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Bam has said it is hoping to reach a settlement on the problem contract which blew a hole in its 2019 accounts after the firm announced improved pre-tax profits for last year.

The firm said profit was up to 拢13.7m in 2020 from 拢9.4m after that number was hit by a problem job it is building in Sheffield.

Bam has previously said the entire concrete frame for the University of Sheffield鈥檚 Faculty of Social Sciences building, designed by HLM, would have to be torn down after problems were discovered with the piling.

Last August, the firm said a review into the piling for the structure, carried out by original piling contractor Cementation Skanska and engineer Mott MacDonald, had concluded work on the frame needed to start again.

The 拢65m building is being built on a former reservoir at the junction of Northumberland Road and Whitham Road in the city.

The cost of the repair work is set to be more than 拢20m but Bam chief executive James Wimpenny said the scheme was now back on track. 鈥淲e had to go back to square one. We are not clear of it [the contract] but we are hopeful of a settlement that鈥檚 amicable to all parties. We need to work out responsibilities and liabilities.鈥�

Wimpenny said revenue this year would be north of 拢800m after turnover in 2020 slumped 15% to 拢793m.

The fall, which Wimpenny said was largely down to the effects of the pandemic, meant the firm was forced into a round of cost-cutting which saw 150 people leave and meant the firm shelled out 拢3.8m on redundancy payments with some of this figure including office moves in Scotland, London and the South-east. The accounts also show that it claimed 拢3m in furlough money from the government鈥檚 Coronavirus Jobs Retention Scheme.

鈥淲e never envisaged to be making people redundant but if revenue drops you have to cut your cloth to suit the size of your business,鈥� Wimpenny added.

Bam, which earlier this year signed on the dotted line for a 拢250m arena scheme in Manchester following another high-profile deal at the end of last year, a 拢195m job to build new studios for broadcaster Sky in Hertfordshire, said work was coming back in fits and starts.

鈥淪ome jobs have parked up but others come back and surprise you. Is it any different to what normally happens?鈥�

The firm is carrying out enabling works on another office block scheme, called S3, slated for Argent鈥檚 King鈥檚 Cross development in London while it is also working on several other jobs in the capital that are at pre-construction stage, including providing design advice on a planned Holocaust memorial set to be built in the shadow of the Palace of Westminster.

Wimpenny added that the introduction of last year鈥檚 Construction Playbook by the government meant firms could start to hike margins north.

The playbook sets out its guidance on sourcing and contracting public works projects and programmes and Wimpenny said: 鈥淸Margins of] 3%-4% is where we鈥檇 like to be. The playbook makes the industry more sustainable in terms of margins because of the long-term view.鈥�