Chief executive Graham Cash says turnover has now levelled out and cites ‘well structured’ business as reason for firm’s resilience
Bam Construct’s revenue and profit have held steady amid difficult UK market conditions, with the firm’s boss saying its focus on innovation and technology has helped it to “beat the market”.
Speaking to Building following the publication of the firm’s results for the year to 31 December 2012, Graham Cash Bam Construct chief executive, said that the firm’s revenue and profit had held up in a challenging market.
“With the market dropping the amount it has, even though we are level [with last year], we are actually beating the market because the market is falling,” he said
Bam Construct’s revenue fell 3%, from £945.9m to £917.2m in 2012, while profit rose from £11.5m in 2011 to £13.9m. The firm’s pre-tax profit margin was 1.5%, up from 1.2% the previous year.
Cash said the firm’s turnover, which peaked at around £1.1bn at the height of the boom, had now levelled out, and he expected it to be “in the £900ms” again this year. He said this year the firm hoped to boost profit, with margins to “show a similar improvement” to this year. “It’s about getting the right quality of work with the right risk profile. If you can do that and deliver a good product then the margin will follow,” he said.
Cash said the firm had enjoyed a “superb start” to the year, winning a range of work, including the high-profile £300m Google HQ job in London – which Cash is unable to discuss – as well as schools work through the government’s Priority School Building Programme.
“We’ve had a strong first quarter – well up on last year’s, even if you don’t include the project that we’re not allowed to talk about,” he said.
Cash said that because the firm was already “well structured” it had not had to focus on internal restructuring, as many of its rivals had, and instead had concentrated on researching clients’ needs and developing innovation and technology.
Last year Dutch parent company Royal Bam Group signed a €3.5m (£2.8m) contract with software firm Autodesk to provide Building Information Modelling (BIM) technology across its global operations, including all Bam projects in the UK, and launched a project aimed at using BIM to improve the facilities management of a building once it is complete.
Cash said the firm’s focus on BIM had helped to give it a market edge, including on the Google HQ job.
Bam has also been appointed to provide pre-construction advice, including building a BIM model, on Derwent’s £150m redevelopment of the former Saatchi & Saatchi (pictured) office building in Fitzrovia, London.
Cash said he hoped this would give Bam an edge in the race for the main contractor’s role on the Make-designed scheme, with Mace, Brookfield and Bam all vying for the job. “We are developing the project with the client, but ultimately the client has the opportunity to tender to those three bidders, and probably will,” he said.
Meanwhile, Bam Nuttall, the UK engineering business, reported revenue of £730m, down from £809m in 2011, with pre-tax profit up 18% to £18.1m – giving the firm a pre-tax margin of 2.5%.
Steve Fox, chief executive of Bam Nuttall, said the firm’s margin “exceeds most competitors and places us among the top performing businesses in the civil engineering market”.
Results for year to 31 Dec 2012
Revenue £917.2m (down 3%)
Pre-tax profit £13.9m (up 20%)
Pre-tax margin 1.5% (2011: 1.2%)
Revenue £730m (down 9.8%)
Pre-tax profit £18.1m (up 18%)
Pre-tax margin 2.5%