Results for the half year ended 30 June 2020
14 September 2020
Costain, the smart infrastructure solutions company, announces its results for the half year ended 30 June 2020.
- All contracts now operational following the impact of COVID-19, with necessary safety measures in place
- Adjusted operating profit of £5.7 million, reflecting the Group's resilient operations despite the impact of COVID-19 in the period
- Reported operating loss reflects the previously announced charges in relation to the Peterborough & Huntingdon contract (£49.3 million) and the A465 Heads of the Valleys road contract (£45.4 million) to adjust the revenue recognised to the amount of cash received to date on the contracts
- Continued positive infrastructure market outlook with good levels of activity and opportunities
- Strengthened balance sheet following £100 million equity raise resulting in net cash of £141 million, enabling the Group to further capitalise on the growing infrastructure market opportunities
- Over £2 billion of contracts and frameworks secured in the first half comprising a greater proportion of integrated services, in line with strategic focus
- Order book of £4.2 billion including £0.9 billion of secured revenue for 2021.
|H1 2020||H1 2019||FY 2019|
|· adjusted1 including share of JVs and associates||£548.7m||£599.2m||£1,182.9m|
|Profit/(loss) before tax|
|· reported3||£(92.3)m||£8.4m||£ (6.6)m|
|Basic earnings per share|
|Net cash balance2||£140.9m||£40.8m||£64.9m|
|Dividend per share||Nil||3.8p||3.8p|
- Before Peterborough & Huntingdon and A465 contract adjustments and other items; amortisation of acquired intangible assets, employment related deferred consideration and other one-off costs as shown on the income statement. As detailed in note 3 to the interim financial statements.
- Net cash balance is cash and cash equivalents less interest-bearing loans and borrowings.
- 2019 reported figures include the impact of the one-off cost of £9.7 million in respect of an arbitration award and a one-off aggregate charge of £8.9 million for the loss on disposal and asset impairment for the Group's non-core business assets in Spain as shown in the income statement.
- Restated following the raising of new capital completed in May 2020.
Alex Vaughan, chief executive officer, commented:
"We are now back on site across all of our operations with strict safety measures in place to protect our teams and the communities we work in. I would like to pay tribute to our people who have done everything they can to look after one another and to do the right thing by our clients, communities, society and to protect our business during this pandemic.
"We are clearly disappointed with the recent arbitration outcome in relation to the A465 contract which, together with the mutual termination of the Peterborough & Huntingdon contract, has resulted in significant revenue adjustments for these long-standing projects. We have in place clear actions to resolve the financial position on these contracts and importantly we have taken decisive action to prevent such issues from reoccurring.
"The equity raise in May has already helped us to capitalise on the immediate opportunities in our infrastructure markets as we successfully secured over £2 billion of contracts in the first half, many of which incorporate our consultancy and digital capabilities in line with our strategic focus. There remains a strong pipeline of further opportunities which we are actively targeting.
"Looking ahead, assuming no further sustained COVID-19 lockdowns, we are confident of delivering growth in profits and margins next year. Although we are mindful of the macro-economic uncertainties ahead, Costain is in a strong position with secured long-term programmes and a positive market backdrop, in particular the UK Government's drive to progress investment in infrastructure so that it is better, greener and faster in support of the nation's economic recovery."
Tel: 01628 842 444
Alex Vaughan, Chief Executive Officer
Tony Bickerstaff, Chief Financial Officer
Carolyn Rich, Investor Relations Director
Sara Lipscombe, Group Communications Director
Tel: 020 3128 8771
A live webcast will be available via the Costain website at 9am today. www.costain.com/investors
Notes to Editors
Costain helps to improve people's lives with integrated, leading edge, smart infrastructure solutions across the UK's transportation, water, energy and defence markets. We help our clients improve their business performance by increasing capacity, improving customer service, safeguarding security, enhancing resilience, decarbonising and delivering increased efficiency. Our vision is to be the UK's leading smart infrastructure solutions company. We will achieve this by focusing on blue chip clients whose major spending plans are underpinned by strategic national needs, regulatory commitments, legislation or essential performance requirements. We offer our clients leading edge solutions that are digitally optimised through the following five services which cover the whole lifecycle of their assets: future-shaping strategic consultancy; consultancy and advisory; digital technology solutions; asset optimisation and complex programme delivery. Our culture and values underpin everything we do.