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Trading Update - 7 January 2010

7 January 2010

Costain, which will announce preliminary results for the year ended 31 December 2009 on Wednesday 10 March 2010, is issuing a trading update ahead of entering its Close Period.

Trading during the final quarter of 2009, and consequently for the year as a whole, remained in-line with the Board's expectations.

The Group's operations continued to benefit from the deliberate focus on targeted blue chip customers whose major spending plans are underpinned by strategic national priorities in chosen sectors. Costain has a proven scale and capability to deliver complex solutions to major customers and as a result has entered 2010 with a strong order book and pipeline of opportunities.

As at 31 December 2009, the Group's Forward Order Book had grown to £2.6 billion, a 30% increase on the previous year (2008: £2.0 billion). Whilst we believe that market conditions will remain uncertain in 2010, the Order Book includes over £850 million of work secured for 2010, ahead of the position for 2009 at this time last year.

The order book has benefited from a number of major contract awards during the year, including:

- five-year AMP 5 water frameworks for Severn Trent and United Utilities;
- the major Evaporator D nuclear project at Sellafield;
- the Midlands Works Contract 4 and five-year MAC 12 Highways contracts reflecting the Group's strategic growth in maintenance activity;and
- the Manchester Waste contract, part of Europe's largest waste project.

In addition, the Group has preferred bidder positions of over £400 million reflecting success in converting previous preferred positions into firm orders.

The Group maintained its strong cash position significantly in excess of £100 million.

Andrew Wyllie, Chief Executive, commented:

"Costain continues to differentiate itself as a result of its strategic focus on customers who are expected to continue with their major investment programmes despite the current economic environment. We have a significantly increased order book, a strong cash position and an ongoing rigorous management of costs."