Contractor buoyed by move not to chase turnover at expense of margins

BAM Nuttall saw revenues fall by nearly a fifth last year, but posted an increased margin of 2% and said its focus throughout 2016 had been on “securing a good quality order intake”.

The contractor posted turnover of £637m last year, down 19.1%, while operating profits fell 28% to £12.6m. Pre-tax profits fell 21% to £14.3m, yet the group still posted a margin of 2%, up from 1.4% in 2015.

A spokesman for the group said the full year results for 2016 were in line with the group’s expectations in terms of profits and revenues, having decided not to chase turnover at the expense of margin.

Chief executive Stephen Fox said: “We have continued to develop our business in a number of key sectors, such as rail and flood alleviation, and our projects are now widely spread throughout the UK.”

Fox said while its order book had reduced, BAM said it remained in a “healthy state”, having secured a number of “very significant awards”, including the HS2 enabling works contract, which it said was worth around £100m to the business.

Other deals awarded to BAM in 2016 included one from EDF to build and install five gravity bases for off-shore windfarm use, described by BAM as a “groundbreaking demonstrator project” which could be used more widely across the industry in future.

At the end of last year BAM was awarded a 10-year framework contract to build structures for the British Antarctic Survey.

Following the EU referendum, BAM said it did not expect the vote to leave to have any significant impact on its order book. “Our workload is dominated by public and regulated sector customers and is consequently mostly influenced by government infrastructure-related decisions.

“The benefits of investment in infrastructure by government seem to be well recognised by now,” it added, in a statement written last month.