controlled operations, 14 carbon abatement projects are now being tested for impact and viability, while our R&D teams are developing ways to decarbonise manufactured concrete products, critical to the future of sustainable MMC (modern methods of construction).
“We do not underestimate the task ahead, but are confident we have the ambition, leadership and commitment in place to make significant changes to the way we operate, and help set much-needed new standards across our sector.”