Laing made the announcement to the stock market early on Wednesday morning, saying that it intended to focus on private finance initiative contracts and prime contracting rather than traditional volume work.
Laing expects the move to reduce turnover by a third from £1.2bn a year to £800m. This would make Laing Britain’s 10th-largest contractor, one place behind Kvaerner. It was Britain’s fifth-largest contractor in 1997.
The construction division will now operate as a single national business, rather than being regionally based.
The construction division will focus on transport, public sector buildings, commercial buildings, industrial facilities and utilities work.
The rationalisation, prompted by management consultancy KPMG, is expected to take up to two years. The troubleshooter was called in by Laing after poor financial results in March, when the company admitted that it had lost at least £26m on a £99m contract to build the Cardiff Millennium Stadium.
Construction boss Jim Armstrong said: “We have to recover the image of being a safe pair of hands in the interests of our shareholders, who have suffered under the cloud of Cardiff.”
The City reacted coolly to the announcement. At the time of going to press on Wednesday, shares in Laing had fallen 38p on the day to 276p. One analyst said: “I still wouldn’t touch their shares with a bargepole.”
