BAM Construct: 70% of our work will be public by 2010

By Tom Bill and Tom Bill Tom Bill2009-04-24T00:00:00+01:00

Richard Gregory, chief executive, BAM Construct

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Chief executive predicts growth in health and education demand but fears spending fall in 2011

BAM Construct has said the contribution of the public sector to its turnover will jump from 40% to 70% because of the recession.

The contractor forecast that the change would happen between 2008 and 2010, and that the contribution from the education sector alone would rise to 40%.

Richard Gregory (pictured), chief executive of the Dutch-owned group, said contractors had to be flexible when chasing work, given the speed at which demand for construction was changing.

He said: 鈥淵ou can only work in the markets that are there. For example there鈥檚 hardly a commercial or retail mixed-use scheme out there at the moment.鈥�

The company, which is the contracting arm of BAM Group UK, announced a 12% rise in turnover in the year to 31 December 2008 from 拢949m to 拢1.06bn. Pre-tax profit increased 7.6% from 拢48.7m to 拢52.4m, although that fell to 拢45.3m after property writedowns.

Gregory said: 鈥淥ver the year we have demonstrated the ability and flexibility to succeed in spite of the downturn. Highlights include a leading position on all three health frameworks in the UK and an exceptional performance in education.鈥�

The crunch year for the industry, according to Gregory, will be 2011, by which time public sector spending will tail off. He said: 鈥淭he key question is whether the commercial market will have picked up by then.

鈥淭he other big worry is the possible change of government next year when any new administration will look at how much UK Plc is borrowing and may cut back in some areas.鈥�

The overall group turned over 拢1.75m in the UK and made a pre-tax profit of 拢94.4m. BAM Nuttall, its civils division, made a pre-tax profit of 拢28.4m on a turnover of 拢650m.