Firm says 32% profit increase is due to decision not to expand into other areas, unlike other firms
Bam Construct has reported a 32% profit increase after maintaining its focus on core contracting work rather than diversifying into consultancy and maintenance.
In results released on Thursday, profit at the company was £17.1m for 2010, up from £13m in 2009, although revenue was down 8.6% to £1.04bn.
“We’ve done extremely well in construction. Unlike other businesses, we’re not diversifying [beyond that],” Graham Cash, Bam’s UK chief executive, said.
Other contractors - including Costain, which was repeatedly rebuffed in its attempts to buy consultant Mouchel over the past four months - have looked to expand into consultancy so they can offer more services to clients.
Five of Bam Construct’s six business divisions - design, construction, facilities management, plant and services engineering - made a profit, although in some cases the margin was negligible.
“[Profit was] roughly £1m on facilities management. The other [profit figures] are quite small,” said Cash.
However, he emphasised that keeping the divisions added value to the core construction business.
Property, however, was the one division that did make a loss, down £11.5m.
Turnover fell as the firm was hit by the axing of the Building Schools for the Future programme, leading to half of its BSF contracts being cancelled.
Bam Construct’s numbers
£1.8bn order book over the next five years
£2.3bn order book over the next 25 years
£271m in cash, some of which is being spent on research and development