James Wimpenny was speaking as firm sees profit rise last year
The boss of V&A Dundee contractor Bam has become the latest to cast doubt on firms plotting growth strategies through acquisitions.
Two weeks ago, new Kier chief executive Andrew Davies put the for sale sign up on a host of businesses as the struggling builder, which has grown its business in recent years on the back of a 拢500m spending spree, said it was planning to cut back and concentrate on its core construction activities.
Last month Willmott Dixon chief executive Rick Willmott said his business had not made an acquisition since 1991 and has no plans to do so 鈥渂ecause you never know what you鈥檙e buying鈥�.
Now James Wimpenny, the chief executive of Bam, whose last deal was a 拢13m purchase of FM firm Suttons six years ago, said: 鈥淵ou鈥檙e better off growing things internally, doing things in a measured way. Even with a little business like [Suttons], it takes forever to integrate these things together.鈥�
Wimpenny (pictured) said Carillion鈥檚 collapse and the problems to have hit Kier have meant clients are beginning to look more at contractors鈥� balance sheets ahead of making appointments.
鈥淐lients have become more wary because of the recent things that have been happening in our industry,鈥� he added.
The firm, which completed Heatherwick Studio鈥檚 Coal Drops Yard project last year, said it has 拢83m cash in the bank and Wimpenny admitted: 鈥淐ash is key. When the cash starts to run dry, you can鈥檛 pay your staff or suppliers.鈥�
Bam鈥檚 revenue in 2018 was flat at 拢950m but pre-tax profit was up to 拢19.4m from a restated 2017 figure of 拢14.8m. Margins improved from 1.5% to 2.8% and Wimpenny said it was on track to hit 3% by next year.
But he said 5% margins were still a way off. 鈥淚鈥檓 not sure [5%] is achievable, unless you鈥檙e very, very selective, just because of the competition that鈥檚 there.鈥�
Bam is currently on site building US tech giant Facebook鈥檚 new headquarters at the same King鈥檚 Cross site where Coal Drops Yard is located. The 拢200m-plus deal is due to finish by the end of next year.
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