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Bam reports UK loss and continues cost-cutting

Royal Bam has reported a £3M loss in its UK business for the first six months of 2014.

The group said it had begun cost reduction “initiatives” while others were in the “preparation phase”.

Bam’s total loss for the period was £15.4M, chiefly due to a £54M hit on two problem civils projects – one in Germany and one in the UK – which it announced on 7 July.

Because of these two projects, the German and UK civil engineering activities were loss-making in the first half of 2014.

However, the longer-term picture in civil engineering is healthy, with growth in revenue by 4% to £1.49bn, mainly due to the UK and, to a lesser extent, Ireland.

There was also strong growth in the UK order book, Bam said.

Overall, UK revenue for the first half of 2014 stood at £927M, up 8% on the £861M posted a year ago.

Group revenue was up 5% at £2.71bn, though this was mainly attributable to the property sector, due to the divestment of commercial properties.

Nico de Vries, chairman of Royal BAM Group, said: “The results for the first half of 2014 show a mixed performance. In our two operational sectors, we continue to work through orders booked under very difficult market conditions.

“The two Civil engineering projects with major losses which we announced on 7 July are stable; other projects delivered strong results, supporting the overall sector result for the first half.

“Some initiatives in cost reduction and working capital management are underway; others are still in the preparation phase, which will be completed early in October.”

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