BAM UK’s revenue and profit in the UK have slipped in the first half of 2019 as the division’s parent company, Royal BAM Group, suffered a loss amid difficulties in its operations in Germany.
BAM UK posted revenue of €883m (£807m) for the first half of the year, with pre-tax profit of €15.7m (£14.4m). That compared to revenue of €910m (£831.7m) and profit of €25.6m (£23.4m) in the same period a year before.
Meanwhile, Royal BAM Group slipped into the red in the first half of 2019, with an overall loss of €27.2m (£24.9m) on slightly increased revenue of €3.5bn (£3.2bn), representing an adjusted margin before tax of -0.8%.
Nonetheless, BAM pointed to “strong” performances in its UK and Netherlands construction and property businesses, although it predicted some slowdown in these markets in the UK.
Meanwhile, it reported that BAM Nuttall had had a slow start to the year but forecast a recovery for the remainder of 2019.
Royal BAM Group’s overall results, however, were dragged down by project losses in Germany and on an international project.
Rob van Wingerden, CEO of Royal BAM Group said: ‘We regret that our results for the first half of 2019 were negatively impacted by extra costs on projects in Germany and at International as announced in July. Discussions with clients for recovery of these costs are ongoing, but the amount and timing are uncertain. As a consequence, in July we lowered our outlook for full year 2019 to an adjusted pre-tax profit margin of around 1 per cent. Our cash position remains strong, and is above the level of mid-2018.
“In Construction and Property, the positive momentum in the Netherlands continued, driven by the high demand for homes. Also, our activities in the UK and Ireland delivered a robust performance. In civil engineering, we had a slow start and markets remain competitive. Our PPP business again delivered strong results. We are continuing discussions with our public sector infrastructure clients in order to achieve an improved risk/reward balance for new projects in our portfolio. We are monitoring the situation around Brexit carefully.”
