We are confident but careful about the outlook for 2016, given the mixed market conditions. We announced our strategy ‘Building the present, creating the future’ in February, and the implementation is in full progress. We expect the adjusted result before tax for the full year will be higher than the level of 2015. We anticipate a restructuring charge of approximately €20 million, mainly related to the Dutch activities.’
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Sector performance At Construction and M&E services revenue was flat; project postponements in Germany were offset by higher activities in the Netherlands and the UK. The result was lower because of losses related to subcontractor bankruptcies at some older projects in Germany and Belgium. The Dutch activities were profitable in this quarter; restructuring plans to further integrate the Dutch activities will be finalised in the second quarter. The order book fell slightly reflecting the lower pound, despite strong order intake in Germany.
Civil engineering revenue in most countries was affected by order phasing of large projects won recently. The positive result was driven by an improved contribution from the UK and Germany offset by the seasonal pattern in the Netherlands. Margins at BAM International were lower due to shrinking activities in oil and gas. The order book grew in Germany but reduced overall mainly because of the cancellation of a Belgian PPP project, low order intake at BAM International and the weaker pound.
In Property, the strong first quarter result was supported by commercial property in the UK. House sales in the Netherlands were up by 17% to 580 homes. The overall investment in Property fell in the quarter, while BAM has made equity-light investments in new residential projects in the Netherlands and mixed use in Ireland to benefit from favourable market conditions.
At PPP, the first quarter profit was driven by a strong operational result on the portfolio. There were no transfers to the PGGM joint venture in the quarter. The bid pipeline remains healthy, with decisions on most of the active bids expected in 2017.
Group overhead was a net positive due to the release of a dividend provision of €9.7 million related to the divestment of BAM’s 21.5% stake in Van Oord in 2011.
Financial position and balance sheet at quarter end
- Recourse net cash position €206 million (Q1 2015: €99 million recourse net cash).
- Trade working capital efficiency improved to -8.6% (year-end 2015: -8.1%).
- The capital ratio at the end of the first quarter was 21.3% (year-end 2015: 21.2%).