‘Strong performance’ from Costain

By Sandy Guthrie09 March 2011

A strong performance for 2010 is being claimed by UK-based engineering, construction and maintenance group Costain, with its infrastructure division reporting growth in revenue and an order book increased to £ 1,1 billion (€ 1,3 billion).

The group said its profit before tax for the year to 31 December, 2010, increased by +54% to £ 27,9 million (€ 32,5 million), up from £ 18,1 million (€ 21,1 million) for the previous year.

Costain chairman David Allvey said he was delighted to report a strong group performance in 2010.

He said, "The fundamental dynamic driving our marketplace is the fact that, irrespective of the economic environment, the UK urgently requires billions of pounds to be invested in basic infrastructure. Whether in roads, water, waste or power, investment decisions for our long-term national success have to be - and are being - taken today."

He added that while customers, both in the public and private sectors, continued to place significant contracts, they also continued to drive for major cost savings in the process.

"Costain has demonstrated that it has the proven ability to meet the exacting needs of its blue-chip customers," he said.

Revenue, including the group's share of joint ventures and associates, for the year was £ 1,02 billion (€ 1,19 billion), down from £ 1,06 billion (€ 1,24 billion) in 2009.

He said the decrease reflected the deliberate actions taken to reduce the group's exposure to the health and education sectors, where significant expenditure cuts were expected, while efforts were increased to secure infrastructure and energy-related projects, which he said showed strong revenue growth.

Andrew Wylie, Costain's chief executive, said the group had ended the year with preferred bidder positions on contracts with an aggregate value of more than £400 million (€ 466 million).

He said, "During the year, we secured over £900 million (€ 1,05 billion) of new orders across the business reflecting the breadth of our operations.

"Of particular note was 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."

He added, "We also secured from the Highways Agency the five-year MAC 14 highways maintenance contract, our fourth such award making our joint venture the market leader."

Costain has been trying to acquire support services group Mouchel, though since a revised offer on 17 February, Mouchel has been in talks with a third party - Interserve.

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