Costain order book soars 20% to record £2.9bn

Aaron Morby 8 years ago
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A raft of major contract wins worth £900m in the first half of the year saw Costain’s order book soar to a record level despite the challenging market.

The firm also managed to return a small rise in underlying pretax profits to £8.4m on turnover slightly down at £463m.

The haul of new work comprised over 90% repeat orders and includes over £850m revenue secured for 2013, of which 30% is support services related.

But a shift away from lump sum contracts to lower risk cost reimbursable work saw a lower level of advanced payments. This ate into cash reserves which halved from £131m in June 2012 to £66m.

David Allvey, Chairman, said: “This was an encouraging start to the year with a 20% increase in our order book to £2.9bn and an increase in underlying operating profit, against a backdrop of market conditions which continue to be challenging.

“Costain is building its order book by generating, through its commitment to ‘Engineering Tomorrow’, innovative integrated service solutions for major customers who are continuing to invest to address essential national needs. ”

The order book also provided increasingly good long-term visibility with over £700m of revenue secured for 2014 and in excess of £1.8 billion secured for 2015 and beyond.

 

Interim divisional performance

Infrastructure: turnover £263m (2012: 246m); profit £14.4m (£9.6m)

Natural resources: turnover £199m (2012: £231m); Loss £100,000 (£5m)

The infrastructure division benefitted from Costain’s growing presence in the rail sector with jobs to rebuild London Bridge and Reading stations. The contractor also picked up its first electrification project on the West Coast main line and is involved in providing consultancy services for the design of High Speed 2.

The natural resources division covering, water, nuclear, oil and gas slipped into the red after cost overruns on a project and restructuring.

Allvey said the restructured business had already seen some early success with its order book increased a third to £1.2bn.

Major contract awards in first half of 2013

  • £450m AMP6 programme for Thames Water
  • A £300m contract, in joint venture, to fit-out Crossrail
  • The FEED design for Centrica’s gas terminal at Barrow
  • Transport for London framework including the Hammersmith Flyover strengthening
  • Electrification upgrade of the West Coast Mainline

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