Resilient BAM puts focus on public sector projects

The Dutch-owned business said UK revenues fell 6 per cent to £1.7bn last year, but pre-tax profits increased 18 per cent to £34.7m.

BAM said the improved profitability was due to “careful market positioning, project selectivity and improved risk management and project execution”.

The group is on site at 11 projects across Yorkshire and the North East and has just handed over the £60m Leeds Arena to operators SMG Europe.

A spokesman told the Yorkshire Post that the majority of ongoing projects are for the public sector.

“The private sector is slow to recover,” he said.

Yorkshire projects include a rail operating centre for Network Rail in York, the Bradford College campus, two schools in Sheffield, a sports centre in Huddersfield, Hull’s historic Larkin Library and Boulevard Academy (pictured right) and the Maltby Academy in Rotherham.

BAM is building a “factory of the future” for Rolls-Royce at Rotherham, which will manufacture high-technology turbine blades for jet engines.

The group is using state-of-the-art 3D modelling software to design, plan and manage the development at the Advanced Manufacturing Park.

BAM employs around 1,000 people in Yorkshire and the North East, making it a major regional player in the construction sector.

Yorkshire-born James Wimpenny, from Huddersfield, leads the regional operations.

Martin Rogers, member of the executive board of Royal BAM Group, said: “BAM’s UK companies have continued to perform well in the challenging economic and business environment that continues to persist.

“The profitability of the UK companies improved in 2012 primarily as a result of careful market positioning, project selectivity and improved risk management and project execution.

“Although their turnover in 2012 was lower than the previous year, combined revenue of £1.7bn is evidence that the BAM brand is a significant force in the UK construction sector.”

He said the forward order book is valued at £2.7bn. BAM is tendering for Sheffield University’s new engineering building and a secure children’s centre for Leeds City Council.

Last year, BAM Construct UK generated revenue of £917.2m, down from £945.9m in 2011. The company increased pre-tax profits by 20 per cent to £13.9m.

Graham Cash, chief executive of BAM Construct UK, said: “We won an array of new projects in 2012 that demonstrates our range and versatility.

“We formed some significant new client relationships with customers who want high value construction and property ser- vices.”

BAM Nuttall saw revenue fall to £730m last year, down from £809m in 2011. The civil engineering company reported a pre-tax profit of £18.1m, up 22 per cent on the previous year.

Steve Fox, chief executive, said: “BAM Nuttall achieved a margin (of 2.5 per cent) that exceeds most competitors and places us among the top performing businesses in the civil engineering market.

“Our order book remains strong, vindicating our selective approach to winning work.”

BAM’s public-private partnership division reported revenue of £55.8m, marginally down on 2011.

Robert Young, head of BAM PPP in the UK, said the market is providing “some exciting opportunities” in the education, transportation and health sectors.

“We hope that the emergence in 2013 of the successor to the private finance initiative will act to stimulate the market more widely,” he added.

Royal BAM Group reported an operating income of 7.4bn euros and a profit before tax and impairments of 107.1m euros. “Last year did not see the economic recovery that is sorely needed,” said chairman NJ de Vries.