A raft of new contracts ranging from Crossrail to Thames Water’s upgrading of its mains system saw civil engineer Costain start the second half of the year with a record order book.
The value of orders rose by 20% to £2.9 billion, with more than £900 million won in the first half. This includes work on Centrica’s new gas storage facility at Barrow-in-Furness, a highways contract with Transport for London that includes strengthening the Hammersmith Flyover, and the electrification upgrade of the West Coast Main Line.
On top of these orders, Costain said it had reached preferred bidder status on a further £500 million of contracts, up from £400 million a year ago. It added that the level of tendering activity remains high as more infrastructure projects get the green light.
Headline profits dropped from £16.3 million to £8.4 million but the previous year was flattered by a one-off £10.5 million gain on transferring projects into its pension fund. This year’s profit is also struck before the £3.7 million costs of the failed bid for rival May Gurney.
Undeterred by that, chief executive Andrew Wyllie said: “We have said we are looking to grow the business organically and through acquisition. We will still look at deals if it is right for us and the seller.” Costain’s cash pile dropped from £131 million to £64.3 million as more contracts shifted from being lump sums upfront to less risky paid-as-you-go terms.
The dividend goes up 7% to 3.75p.
