The adjusted result before tax of the group for 2014 was a profit of €62.2m, down by €13m compared to last year. But restructuring costs of €68.8m and impairment costs of €115.9m turned this into a loss of €122.4m.
Rob van Wingerden, CEO of Royal BAM Group, said: “The Back in Shape programme is making good progress. The simplified new structure to make us more effective on the outside and efficient on the inside is in place. New and improved processes are being implemented that will result in better project control. And we are strengthening our culture with a focus on balancing risks and rewards.
“Although the investment sectors delivered very good adjusted results, the overall Group result was held back by a weak year at the operational sectors due to working through older contracts and under-recovery of overheads in the Netherlands. During 2014, Dutch house markets developed increasingly towards a ‘twin track’ with recovery in and around the major cities but continued decline in some regional areas and a shift to more affordable homes. This led to the impairment of some Dutch land positions. There were also impairments for two volume-related Irish PPP contracts, reflecting the development of the Irish economy. Because the net result for the year was negative we will not pay a dividend in respect of 2014.”
Revenue of €7,314m was up by €272m (4%) on the comparable revenue of 2013. The positive influence of the stronger pound sterling was €105m (1.5%); the rest of the increase was attributable to property, mostly due to divestments of commercial properties.
The adjusted result before tax of the Group for 2014 was €62.2m, down by €13m compared to last year.
The combined adjusted results for the two operational sectors were down by €75.7m; this was mainly due to losses on the two civil engineering projects as announced on 7 July 2014, and to a lesser extent on Dutch construction activities during the year. This was mostly offset by higher results at property and PPP, up by €34.7m and €24.2m respectively.
Looking at the adjusted result in 2014 by geography, the losses in the UK and Germany related to two projects but there were strong results in Belgium, PPP and BAM International.
The total restructuring costs in 2014 were €68.8m, of which about €53m related to the back in shape programme and €16m was for capacity reduction.
The closing order book of €10.3bn was broadly stable compared to end-2013, with most of the reported increase of €300m caused by the effect of the stronger pound sterling on the UK order book. The year-end order books closed higher in the UK, Belgium, Germany and PPP. The Netherlands and BAM International were slightly down.
At construction and M&E services revenue was down by €62m (2%) to €3,016m. Revenue in the Netherlands was down by 13%; most of this fall came in residential construction linked to low house sales to individuals in 2013 and ongoing reduced production for housing associations . This was partly offset by higher revenue in UK (mainly supported by exchange rate), Germany and Belgium.
The adjusted result of negative €5.5m for the sector in 2014 was due to a loss in the Netherlands caused by a lower quality order book and the under recovery of overheads. Compared to 2013 the result in the UK was lower due to market conditions and Belgium was ahead in 2014. The order book rose by €411m to €4,424m at year end 2014. This was driven by the UK (including €127m from currency movements), Germany and the Netherlands. The order book in Belgium was reduced by high production on one large project.
In civil engineering, revenue for year 2014 slipped by 1% to € 3,949m. Within this total, there were increases in the UK (up by €92m, of which €71m was currency effect) and Ireland reflecting BAM’s strong market position. Lower revenue was recorded in Belgium and the Netherlands.
The adjusted result of €14.2m for 2014 was lower compared to €61.4m in 2013 because of the losses on the two projects, which also led to losses for the year in the UK and in Germany.
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