Benefits From The Budget
21 March 2016
Costain potentially stands to gain from the measures laid out in this year’s budget, says Finance Director Tony Bickerstaff.
A combination of continuing government emphasis on maintaining and improving the nation’s infrastructure, together with a boost on the taxation side of the equation, could bring benefits.
George Osborne last week promised cash for a series of major projects, including the Crossrail 2 programme. This will run from northeast to southwest across London, connecting Hertfordshire and Surrey and will complement the current Crossrail programme, which runs west-east across the capital and is due to open in 2018.
Also on the Chancellor’s list of projects that can expect funding are the high-speed rail link HS3 between Manchester and Leeds and flood defences, which will get £700 million to try to fend off the inundations that have become all too familiar in recent winters.
“The emphasis placed by government on the continuing importance of upgrading infrastructure, particularly the rail and road systems, is a good thing for us,” said Tony. “One of the things George Osborne has been consistent on is the importance of infrastructure to the economy.”
Schemes such as Crossrail 2 and HS3 have been known about for some years: “The good thing is that they are actually going to allocate some money to develop these schemes. That’s a consultancy opportunity for us, as we’ve broadened our skill-set in recent years.”
Similarly, the call for improved flood defences could be good news for Costain. “At the moment we do a lot of work with water utility companies. Strategically, supporting those customers with the provision of clean drinking water and flood defences is an important skill-set that we have.”
On the financial front, the announcement that corporation tax will drop from the current 20% to 17% by 2020 is also good news, says Tony. “There was already a plan to bring it down to 18%, now it’s 17%. What that means for businesses is that it gives us increased scope to invest in people, skills and capabilities.”
Although it could also mean improved dividends for shareholders, “Again, that’s all about investment. As a business we need to attract investment.” Increasing dividends is important for Costain to continue to attract investor support.
Costain Communications Department