Has Ray O’Rourke’s successor been under his nose all along?

To some, the answer to construction’s great unanswered question of recent times – who will succeed Ray O’Rourke? – has been hiding in plain sight all along.

The list of would-be Rays is a long one and the latest recipient of the mantle has been, on the face of it, the most obvious. His son.

A civil engineering graduate from Birmingham university, 45-year-old Cathal has been at the family business since 1999 and is currently living in Australia, where he has been based for the past 13 years.

That will change in the next few weeks because, on Tuesday afternoon, the firm announced Cathal would become chief operating officer, a role not used since the days of Tony Douglas, at the country’s biggest private contractor. He returns to the UK next month.

The news has capped a chaotic 18 months at the business, which began with a suggestion by O’Rourke himself that the firm was looking at a float next year.  Many put this down to a proposal of last resort after a series of succession plans had bitten the dust.

That autumn, there followed the news that Ray O’Rourke was calling time, stepping down, along with his younger brother Des, to be replaced by a former Anglo American executive called Seamus French who would run the firm’s European arm first before taking over the chief executive’s role in September 2022.

But, last October, news emerged that French had not lasted a year and would leave by Christmas. Ray would be returning (or, in reality, remaining) as chief executive for the next couple of years.

“It’s a good job they’re not listed,” one chief executive told Building this week when Cathal’s appointment was announced. “It’s all been a bit scattergun.”

But even private firms, though free from plc rigours, need a succession plan to satisfy investors and with O’Rourke turning 77 next January, no firm more so than the one which bears his name.

He has got to let Cathal get on with it and take a back seat – although he will find it difficult

Stories about Ray O’Rourke finding it hard to let go are legion. “The joke was that he would leave Laing O’Rourke in a wooden box,” remembers one former staffer.

“He has got to let Cathal get on with it and take a back seat,” another adds. “Although he will find it difficult.”

Cathal had actually stepped down from leading the firm’s Australia business last year after nearly a decade in charge. He arrived in the country in 2010, a move – given Australia’s distance from the UK – that some say wasn’t entirely coincidental: “He wanted to go out there, to get away from [Ray’s] shadow and prove his worth to the business and industry, to be his own man.”

Another former colleague adds: “Cathal is very different to his father and, for a period, was in his shadow – which is a big shadow. His move to Australia has been fantastic for him, to be his true self in many ways and become comfortable in his skin and style.”

Cathal says he stepped down last year to take parental leave – but kept his hand in as a non-executive at the Australia business.

By all accounts, he has enjoyed an enviable lifestyle in Sydney, living in what estate agents might say is a well-appointed location. “He has a massive house overlooking one of the bays,” says one source.

When Cathal’s appointment was announced, temperatures in London were barely above freezing while Sydney was recently basking in heat of 40 degrees. So what, then, has made him swap Australia’s biggest city for O’Rourke’s base in Dartford?

“In a word: duty,” says the ex-staffer. “He’s a lovely bloke, he’s a good guy and compassionate. But he understands his role and the importance of duty.”

Building understands his father flew out to Australia towards the end of last year to convince his only son – O’Rourke also has two daughters – to listen to what he was proposing.

“He had to be persuaded,” says a source familiar with the situation. “Cathal is the only member of the family who is able to do it.

To come back into a COO role is looking like a succession to me. Ray has tried everyone else. It’s not a bad choice

“I think it will work. It’s a good solution for the family and the business, where he’s well respected and liked.”

Another adds: “To come back into a COO role is looking like a succession to me. Ray has tried everyone else. It’s not a bad choice.”

His father’s difficulties in sorting out a succession have been well documented but a common theme has run through it all: his problem of letting go. “Ray has not been comfortable with any of this, bringing someone in from outside and letting them get on with it. He can’t do it. I really like him but I couldn’t work for him.”

The ex-staffer remembers that, at one time, the three mostly likely to succeed Ray internally were Callum Tuckett, Andrew Jackson and Cathal.

Tuckett, who was at Laing when O’Rourke bought it for £1 in 2002, is now running Multiplex, while Jackson, another one who was there at the time of the takeover, is COO of Mace’s construction business.

“Tony Douglas should have been the one, in my opinion, of those who he did appoint,” the former staffer adds. “But the crash happened and Ray got jumpy and didn’t stick with him.”

Douglas, who still has connections to the industry via a non-executive role at Keltbray, left after two years as COO in 2009 and went on to run Etihad Airways before leaving last autumn to lead new Saudi airline RIA. All, then, clearly had something that others later saw but O’Rourke, for whatever reason, did not.

Cathal, by all accounts, has done a successful job in Australia, where the firm beefed up its presence in 2006 after it paid £30m to Carillion for Barclay Mowlem. The Australia business of Mowlem came with Carillion’s purchase of that contractor at the end of 2005.

He moved the business from oil and gas jobs to a focus on infrastructure and defence work – although the firm has run into trouble on one contract and shipped more than £70m on the scheme in northern Australia. It is in dispute with its former partner on the project, Kawasaki Heavy Industries.

That blot aside, the opinion of Cathal from rivals is good. “He’s a great guy,” says one. “He’s a forward-looking people person. A fantastic statesman and front man. I’d say he’s more of a chairman or CEO than a COO.”

Another says: “I suspect he will be a breath of fresh air and bring a new energy that many will be craving for. Top man. I do hope he can build the team he needs with him to complement the qualities he has.”

The ex-staffer concurs. “He’s brilliant with clients and is really easy to talk to. Not everyone can do that. He’s got a good sense of humour and is really progressive, very inclusive and diversity is very important to him.”

One telling thing about Tuesday’s announcement was Cathal’s own words. “My partner and I will be returning to the UK with our nine-month-old daughter,” he said.

Not many corporate appointment stories include quotes like this. They tend to be much more business focused, certainly no insight into a private life.

Whether a float – remember that? – ever happens is now a matter of opinion. “It looks like that is off the table,” says one. The consensus is that, for a firm like Laing O’Rourke to ever get a listing, it needs to build up a good track record on profit.

You never know. Ray often achieves things people cannot comprehend

O’Rourke’s profit has yo-yoed in the past few years – hitting nearly £46m in 2020 but slumping to just £2.7m a couple of years later.

Another part of a successful float is having a succession plan in place. “He [Ray] has got to get that sorted. The banks will demand it,” the ex-staffer says.

Of a float, another adds: “You never know. Ray often achieves things people cannot comprehend.”

Whether that plan is now in place, only time will tell. Still, this week’s news points to the fact that some sort of succession plan, by hook or by crook, is finally emerging.

Hindsight is a wonderful thing, of course, but, if it does work out with Cathal, the irony would not be lost on many: that Ray O’Rourke’s eventual successor has been right under his nose all along.