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Royal Bam's UK profit up 38% in half-year

Royal Bam saw pre-tax profit from UK work increase by a third from £16.7m to £23m in the first half of 2018.

Its half-year results released today showed revenue from its UK operations, which include Bam Construct and Bam Nuttall, dropped slightly to €910m (£817.7m) for the six months to 30 June, down from the €923m (£829.4m) posted for the same period of 2017.

Bam’s overall UK pre-tax margin jumped from 2 per cent to 2.8 per cent.

Its construction and property business, which primarily falls under Bam Construct in the UK, recorded order book growth driven in part by the acquisition of ex-Carillion projects such as One Chamberlain Square in Birmingham (pictured).

Bam Construct chief executive James Wimpenny recently told Construction News the company was increasingly vigilant over what it bid for to avoid problem jobs.

In its most recent full-year results, Bam Construct reported a drop in pre-tax profit from £26.2m in 2016 to £19.3m in 2017.

Overall the Dutch-based Royal Bam group saw pre-tax profit rise to €58m (£52.1m) for the first half of 2018, up from €42m (£37.7m) in H1 2017. 

Group turnover increased from €3.24bn (£2.91bn) to €3.11bn (£2.79bn).

Bam’s management said group performance had been hampered by its Dutch civil engineering operations.

The company suffered a €27.8m (£25m) loss on the IJmuiden sea lock, which Royal Bam is building in 50:50 PP joint venture with VolkerWessels. This added to the €68m (£61.1m) loss it made on the project in 2017.

IJmuiden also drained €58m (£52.1m) of cash from the company in H1.

However, Bam still reported an improved net cash position of €88m (£79.1m) at the end of June, compared with a €10m net debt position the same time last year.

This was largely due to a reduction in borrowing.

Royal Bam said the group was on course to achieve an adjusted pre-tax margin of 2 per cent by the end of the year.

The group’s order book stands at €11.8bn (£10.6m).

Its UK civils business Bam Nuttall is currently bidding in a joint venture with Ferrovial and Flour for the £1.65bn contract to redevelop Euston station as part of HS2.

The firm is targeting an adjusted pre-tax margin of 2-4 per cent by 2020.

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