International engineering firm Laing O’Rourke has announced it plans to sell its Australian operations
A change in infrastructure spending in Australia has prompted engineering firm Laing O’Rourke to sells its operations based in the country.
The Australian arm, which reported post-tax profits of A$142m in the 12 months to March 2015, is expected to sell for more A$1bn.
The decision follows a review of the firm’s portfolio, which prompted several unsolicited approaches for the Australian-based arm of the company.
Growth in the UK construction market and Westminster’s commitment to infrastructure projects has made this a more lucrative option than Australia, which has seen a slowdown.
Chief executive Ray O’Rourke said: “Another key conclusion of the review was that the European business and the UK in particular was very well placed for strong growth potential, which will be further fuelled by the [UK] government’s renewed focus on infrastructure and new housing.”
Australia has seen an end to major oil and gas projects, and a shift in focus to urban infrastructure such as road and rail upgrades. It was forecast by the Australian Constructors Association that transport infrastructure would see a potential pipeline worth some A$101bn over the next two years.
Laing O’Rourke said the downturn had impacted its order book. By the end of March 2015 the firm had A$2.2bn in secured orders, more than A$1bn in submitted tenders under consideration, and more than A$30bn in new opportunities.
The company said: “However, a watching brief on all projects will remain, as the Australian market and construction industry are highly leveraged to exogenous factors, particularly offshore demand for our traditional resources.”
The sale is being co-ordinated on behalf of Laing O’Rourke by HSBC Investment Bank.
