Costain remains on target

The appointment of UK-based Costain by Magnox to a framework contract worth around £288 million over a ten-year period has helped the engineering solutions provider claim that it is continuing to perform in line with its board’s expectations.

In an interim management statement covering the period from 1 July to November 6, Costain claimed that following its strong performance in the first half of the year, the group was continuing to perform well.

It said its strategy was to focus its resources on meeting the integrated service requirements of major customers, whose spending plans were underpinned by national needs, regulatory commitments or essential maintenance requirements, and who were continuing to invest significantly in those requirements.

It added that its strong relationships with its customers were underlined by the fact that over 90% of the group’s forward order book was made up of repeat orders.

During the period, Constain has secured further contract awards and extensions including the appointment by Magnox for the delivery of construction, infrastructure and maintenance projects across all ten sites operated by Magnox on behalf of the UK’s Nuclear Decommissioning Authority.

Costain said it was continuing to expand its support service related activities, both organically and by benefiting from the capabilities secured through the acquisition of two businesses last year.

Currently, 28% of revenues secured for 2012 comprise support service activities and it expects this to continue to grow.

The group’s forward order book currently stands at £2.4 billion. As well as including over £650 million of revenues secured for 2013, the order book also provides good long-term visibility, said Costain, with around £1.6 billion of revenues secured for 2014 and beyond. The balance of the order book is for the remainder of 2012.

Costain said it had also maintained a strong preferred bidder position of about £400 million, adding that the overall level of tendering activity across the group's targeted markets remained high.

It said there had been no material change in “the robust financial status of the group, which continues to have a strong net cash position and no significant borrowings”.

Costain said that despite the on-going challenging economic conditions, it remained on course to deliver a result for the year in line with the board's expectations.

In August, Costain reported a 2% year-on-year rise in revenues for the first six months of 2012.