Laing O’Rourke has been given a boost by its lenders after agreeing extra bank funding following a strategic review of the business.
The contractor’s chief executive Ray O’Rourke said its financial backers had shown “significant support” for the company’s new five-year strategy, launched at the start of this month.
As a result, he told staff that Laing O’Rourke and its banks had agreed “additional medium-term facilities through to October 2018”.
The five-year plan will see Laing O’Rourke close out on legacy projects and continue to push the sale of its profitable Australian hub.
Mr O’Rourke said the planned divestment of the Australian business was going well and would further strengthen the group’s balance sheet.
“The purpose of this divestment is to further strengthen our balance sheet and provide options as to the allocation of capital over the remainder of this decade, provide additional working capital, and enable us to progress our Advanced Manufacturing agenda,” he said.
Mr O’Rourke said a number of organisational changes have been made as part of the new strategy. The contractor confirmed in February that it would have to make around 200 redundancies, with staff already engaged in a consultation process.
He added: “[The changes] underpin our vision and strategy en route to becoming the delivery partner of choice through early engagement as an engineering and manufacturing enterprise.”
Earlier this week, it was revealed that Laing O’Rourke’s head of major projects Jonathan Goring will move to Lovell, less than six months after taking up his role.
Last month, it emerged that Laing O’Rourke stalwart Callum Tuckett will leave the company, although Laing O’Rourke has not confirmed his departure.
Further changes to the organisational structure will take place at the beginning of May when the company will release further information on the sale of the Australian business, Mr O’Rourke said.
Business Update – Start of Laing O’Rourke’s New Trading Period
As we start the new FY17 trading period, I want to share with you a brief update on the progress the business has made over the last six months.
In September 2015 we instigated a Strategic Review across the business portfolio, the purpose of which was to determine the next five-year strategy and operating plan commencing 1 April 2016, as we close out on legacy projects.
I am pleased to announce that this review has been completed and a new business plan has been approved by the board.
Furthermore, in order to ensure we have a strong and stable platform to meet the market opportunities ahead of us, we also completed an extensive process of sharing this plan with our financial stakeholders.
These stakeholders have shown significant support for our business plan by agreeing additional medium-term facilities through to October 2018, reflecting their confidence in the direction of the business.
We also commenced the planned divestment of our Australia business, which is progressing in line with expectations. The purpose of this divestment is to further strengthen our balance sheet and provide options as to the allocation of capital over the remainder of this decade, provide additional working capital, and enable us to progress our Advanced Manufacturing agenda.
There are a number of organisational changes that have been made to align the business behind these plans and underpin our vision and strategy en route to becoming the delivery partner of choice through early engagement as an engineering and manufacturing enterprise.
The key drivers remain a clear focus on securing major projects and strategic frameworks, improved productivity on our projects, all of which is supported by an efficient overhead cost base.
I will return to the organisational structure at the beginning of May when we will have more definition on the progress regarding the divestment of the Australia Hub.
The board and I have every confidence in the organisation’s ability to successfully implement our plans and deliver our highest ever quality order book on behalf of our clients. Thank you for your continued support of our strategy as we enter the next exciting phase of Laing O’Rourke’s development.