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Chairman's Statement

Laing O’Rourke has been built on the belief of finding and following a better way, and our people remain the key to this success.

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I am pleased to report another profitable year in which we have sustained revenues and operating margin, outperformed our industry in cash generation and achieved our targets for new business. This is a creditable performance and I am proud of the commitment and hard work of all my colleagues around the Group.

Since the global economic crisis impacted our industry, we have faced some extraordinary challenges; as a business we stayed true to our mission and guiding principles. 

We put in place the building blocks to ensure we emerged from the period a stronger and more focused business, able to respond to the changing dynamics of the markets and our clients.

Our Group Chief Executive, Anna Stewart, introduced greater discipline in our decision-making processes, took major steps to increase our operational efficiency, put in place a new governance framework, refreshed our senior management team and formalised our Group Strategic Roadmap (GSR) with human capital and engineering excellence at its core.

Our business model is resilient, and is underpinned by a management and performance framework that ensures we remain selective in securing those projects which embrace our unique business offering (UBO) of engineering excellence, Design for Manufacture and Assembly (DfMA) and direct delivery through digital technologies.

Over the past few years, we have faced significant economic challenges, but thanks to the expertise of our people we have delivered consistent results during a period of huge uncertainty, and invested in securing our future. 

Commitment to safety and sustainability

Safety excellence underpins our business, guiding our decisions and helping us to achieve our business goals in a responsible way. Safety has always been our highest priority, and therefore it is pleasing to be able to report a fall in our Group Accident Frequency Rate (AFR) from 0.21 to 0.18, driven by a strong performance from the Australia Hub. This result has been achieved in the light of the increasingly complex nature of the engineering and contracting work we now undertake across the Group, coupled with a more intense period of construction activity across our core sectors. However, it is with regret that I report that in November 2013 a worker from our supply chain died from injuries sustained on the Francis Crick Institute project in central London.

The Board is fully committed to the integration of sustainable development across the Group with a focus on broader social and environmental issues to benefit the stakeholder groups most directly impacted by our operations. Our project delivery teams work tirelessly to enhance the contributions of Laing O’Rourke by focusing on responsible procurement, minimising waste, health and wellbeing of the workforce and greater levels of positive engagement with local communities. Details of the progress we are making against these and other priorities can be found here

Leadership and our people

During her first year as Group Chief Executive, Anna Stewart has made a number of changes to the organisational structure and management team to accelerate the implementation of the Group’s strategy. This has included the creation of the Specialist Trading Business Group in the UK to drive greater focus and efficiency into the delivery model for our DfMA agenda.

Anna also announced a number of senior internal and external appointments, ensuring that we continue to strike the right balance between new skill-sets and core engineering and construction expertise. Most recent amongst these was the external appointment of Paul Westbury as Group Technical Director from engineering consultancy, Buro Happold, to lead our global technical and engineering functions, including the Engineering Excellence Group (EnEx.G). Paul’s extensive expertise will accelerate the development of the Group’s design and engineering offering.

The Group also appointed Stephen Harley, a global logistics and manufacturing professional who joined us from the Ford Motor Company, to lead the implementation of the next phase of our masterplan for advanced manufacturing in the UK.

During the year we announced that Roger Robinson would step down as Chief Executive of the Europe Hub and as a member of the Group Executive Committee. I would like to thank Roger for his contributions as we navigated one of the worst trading periods in history. He will continue to represent the Group, supporting our business activities with a number of our strategic clients.

I am pleased that Cathal O’Rourke has been appointed to the role of Managing Director of the Australia Hub and to the Group Executive Committee. Similarly, John O’Connor will assume responsibility for our people agenda when he becomes Group Human Capital Director and a member of our Group Executive Committee in September 2014.

We continue to work hard to put in place succession and development programmes that serve as attractors for the very best talent in the construction industry. I believe our commitment to invest in these areas through the downturn has been instrumental in the Group’s continued profitability and growing levels of market confidence in our unique delivery approach.

I am consistently impressed by the quality and dedication of our teams, and their ability to challenge the traditional methods of delivery, and innovate in an industry which has for too long shunned new ideas and perspectives.

Laing O’Rourke has been built on the belief of finding and following a better way, and our people remain the key to this success. 

On behalf of the shareholders and the Directors, I thank them for what we have achieved together during the year. 

Performance summary and outlook

We remain positive about the opportunities to grow the business, and we are on track to capitalise on the inherent value that the unique combinations of the main elements of our delivery model offer us globally.

I remain confident in our ability to determine our own future to create value that rewards the loyalty and support of all our stakeholders.

It remains for me to thank our clients, stakeholders and supply chain partners for the trust they place in us to deliver and for their continued support of our strategy.

Ray O'Rourke KBE
Chairman