Bam Construct UK makes 3.5% margin on construction activities

Bam Construct UK’s £1.1bn construction turnover generated a margin of 3.5% last year, comfortably ahead of the 3.0% margin achieved in 2007.

The figures cover the 12 months to 31 December 2008.

The new name of Bam Construct UK surfaced eight months ago as a replacement for HBG UK. The renamed group as a whole made a pre-tax profit of £45m on turnover of £1.1bn with £15m of this sum coming by way of interest rather than operational activities.

The contributions to profit (and loss) from its three divisions (before interest), prior to allocation of £2.7m of central costs, were:

• construction-  £38m (previous year £28m)
• property development – loss of £1.4m (previous year profit of £16m)
• fm - £1.6m (previous year £1.0m)

Last year, the group’s central costs ran to £5.5m.

Bam Construct UK has 2,800 employees and churn rate runs to just 8.5% compared with the estimated average figure of 17% for the construction sector as a whole, says the firm.

A highlight of the employee engagement programme was a staff consultation conference with 80 managers who were less than five years in post, to obtain their views and ideas about the challenges for the businesses.

During 2008 Bam enhancement of employee benefits included;

• improved maternity and paternity benefits
• a cycle-to-work loan scheme (it is the bike that is loaned, not the cyclist)
• subsidised gym membership
• introduction of a sabbatical policy.

Bam joined the London Benchmarking Group. The 100 companies work together to measure corporate community investment.

The group’s seven regional construction businesses were all profitable.

The highest-paid director received £499,000 which was higher than the £464,000 tally of the previous year. He stands to retire on an annual pension of £93,000 which was well ahead of the figure of £80,000 in the last set of accounts.

For the rest of the employees, the two main pension schemes have shown deficits that are being patched up thanks to a string of king-sized, one-off extra payments.

In 2007 Bam’s ordinary contribution of £7m was augmented by a further special payment of £20m, resulting in a total of £27m.

Last year the pressure eased somewhat and a special £5m was sufficient to add to the £7m ordinary payment.

The funding recovery plan has been agreed with the pension trustees.

Other employees, brought into the group under TUPE transfers, are not participating in either of the two main schemes. Rather, their pensions remain in multi-employer schemes outside the Bam group. The deficits in the seven such schemes stand at cumulative total of £3.9bn.