Trading Update for the year ended 31 December 2014
Costain, the engineering solutions provider, today announces its trading update for the year ended 31 December 2014, ahead of its full year results announcement on 3 March 2015.
Since the announcement of the Group’s Interim Management Statement on 5 November 2014, Costain has continued to perform well and will deliver a full-year result in line with the Board’s expectations.
In addition, as part of ongoing actions taken to manage the obligations in the legacy Costain Pension Scheme (the ‘CPS’), in December 2014 the Group transferred the interest in its two remaining PFI investments into the CPS, at an agreed valuation of £7.4 million. This represents an effective discount rate of circa 7%. As a result of the transaction, the accounting profit realised on the transfer of the assets is £3.7 million in 2014.
During December, handover was achieved on the final waste facility on the legacy Greater Manchester Waste Disposal Authority PFI contract awarded in 2007. All forty six facilities on the contract are now either fully completed or in the post-completion (warranty) period under the terms of the contract, during which some further work and plant modifications will be completed. In achieving handover of the final facility the Group received in December contractual retention and milestone payments of £14 million. It has been the Group’s policy since 2009 not to pursue fixed price contracts of this nature.
Throughout the year, the Group continued to be awarded multi-disciplined, large scale contracts helping to meet national needs in energy, water and transportation, including the delivery of Network Rail’s National Electrification Programme, appointment to the Highways Agency’s Collaborative Delivery Framework, and appointment by Southern Water for its AMP 6 investment programme.
Consequently, the Group’s order book has further increased, finishing the year at a new record level of £3.5 billion (31 December 2013: £3.0 billion).
As well as including over £1.0 billion of revenues secured for 2015 (as at 31 December 2013: over £750 million secured for 2014), the order book also provides good long-term visibility with £2.5 billion of revenues secured for 2016 and beyond.
The increasingly strategic nature of Costain’s long-term customer relationships has ensured that over 90% of the order book comprises repeat business and is in target cost, cost reimbursable, collaborative forms of contract providing good long-term visibility. The Group also has a strong preferred bidder position of over £500 million, and is actively tendering for work across all its target markets.
The Group finished the year with a strong net cash position of over £140 million.
Andrew Wyllie CBE, Chief Executive, said:
“We have finished the year with a record order book and strong net cash position, providing confidence and visibility for the future.”
Tel: 01628 842 444
Andrew Wyllie CBE, Chief Executive
Tony Bickerstaff, Finance Director
Graham Read, Communications Director
Tel: 020 7457 2020