Billion-dollar builder in QBCC investigation
A TOP-tier construction giant with more than a billion dollars turnover on major projects across Australia is working to convince the Queensland building regulator that it meets the minimum financial requirements for a licence.
The Queensland Building and Construction Commission (QBCC) confirmed it was investigating the financial position of Laing O'Rourke, which had not been required to provide the regulator with financial information since March 2014.
The company holds the state's highest possible class of licence, allowing it to work on projects worth more than $240 million.
Licensees that cannot satisfy requirements face suspension or cancellation of their right to work in Queensland.
The company yesterday said it was confident it met the requirements to retain its licence, and was working with the regulator to ensure that was the case.
The UK-based company's Australian arm booked a net loss of £14.6 million (A$26.6 million) towards the group's global net loss of £46.5 million (A$84.6 million).
In its last annual report it said it had reduced its workforce in Australia from 3262 in 2017 to 1997 in 2018.
It said its FY18 results had been hit by reduced revenue and increased tender costs along with legal and other costs over a terminated contract to construct cryogenic tanks at the Icthys LNG site near Darwin. Its losses on that contract as at June 30 were £40.3 million (A$73.3 million).
Laing O'Rourke's auditors emphasised the uncertainty over whether another $187 million noted by the company as a non-current receivable would actually be realised.
The company said its cashflow forecasts did not rely on the disputed amounts and that it believed it would meet its obligations for $100 million in debt facilities, but acknowledged "a level of uncertainty" over some of its forecast income.
Laing O'Rourke's Australian projects have included the $130 million Griffith University health centre, Brisbane Airport expansion, Brisbane Convention and Exhibition Centre and $955 million redevelopment of Sydney's Central Station.
An email from the QBCC confirmed it was investigating Laing O'Rourke's financial position.
It said the company had not been required to provide financial information to the QBCC since March 2014, but new legislation required annual financials be submitted by all licensees with annual revenue above $30 million.
"By the end of March 2019, the QBCC will have financial information from these companies that is no older than FY 2017-18," the statement said.
"By the end of 2019, every licensee will be required to meet new annual financial reporting obligations.
"This will help the QBCC to better protect subbies, suppliers, other companies, homeowners and investors from potential financial detriment when licensees are operating with poor financial health."
A statement from Laing O'Rourke said the QBCC reviewed "all contractors, every year".
"As is the case every year, Laing O'Rourke is engaging with the QBCC to confirm that Laing O'Rourke continues to meet all necessary requirements," the company said.
"We are confident the business meets all necessary requirements.
"Laing O'Rourke is committed to ensuring it is fully compliant with all legislative and regulatory requirements, across all jurisdictions in Australia - this includes ensuring that all subcontractors and suppliers are paid in accordance with contractual arrangements."