Bam Construct chief voices fears over ongoing Euro crisis
Fears of a full-scale crash in the Eurozone are depressing the UK construction market, chief executive of Bam Construct UK Graham Cash has said.
Cash said construction firms “desperately need” a resolution to the Euro crisis, as the firm reported a drop in both turnover and profit for the financial year ended 31 December 2011.
“Developers have not got the confidence as [they fear] we’ve got this dark black hole coming that’s the Euro [collapse],” Cash said.
Bam Construct’s turnover fell 9% from just over £1bn in 2010 to £946m, while pre-tax profit dropped a third from £17.1m to £11.5m.
For the full financial results see here
But Cash said the firm would continue to target work with “bold” clients developing major schemes in the tough market, including Argent and the Co-op.
Bam landed a £24m retail-led scheme for Argent at Kings Cross in north London in January and will complete construction of a new headquarters for the Co-op in Manchester in August – a scheme thought to be worth about £100m.
Bam is also planning further expansion into facilities management after poaching senior Interserve director Kath Fontana to head up its FM division.
Cash said the education sector was still “the biggest market out there” for Bam after picking up seven multi-million pound academy projects so far this year.
But he added the contractor had been frustrated by a lack of clarity on the coalition’s Priority School Building Programme.
Cash said a fall in profit and a fall in its operating margin from 1.6% in 2010 to 1.2% was “the reality of the market we’re in”.
He added the company had completed its downsizing for the time being, after making 100 staff redundant last autumn.
Bam Construct’s sister company – civil engineering contractor Bam Nuttall – recorded stronger results for the year ended 31 December 2011.
Major wins on Crossrail helped push Bam Nuttall’s revenue to a record £809m, up 17% from £684m in 2010.
However pre-tax profit at Bam Nuttall fell by 9% from £15.7m in 2010 to £14.3m.