Laing O'Rourke reports 73m EBIT for the year to 31 March 2020
16.12.20EBIT increases by £26M on prior year via strategic focus on bid selection, early client engagement and certainty in delivery.
Statement from CEO Ray O’Rourke on the publication of Laing O’Rourke’s FY20 accounts:
“It gives me pleasure to present a report which shows a business delivering what it said it would. It is a tribute to the hard work and dedication of our people and the leadership team guiding them.
“I must also thank them for the sacrifice they have made to help the business build its resilience. As we end 2020, our collective experience, coupled with a relentless focus on leading change in the sector, positions us to confidently face the post-COVID, post-Brexit scenarios.
“While there are still challenges in the market, we remain committed to the changes necessary to transform our business and lead a more productive, safe and resilient construction industry.
“The past year has strengthened our resolve and the crisis has reminded policymakers of the strategic national importance of construction, creating a new wave of interest in the role and capabilities of the modern methods of construction on which our operating model is based.
“This new way of building will be vital to delivering tomorrow’s infrastructure and buildings, and to economic recovery.
“We remain grateful to Government, our clients, suppliers and other stakeholders for their continued support and collaboration over the period, which bears testimony to the power of our experience.”
From the FY20 Annual Report:
- Stable Group Managed revenue of £3.0bn (FY19 £3.3bn);
- Group Statutory profit before interest and tax increased to £72.9m (FY19 £47.2m) despite lower volume and accounting for Covid-19 impacts;
- Group profit before tax of £45.5m in its fourth consecutive year of improvement;
- Profit margins continue to improve with a gross margin of 10.4% achieved (FY19 7.7%);
- The Group generated a net cash improvement of £22.3m and finished the year with net cash of £155.2m;
- At the year-end, the Group had an order book of £8.2 billion;
- The business has insulated its operations against Brexit via detailed scenario and contingency planning, with mitigation plans for talent and skills retention, labour availability, and plant and equipment imports;
- As the impact of the coronavirus global pandemic became evident, the business took measures to protect its people while maintaining a safe level of productivity across projects, offices and manufacturing facilities. The health and safety of employees was the company’s priority, operating in line with all government guidance.
Chairman’s Comment
Speaking about the company’s solid results for FY20, Group Chairman Sir John Parker GBE FREng said:
“The industry probably has the best opportunities it has seen for the last 50 years, given government commitments in Australia and the UK to transform infrastructure investment. Their targets are in sectors – healthcare, education, energy and transport infrastructure – where Laing O’Rourke has a sustained experience and record of success.
“Our positive financial position means we stand ready to play our active part in post-pandemic economic recovery. Our sector, as it has done in the past, will be at the heart of this collective effort. It will offer us exciting opportunities to demonstrate the benefits of our unique operating model and our digital and manufacturing-based Modern Methods of Construction.”
Outlook
The Group continues to provide regular financial updates to its clients, suppliers and stakeholders. In quarter three of the FY21 trading year, Laing O’Rourke confirms:
The Group has continued to make solid progress in delivering its strategic targets despite the impact of Covid-19 and is currently performing in line with its latest business plan.
UK cash position continues to perform strongly and is outperforming its latest business plan forecast. Group net cash at the end of November was £161m;
The Group has continued to convert its strong pipeline throughout the Covid-19 pandemic and continued conversion of this pipeline is the Board’s main priority for the remainder of the current financial year. The Group has c.98% of forecast FY21 revenue secured or anticipated and c.75% of FY22 revenue either secured, anticipated or at preferred bidder stage.
The UK Cabinet Office has just named Laing O’Rourke as a Government Strategic Supplier.
Rowan Baker, Chief Financial Officer, said: “It is a pleasure to present my first Annual Report as Laing O’Rourke CFO.
“The FY20 performance and our progress already in FY21 show the resilience of our operating model during times of volatility. It also gives us a high level of confidence that the next refinancing process will be conducted well ahead of the target date of 31 December 2021.”