BAM Contractors returns to profit

ONE of the largest construction groups in the country, BAM Contractors returned to profit last year despite writing down its Irish property portfolio by €37.7 million.

Accounts filed with the Companies Office show that Dutch-owned BAM Contractors (formerly Ascon Contractors) and subsidiaries recorded a pre-tax profit of €4.4m in the 12 months to the end of December. It followed a pre-tax loss of €9.9m in 2009.

The civil engineering group returned to profit despite revenues declining 25.5%, from €362.8m to €270.2m.

The figures show that BAM Contractors is free of external debt after its parent, Royal BAM, helped to pay off the group’s bank debt of €74.8m last year.

The group recorded an operating profit of €7.3m last year compared to €14.1m in 2009.

A note attached to the accounts reveals the group wrote down its property by €37m “due to the continued decline in the Irish property market and the expectation that the recovery of property values is unlikely to occur in the immediate term”.

The chief factor behind the group returning to pre-tax profit was the receipt of €36.5m in interest and finance income compared to €1.4m in 2009.

“Public-sector building works were the main contributors to the overall group performance,” the report states. Our civil engineering sector is experiencing a significant reduction in activity with delays in income collection continuing to be an unwelcome feature within the industry.

The group had accumulated profits of €59.8m at the end of last year.

Last month, BAM Contractors and Heineken Ireland secured planning permission for a €150m plan to transform the former Beamish & Crawford brewery site in Cork city into a multi-million euro events centre.

Some of the group’s recent projects include the Portlaoise Public Private Partnership bypass and the Luas extension to Citywest.

BAM Contractors employed less people last year, falling from 795 to 601, with staff costs declining from €60.3m to €44.4m