Bam Construct will target new sectors with its property development business after doubling profit in its latest financial results.
The contractor revealed its property development arm would look to expand into student accommodation and “other new or emerging sectors of the market” in 2017.
Bam Properties is currently developing two projects: Latitude, a 450,000 sq ft office development in Leeds; and Atlantic Square, a £100m mixed-use project in the centre of Glasgow.
It has also previously developed a student accommodation project at Stoddart Street in Newcastle in a joint venture with Connislow, but the contractor said that joint venture would be wound up to allow Bam to “pursue student accommodation projects in its own right, or with funders”.
In its financial results for the year to 31 December 2016, the contractor reported revenue of £1.07bn, up from £897.5m a year earlier.
Bam also reported a pre-tax profit of £26.2m, more than double the £13.0m reported in its previous results, leaving the firm with a pre-tax margin of 2.4 per cent, up from 1.3 per cent over the same period a year before.
Chief executive Graham Cash said the firm would look to target margins of “at least 3 per cent” by 2020, and added that Bam was “becoming increasingly selective” on the projects that it bids for.
He added that 55 per cent of the contractor’s work won in the year was repeat business with existing clients.
The contractor said its construction arm, which posted a turnover of £986.7m, is aiming to deliver 25 per cent of its work through frameworks, and will “consider the potential” of the private rented sector this year.
Frameworks that Bam has won a place on include the £4bn ProCure22 health deal and the YORbuild2 regional construction framework.
It will also maintain its focus on three core sectors: commercial, education and health.
Its construction arm won 36 contracts during 2016, which include a £41m campus extension for Birmingham City University and the 100,000 sq ft Coal Drops Yard project in King’s Cross for client Argent.
The contractor said that most of its projects were procured through a two-stage tender or negotiated basis, rather than single-stage tender process.
Bam also revealed it would up investment in its services engineering division to increase its in-house M&E capabilities.
The group reported an order book of £1.65bn, adding that it had not seen any significant impacts from last June’s EU referendum to date.
It also increased staff numbers year on year and now employs 2,315 people, up from 2,291 a year earlier.
Cash and cash equivalents at year-end stood at £116.6m, up from £78.9m a year earlier.