23 August 2023

• Reported and adjusted¹ H1 23 revenue of £664.4m (H1 22: £665.2m).
• Adjusted operating profit¹ increase of 7.1% to £15.0m (H1 22: £14.0m) resulting from increasing volumes and margin in Natural Resources, and benefits from our Transformation programme.
• Reported operating profit of £7.6m (H1 22: £11.9m), reflecting costs of repositioning digital services towards growth and our Transformation programme.
• Adjusted operating margin of 2.3%, with 20bp increase on H1 22.
• Net cash³ increase at half year to £132.1m (FY 22: £123.8m, H1 22: £95.9m).
• Pension deficit payments substantially reduced following triennial review, and banking and surety facilities successfully refinanced.
• Resumption of dividend payments being progressed.

 

Alex Vaughan, Chief Executive Officer, commented:

“Costain’s performance in the first half of 2023 demonstrates the strength and resilience of our business, with an increase in adjusted operating profit supported by the robust growth in Natural Resources, resilience in Transportation and continued positive cash generation.

“In the period, we delivered important actions to strengthen our balance sheet, including finalising our actuarial pension review, and securing the refinancing of our banking and bond surety facilities; both of which increases our ability to generate further cash for the Group. Our Transformation programme to create efficiencies within the Group is on track, with further benefits to come in H2 23 and FY 24. The increase in operating performance and the positive outcomes regarding the pension review and refinancing, enables the Board to consider the resumption of dividend payments, including the payment of an interim dividend in respect of the period to 30 June 2023.

“There remains a positive outlook across our markets, while recognising the short-term rephasing of the government’s transport spending. We expect that the sectoral growth we have seen in Natural Resources, together with the rephasing and rescoping of some infrastructure projects in Rail and Road to continue for the remainder of the year and into 2024.

“While we are mindful of the macro-economic backdrop, recognising the timing of customer procurement cycles, the quality of our secured and preferred bidder work gives us good visibility on future revenue, with more than 90% of revenue secured for the remainder of 2023. Our expectations for 2023 remain unchanged and we continue to be confident in the Group’s long-term prospects.”

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