Royal Bam, the Dutch parent company of Bam Construct and Bam Nuttall, has reported Q1 results showing revenue growth and improved profit compared with the same period a year ago.
In a conference call, chief executive Ruud Joosten (pictured) cited government-led infrastructure projects in the UK as a key factor: “The majority of the growth came from activities in the UK at this moment in time,” he told analysts.
Revenue for the group in Q1 2021 was €1.65bn (£1.43bn), up from €1.60bn (£1.39bn) a year earlier. Adjusted EBITDA (after non-recurring costs including restructuring) stood at €53.3m (£47.8m), up 28 per cent on the €41.7m (£36.1m) seen in Q1 2020.
Its margin increased to 3.2 per cent from 2.6 per cent a year ago. Margin for the full year in 2020 had been 2.9 per cent.
The results follow a mixed bag of year-end 2020 figures reported in February this year.
The company also said it had seen “strong order intake” of new projects in the UK. “We see very good developments indeed in [our] home markets, looking especially at the UK, in Q1, with some big projects,” Joosten said. He added that Bam Nuttall in particular had benefited from “government actions in the UK to really invest in infrastructure” and claimed that results in the UK demonstrated “that our strategy is going in the right direction”.
In a statement, Royal Bam highlighted its contract win for the new Sky Studios project in Elstree, and in civil engineering said it had seen “a significant increase in revenue in Bam Nuttall’s rail division on existing framework contracts, a workload acceleration in the Scotland & North region, and an increase of major project activity”.
Today’s trading update came in the wake of restructuring that began in September 2020, which saw layoffs in the UK. Royal Bam confirmed that it has completed its “cost-reduction process” and has now switched focus to “portfolio improvement and risk reduction”, noting that uncertainty remains around the future impact of the pandemic.
Joosten also commented on the impact of material shortages in the industry: “Raw material pricing is [...] a high-impact occurrence for the market,” he observed, before adding that Bam has “contractual defences” to mitigate the issue “so we don’t see a big [financial] risk there”. He added: “For new tenders indeed it can sometimes lead to longer negotiations, to get it into the tender, but our intention always is to build it into the tender as we start the project.”