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Laing O鈥橰ourke narrowed losses in 2017 but continuing problems with a PFI hospital contract in Canada and ongoing restructuring costs helped keep it in the red for a second successive year.

The country鈥檚 biggest private builder had already flagged up more issues on the Centre Hospitalier de l鈥橴niversit茅 de Montr茅al project, which the firm is delivering in joint venture with Spanish contractor OHL, just before Christmas and in a note accompanying its 2017 results, the firm said the job had blown a further 拢83m hole in its accounts 鈥� on top of the 拢93m it lost on the job in 2016.

Phase one of the scheme has been completed with Laing O鈥橰ourke handing over building work on the second phase of the job to Canadian contractor Pomerleau with around 15% of the scheme still to be finished.

In its latest set of accounts for the year to March 2017, which were signed off on Friday (2 March), the firm said that losses on Canada and other joint ventures was 拢86.2m.

The firm, which last month began construction work on an 拢850m retail scheme in Edinburgh, said restructuring its European business, which includes its UK arm, had hit it for another 拢11.6m, including redundancy payments and consultation costs.

This helped it rack up a 拢67m pre-tax loss although this was down sharply on the 拢246m loss it posted in 2016 while underlying profit, helped by improvements in the performance of UK contracts, returned to the black, turning an 拢82m loss in 2016 into a 拢35m profit 12 months later.

But the amount it spent on restructuring was down from the 拢23.1m it posted in 2016 and there was better news at its Design for Manufacture business with the firm reporting no exceptional costs in 2017 following the 拢43.3m it racked up in 2016 in contract losses on three jobs. It added: 鈥淪ignificant lessons have been learned from these projects, all of which were won in 2013; a particularly aggressive price-driven market.鈥�

And Laing O鈥橰ourke has not paid out any more money compensating blacklisted workers under an initiative called the Construction Workers Compensation Scheme which saw it hand over 拢5.1m in 2016. It also made an 拢8m profit last year on the sale of its construction plant business.

Chief executive Ray O鈥橰ourke said the firm was expecting to post a pre-tax profit in 2018 when its current financial year closes at the end of this month, adding that its current order book stands at over 拢10bn.

He said: 鈥淭he Group has responded strongly to recent challenges, not only by restructuring the UK business, but also through new processes and controls on project selection, operational delivery, digital data and risk and assurance.鈥�

He added that he wants to outperform the government鈥檚 industrial strategy timetable which would see construction productivity on a par with the aviation and automotive industries by 2025.

And in a reference to Carillion鈥檚 collapse, O鈥橰ourke (pictured) said: 鈥淚t has been a difficult time for our sector and recent events have only reinforced the importance of Laing O鈥橰ourke鈥檚 early actions to redefine the business.鈥�

Laing O鈥橰ourke鈥檚 revenue during the period went up to 拢3.2bn from 拢2.5bn in 2016 with income from its two businesses 鈥� Europe, which includes the UK, UAE and Canada, and its Australian hub, headed up by O鈥橰ourke鈥檚 son Cathal 鈥� rising by 拢393m and 拢239m respectively.

But the firm said its Australian business was hit by an A$70m (拢39m) loss on a huge gas station job in northern Australia over a pay dispute.

The contractor was building four cryogenic tanks at the LNG Tanks Project in Darwin for lead construction partner Japanese firm Kawasaki Heavy Industries. It pulled its 800 workers from the job last March and in its accounts Laing O鈥橰ourke said it 鈥渋ntends to pursue a number of substantial claims鈥� over the work.

The number of employees at the business at the year end inched up by 39 people to 15,273 although its wages bill went up 12% to 拢778m.

Having now filed its group accounts, Laing O鈥橰ourke, which is registered in Cyprus but whose ultimate parent is British Virgin Islands-registered Suffolk Partners Corporation, is expected to file accounts for its individual businesses, including its largest, Laing O鈥橰ourke plc, at Companies House later this month.

The firm, which has extended the date on its refinancing deal (see box below), said it plans to move the tax status of the group from Cyprus to Jersey during this year.