Last updated March 5th 2023
Laing O”Rourke plc
Laing O’Rourke is the largest privately-owned contractor in the UK with total revenues of around £3 billion. The business began life as a specialist concrete subcontractor, R O”Rourke & Son Ltd in 1978, and through the acquisition of John Laing Construction in 2001, it joined the ranks of the largest UK construction companies.
The group’s business model covers a full range of engineering, construction and specialist services capabilities. It has capabilities across project investment services; engineering consultancy; digital engineering; project management and design for manufacture and assembly. It”s strategy is to target major specific, complex projects where it can offer a competitive edge. The group operates through two major geographic hubs: Europe (covering the UK, UAE and Canada) and Australia and employs 10,256 people (7,593 in its Europe hub and 2,663 in Australia).
Today, the group”s key infrastructure projects include Hinkley C nuclear power station, where it is in a jv with Bouygues on the main civils works, the HS2 rail link and the recently-completed Northern Line extension. The firm is also the contractor on Everton FC”s new 52,000 capacity stadium at Bramley-Moore Dock on Liverpool’s waterfront.
Other key recent project wins include the redevelopment of Olympia and The Whiteley in west London, Shepperton Studios for Pinewood and the Stephen A. Schwartzman Centre at Oxford University. Meanwhile, the firm’s specialist structures business, Expanded, has won the civil works at HS2’s Old Oak Common station.
Laing O’Rourke works across most major sectors including: buildings, transport, power, water & utilities, mining & natural resources and oil & gas. In common with most major UK contractors, the group has been impacted by rising costs on projects taken on in past years although its recent results have been much-improved.
The group has been a pioneer in offsite manufacturing and has invested some £200 million in the Laing O’Rourke Centre of Excellence for Modern Construction in Nottinghamshire. It also puts an emphasis on digital engineering.
The group”s main in-house supply chain businesses include: Expanded (which provides a total capability in the early stages of major projects); the Middle East and its jv activities in Canada, Explore Manufacturing, Crown House Technologies, Select Plant Hire, Vetter (a specialist stone contractor) and GRC UK, (a glass reinforced concrete manufacturer).
The group”s latest annual report up to March 2022 – and published in autumn 2022 – shows that the company has a notably improved cash position and a global order book worth £9 billion, up from £7.9 billion previously. As well as higher infrastructure spending, the group has also begun to see an increase in privately-funded projects across at its buildings business unit in the UK.
In early 2022, the group appointed Seamus French as its Europe Hub MD and CEO-designate and founding chief executive Ray O’Rourke announced plans to step down. Seamus French, was CEO of Anglo American’s bulk commodities and other minerals division.
Finance
To view the financials for Laing O’Rouke plc, visit Companies House and use Company ID 04222545.
Laing O”Rourke’s latest results point to a solid performance at the UK”s largest privately-owned contractor and a good recovery from the impact of the pandemic. Its global accounts show group revenues in the year to end-March 2022 rose to £2.965 billion from £2.511 billion previously and underlying profit (as measured by pre-exceptional earnings before interest and tax) rose by 26% to £95.5 million from £76 million previously. Pre-tax profit stood at £2.7 million, down from £41.4 million previously. However, the group”s net cash position was much-improved at £339.1 million compared to £276.1million and the group has repaid and refinanced its UK core bank debt was repaid and a new £35m facility has been put in place.
Europe
Laing O’Rourke’s European hub (covering the UK, UAE and Canada) reported an increase in gross profit to £156.7 million from £144.5 million as the business rebounded from the pandemic and revenues rose to £1.835 billion from £1.621 billion. The gross margin dipped to 8.5% from 8.9% reflecting inflationary pressures.
In the health sector in early 2023, LO”R handed over phase 1 of The Louisa Martindale Building, a hospital project known as Brighton 3Ts to University Hospitals Sussex NHS Foundation Trust. LO”R also handed over the keys to the Liverpool University Hospitals NHS Foundation Trust over the summer 2022.
In the infrastructure sector in autumn 2022, LO”R won the contract to build HS2’s new Interchange Station at Solihull in the West Midlands, which is expected to support around 1,000 jobs over the next five years and which is hoped will be a catalyst for regeneration in the area.
Elswhere on HS2, a joint venture between Laing O’Rourke and Murphy, LM, is one of three contractors on the £900 million enabling works which cover Phase One, from London to Birmingham and the connection to the West Coast Main line – ahead of the start of the main civil engineering work.
The group has also maintained its track record for securing high profile UK construction projects. In early 2022, the University of Oxford appointed Laing O’Rourke to deliver the Stephen A. Schwarzman Centre for the Humanities, one of the university’s largest single building projects and the company”s 12th for this client.
In late summer 2021, Laing O’Rourke, together with SG, Kier and Wates were appointed to the Ministry of Justice’s £1billion New Prisons Programme to build four new adult male prisons across the UK – creating over 6,000 new places. Around the same time the group was appointed by Manchester City Council to construct the Abraham Moss Library and Leisure Centre, a major regeneration project.
Meanwhile, in late spring 2021, Laing O”Rourke was appointed to the £600 million mains work construction contract at Olympia Central which will turn the west London venue into a major cultural destination. The work will involve seven new buildings – including a 4,400 capacity live music venue and will be completed in 2024.
The go-ahead for construction to start on Hinkley Point C nuclear power station – where Laing O”Rourke is in jv with Bougyes (BYLOR) as the project”s main civils works contractor team – bodes well for the firm. BYLOR will deliver the main civil engineering works and over 60 major structures across the site over a seven year period on what will be Europe”s largest infrastructure project.
Overseas, in late 2022, Laing O’Rourke Middle East was appointed by Khazna Data Centres to design and build a 21.45MW data centre facility and office space in a 26,000 sq m plot at Dubai Design District; the fifth data project for the client in the region. Today, data centres are a key market for the group and it also has a successful joinery business.
Australia
The group’s Australia hub saw improved underlyig results in 2021/22 with revenues rising to £1.13 billion from £890 previously gross profits increasing to £122.3 million from £96.3 million. But the business reported a pre-tax loss of £6.2 million compared to a profit of £27.3 million after heavy exceptional items.
The Australia business has succeed in landing some major contracts in recent years. In late 2021, a Laing O’Rourke, Pritchard Francis Consulting and KBR consortium won the Byford Rail Extension, which includes eight km of rail line and the construction of an elevated rail line through the suburb of Armadale in Perth.
Laing O’Rourke has also recently won the Aus$ 150 million Bridge Inn Road Upgrade project by Major Road Projects Victoria in Melbourne’s northern suburbs; the second project won by its Victorian business under MRPV’s Program Delivery Approach.
The group has also recently been awarded the circa Aus$538 million Initial Works and Early Works package for Suburban Rail Loop (SRL) East – Cheltenham to Box Hill in Melbourne.
Glenigan Data
Recent Glenigan figures showed that Laing O”Rourke ranked as the 9th largest UK contractor in the year to December 2022 with 10 significant new deals worth £1,179 million, of which was £758 million was building work and £421, civils work. Meanwhile, Glenigan regional league tables showed that Laing O”Rouke was the largest contractor in the South East with four significant contracts worth £586 million over a recent year and the ninth largest in London.
Conclusion: Healthy order book and solid prospects
Laing O’Rourke is organising itself on the basis that its clients are increasingly seeking contractors with a broad capability and scale and where it can provide a service over the lifecycle of assets. Having overcome the impact of legacy contracts, particularly on overseas projects and work taken on during an earlier downturn along with Covid, the group”s results and balance sheet are now improving. For now, the firm is benefitting from its strong reputation and longstanding links with major clients such the University of Oxford and its presence in key infrastructure sectors such as power and rail (HS2, Hinkley Point) as well as the places it holds on some key long-running frameworks. Meanwhile, the group is becoming more efficient and returns should improve as initiatives such as design/manufacture/assembly are adopted more widely.
Winning work with Laing O’Rourke
Laing O’Rourke”s approach to supply chain management is based on collaboration. The group is keen to use local firms. It has a target of sourcing the share of its total spend on materials and labour from within 40 miles of its sites of 40%. The group claims to have an industry-leading payment record and suppliers are expected to comply with all applicable national and international regulations. A page on the group”s website details its approach to its supply chain https://www.laingorourke.com/company/governance/supporting-our-suppliers/
Contacts
Companies interested in working with the group around its HQ in Dartford are asked to email details to centralprocurement@laingorourke.com
Andrew Carroll is Procurement Leader, Major Projects at Laing O”Rourke Construction
Email: acaroll@laingorourke.com
Tel: 01322 296200
At Laing O”Rourke in its Dartford hq, the Procurement Leader is
Clare Stamper
Tel 01322 296200
Tim Richardson, Senior Procurement Manager, Bradford.
Email: trichardson@laingorourke.com