Laing shares halve in value

Costs at the Millennium Stadium over-ran

Shares in the British building group John Laing halved in value after it announced a deal to sell its loss-making construction business.

The company said it was selling the business for just one pound to the privately owned construction firm O'Rourke Group, and would take a £30m charge on the sale of the business.

Losses at the construction offshoot meant Laing reported a first half pre-tax deficit of £37.8m against a profit of £28.9m last year.

The company is now planning a £72.8m rights issues to cover the loss on the sale and other debts.

The construction business which Laing is selling has racked up losses of over £195m over the past three years.

One of the main contributors to this figure was the losses linked to the building of the Millennium Stadium in Cardiff, which saw costs over-run.

Other businesses 'excellent'

The company's chairman Sir Martin Laing said the reorganisation would lead to "a more focussed group based on the lower risk core activities".

Following the sale of its construction unit, Laing will be left with its housebuilding, property and infrastructure investment businesses.

The group has been looking to pick up business through the Private Finance Initiative (PFI) in Britain where it provides services in public sector areas.

Laing's continuing businesses turned in an operating profit of £44.3m for the half-year.

"Notwithstanding the difficulties experienced by the group in its construction activities, the UK homes and investment divisions continue to produce excellent results," Sir Martin said.

It was also announced that Sir Martin would step down from his position as company chairman in January.

Shares in John Laing halved in value during the course of the day, falling to 116.5p from 233.5p. In March the shares were valued at 567.5p.