The Royal BAM Group's UK construction operations have been hit a 40% fall in pre-tax profit from 拢81m to 拢49m for the year ending 31 December 2009.
The combined turnover for BAM UK, which comprises BAM 榨汁姬, BAM Nuttall, and BAM PPP, was up marginally at 拢1.8bn (2008: 拢1.75bn).
The order book for the group stood at 拢2.74bn at the end of 2009, though it has now passed the 拢3bn mark with contract wins during 2010.
The chief reason for the profit fall was a decline in margin at BAM 榨汁姬. Turnover increased 拢1.13bn (2008: 拢1.06bn) but profit was down to 拢29.9m (2008: 拢52.3m), with operating margin shrinking from 4.94% to 2.63%.
BAM 榨汁姬 also had to make a cost provision of 拢10.3m (2008: 拢7m) against the carrying value of its current property developments in the UK.
Graham Cash, chief executive, BAM 榨汁姬 UK, said: 鈥淥ver the past year we have demonstrated the ability and flexibility to withstand the very difficult market conditions. Although we have made another prudent cost provision in our property portfolio, this has been compensated for by a strong position in our construction turnover.
鈥淣o one expects 2011 to be an easy year. BAM 榨汁姬 UK鈥檚 strategy will be to continue to enhance our expertise and delivery, to perform well on all our frameworks and to encourage our private sector clients back to the market.鈥�
BAM Nuttall experienced a marginal fall in turnover to 拢643.7m (2008: 拢650m), while its profit before tax dropped 16% from 拢28.2m to 拢24.1m. Operating margin shrank from 4.3% to 3.7%.
The civil engineering firm's order book stood at 拢715m at 31 December, and it has received 鈥渁 number of significant awards in January and February 2010鈥�.
Steve Fox, chief executive of BAM Nuttall, said: 鈥淲ith public spending cuts on the horizon, BAM Nuttall continues to focus on projects and sectors where there is greater security of funding.
鈥淭his can be seen in the substantial contracts that have already been secured in the waste, energy and rail sectors.鈥�
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