Costain eyes fresh takeover targets

Aaron Morby 13 years ago

Costain is looking at several “exciting” opportunities to transform its business after its bid for Mouchel was rebuffed.

The firm, which unveiled year-end pre-tax profits sharply up 54% to £27.9m, would not detail its plans but said it had enough cash reserves and borrowing head room to exploit major market opportunities.

Chairman, David Allivey said: “Our strategy of growing the business through a combination of organic growth and targeted acquisitions is providing a number of exciting options for us to consider.”

He said that Costain’s four bid approaches for Mouchel was an example of the firm’s ambition.

Allivey added: “We are actively progressing a number of opportunities ranging from bolt-on to transformational transactions, and all of which must meet a strict set of criteria in the event that they were to be concluded.”

Andrew Wyllie, chief executive said: “Our banking and bonding facilities were extended early in the year to 2013 and increased by 20% to £345m.

“Consequently, we have the necessary headroom available to capitalise on major market opportunities as they arise and achieve our longer-term strategic objectives.”

Wyllie also said Costain also said it had not walked away from Mouchel, even though the consultant was in preferred offeror talks with Interserve.

“We haven’t walked away and we are very much in an offer period.”

The big rise in profit was helped by  gains from PFI sales to reduce the pension deficit, while turnover slipped 4% to £1.022bn.

Discounting PFI sales, operating profits fell 20% to £17.4m as tougher trading saw margins fall from 2% in 2009 to 1.7% last year.

Following major contract awards Costain’s order book at the year-end held up at £2.4bn down slightly from £2.6bn last year.

Big wins included the Highways Agency Managed Motorway framework, Welsh Water AMP 5 contract, a 10-year nuclear framework for Magnox South, Bond Street station upgrade for London Underground and cable tunnel infrastructure for National Grid.

Net cash at the end of the year had risen to £144m.

    Costain trading divisions

  • Environment: profit £17.2m (£3.2m): turnover £422m (£594m)
  • Infrastructure: profit £12.2m (£16.9m); turnover £395m (£365m)
  • Energy and process: profit £8.2m (£9.3m): turnover £137m (£101m)
  • Land development: loss £1.8m (-£2.6m);  turnover £0.8m  (£1.2m)

Trading profits at the environment division doubled to £6m even after allowing for the £11m gain from selling six PFI investments.

At the infrastructure business profitability was impacted by a high level of bidding costs and a high level of project bonuses in 2009. The year-end order book grew 10% to £1.1bn.

Latest news

RSK snaps up muckshifting and civils firm RJT Excavations

£30m turnover civils specialist employs around 125 staff
10 hours ago

Willmott Dixon replaces Buckingham on Swansea job

Firm will pick up the pieces to finish off largely complete £135m job
12 hours ago

M&E specialist Michael J Lonsdale goes under

£250m revenue London specialist placed into administration
1 day ago

Another part of Real group heading for administration

Real SW staff given bad news as first contract already novated to Rydon
20 hours ago

HSE to prosecute Falcon after triple crane death

Court proceedings to start this month following tragedy in 2017
1 day ago

Retention records added to stricter payment reporting laws

Disputed value of invoices to be bolted into prompt payment reporting
19 hours ago

Esh Group counts on record orders after resilient year

Order book swells to £600m raising hopes for year ahead
20 hours ago

Costain transportation MD exits

Sue Kershaw resigns after nearly four years heading highways, rail and aviation division
20 hours ago

Materials giant Heidelberg drops Hanson brand

Hanson UK renamed Heidelberg Materials
20 hours ago
Heidelberg Materials

Clegg Construction sinks £3m into the red

Clegg Group lifted by specialist food project arm after tough year in general building
2 days ago

£350m Birmingham triple tower scheme approved

Vast curving Ringway Centre to be demolished for 1,750 flats development
2 days ago

Eight face fight to renew £400m North West framework

Bidding starts for places on NWCH's £1m-£4m project framework
2 days ago

Midgard lands £245m Tottenham Hale towers

Three towers of up to 38 storeys complete north London regeneration scheme
2 days ago

Designs chosen for mini nuclear reactors

First contracts for next generation of nuclear power to be awarded next summer
2 days ago

Go-ahead for Wates £35m Hartlepool leisure centre job

Work on the Highlight waterfront centre to start in November
2 days ago

Buckingham Group supply chain hit for over £108m

Over 1,200 firms left in the lurch, while bond providers brace for £86m payout
5 days ago

Bidders day for £4bn-plus Palace of Westminster restoration

Tendering to start next July for main construction, integrator and design partners
5 days ago

Green light for 690-home Birmingham Smithfield scheme

Prosperity Group plans to start work in Autumn next year on major Smithfield scheme
5 days ago

Go-ahead for 289 homes next to Saltaire World Heritage site

Ambitious plan to demolish a vacant Bradford office complex for new residential quarter
5 days ago

Costain wins phase 2 of A40 Westway viaduct repairs

TfL re-signs Costain for Wood Lane to Marylebone Flyovers repairs
5 days ago

Regeneration specialist Muse gets new MD

North west chief Phil Mayall promoted to run whole Muse business
5 days ago

Building engineering services workers accept 7% pay rise

Two-year deal includes a 3% hourly rate rise from October 2024.
5 days ago

Inland Homes files for administration

Questions remain over house builder's last two years of accounts
6 days ago

Council orders developer to tear down tower blocks

Comer Homes told to demolish occupied towers in Woolwich after planning row
7 days ago

Bouygues UK restructure sees CEO exit

Contractor restructures as Rob Bradley retires
7 days ago

Fit-out firm BW Workplace returns to profit

London and south east fit-out firm sees revenue rebound 50% to £216m
6 days ago

Tarmac fined £1.275m after quarry death

26-year-old Luke Branston died during maintenance work at Leicestershire quarry
6 days ago

Galliford Try targets multi-rise affordable housing

Firm fills new role of director of affordable homes
6 days ago

Barratt to demolish more homes with faulty foundations

Number of homes to be demolished on Cambridge estate rises from 36 to 83
7 days ago

Steel contractor William Hare edges back to break-even

Revenue slides a quarter to £165m as firm records £108,000 profit
7 days ago

Contractor services