BAM Construct eyes higher margin markets

Aaron Morby 5 years ago
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BAM Construct UK is looking at expanding into higher margin workstreams as it seeks to boost margins.

BAM Construct chief James Wimpenny is looking at fresh markets for margin growth
BAM Construct chief James Wimpenny is looking at fresh markets for margin growth

The firm, which includes mainstream construction and property development, is carrying out feasibility studies on chasing new workstreams as it prepares to widen its scope from its traditional commercial and education building markets.

Energy, sustainability and housing are understood to be areas BAM Construction is exploring to feed future margin growth.

James Wimpenny, chief executive of BAM Construct UK, said: “We cannot earn enough from construction alone to provide the investment we need in our people and the technology they need for the future.

“We have therefore embarked on feasibility studies for potential work streams that would generate higher levels of profit to enable growth.”

He said: “There will be no sudden moves. Entry to new markets will be carefully planned with assistance from experts both inside and outside the group.”

Wimpenny revealed the plan to widen BAM Construct’s horizons as the firm revealed pre-tax profits had risen 31% to £19.4m in 2018.

This saw margins, which include the property development arm and FM divisions, rise to 2.8% from 1.5% on turnover marginally down at £950m.

Wimpenny said BAM had a strong order book of £1.76bn and no debt, with £83m cash reserves.

“Our increased profitability reflects our business reducing risk by selective tendering and working smarter.

“Ultimately this consistency benefits both us and our clients in a sector which has experienced recent instability.

“We are assisted by having a good balance of work between the private sector (58%) and public sectors (42%) and 65% of our work is repeat business.”

Wimpenny said that the consistent performance of the business is both a reason to seek further growth, and a good platform for it.

 

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