Laing focuses on PFI as losses cut to £18.6m

JOHN Laing served notice on its remaining housebuilding operations yesterday and said it was still looking for acquisition opportunities to bolster its growing public sector contract work.

The group, which in January paid 43 million in cash and assumed liabilities to troubled services group Amey for its holdings in eight private finance initiative (PFI) projects, said it had room to buy again despite plenty of organic growth expected from a strong pipeline of projects.

After wiping out its debts with the 295 million sale of Laing Homes to Wimpey last autumn, Laing is in talks to sell its stakes in four other housing units, in which it wrote down the carrying value by 5 million yesterday but still hopes will realise up to 70 million. It also sold its property arm to Kier.

The company is now focused on Laing Investments, which specialises in roads, rail and public building projects as well as the Chiltern Railways franchise.

As it reported narrowing bottom line losses from 30.3 million to 18.6 million in 2002, Adrian Ewer, the finance director, said: "We are looking for more acquisition opportunities and we have the resources to do them should we wish to."

Pre-tax profits from continuing businesses rose to 17.3 million, before the exceptional hit, from 11 million a year ago.

Laing illustrated its confidence in "predictable and secure" earnings in the long term from paying some of its dividend - up 12 per cent at 7.6p - by dipping into reserves.

Ewer cautioned that earnings would grow steadily this year and next but then speed up from 2005 as contracts matured and interest costs on project debt fell.

Laing’s main interest in Scotland is its membership of the public-private partnership schemes rebuilding schools in Edinburgh and Glasgow, which it bought from Amey. It also has a stake in the toll road project alongside the M6 between Carlisle and Glasgow.

Including the Amey port-folio, Laing is investing in 32 projects and is preferred bidder on another ten. The directors value its PFI portfolio at 215 million.

Meanwhile, the architect of Laing’s recovery, Bill Forrester, is preparing to cut back his responsibilities later this year, moving to a non-executive role from executive chairman.

Ewer said: "Appointing an executive chairman was exactly the right thing to do when Laing was coming out of its difficulties but it was not meant to be forever."

The shares closed down 1p at 127.5p.