Supply chain issues and cost overruns on a large job saw subsidiary fall into red 

BAM’s UK and Ireland business has reported a modest increase in revenue and profit, buoyed by a strong performance from its civil engineering arm. 

Its full year results for 2023 showed revenue of €3.14bn (£2.68bn), up a fraction from €3.13bn (£2.68bn), while earnings before interest, taxes, depreciation, and amortisation (EBITDA) also improved from €82m (£70.11m) in 2022 to €122m (£104.3m). 

bam nuttall

Civils works helped keep BAM UK growing in 2023

The Dutch firm said the British pound exchange rate had a €55m (£47.03m) negative effect on its revenue. 

This was despite losses of €14.8m (£12.65m) in the UK construction business, which was “impacted by supply chain issues and cost overruns at a large project”. 

BAM Nuttall, the group’s civil engineering business, posted revenue of €1.36bn (£1.16bn), up from €1.24bn (£1.06bn), and profit of €77.3m (£65.8m). 

This high activity, which was mirrored in the BAM’s Ventures business, helped offset a drop in work in Ireland, where revenue was down to €463m (£396m) from €669m (£572m). 

The report said the UK civil market was “expected to be stable”, with the 2023 UK Energy Act boosting the prospects for energy security and net zero works. 

In the short-term, the construction market was anticipated to be “more challenging”, but in the medium term “there is a healthy pipeline in BAM’s core construction markets for education, health, offices and leisure and key markets in Ireland like transport and social infrastructure”. 

>> Treasury and IPA set out £700bn infrastructure pipeline over next 10 years

>> Bam starts hunt for new building boss after current head decides to leave after nearly 40 years at firm 

Ruud Joosten, chief executive of Royal BAM Group: “Market conditions remain challenging in the short-term as a consequence of higher interest rates, political and geopolitical uncertainties and the continued pressure to attract and retain staff.  

“For the medium and longer term, we see attractive market opportunities supported by demand for decarbonisation, critical infrastructure and sustainable and affordable homes, where we have proven market-leading capabilities.” 

The UK and Ireland business’ order book was down by 16% to €4.5bn (£3.85bn). 

Project wins in 2023 included additional work for HS2, the extension of a climate mitigation framework with the Environment Agency and the repurposing of the Typhoo Tea building in Birmingham into a new BBC facility.