黑洞社区

The appointment of a new chief executive at Laing O鈥橰ourke makes a public listing of the company all but inevitable, senior figures in the industry have told 黑洞社区.

The country鈥檚 largest private contractor could pass out of family control by 2024 if it sticks to a timetable founder and current chief executive Ray O鈥橰ourke outlined over the summer.

Last week the firm鈥檚 chairman Sir John Parker announced O鈥橰ourke will be replaced by a senior executive at FTSE-listed Anglo American.

Seamus French, the mining giant鈥檚 chief executive of bulk commodities and other materials division, joins in January as managing director of O鈥橰ourke鈥檚 Europe hub and will take over from O鈥橰ourke himself as group chief executive at the end of the summer.

O鈥橰ourke, who turns 75 in January, will step down and join younger brother Des as a deputy chairman.

Rivals 黑洞社区 spoke to say the move to appoint the 59-year-old Irishman points to the firm readying for a float 鈥� rather than trying to flush out a buyer.

鈥淚t鈥檚 clear they鈥檙e preparing it for a float,鈥� one executive said. 鈥淛ohn Parker is an incredible individual and he鈥檚 done a lot to get corporate governance up to scratch. This is all part of that.

鈥淪eamus, who I鈥檝e never heard anything bad about, was probably never going to be chief executive of Anglo American. This is a good opportunity for him [to be chief of a listed firm].鈥�

He added potential internal candidates, including O鈥橰ourke鈥檚 son Cathal as well as Declan McGeeney, the firm鈥檚 director of infrastructure, and Paul McNerney, UK building director, would have been marked down for not having enough experience at a FTSE listed company.

Cathal is stepping down from leading the Australia business at the end of its current financial year next March and will stay on the group board as a non-executive.

One boss said: 鈥淐athal is bright and a genuinely nice guy. But he doesn鈥檛 have the drive of his dad. Declan understands the harder end of construction but wouldn鈥檛 look good [to investors] for the IPO [listing]. The same with Paul who is very commercial.鈥�

Laing O鈥橰ourke made the unusual step of revealing the length of French鈥檚 contract, three years, and a spokesperson said: 鈥淚t is the term of the contract Seamus has signed and we decided we wanted to be transparent about it.鈥�

One chief executive said: 鈥淭hat might be to do with the float. Equally, he [French] might have wanted three years because it has been a bit of a revolving door there. But there was no obligation for them to make that public.鈥�

Cathal stepping down effectively rules out the possibility of the firm being handed on to the next generation of O鈥橰ourkes, while overseas interest is thought to be patchy.

鈥淭he Chinese had a look some years ago but they were only floating around,鈥� one boss said. 鈥淏ig European contractors have given up on big acquisitions.鈥�

For a float to happen, most agree the firm has to be making more money and demonstrate future profit growth and pipeline of work.

In its last set of results, Laing O鈥橰ourke saw pre-tax profit fall 9% to 拢41.4m in the year to March 2021 on revenue flat at 拢2.5bn.

鈥淚 think they鈥檝e got to be doing about 拢100m [profit],鈥� one executive said. 鈥淭he market is not desperate for another contractor to be listed.鈥�

Another added: 鈥淚t鈥檚 got to be about risk versus reward. They鈥檝e got to show steady profit growth and a pipeline that鈥檚 underpinned by future strong growth. Being listed is about managing constant short-term expectations. It鈥檚 pretty relentless and all about the numbers. If you make money, great, but if you don鈥檛, you鈥檙e a complete failure. It鈥檚 pretty binary.鈥�

A chemical engineer by background, French said: 鈥淩ay, Des and the leadership team have set some very exciting ambitions for the next few years and I鈥檓 confident we have the people and experience to achieve these goals.鈥�