Pre-Close Trading Update - 28 June 2012
28 June 2012
Costain, one of the UK's leading engineering solutions providers, is today issuing a pre-close trading update ahead of its interim results for the six months ended 30 June 2012, which will be announced on Thursday 23 August 2012.
Costain has performed strongly over the first half and is on-course to deliver a result for the year which is in-line with the Board’s expectations.
During the first half, the Group has continued to secure significant new awards and extensions to existing contracts as a result of focussing on blue chip public and private sector customers whose spending plans are driven by national need, regulatory commitments or essential maintenance requirements
The Group’s forward order book stands at £2.4 billion (30 June 2011: £2.3 billion). In addition, Costain continues to maintain a strong preferred bidder position of over £400 million. As at the end of the first half, c. £850 million of revenue has been secured for 2012.
Reflecting the transformational impact of the ‘Choosing Costain’ strategy on the Group, Costain has today announced the formation of a new joint venture with Severn Trent plc to provide complete business water and waste water management services to high volume commercial and industrial water users.
In June the Group announced a strengthening of its Executive Board with the appointments of Mark Rogerson as Chief Development Officer and Tim Bowen as Regional Development Director to be based in the Middle East. Simon Ellison has been appointed as Highways Director in succession to Tim Bowen.
Group Pension Scheme
In February 2012, the Group announced two further actions being taken to manage the obligations in the legacy Costain Pension Scheme (the ‘CPS’). The first of these was the transfer of the Group’s interest in two PFI investments into the CPS at an agreed value of £20.3m which was completed on 22 February 2012 and resulted in an accounting profit on the transfer of £10.2 million. The second action was the implementation of Enhanced Transfer Value (‘ETV’) and Pension Increase Exchange (‘PIE’) offers to the members of the CPS. The ETV and PIE exercises have now been completed and resulted in a reduction in the scheme liabilities and assets of approximately £35 million and will result in a one-off accounting cost of circa £3.5 million to be expensed in 2012. Together, the actions reduce the accounting pension deficit (before deferred tax) by approximately £18 million.
Costain will announce interim results for the six months ended 30 June 2012 on Thursday 23 August 2012. There will be a presentation to analysts at 09.30 that morning at the offices of College Hill: The Registry, Royal Mint Court, London, EC3.