Manchester waste scheme losses dent Costain profits

Aaron Morby 2 years ago
Share

Costain lifted pretax profits 15% to £26m last year despite suffering further heavy losses on its legacy Greater Manchester waste PFI contract.

This morning the firm revealed a strong performance at the infrastructure division had helped to lift group turnover 17% to £1.32bn and secure a record order book, up from £3.5bn to £3.9bn.

But its Natural Resources division plunged £10.8m into the red after being hit by further costs on a legacy Greater Manchester Waste PFI contract awarded back in 2007.

Andrew Wyllie, chief executive, said that all 46 facilities on the Greater Manchester Waste Disposal Authority PFI contract were either fully completed or in the warranty period.

He said: “During the course of that further work in 2015, a number of additional issues have been identified and are being addressed. 

“The group has incurred further costs and has taken additional provisions to reach final acceptance on the project, which is expected in the second half of 2016, and to complete the remaining works in a time appropriate to the operational running of the plants.”

He added: “As previously reported, Costain is in discussions with relevant contract counterparties and the group’s insurers regarding the issues that have arisen on this contract.”

The division’s performance was also impacted by the decline in oil prices, which resulted in delays in customer spending on North Sea projects, seeing turnover slide to £318m from £354m previously.

But overall the group performance was boosted by the Infrastructure division, which recorded a 30% increases in revenue to £996m, and profit up by half to £50m.

Costain finished the year with net cash of £108m, down from £148m in 2014, following the £36m acquisition in August 2015 of Rhead Group.

Wyllie said the prospects for Costain were good with a strong forward order book and preferred bidder jobs.

He said: “Such a level of secured work gives us good reason to look to the future with confidence, especially as the level of active tendering across all our target markets remains high.”

The group’s tender success rate continues to be better than one in three with over 75% of Costain’s order book for contracts or frameworks with a remaining value in excess of £100m.

 

Latest news

Almacantar chief in Twitter tirade against McAlpine

Mike Hussey says he would not trust contractor to 'deliver a pizza'
3 hours ago

Persimmon chiefs hand back £50m after bonuses outcry

Persimmon bosses waive second instalment of bonuses
4 hours ago

Colas and Volker to exit huge London highways contract

CVU joint venture and TfL agree to part company early on eight-year framework
22 hours ago

Lendlease on board for £4bn London Euston district

Arup and Grimshaw will now work on Euston plans
13 hours ago

Carillion cracked hospital beams remedial work unfinished

Auditors and pension regulator heavily criticised by MPs
22 hours ago

Amey Rail snaps up Carillion rail projects saving 700 jobs

Projects in the East Midlands, London and North West England back on track
1 day ago

Willmott Dixon gets start date for £49m Colston Hall revamp

Work to start in June on major regeneration for Bristol landmark
14 hours ago

Boost your online presence with the new Enquirer Directory

New site for suppliers and buyers will showcase their products, services and latest stories
4 months ago

Betting Spy: England to win the Calcutta Cup

England can cover the handicap in the Six Nations while West Ham have it all to do as usual at Anfield
14 hours ago

Carillion bosses dodge pension black hole

Accounts show one pension scheme was in surplus while the rest had an £800m deficit
1 day ago

Morgan Sindall profits soar as margins restored

Fit-out and construction deliver strong profit growth as 2018 set to be bumper year
1 day ago

Centre Point Tower developer claws back £1m from McAlpine

McAlpine counts cost of row over design and build or construction management route for London tower
1 day ago

Sisk vows to complete joint venture jobs after Lagan collapse

Contractor will complete Highways England schemes on its own
2 days ago

Suspended sentence for scaffolder spotted without harness

Court hears how experienced worker chose to ignore safety rules
1 day ago

Construction slave labour ring smashed in East London

Fifty Eastern European workers saved after exploitation on sites
2 days ago

GRAHAM wins £86m Liverpool build to rent tower

Demolition work to start on waterfront site this month
2 days ago

Interserve to close power lines operation axing over 70 jobs

Power transmission firm to be wound down over next few months
2 days ago

Lagan puts construction arms into administration

Up to 200 jobs at risk as construction and building divisions hit by delays and disputes
3 days ago

Barratt looks to new building methods to boost volumes

Completions creep up by 2% as UK's largest house builder looks to use more offsite construction
2 days ago

BAM counts cost of weaker pound

UK business pre-tax profit slip of 7% to £35m due to exchange rate change
2 days ago

Galliford Try clinches £55m Leamington Spa housing project

Partnerships arm will build 375 homes for Waterloo Housing Group
2 days ago

Green light for London Deutsche Bank HQ

Developer Landsec says construction to continue once substructure is complete next March
2 days ago

Highways England calls bids for £326m Area 10

Hunt starts for maintenance and response contractor in north west
3 days ago

Carillion directors ‘contemptuous’ of pension funding

Carillion trustees alerted watchdog twice over pensions shortfall to no avail
3 days ago

Civils to start on £160m Yorkshire shopping centre

Advanced highways and infrastructure work to start this summer
3 days ago

Liverpool advances £700m Festival Park redevelopment

Willmott Dixon to carry out enabling works around Festival Garden dome base
4 days ago

Consultant Dar to build new Holborn HQ

Hunt on for contractor as Currie & Brown owner plans UK expansion
3 days ago

Another 152 Carillion staff axed taking job toll to 1,141

Staff told to pack up as fresh wave of job cuts unveiled today
4 days ago

Mace lands £350m Stevenage town centre revamp

Council picks winning developer for major town centre regeneration
4 days ago

Construction cartel whistleblowers offered £100k for tip-offs

Competition and Markets Authority targets construction in latest crackdown
4 days ago

Contractor services