Last updated 17 February 2023
Royal BAM
Royal BAM is the UK operating company of the Dutch contractor of the same name. The group’s UK presence began in 1978 when HBG acquired Edmund Nuttall, a civil engineering contractor founded in 1865 by James Nuttall that had remained a family business.
In 2003, BAM merged with HBG, which had a number of UK building operations. In 2008, these businesses operated as BAM Construct and BAM Nuttall respectively but also rebranded as a combined business, Royal BAM, which is one of the UK’s biggest construction groups with a turnover of around £2 billion a year and a workforce of more than 5,400.
Financials
In the 2022 calendar year, revenue at the Royal BAM Groep fell 10% to €6.6 billion (2021: €7.3 billion) and adjusted profits at an EBITDA level rose to €350.2 million (2021: €278.4 million).
UK construction operation’s revenue rose to €1,062 million (2021: €988 million) and adjusted profits at an EBITDA level rose to €35.6 million (2021: €28.0). UK civil engineering revenue increased to €1,243 million (2021: €1,234 million) but adjusted profits at an EBITDA level fell to €22.0 million (2021: €29.9 million).
To view the individual results for BAM Construct and BAM Nuttall, please visit Companies House and use Company IDs 03311781 and 00305189 respectively.
Operations
BAM Construct
This division has six main trading subsidiaries covering: construction, design, facilities management (FM), plant, properties, and services engineering.
BAM Construct works in the private sector, notably for leading property companies such as IDI Gazeley, and in the public sector for clients including the NHS and local authorities such as Manchester City Council. This division works on many flagship projects, such as the £250 million Coop Live Arena in Bradford (Project ID 19299635) and is on a number of long-term framework agreements, including the renewed and extended £2 billion Procure North West framework (Project ID: 18052831) and the Department for Education’s £7 billion construction framework (Project ID: 20282701).
BAM Nuttall
BAM Nuttall is the civil engineering division and works for a range of public sector and regulated clients from the Highways England to utilities such as SSE on major projects from the £60 million Third River Crossing in Great Yarmouth (Project ID: 08186837) to the £200 million Wyre Tidal Barrage in Lancashire (Project ID: 90441565) to a £0.8 billion plan with Laing O’Rourke to build 16 compact nuclear power stations with ?? (Project ID: 19395162).
The business is also on a number of long-term framework agreements. These range from the £323 billion YORCivil2 framework (Project ID: 16365717) to the £2 billion Wales & Western Rail Framework CP7 (Project ID: 22123595).
On major projects, BAM Nuttall often works in joint ventures with other leading contractors such as Ferrovial, Mace, Morgan Sindall and Farrans.
Other operations
In January 2013, BAM””s facilities management operation was boosted by the acquisition of Sutton Group. Other operations include BAM PPP, which works with BAM Construct and BAM Nuttall to bid for major projects in the transportation, health and education sectors. BAM PPP has also established an investment joint venture with Dutch pension fund administrator, PGGM, with equity funds of approximately £200 million to invest in future projects.
Glenigan Data
Royal BAM is the main operating company for the group’s UK activities, which are split between BAM Construct, BAM Nuttall and BAM PPP. This enlarged business is amongst the UK’s top 20 contractors by most measures and Glenigan’s data shows that in the 2022 calendar year, orders reached £977.3 million (2021: £1,880.7 million). Royal BAM was ranked in 14th in Glenigan’s ranking of the UK’s top 100 contractors (2021: Second).
In regional terms, Royal BAM was ranked amongst the top 10 contractors in sixth out of the UK’s 12 economic regions in 2022 (2021: Five). The biggest exposure is in the North West, where an order book of £160.6 million ranked Royal BAM in third. Royal BAM was sixth in both Yorkshire and the South West with orders of £106.3 million and £102.2 million respectively.
The group was eighth in Scotland with orders of £107.7 million. In the West Midlands, Royal BAM was tenth with orders of £92.9 million and in the same position in the North East, where the 2022 order book was £55.9 million.
Conclusion: Civils ahead but for how long?
Civil engineering provided the bulk of UK revenue in 2022, but profits slumped and Glenigan’s research suggests orders are down due to a downturn in this sector. Overall, the order book at Royal BAM halved in 2022 as the group did not add any more of the major civil engineering jobs, which had provided a significant boost in the previous year.
The proportion of work in the order book by value that was civil engineering-related slumped to 19% by value with the balance in the building engineering sector (2021: 67% civil engineering/33% building/). Civil orders crashed to £187.4 million (2021: £1,265.5 million), but building work rose 28% to £789.9 million (2021: £615.3 million).
The rise in civil engineering work had come through success in the roads sector. And major schemes, such as the £320 million Arundel bypass (Project ID: 14429865) and a £250 million scheme on the A38 at Derby (Project ID: 16389133), which were both won in 2021. The 2021 roads order book had surged to £731.7 million and Royal BAM was ranked third in Glenigan’s ranking of the top 20 roads contractors but has since fallen out of the table altogether.
This reduction in major civil engineering schemes, which are naturally more risk due to their size, has reduced the risk level. The size of the average contract award in 2022 across all sectors halved to £17.1 million (2021: £34.8 million).
The management are keenly aware of the problems posed by major civil schemes and some roads schemes, such as the £312 million M40/M42 Smart Motorway job in the Midlands (Project ID: 17455560), were taken on in joint venture with Morgan Sindall to reduce risk. However, problems on jobs including a guided bus-way project for Cambridge County Council (Project ID 08134039) and the Liverpool 2 Container Port project, which previously sent the combined UK operation into the red, and a decline in profits in 2020 was again due to provisions on two projects.
While Glenigan’s data shows that the order book has decreased, the group’s regional presence has strengthened, albeit at a lower level but a decrease in civil engineering workload seems likely. However, as one of the UK’s leading contractors and with the backing of a major international group, BAM Construct and BAM Nuttall are better placed than many rivals to weather a difficult period for the wider economy and bounce back up Glenigan’s ranking of the industry’s top contractors.
Winning Work with Royal BAM
BAM is accredited to a range of industry bodies and standards from Constructionline to the Considerate Constructor’s scheme, and a member of the UK Construction Group and fully supports the standards set by UKCG. Royal BAM sources all materials through regional procurement teams, while project commercial teams procure sub-contract services through a supply chain management system. Information on BAM Construction’s supply chain system can be found here.
Companies interested in joining BAM’s supply chain must first sign up to Builders Profile. Details on BAM’s procurement can be found here.
BAM has four categories of sub-contractors from category one, firms that work with the group frequently, down to category four, which is the entry level for new members of the supply chain. 250 category one subcontractors deliver more than half of BAM’s workload. BAM is a member of Build UK and subcontractors must be registered with the Construction Skills Certification Scheme.
BAM Construct also runs supply chain sustainability schools in England, Scotland and Wales. Details can be found here.
Materials suppliers wanting to be added to BAM’s database must contact one of the seven regional buying teams covering: Scotland, North East, North West, Midlands, Western, South East and London.
Key Royal BAM UK procurement contacts include:
Head of supply chain & systems at BAM UK – Steve Hayward, tel: 01276-63484
Steve.hayward@bamnuttall.co.uk
Preconstruction director at BAM Construct – Adrian Blackie, tel: 01442-238300
Senior estimator at BAM Construct – Nick Ilott, tel: 01442-238300
Supply chain manager at BAM Nuttall – Del Crabb, tel: 01276-63484
National procurement manager at BAM FM – Nick Cooke, tel: 01442-238300