Costain cashes-in on infrastructure and technology boom

Grant Prior 7 years ago
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Increasing spending on infrastructure saw profits and turnover rise at Costain last year.

And the contractor is vowing to lead the technology revolution underway in construction as it continues to recruit more people in hi-tech roles.

Results for the year to December 31 2016 show pre-tax profits up to £37.5m from £29.9m as turnover increased to £1.7bn from £1.3bn.

Chairman Dr Paul Golby said: Our major customers are committed to spending billions of pounds to improve people’s lives by enhancing the UK’s energy, water and transportation infrastructures. 

“In order to deliver solutions to their increasingly complex requirements, Costain will continue to provide the broadest range of innovative integrated services and technology-based solutions.

“Costain is well-positioned to take advantage of the opportunities that lie immediately ahead and this, combined with the good visibility we have over the medium-term, reinforces our confidence for the future.”

Chief executive Andrews Wyllie outlined how the firm’s Engineering Tomorrow strategy of focusing on innovation is paying dividends.

He said: “Costain today has over 4,100 people and, reflecting the development and changing nature of the business, over 1,200 of those are now in technology, advisory or design service roles”

The infrastructure division saw operating profit rise to £56.6m from £50.9m on turnover up to £1,276m from £996m.

The Natural Resources division made a loss of £12.6m on turnover of £377m following further problems with the Greater Manchester Waste Disposal Authority PFI contract where the company set aside another £15.1m in costs and provisions.

The job was awarded in 2007.

Costain said: “In the period, the Group has incurred further costs and has taken additional provisions to reach Final Acceptance on the contract, which is now targeted this year; and to complete the remaining works when access is available in accordance with the operational running of the plants under an agreed schedule to 2019.

“Costain has received significant payments from, and remains in discussions on further payments with relevant contract counterparties and the Group’s insurers regarding the issues that have arisen on this contract.

“It has been the Group’s policy since 2009 not to pursue fixed price contracts of this nature.”

Wyllie said: These are exciting times with billions of pounds being spent upgrading and renewing the country’s energy, water and transportation infrastructures.

“There is a revolution in the deployment of technology-led innovative solutions to meet the increasingly complex requirements of our national infrastructure needs and we are continuing rapidly to transform our business to be at the heart of the opportunity this presents.

“We started 2017 with a maintained record order book giving good visibility over the medium term and we look forward to the future with confidence.”

 

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