Construction and engineering giant Laing O’Rourke has warned of a “challenging” couple of years ahead for the sector as it said annual earnings were down by a quarter.
Profit before tax and exceptional items dropped 24.8 per cent to £58.6m for the year to March 31, while managed revenues rose 0.5 per cent to £4.4bn.
The company, whose projects have included London’s Olympic Park in Stratford and the City’s Leadenhall Building – known as the ‘Cheesegrater’ – said margins had been squeezed as firms cut prices to win new work, while costs were rising.
Chief executive Anna Stewart said: “We expect the next two years to be challenging for our industry and for us, as we complete projects secured in recessionary times while at the same time balancing labour and material price recoveries.
“In the UK, we are definitely experiencing an improvement in the opportunities now available and in the pipeline.
“Inflationary pressures and resource shortages are being felt, but these are not immediately translating into adjustments to customers’ budgets or bidding prices.”
The firm, which this week won a £100m contract for Imperial College London’s White City research hub, said that despite initial signs of recovery, overall volumes remained well below the 2008 peak.