BAM Construct UK eyes further growth amid increased profits
BAM Construct UK is seeking to expand into higher margin workstreams after it reported increased profits on a slightly reduced turnover for 2018.
The company recorded turnover of £949.8 million (down slightly by 0.3% on 2017) with profit before tax and exceptional items of £27m, which is a margin of 2.8% (2017: 1.5% restated). It also reported a strong order book of £1.76 billion and no debt, with £83m cash reserves.
The business has seven operating companies in the construction sector plus separate businesses for plant hire, services engineering, facilities management, property management and design.
James Wimpenny, chief executive of BAM Construct UK, said: “Our customers appreciate the consistent performance we deliver, both in our operations and in our balance sheet. Our increased profitability reflects our business reducing risk by selective tendering and working smarter. Ultimately this consistency benefits both us and our clients in a sector which has experienced recent instability.
“We are assisted by having a good balance of work between the private sector (58%) and public sectors (42%) and 65% of our work is repeat business, as clients that we have worked with before re-engage us. That is something I believe shows that our collaborative culture is one that our clients appreciate adds value to their projects. I am also pleased with progress at our growing FM business.”
Mr Wimpenny said that the consistent performance of the business is both a reason to seek further growth, and a good platform for it.
He added: “We cannot earn enough from construction alone to provide the investment we need in our people and the technology they need for the future. We have therefore embarked on feasibility studies for potential work streams that would generate higher levels of profit to enable growth. There will be no sudden moves. Entry to new markets will be carefully planned with assistance from experts both inside and outside the group.”
BAM has 2,549 employees. It completed 33 construction schemes in 2018 and secured 39 more.
Despite very little change in turnover, the company was able to reduce its carbon emissions (tCO2e) by 13% to an all-time low of 11,488 tonnes.