BUILDING group John Laing slumped into the red last year after problems at its construction arm took their toll on annual figures.

Laing posted a one-off hit of £33.6m following the sale of the under-performing division to Essex firm O'Rourke for £1.

That left its mark on figures issued yesterday as Laing achieved pre-tax losses of £24.7m, compared with profits of £5.7m last time.

The group is also in talks to offload its property division as part of a campaign to generate £120m from asset sales.

A preferred bidder for the arm has been identified as Laing focuses on its housing operation, which employs 800 people, and its investment business.

Executive chairman Bill Forrester said the company now had a more predictable earnings profile from its remaining activities.

He said: "We are now better positioned to take the group forward, building on the trading strength and established market positions of our continuing businesses."

The construction division, which was involved in the building of Cardiff's Millennium Stadium, saw losses before interest go up to £128.1m from £88.9m a year earlier.

But operating profits from ongoing operations rose 18 per cent to £84.5m in the year to December 31, said the company.

In Laing Homes, UK profits were broadly unchanged at £53.3m after turnover rose to £381.3m from £352.3m a year earlier. The operation sold 1,375 units during the year, up from 1,235 a year earlier, while the average selling price was down to £227,000 from £238,000.

Mr Forrester said reservations since the start of the year were ahead of the same period last year, while house price inflation was continuing.

He added: "The board expects another good year from Laing Homes."

Laing Investments recorded profits before interest of £83.2m - up from £27.4m - after adding £48m following the sale of a 15 per cent stake in a Spanish road building operation.

During the year, Laing secured preferred bidder status to build and operate 17 police stations in Manchester, while its M40 Trains subsidiary has also been awarded a 20-year extension to its Chiltern rail franchise.

Laing Property, which employs 35 people and develops and manages commercial, retail and industrial property, recorded profits before interest and tax of £9.7m, down from £13.2m a year earlier.