Laing O’Rourke’s turnover has fallen by 15 per cent as a result of declines in the UK and Middle East markets, its annual report has revealed, while it lost 3,500 staff in 2009-10.
Underlying earnings were slightly down, from £115 million to £110m.
The report details how problems in its Europe, Middle East and Asis hub have seen it incur £16.7m in redundancy payments, while total staff numbers were down from 23,205 to 19,668.
The company paid out £0.4m too in pay-offs to former directors. Former COO Tony Douglas left late last year, while finance director Iain Ferguson also left during the period covered by the report.
The contractor posted managed turnover of £4.3 billion for the financial year ended 31 March 2010 and it said this reduction in revenues was due to “market fractures in the UK and Middle East.”
The report said: “Our cautious strategy to sustain earnings quality and the benefits of our diversified international portfolio provided the necessary protection. More than half of the recorded decline was in our Middle East business, as the economy, particularly in Dubai, paused.”
Laing O’Rourke recorded pre-exceptional earnings of £110 million while its cash balances grew by 17 per cent to £716m.
The firm said its order book had also reduced from £10bn, reported in the previous financial year, to £8.2bn.
The annual report showed that Laing O’Rourke more than doubled its exceptional costs to £42m, including £16.7m in redundancy costs.
The firm said it would be “selective but decisive” in pursuing opportunities in the future but said it was hopeful that it could win work through many of the framework deals – including Building Schools for the Future local education partnerships – it had secured last year.
It said: “We are adopting a cautiously optimistic approach in recognising work that might flow through these frameworks as it may be limited to those schools that have already been awarded, rather than all proposals outlined under the original framework agreements.
“We are currently reviewing the implications of the UK Chancellor’s recent budget statement. We await with interest the outcome of the new UK Coalition Government’s various public spending reviews, due to report later this year, and will continue to deliver value for our clients on those schemes we have already secured.”