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Europe profits down by a third at Laing O'Rourke but Australia shows strong performance

Laing O’Rourke’s underlying turnover has grown 11 per cent while pre-tax profits were up 81.1 per cent, owing to a return to profit for its Australian business.

Revenue for the firm – excluding joint ventures and inter-segmental revenues – hit £3.23bn in the year to March 2013, up 11 per cent from £2.91bn in March 2012.

Pre-tax profits rose to £77.9m, up from £43m the previous year, while profit from operations jumped to £81.1m from £51.7m.

The results mean the company’s operating margin against underlying turnover is up to 2.5 per cent, compared with 1.8 the previous year.

“Laing O’Rourke has delivered another creditable performance”

Ray O’Rourke, group executive chairman

Turnover including joint ventures was broadly flat at £3.57bn. Managed revenue across both Europe and Australia (revenue including inter-segmental turnover) grew by 2 per cent to £4.4bn in the year to March 2013, while pre-execeptional EBIT was up 45.2 per cent to £78m.

The group’s cash and cash equivalents grew by 13.9 per cent to £684m.

Excluding joint venture shares, revenue was up at Laing O’ Rourke’s Australian business by 29.4 per cent to £1.50bn, but turnover in Europe slipped to £1.73bn from £1.75bn.

Pre-tax profits (before exceptionals) meanwhile were down in Europe by 32 per cent to £51.2m, while Australia saw a significant return to profit, hitting £30m compared with a loss of £32.4m the previous year.

Laing O’Rourke said its order book stood at £8.2bn, creating “good medium-term earnings visibility”, with 91 per cent of its revenue for 2013/14 already secured.

Its repeat business and contract extensions from clients were up 71 per cent, while it highlighted “prestigious” wins from new clients.

During the year, the group appointed Anna Stewart as group chief executive, David Stewart as chief executive of the Australia hub, and Callum Tuckett as group director of finance and commerce.

The group said it expected “moderate” growth in managed revenue and pre-tax earnings through to 2015, given the challenging climate, but that it was well-positioned to “achieve its medium-term goals”.

Group executive chairman Ray O’Rourke said: “Laing O’Rourke has delivered another creditable performance, generating strong cashflows, earnings and forward orders.

“We also made good progress against our strategic mission to become an enduring engineering enterprise that delivers Excellence Plus performance for our clients, and on the key actions that we are taking to deliver strong, stable and sustainable revenues over time.”

Ms Stewart commented: “In 2012, we established our Group Strategic Roadmap, putting in place the right foundations to deliver on our 2020 objectives over the next three to five years.

“We delivered another resilient performance and made strong progress against the key elements of our strategic plan to become the first-choice engineering and construction partner for clients.”

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