Half-year results from Royal BAM Group, parent company to BAM Construct and BAM Nuttall, show that both the group and its UK businesses have returned to modest profit after a period of being hit by problem contracts.
Overall, the group reported a pre-tax profit of €19.6m, on a revenue of €3.515bn. A year ago, the interim results showed turnover of €3.382bn and a pre-tax profit of €4.6m.
In the UK, the combination of BAM Construct and BAM Nuttall delivered turnover of €1.093bn and pre-tax profit of €3.9m, compared to €927m in the first half of 2014 and a loss of €3.8m.
Last year, former chairman Nico de Vries said that the group had made a loss on a “mid-sized civil engineering project [in the UK] bid in 2012”. It also made a loss on a project in Germany.
According to the results statement, the group-wide 4% increase in revenue was largely attributable to the UK, although the relative strength of sterling versus the euro was a major factor in this.
"The order book is improving as new projects are being won under the enhanced procedures and existing projects get nearer to completion. This progress is made possible by the commitment and engagement of all our staff across the group."
Rob van Wingerden, chief executive of Royal BAM group
It says that the UK order book is stable and now has a “focus on projects with a more favourable risk/reward profile”.
The group partly attributes the improved performance in 2015 to its “Back in Shape” programme, which it says delivered €25m in savings out of an overall target of €100m.
Rob van Wingerden, chief executive of Royal BAM group, said: “The Back in Shape programme, which has been underway now for 10 months, is making fundamental improvements in our culture, structure and processes.
“The order book is improving as new projects are being won under the enhanced procedures and existing projects get nearer to completion. This progress is made possible by the commitment and engagement of all our staff across the group.”
The programme aims to improve BAM’s operational and financial performance by “strengthening its culture, simplifying its structure and sharpening its processes”.
There are targeted improvements in four areas: cost reduction on non-project overheads in the operating companies; better project control; working capital reduction; and divestments.
The programme is understood to have a led to a number of redundancies among support staff at BAM Construct.
