HomeBusinessLaing O’Rourke ‘well positioned’ by FY21 results

Laing O’Rourke ‘well positioned’ by FY21 results

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Laing O’Rourke says its latest earnings show it is continuing to “deliver certainty and technical excellence for clients and stakeholders” and that it is well positioned to achieve sustainable growth in its targeted global sectors.

Laing O’Rourke aims to increase the number of women in project delivery

The group released its Annual Report for the 2021-2021 financial year (FY21), 20 years since the completion of the acquisition of Laing Construction by R. O’Rourke & Son Ltd in 2001.

The business reported earnings before interest and tax for the financial year ended 31 March 2021 of £69.9 million (FY20: £72.9 million), delivering a group profit before tax of £41.4 million (FY20: £45.5 million) with an ongoing order book of £7.9 billion (FY20: £8.2 billion).

It reduced its bank debt position by £56 million in FY21, and by a further £126 million since the financial year end. This enabled the business to terminate a multi-bank financing arrangement, in place since 2016, and replace it with an unsecured Revolving Credit Facility for £35 million with HSBC under more agile terms and conditions. 

This new funding arrangement incentivises or penalises Laing O’Rourke depending on its progress against three 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 £58 million in loans and interest to equity, demonstrating their ongoing confidence in the group’s strategic direction, enabled by continued investment in people, technology and its self-delivery operating model.

Rowan Baker, Laing O’Rourke.

Chief financial officer Rowan Baker said: “I am pleased to present my second financial review for Laing O’Rourke, concluding my first full trading period with the group. The year ending 31 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. The group resumed full operations in the second half of FY21, delivering an overall two per cent full year increase in revenue year on year to £2.5 billion (FY20: £2.4 billion), a full year profit before interest and tax of £69.9 million (FY20: £72.9 million) and EBITDA (earnings before interest, taxes, depreciation, and amortization) of £114.8 million (FY20: £121.6 million). 

“There was a significant net cash improvement during the year of £120.9 million, and we finished FY21 with net cash of £276.1 million. 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.”  

Ray O’Rourke, Laing O’Rourke.

Chief executive Ray O’Rourke KBE 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 per cent 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.”

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