Supply chain issues and cost overruns on a large job saw subsidiary fall into red
BAM鈥檚 UK and Ireland business has reported a modest increase in revenue and profit, buoyed by a strong performance from its civil engineering arm.
Its full year results for 2023 showed revenue of 鈧�3.14bn (拢2.68bn), up a fraction from 鈧�3.13bn (拢2.68bn), while earnings before interest, taxes, depreciation, and amortisation (EBITDA) also improved from 鈧�82m (拢70.11m) in 2022 to 鈧�122m (拢104.3m).
The Dutch firm said the British pound exchange rate had a 鈧�55m (拢47.03m) negative effect on its revenue.
This was despite losses of 鈧�14.8m (拢12.65m) in the UK construction business, which was 鈥渋mpacted by supply chain issues and cost overruns at a large project鈥�.
BAM Nuttall, the group鈥檚 civil engineering business, posted revenue of 鈧�1.36bn (拢1.16bn), up from 鈧�1.24bn (拢1.06bn), and profit of 鈧�77.3m (拢65.8m).
This high activity, which was mirrored in the BAM鈥檚 Ventures business, helped offset a drop in work in Ireland, where revenue was down to 鈧�463m (拢396m) from 鈧�669m (拢572m).
The report said the UK civil market was 鈥渆xpected to be stable鈥�, with the 2023 UK Energy Act boosting the prospects for energy security and net zero works.
In the short-term, the construction market was anticipated to be 鈥渕ore challenging鈥�, but in the medium term 鈥渢here is a healthy pipeline in BAM鈥檚 core construction markets for education, health, offices and leisure and key markets in Ireland like transport and social infrastructure鈥�.
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Ruud Joosten, chief executive of Royal BAM Group: 鈥淢arket conditions remain challenging in the short-term as a consequence of higher interest rates, political and geopolitical uncertainties and the continued pressure to attract and retain staff.
鈥淔or the medium and longer term, we see attractive market opportunities supported by demand for decarbonisation, critical infrastructure and sustainable and affordable homes, where we have proven market-leading capabilities.鈥�
The UK and Ireland business鈥� order book was down by 16% to 鈧�4.5bn (拢3.85bn).
Project wins in 2023 included additional work for HS2, the extension of a climate mitigation framework with the Environment Agency and the repurposing of the Typhoo Tea building in Birmingham into a new BBC facility.
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