BAM Construct: 70% of our work will be public by 2010

BAM Construct has said the contribution of the public sector to its turnover will jump from 40% to 70% because of the recession.

The contractor forecast that the change would happen between 2008 and 2010, and that the contribution from the education sector alone would rise to 40%.

Richard Gregory (pictured), chief executive of the Dutch-owned group, said contractors had to be flexible when chasing work, given the speed at which demand for construction was changing.

He said: “You can only work in the markets that are there. For example there’s hardly a commercial or retail mixed-use scheme out there at the moment.”

The company, which is the contracting arm of BAM Group UK, announced a 12% rise in turnover in the year to 31 December 2008 from £949m to £1.06bn. Pre-tax profit increased 7.6% from £48.7m to £52.4m, although that fell to £45.3m after property writedowns.

Gregory said: “Over the year we have demonstrated the ability and flexibility to succeed in spite of the downturn. Highlights include a leading position on all three health frameworks in the UK and an exceptional performance in education.”

The crunch year for the industry, according to Gregory, will be 2011, by which time public sector spending will tail off. He said: “The key question is whether the commercial market will have picked up by then.

“The other big worry is the possible change of government next year when any new administration will look at how much UK Plc is borrowing and may cut back in some areas.”

The overall group turned over £1.75m in the UK and made a pre-tax profit of £94.4m. BAM Nuttall, its civils division, made a pre-tax profit of £28.4m on a turnover of £650m.