Co-op Live helps send Bam’s construction arm sinking £40m into red

The construction arm of Bam’s UK business sank into the red last year after the firm said it was hit by losses on its late-running Co-op Live scheme.

The job hit the headlines last spring when a series of opening deadlines came and went with gigs by Take That, Keane and comedian Peter Kay having to be pulled before it finally opened in the middle of last May.

In group results out this morning, Bam said losses at its construction arm last year widened to €48.3 (£40m) from €14.8m (£12.3m) last time. Turnover at the division was down 13% to €905m (£754m).

It added: “The performance of Construction UK was impacted by project delays and supply chain issues, including a loss for Co-op Live in Manchester.”

The firm declined to say how much it had shelled on the job but last year the boss of Co-op Live said Bam had “lost a lot of money” on the scheme, saying the cost of the job had gone up from £365m to £450m.

Bam signed up for a fixed-price deal when it won the job four years ago and Tim Leiweke, chief executive of the Oak View Group, the American operator behind the venue who co-own it, admitted: “Bam got hit hard, they’ve lost a lot of money on this job, I feel bad for them, they’re doing the best they can. Some things we could have expected, some things were unexpected.”

>> See also: A nightclub on a massive scale’: touring Populous’ £365m Co-op Live arena

>> See also: Uh-oh. Co-op Live’s woes leave industry with familiar sinking feeling

But Bam’s UK civils business saw earnings jump 24% to €95.5m (£80m) while revenue was up 15% to €1.5bn (£1.25bn), buoyed by rail and energy schemes.

Bam added: “The construction market in the UK is expected to grow. Energy remains a focus of the UK government. Furthermore, negotiations have begun with the shortlisted bidders for the Small Modular Reactor programme and Bam participates in this process with Rolls Royce. The New Hospital Programme in the UK will be put on a more sustainable and deliverable footing.”

The UK and Ireland division’s order book was up by 58% to €7.2bn (£6bn) which includes recently awarded work on HS2 to design and construct trackwork in a joint venture with Ferrovial.

Meanwhile, Bam’s group revenue was up 3% to €6.5bn (£5.4bn) last year with earnings up 9.5% to €333m (£278m).