Interim Management Statement
7 May 2014
Costain, one of the UK's leading tier one engineering solutions providers, delivering integrated consulting, project delivery and operations and maintenance services, announces its Interim Management Statement covering the period from 1 January 2014 to the current date. The Group is holding its Annual General Meeting later today.
The Group has made a strong start to the current year and is performing in line with the Board's expectations.
As a result of the implementation of its ‘Engineering Tomorrow’ strategy, Costain is continuing to secure new work from major blue-chip customers who are investing billions of pounds in capital, operations and maintenance contracts and who require increasingly innovative solutions to solve their complex requirements.
Costain’s major customers continue to consolidate their supply chains as they seek to work in a more strategic and collaborative manner with a reduced number of tier one engineering solutions providers. This is reflected in the following contracts secured since the start of the year:
- Appointed to the Network Rail £2 billion National Electrification Programme, with the contract worth an initial £900 million over seven years to the Group’s joint venture.
- As part of the multi-billion pound Crossrail programme, a contract from Network Rail, worth an initial £150 million to Costain, to deliver the infrastructure and stations between Stratford and Shenfield.
- Appointed by National Grid to three frameworks as part of their overall investment, to 2021, of approximately £2.5 billion on new electricity transmission lines and cables and £6.9 billion on upgrading gas transmission infrastructure.
As a result of new contract awards and extensions the Group’s high-quality forward order book has further increased to a new record level of £3.2 billion (31 December 2013: £3.0 billion), of which over 90% is from repeat orders.
In addition, the Group maintained its preferred bidder position at over £400 million (31 December 2013: over £400m).
To date, over £900 million of revenue has been secured for 2014 (31 December 2013: over £750 million).
The overall level of tendering activity across the Group's targeted markets is high.
On 18 March 2014 the Group completed the £70.3 million (net of expenses) capital raise enabling Costain to take greater advantage of the opportunities in its chosen markets and accelerate the Group’s medium and long term prospects.
The Group continues to benefit from a robust financial position with a strong net cash position in line with expectations.
Costain is well positioned in a developing market of a limited number of providers who can deliver the innovative integrated consulting, project delivery and operations and maintenance services increasingly demanded by major customers.
With increased financial resources, a record order book and a strong pipeline of opportunities, the Board remains confident of meeting its expectations in 2014.
7 May 2014
Costain Tel: 01628 842 444
Andrew Wyllie, Chief Executive
Tony Bickerstaff, Finance Director
Graham Read, Communications Director
Instinctif Partners Tel: 020 7457 2020