The contractor issued a trading update today ahead of announcing results for the six months to 30 June 2019 on 21 August. 

Projects hit by delays to the timing of contract start dates and new awards include the M6 Smart Motorway, Preston distributor road and HS2 Southern Section main works. 

The M4 Corridor around Newport project was cancelled by the Welsh Government earlier this month. 

Costain said revenue for 2019 will be lower than previously anticipated and underlying operating profit for the full year is expected to be in the range of £38m to £42m.

Half year results will include a one-off charge of £9.8m in respect of a recent arbitration award in favour of Diamond Light Source Limited for the cost of remedial works required to the roof at the National Synchrotron facility which was completed in August 2006. 

The subcontractor who installed the roof would have been contractually liable for the remedial works but went into administration in November 2017.

Costain said trading on current contracts during the first half has overall been in line with expectations. 

New orders included the A19 improvement contract and long term AMP7 awards for Severn Trent Water, United Utilities and Yorkshire Water.

Revenue secured to date for FY2019 is £1.1bn with the group’s operating divisions expected to trade within the target margin range for the year.

Costain said its has a “robust balance sheet” including a strong net asset position and positive net cash, and expects to report an average month-end net cash balance for H12019 of £65m.

Chief executive officer Alex Vaughan will set out his ‘Leading Edge’ strategy for the business and its medium-term development next month.

Vaughan said: “Despite delays to the timing of certain contract start dates and new awards, our markets are strong, as evidenced by the breadth of our new contract awards in the first half.

“We have a strong balance sheet, profitable operations and a broad range of capabilities to support the growth of the business.

“Costain is well placed to secure the opportunities ahead of us.”