Laing O’Rourke, the UK’s Largest Privately Owned Construction Solutions Company, Makes Significant Progress

Full Year Results

Laing O’Rourke Group (‘Laing O’Rourke’ or ‘the Group’), the UK’s largest privately owned construction solutions company, today announced a strong set of financial results for the year ending 31st March 2008 reflecting significant earnings growth and a record order book.

The Group is growing an international business with hubs in Europe, the Middle East and Asia, and Australasia which create a range of growth opportunities and spread risk.

Total global employees increased to over 30,000 people spread across these three hubs.

Financial Highlights

Managed turnover 21.5% ahead at £4.24bn (2007: £3.5bn)
EBITDA up 42.3% at £142.6m (2007: £100.2m)
EBIT up 63.9% at £87.7m (2007: £53.5m)
Order book at year end £9.31bn (2007: £8.37bn)

Operational Highlights

Commencement of work on the $20bn Al Raha Beach project in Abu Dhabi
Delivery of the ‘Old Town Commercial Island' mixed-use development in Dubai
Work commenced on the Delhi Convention Centre to be used for the 2010 Commonwealth Games in India
Successful handover of Heathrow Terminal 5 on time and on budget
Opening of the new high-speed St Pancras railway station in London
Selected to deliver Australia’s first ever gas-fired, air-cooled power station

Ray O’Rourke, Chairman and Chief Executive, said: “Our unrivalled reputation for delivering complex projects – on time and on budget – continued to set us apart in a year marked by ongoing growth and exceptional opportunity across the Group.

”Our hub-based business model, coupled with the skills of our directly employed workforce, has ensured flexibility to respond to changing macroeconomic circumstances in each of our operational units. This approach has exposed the Group to the considerable growth stories in each hub while de-risking the Group from the vagaries of any one market.”

Iain Ferguson, Group Finance Director, said: “Laing O’Rourke has delivered a good set of results, beating our forecasts and generating cash.

“As we enter an economic environment not experienced for many years and with difficult financial markets, we can be satisfied that the Group’s order book is at record levels, rising to over £10bn since the period end, our cash position is strong at £477m, an increase of 58% over 2007, and we have committed but unused banking facilities of £170m.”

Operating overview

While market conditions and tightening lines of credit have affected many businesses, Laing O’Rourke continues to grow and achieve its operational goals. The Group continues to build upon its geographic spread, with each of its markets continuing to provide significant volumes of work. Each hub has certain characteristics driving growth in their respective markets; from rebuilding infrastructure, transport and public utilities in the European Hub to creating new mixed-use developments in the Middle East and new infrastructure assets to support the extraction industries in Australia.

The strategy of operating through three geographical hubs continues to build momentum with each growing revenues and contributing positive earnings. The hub structure helps to protect the Group against regional economic cycles and enables it to enlarge and enrich its talent pool in a highly competitive environment.

Europe

The Group’s European construction business generated managed revenue of £3.24bn for the year. It continues to win public and private sector work through its innovative approach to identifying and securing projects. Laing O’Rourke’s secured projects and client-base provide long-term revenue, earnings and cash generation.

Explore Capital, the property development business, has had a quieter year with the continued development of Napier Park in Luton, and smaller mixed-use developments in Coventry and Brighton. Explore Living, our residential arm, has performed well despite the steadily deteriorating economic climate.

Steetley Offsite Manufacture

At Steetley in the East Midlands, an advanced facility for the design and manufacture of precast construction products is being created. Planning permission has now been granted; the site has been cleared and preparation for construction is underway. The Group strongly believes in the benefits of offsite manufacturing – waste reduction, quality, certainty of delivery and increased levels of safety.

Middle East and India

The Middle East and Asia Hub generated managed revenue of £0.42bn, an increase of 23.8%. The hub provides access to two of the world’s most vibrant construction markets. The Dubai business has won significant volumes of new work during the year. Under a joint venture with Aldar, signed in November 2006, the Group acts as project manager and construction partner to the Middle East-based developer. It is currently delivering the major Al Raha Beach development in Abu Dhabi. The specialist trading businesses have also performed well during the year.

The joint venture with Delhi Land & Financial (DLF) in India has exceeded expectations for the year, with a number of projects, including infrastructure, residential and commercial developments. Work has recently commenced on the Delhi Convention Centre which will be used for the 2010 Commonwealth Games.

Australasia

The Australasian Hub generated managed revenue of £0.58bn. The hub had a very good year, achieving all of the goals set out at the time of the acquisition of the Barclay Mowlem business in July 2006.

The construction business comprises three distinct and profitable business units: engineering and infrastructure, building, and rail construction and maintenance.

The rail business continues to perform ahead of expectations, beginning the year with a contract win in the Kingdom of Saudi Arabia. The ongoing construction and maintenance of the Pilbara Railway for Fortescue Metals in Western Australia has broken records during the year.

The engineering and infrastructure business has been busy throughout the year. We began construction of the Luggage Point waste water treatment plant in Brisbane during the year and were selected to deliver the Darling Downs gas-fired, air-cooled power station for Origin Energy, the first of its type in Australia.

The construction business was successful in winning a number of projects including the DB Reef Tower and 123 Albert Street, in Brisbane. We continued to invest in our Explore Capital business in Australia.

Outlook

With extensive experience in multiple sectors and an increasing investment in manufacturing, we continue to forecast positive earnings growth throughout the Group.

The level and diversity of the order book remains robust, which since the year end has grown to over £10bn.

However, we are not complacent. The economic climate, particularly in Europe, is worse than 12 months ago and shows little sign of improvement, at least in the short term. While this has not affected our order book, the Group remains vigilant to any indicators that may demonstrate otherwise.

Laing O’Rourke is a vibrant business that is well-positioned to capitalise on the numerous opportunities that are available in the markets in which we operate. We remain committed to our vertically integrated business model as we seek to position ourselves as a Total Solutions Provider for the built environment.