Bam’s UK construction business slips into the red

Turnover was stable but pre-tax profit fell in Bam’s UK construction arm in 2023, partly due to rising costs on an unnamed major project.

Bam Construct & Ventures said it made revenue of €1.05bn (£900m) for the calendar year, compared with €1.06bn in 2022, in unaudited figures announced today by its Dutch parent Royal Bam.

The construction division also fell into the red, as adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of €35.6m in 2022 turned into a loss of €14.8m.

Royal Bam chief executive Ruud Joosten attributed the performance to “supply-chain issues and cost overruns at a large project”.

Bam Nuttall (the engineering division of Bam’s UK operations) returned healthier year-on-year figures, with a 10 per cent increase in revenue to €1.36bn. Its EBITDA more than trebled to €77.3m.

The order book for all Bam’s UK and Irish operations stood at 4.53bn at the end of 2023 – down by 16 per cent on the previous year, partly due to a 300m hit from the government review of the Road Investment Strategy 2 programme.

Royal Bam highlighted project wins in 2023 such as additional works for HS2; an extension of the framework agreement with the UK Environment Agency to mitigate climate change and protect against coastal erosion and flooding; and the repurposing of the Typhoo Tea building in Birmingham into a new broadcast centre for the BBC.

The Dutch parent company predicted a “challenging” short-term market for its UK construction business, with a more stable operating environment for Bam Nuttall.

It added that in the medium term “there is a healthy pipeline in Bam’s core construction markets for education, health, offices and leisure”.

Source link

About The Author