Results for the year ended 31 December 2020
16 March 2020
Costain, the smart infrastructure solutions company, announces its results for the year ended 31 December 2020.
Operating effectively and profitably
- in responding to COVID-19 all contracts continue to operate effectively with clear safety measures and remote working in place
- adjusted operating profit of £18.0m (2019: £37.9m), despite financial impact of COVID-19, in line with revised expectations
- statutory reported loss before tax of £96.1m (2019: £6.6m) includes significant charges in relation to the Peterborough & Huntingdon (P&H) and A465 road contracts
Significant operational improvements made
- new leadership team
- de-layered organisational structure
- improved contract selection and risk management processes
Continued momentum in securing new work in line with strategic focus
- £2.3bn of new contract awards and extensions, including £1.1bn of new contract awards and extensions and £1.2bn of preferred bidder at year end
- £4.2bn order book
Strong year end cash
- net cash of £102.9m (2019: £64.9m)
Confident outlook for 2021 and beyond
- substantial and growing infrastructure market, positioned on significant long-term underwritten investment programmes
- confident in delivering growth in profits and margins in 2021
|Financial Summary||2020 £m||2019 £m|
|Profit/(loss) before tax|
|Net cash balance3||102.9||64.9|
|Basic earnings/(loss) per share|
|Dividend per share||Nil||3.8p|
- Before revenue impact of significant contract provision adjustments of £92.1m (2019: £20.0m) (see financial statements note 3).
- Before net other items of £10.3m (2019: £21.1m) and significant contract provision adjustments of £99.7m (2019: £20.0m) (see financial statements note 3).
- Net cash balance is cash and cash equivalents less interest-bearing loans and borrowings (before arrangement fees of £1.2m).
Alex Vaughan, chief executive officer, commented:
"Last year was a challenging year but I am proud of how well everyone at Costain responded and the resilience shown across our business which enabled us to continue to operate effectively with strict COVID-19 safety measures in place.
"We are pleased to report an adjusted operating profit of £18.0m, despite the financial impact from COVID-19. The significant charges reported at the half-year relating to two contracts are clearly disappointing, and importantly we have taken robust steps to prevent such issues from reoccurring.
"Last year, we continued to be successful in winning new contracts and preferred bidder positions worth over £2.3bn with an increasing proportion of this work incorporating our broader service offering in line with our strategy.
"The UK Government has provided a clear strategic framework for UK infrastructure investment, underpinned by long-term underwritten investment programmes to support the UK Government's drive to level-up economic growth and to meet decarbonisation commitments. I am confident that Costain is in a good position to capitalise on the opportunities in front of us and to grow our profits in 2021."
Tel: 01628 842 444
Alex Vaughan, Chief executive officer
Helen Willis, Chief financial officer
Sara Lipscombe, Group communications director
Tel: 020 3128 8771
There will be a live online presentation for analysts today at 09:00. To register your attendance please contact [email protected]
An on-demand webcast will be available via www.costain.com/investors from 2pm today.