Laing O’Rourke sees pre-tax loss amid 13% revenue growth

Despite a challenging period for the construction sector, Laing O’Rourke saw a revenue growth of 13% to £3.4 billion (US$4.2 billion) in the year ending 31 March 2023.

“Together with the whole UK construction sector, we were presented with extremely challenging market conditions during this trading period” (Photo: AdobeStock)

The group order book also grew to a record £10 billion (US$12.6 billion), up 16% from the previous year.

However, Laing O’Rourke says that this was offset by the impact of inflation on a small number of UK fixed-price contracts, resulting in an earnings before interest and taxes (EBIT) loss of £78.8 million (US$99.6 million).

The company also saw a further loss of £273.9 million (US$346.3 million) which is said to be driven by a previous contract signed in Australia in 2010.

“Together with the whole UK construction sector, we were presented with extremely challenging market conditions during this trading period. Unprecedented inflation impacted margins on a small number of our fixed-price projects in the UK. And while it had no immediate cash impact, provision for an exceptional item on a legacy project in Australia added to our loss,” said Rowan Baker, chief financial officer at Laing O’Rourke.

Ray O’Rourke, chief executive at Laing O’Rourke, added, “During FY23, geopolitical upheaval had profound inflationary effects, impacting the global economy, households, the wider sector, and the business. Official figures showed inflationary costs for the sector peaked at 26% during 2022, the biggest impact on construction in 40 years.

“The work we have done over a number of years has ensured Laing O’Rourke remains a resilient business and I thank all our colleagues for their hard work. With a record order book and a return to profitability in the first half of FY24, I remain very positive about the future.”