BAM counts cost of Sheffield job as profit halves

Aaron Morby 3 years ago
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BAM Construct’s pre-tax profit more than halved in 2019 to £9.4m after a provision for its problem University of Sheffield project.

Concrete frame that was demolished for Sheffiedl University's Faculty of Social Sciences
Concrete frame that was demolished for Sheffiedl University's Faculty of Social Sciences

The firm was forced to tear down the concrete frame of its £65m Faculty of Social Sciences project during the summer and has just re-piled the site.

BAM has taken several provisions totalling £30m for the project and other issues in last year’s accounts published yesterday.

The contractor said it was discussing a cost recovery plan with the university, the expert subcontractors involved and the insurer.

Over last year, BAM recorded revenue slightly down at £930m resulting in a profit before tax margin of 1% (2018: 2.1%).

BAM’s focus on cash resulted in another strong cash balance of £285m (2018: £265m) and a strong balance sheet of £95.7m (2018: £133.6m).

Chief executive James Wimpenny, said: “Clients want reassurance that contractors can last out these difficult market conditions and our financial stability and liquidity remain very strong.”

Wimpenny added: “The economic impact of the Coronavirus pandemic on the construction sector has been more severe though.

“While productivity may return to near normal levels, we expect demand will continue to be suppressed until government-spending stimuli take effect.

“Our capability to compete successfully is reinforced by the breadth and depth of our expertise, and our strong balance sheet and order book of £1.4bn, which means we remain a strong, profitable, sustainable and reliable contractor.

Consequently, we continue to pursue only profitable work for clients that want us to design, construct and manage high-quality buildings using our low carbon and sustainable capabilities.”

 

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