HBG UK achieves a £24.3 million profit before tax for 2005

8 May 2006 10:04 - Royal BAM Group nv

HBG UK Ltd has achieved eight years of consistent year-on-year profit increases with excellent results for 2005, alongside a record order-book at year-end. In a relatively stable market for construction in both the public and private sectors, a less volatile commercial letting environment and with the government’s continued commitment to PFI in education, each of the HBG design, construction, property development, and facilities management activities has contributed to a robust business performance in 2005.

Following the transfer of PFI assets to BAM PPP, a sister company of HBG UK, in January 2005, turnover on a like for like basis for all ongoing operations in HBG remained consistent at £776.4 million (2004: £787.8 million). HBG UK achieved a record profit before tax of £24.3 million for 2005, representing a 33% increase over the previous year (2004: £18.3 million, excluding BAM PPP activities), equating to an overall margin of 3.13%.

The HBG UK order book at 31 December 2005 stood at £1.4 billion (2004: £972 million), with the construction business accounting for £1.1 billion (2004: £818 million).

Every one of the seven regional construction businesses of HBG Construction achieved a healthy profit during the year and several large contracts have been awarded recently, including the mixed use town centre developments in Hull (£76 million), Folkestone (£28 million), Maidenhead (£40 million) and Milton Keynes (£71 million), and large commercial developments at 55 Baker Street (£95 million) and 40 Portman Square (£33.5 million) in London. HBG Construction was awarded 106 new contracts during 2005 and ended the year working on no less than 165 projects in total throughout the UK. Overall profit before tax on construction activities was £22.8 million (2004: £18.0 million) on a turnover of £750.8 million (2004: £782.5 million), representing a margin of 3.0% (2004: 2.3%).

HBG Properties, the nationwide property development business of HBG UK, achieved an excellent profit before tax of £5.5 million (2004: £1.4 million) on a turnover of £52.6 million (2004: £51.8 million). This reflected some very successful lets and sales for completed projects during the year; with office completions achieved in St Albans, Bristol, Leeds, Birmingham, London and Swindon. Further investments have been completed in Leeds, Manchester and Chiswick.

The HBG Facilities Management service continues to grow as more PFI schools come on stream. Now employing over 390 people, the FM business’ turnover grew to £9.3 million (2004: £8.2 million) and is providing an increasingly important secured long-term fee income for HBG.

HBG will continue to work closely with its civil engineering sister company Edmund Nuttall Ltd and there are many examples of joint collaboration with projects in Padstow, Liverpool South Parkway, Ferensway in Hull and the energy from waste plant in Colnbrook,  Joint synergies will continue to be exploited wherever enhanced value can be achieved.

Commenting on HBG UK’s performance in 2005, chief executive Richard Gregory said: ‘The remarkable consistency of HBG’s profit growth over the past eight consecutive years clearly reflects our continual focus on customer needs and the provision of quality, innovation and transparency in our whole supply chain. It also reflects the efforts, loyalty and quality of HBG people and those who work with us to deliver a better built environment for the UK’.

HBG UK Ltd is an operating company of the Dutch based construction group Royal BAM Group nv, which reported for 2005 a consolidated net result of EUR 153.3 million and a turnover of EUR 7.4 billion (IFRS).

For further information contact: HBG Public Relations Department:  Alan Smith, telephone (020) 83 38 26 35 or email: asmith@hbgc.co.uk, or Lucie Culkin telephone (020) 83 38 27 10 or email: lculkin@hbgc.co.uk

Please visit our website at: www.hbgc.co.uk