In its latest results BAM Construct UK has reported turnover for 2016 up 19% to £1.1bn with gross profits up 32% to £59m.
The firm reported pretax profits of £26.2m for the 12 months to the end of December 2016, more than double 2015’s figure, boosted by a £12m exceptional gain resulting from an adjustment to the group’s pension scheme. Underlying operating profits rose 9.2% to £14.2m.
The firm’s construction division notched up turnover of £987.6m, a rise of 22%, while pretax profits were down by £200,000 at £5.3m.
BAM said the division completed 55 projects and won 36 new projects during the year, including developer Argent’s Coal Drops Yard at King’s Cross designed by Heatherwick Studio, and Three Snowhill, a 19-storey tower in Birmingham for Ballymore Estates. It said that 55% of the work secured represented repeat business.
The contractor said that it will look at expanding into the private rental sector this year as it explores potential growth opportunities and also plans to broaden its property development division targeting student accommodation and commercial development, having reorganised its portfolio.
Elsewhere construction firm Mace posted a 70% dive in pretax profit for last year on the back of two difficult jobs. In its latest results for the year to 31 December 2016 the company’s pretax profit has fallen to £10.7m, down from £36.2m two years ago.
The fall in pretax profit was due to the contractor’s work on developer Landsec’s £2.2bn mixed-use scheme Nova in London’s Victoria district, plus Highpoint, a 46-storey PRS tower in Elephant and Castle.
Phase one of Nova finished in April, over half a year late with Landsec confirming in May that it had run late and over budget, blaming the “complexities of construction – together with competition for labour in a busy sector”.
Mace was the main contractor on the scheme, and in May 2015 was forced to replace the concrete works contractor after the incumbent, PC Harrington Contractors, entered administration.
However, according to its results Mace has nearly hit its £2bn turnover target four years earlier than planned.
The firm reported that the group’s revenue had risen to £1.97bn in 2016, up from £1.73bn for the previous year.
Having hit this target, Mace said it would now review its strategy and targets to take it through to 2022.
The group’s cash balance stood at £117m for 2016, compared with £123m for the previous year.
Contractor Kier also revealed in its full-year results today that it will take a £73m hit after taking the decision to close its Hong Kong and Caribbean businesses.
The firm is set to close its Caribbean business following the agreement of a final account with an unnamed client on what Kier called “a challenging project”, which is expected to complete “within the next three months”.
The firm is also putting aside £10m for potential safety fines following new tougher sentencing guidelines.
Closure of the overseas operations is costing £79m while the loss has been offset by income from the sale of Mouchel Consulting last October, which raised £39m.
It is the latest phase of Kier’s “portfolio simplification programme” which started after the acquisition of Mouchel.
Kier said: “Since the acquisition of Mouchel in June 2015, the group has undertaken a programme of portfolio simplification allowing it to focus on, and grow, its market-leading positions in regional building, infrastructure services and housing.
“This portfolio simplification programme is nearing conclusion and, taking into account the other non-underlying items, will generate cash for the group to enable it to focus on the future growth of its core operations.”
