BAM Group’s UK operations post record financial results The three UK subsidiaries of European construction company Royal BAM Group together are reporting record results for the year ending 31 December 2008. The combined turnover for BAM Construct UK, BAM Nuttall and BAM PPP amounts to £1.75 billion with a combined pre-tax profit of £94.4 million. This represents an industry leading margin of 5.4%. The turnover result positions Royal BAM Group’s UK operations in the top three in the UK market. BAM Construct UK and BAM Nuttall report a healthy order book position with a figure of £3.2 billion at the year ending 31 December 2008. BAM Construct UK and BAM Nuttall underwent a rebranding process during 2008 to reinforce the brand strengths of Royal BAM Group within the UK market. This is part of a European-wide strategy to promote the strength of the BAM brand and position the Group as a market leader in its key sectors of construction, property development, civil engineering, PPP, M&E, consultancy and engineering. In uncertain economic times the financial strength of Royal BAM Group, which recently posted a turnover of €8.835 billion and a pre-tax profit of €252.5 million, will give reassurance to customers that the UK operations are in a strong position to deliver current and future projects. BAM Construct UK delivers a strong, consistent performance in 2008 BAM Construct UK delivered another strong performance in 2008 with turnover held above £1billion and a pre-tax profit margin of 4.95%. BAM Construct UK – highlights of 2008
Turnover in construction and related activities held steady at £1.06 billion
Pre-tax profit increased by 7.6% to £52.4 million* delivering a margin of 4.95%
Total order book increased to £2.5billion
Listed in the prestigious ‘Sunday Times Top 100 Companies to Work For’
BAM Construct UK - Financial summary
2008 £m 2007 £m Change %
Turnover 1059.4 1043.3 1.5
Operating profit* Profit before tax* (before property cost provision) Work in hand
41.7 52.4 2553.0
39.6 48.7 2298.0
5.3 7.6 11.0
Cash liquidities 215.0 192.0 12.0
*BAM Construct UK made a cost provision in 2008 of £7.1 million against the carrying value of its current property developments in the UK. The PBT figure net of this provision is £45.3 million giving a margin of 4.3% in 2008. Richard Gregory, Chief Executive, BAM Construct UK, comments: 'BAM Construct UK has had another strong year with its highest ever turnover. Over the past year we have demonstrated the ability and flexibility to succeed in spite of the economic downturn. Highlights of the year include a leading position on all three health frameworks in the UK, and an exceptional performance in the education market. ‘Although we have made a prudent cost provision in our property portfolio, this has been compensated by an increase of 35% in our construction profit and strong performances by our FM, Design, Services Engineering and Plant Hire businesses. ‘BAM Construction also achieved its best ever performance in health and safety reducing the accident frequency for our combined workforce, including subcontractors, to 0.21. During 2008, we started 56 new projects and carried out operations on 163 sites across the UK employing, on average, 9200 people on any single day. ‘BAM FM, our facilities management business, commenced operations on four new schools in the year, and now delivers services in 26 schools, three hospitals, and two police headquarters across the UK. It also manages a number of our completed commercial property developments. Our increasing capacity to offer a fully integrated service from sustainable design, through construction, and on to management of the completed building, is proving a strong selling point to customers, especially in the education market. ‘Our commitment to CSR continues to strengthen. All of our own property developments now achieve BREEAM ‘very good’ or ‘excellent’ ratings. BAM Design is developing real expertise in designing to help our clients meet the demands of energy performance certificates and carbon reduction requirements. ‘Our strategy for the coming year is to continue with the same consistent performance. We will maintain our strong presence in every region of the UK and our leading position in the education market by bidding, along with BAM PPP, for future waves of the Building Schools for the Future Programme and the National Academies Framework. We will concentrate also on staying in pole position on all three health frameworks in the UK: ProCure21, Designed for Life – Building for Wales, and Frameworks Scotland. We will continue to develop our integrated services, offering added value to our clients, through our construction, design, services engineering, FM and plant hire capabilities.’
