Laing O’Rourke is highly confident about prospects for the year ahead despite post-pandemic and post-Brexit uncertainty.
The private contractor has ridden out a challenging 2020 with a strong order book and a better net cash position in November than it started out with this year.
After extensively stress testing Brexit scenarios, the firm said even a no-deal Brexit would have a minimal adverse impact on the present business.
Laing O’Rourke has now insulated its operations against Brexit with mitigation plans for talent and skills retention, labour availability, and plant and equipment imports.
Newly-published results reveal pre-tax profit jumped nearly 40% to £46m in the year to March 2020, despite revenue dipping 11% to £2.4bn.
The group started the present financial year with an £8.2bn order book (2019: £7.6bn) and improved net cash up £22m to £155m. This has risen again to £161m at the end of November after careful management of cash during the crisis.
Covid-19 hit the business for £16m in unrecoverable extra costs with overall revenue for this financial year expected to be down by between 10% and 20%.
Laing O’Rourke received £9.5m in Government Job Retention Scheme grant for around 1,000 furloughed staff who all returned to work at the start of August.
Chief executive Ray O’Rourke said the business had continued to convert its strong pipeline throughout the Covid-19 pandemic.
He said that continued conversion of this pipeline was the board’s main priority for the remainder of the current financial year.
Laing O’Rourke has secured 98% of forecast FY21 revenue, with 75% of revenue either secured, anticipated or at preferred bidder stage for the following year.
“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, said Ray O’Rourke.
“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.”
Rowan Baker, recently appointed chief financial officer, said: “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.”