John Laing plc History

Company Perspectives:

Laing is an innovative company that is embracing the opportunities presented in our rapidly changing world: yet it is one that can do this with the benefit of over 150 years of experience. Our aim is to give our customers a service which spans the entire development, management, and operation of infrastructure, housing, and other accommodation. A service which is second to none. Recognized for the quality of our products and services, we are constantly developing and investing in new skills and systems to support their continuous improvement.

Key Dates:

1848:

James Laing and his wife Ann build and sell their first house.

1882:

Laing's son John takes over the business.

1920:

John Laing becomes a limited company and opens offices in London.

1939:

The company begins constructing aerodromes as part of the war effort during World War II.

1952:

The firm goes public under the name John Laing & Sons (Holdings) Ltd.

1978:

John Laing dies.

1987:

An Energy, Technology, and Environmental division is established as part of a diversification effort.

1999:

The company manages the construction of the Millennium Dome.

2001:

John Laing sells its Construction Division.

2002:

Laing Property is sold; Sir Martin Laing retires.

Company History:

With over 150 years of experience under its belt, John Laing plc operates with two main divisions--the Laing Homes Group and Laing Investments. The Home unit constructs a wide range of residential housing in the United Kingdom as well as in the United States through WL Homes LLC. Laing constructs nearly 1,300 units per year, from simple one-bedroom apartments to £1 million luxury homes. Through its Investments arm, Laing deals with infrastructure projects related to the transportation, health and education, defense, and utilities industries. The company provides development, financing, construction, and service operation through this segment. During the early years of the new century, the company made significant changes to its operations by selling off both its Construction and Property divisions, along with a portion of its stake in WL Homes. In 2002, Sir Martin Laing--fifth-generation descendant of David Laing--retired, leaving Bill Forrester as executive chairman.

Early Beginnings: Mid- to Late 1880s

After building his first house, David Laing worked in the village repairing the church, digging wells, and engaging in other small jobs to maintain his livelihood. His eldest son, James, born in 1816, joined him upon finishing school. It appears that James Laing would have been content to carry on as a repairman and minor builder like his father, but his marriage in 1841 to Ann Graham, who had her eyes on the future, changed James Laing's life. She convinced him to hire permanent employees and buy a plot of land for £20. In his spare time, Laing built a house on the plot; Ann helped by leading a team of their children in hauling rocks up the hill from a river bed. He finished the house in 1848 and sold it the same year, thus giving birth to the Laing construction firm.

The £150 proceeds from that first sale financed construction of two more houses on the same piece of land. James and Ann raised their family in one of the houses and sold the other. It is uncertain why in 1867 James sold everything and moved the family to Carlisle, where he worked as a laborer until he managed to start another business of his own. Again, the eldest son joined his father in business; John Laing, born in 1842, worked as a stonecarver for his father.

When James Laing died in 1882, John Laing took over the business and began to procure larger contracts for public projects such as the Carlisle electricity works and repairs on the local castle. Under John Laing, the business began to produce its own building materials. Laborers dug clay, made bricks by hand, and fired them in a kiln on the construction site. The business remained relatively small and confined to the Carlisle area until the fourth Laing took over.

John Laing's son John William Laing, born in 1879, was active in the business before he was 20 years old, so active that the firm changed its name to John Laing and Son. Ann Laing, by now quite advanced in age and feeling that her family was suitably established, wanted her grandson to go into a more genteel field than construction. Unaware that the young man was a budding construction tycoon, she tried to keep him out of the business. In a peculiar reversal of the norm, John William Laing rebelled against his grandmother by staying in the family firm.

The construction industry in Great Britain experienced great growth in the first decade of this century. During this period Laing procured many contracts for public works, including the Uldale reservoir and the Barrow sewer.

Expansion Efforts: 1910s-1930s

By 1910, John William Laing was the sole proprietor of the firm and had begun to organize it into the successful international business it is today. He hired more employees and started accepting larger and more distant contracts, especially for factory construction. Laing was very concerned about preparing accurate cost estimates, maintaining strict control over the construction workers, and using scientific methods. He wanted to know about every aspect of construction, even at times living on building sites and learning such skills as bricklaying, masonry, and how to inspect each laborer's work.

Laing devised his cost-estimating technique with William Sirey, a clerk in the firm. It consisted of sending trained estimators to the site to prepare a detailed analysis of every phase of the job. As a result, Laing's quotes were more accurate than those of his competitors. The system additionally helped the firm reduce the builder's standard problem of surprise costs surfacing during construction. Estimators remain important in the company that was among the first to apply cost-control procedures systematically.

During World War I, the company received a series of British government contracts for war works. Laing built naval armament testing stations, an armament factory and workers' accommodations in Gretna, an aerodrome, and a riveting school. By the end of the war, John Laing & Son was a substantially larger firm with an intricate and invaluable web of contacts in government departments.

In 1920, the firm became a limited company and opened offices in London. Two years later, the headquarters moved from Carlisle to a 13-acre site in Northwest London at Mill Hill. Now in national competition for construction work, the company won contracts for the Middlesex County Hospital, the Federation of British Industries House, office blocks, pumping stations, power stations, and an army camp.

The postwar housing shortage led to a significant amount of business for the company, which built many public housing blocks for the Local Authorities while also building houses for sale to the public. A subsidiary company, Laing's Properties Ltd., owned and managed large blocks of Laing-built flats. Laing's largest source of work, however, was the Air Ministry, for which the company built aerodromes, airfields, equipment depots, and the underground headquarters for the Bomber Command of World War II. The company began constructing three new aerodromes in October 1939 and 14 more the next year. In the process, Laing developed expertise in runway construction that would prove lucrative during the war years.

World War II brought contracts for a total of 54 aerodromes, including hangars, runways, offices, and housing. Work on ordinance factories, power stations, coal mines, and part of the floating harbor used in the D-Day invasion of France also made significant contributions to Laing profits during the war.

Postwar Growth

The fifth generation of Laings, William Kirby Laing and James Maurice Laing, joined the firm before World War II. In 1950, the company established its first regional center, in Bristol. Two years later the company went public and took the name John Laing & Sons (Holdings) Ltd. The family and its trusts and charities held the bulk of the shares. John Laing became the chairman, and his sons became joint managing directors. By this time, the number of employees was up to 10,000, and every site had a quality supervisor.

Postwar contracts included schools, the Prestwick and Glasgow airports, factories, the Windscale and Berkeley nuclear power stations, and more than 10,000 houses. The firm continued the coal mining it had begun during the war, extracting 12,555 tons in 1947. In 1953, net assets reached £6.6 million, and the company employed 15,000 people at its building sites and offices.

John Laing retired in 1957 and was knighted two years later. Paternalistic and devout, he served as president of the London Bible College; helped establish the Salisbury Bible House in what is now Harare, Zimbabwe; and had his company build the Coventry Cathedral and return the profits to the church. While he was known during his time at the helm of the firm for providing every construction site a welfare officer to look after meals, movies, whist drives, and religious services for the laborers, it was reported that he could also be harsh. He once reportedly fined a man for going to the pub during lunch. He died in 1978 at age 98.

Under William Kirby Laing and James Maurice Laing, the company continued on the successful path the men's father had planned, winning contracts for more power stations and expanding into road construction while continuing to build houses. In 1985, Martin Laing, of the family's sixth generation in construction, became chairman. That year, the company won contracts totaling almost £27 million.

Martin Laing determined that the company, now Britain's largest construction firm, should begin to diversify. With an £84 million cash reserve, Laing had room to experiment. Diversification projects included building supermarkets at airports and creating a new water treatment company, called Water Services, set up as a joint venture with the French company Lyonnaise des Eaux. Martin Laing believed the skills the company gained from the experience of installing its own elaborate computer system could be the basis of a profitable service. Consequently, in 1987 the company established its Energy, Technology, and Environment division, which offered high-technology services, from computer-aided road design to nuclear waste processing.

The company's other divisions continued to be successful as well. Profits rose steadily in the 1980s, from £30.3 million in 1984 to £38.1 in 1986, with each subsidiary doing correspondingly well. Home construction in the United Kingdom, Saudi Arabia, Oman, the United Arab Emirates, Iraq, Spain, and California was now one of the major sources of the company's growth, although there were some problems with non-payment by clients in Saudi Arabia. This depressed share prices somewhat. Nevertheless, the company's participation in several major projects the British government planned for the late 1980's and early 1990's preserved Laing's leadership of the United Kingdom construction industry into the early 1990s.

Restructuring for the Future: 1990s and Beyond

The remainder of the 1990s and the early years of the new century saw drastic changes for Laing's operations however. By 1997, the company operated with four main divisions--construction, homes, property, and investments. That year, both sales and profits increased over 1996 figures due in part to the completion of the Hong Kong Convention and Exhibition Centre. That year, the company was also awarded the contract for the Millennium Stadium at Cardiff Arms Park, a contract that would prove costly.

As the company celebrated its 150th anniversary in 1998, it faced falling profits due to cost overruns with the Millennium project and continued problems within its construction division related to competition and overcapacity. The company focused on its housing activities and merged its U.S. operations with Watt Residential Partners, which became WL Homes LLC. It also continued to diversify its offerings in the residential housing industry and acquired a 20 percent interest in upscale home builder Octagon Group Ltd. The company was also heavily involved the United Kingdom's Private Finance Initiative (PFI). In fact, the company took part in one of the first PFI projects in the UK when it was contracted to construct and maintain the Second Severn Crossing, a cable bridge connecting England and Wales. The project was completed in 1996.

In 1999, Laing reported positive results as the UK housing market strengthened. That year the company purchased a controlling interest in the Chiltern Rail franchise. The construction division, however, continued to falter. As such, Laing set plans in motion to reposition itself as it entered the new century. During 2000, the company announced it would sell its construction business, which suffered a loss of £88.9 million that year. The unit was sold to O'Rourke plc in October 2001. Laing also sold its property development division in early 2002 and also began to divest its interest in WL Homes in order to focus on its home building operations in the United Kingdom. Overall, the company divested £122 million in assets in order to reduce debt.

Laing, which by 2002 had transformed itself into two main divisions--homes and investments--underwent yet another change when Sir Martin Laing retired in early 2002. Bill Forrester, a company director, took over as executive chairman. The new leader commented on the company's restructuring actions in a 2002 The Western Mail article, stating, "We are now better positioned to take the group forward, building on the trading strength and established market positions of our continuing businesses."

Indeed, the company secured profits in the first half of 2002 after reporting a £24.7 million loss in 2001. Management remained optimistic that its repositioning would pay off in the long term. While there was speculation in the investment world that Laing would sell off its homes division, the company gave no indication that it planned to cut its operations further. With over 150 years of experience behind it, Laing would no doubt remain a player on the UK real estate and construction scene for years to come.

Principal Subsidiaries: John Laing Homes plc; Laing Homes Ltd.; Beechcroft Developments Ltd.; Octagon Group Ltd.; Laing Investment Ltd.; Severn River Crossing plc (35%); Altram LTR Ltd. (33.33%); Altram (Manchester) Ltd. (26.1%); M40 Trains Ltd. (84.36%); Octagon Healthcare Holdings (Norwich) Ltd. (20%); Defence Management Holdings Ltd. (50%); UK Highways Services Ltd. (19%); Hyder Investments Ltd.; Laser Ltd. (50%); UK Highways plc (50%); UK Highways M40 Holdings Ltd. (50%); UK Highways A55 Holdings Ltd. (50%); Countryroute Ltd.; Coastal Clear Water Holdings Ltd. (50%); Services Support Ltd.; Education Support Ltd.; Modus Services Holdings Ltd. (40%); City Greenwich Lewisham Rail plc (40%); Meridan Hospital Company Ltd. (50%); John Laing Services Ltd.

Principal Divisions: Laing Homes Group; Laing Investments.

Principal Competitors: Amey plc; George Wimpey plc; Taylor Woodrow plc.

Further Reading:

• Coad, Roy, The Biography of Sir John W. Laing, CBE, London: Hodder and Stoughton, 1979.
• Cook, Andy, "Penalty Time for Laing," Building, November 13, 1998, p. 18.
• Evans, Graeme, "Construction Arm Pushes Laing Into the Red," The Western Mail, March 19, 2002.
• Harrison, Godfrey, Life and Belief in the Experience of John W. Laing CBE, London: Hodder and Stoughton, 1954.
• Sall, Keren, "Laing's Profits Up 41%," Contract Journal, September 24, 1997.

Source: International Directory of Company Histories, Vol. 51. St. James Press, 2003.

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