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Costain improves but order book shrinks

Costain chief executive Alex Vaughan

Costain leader Alex Vaughan

Costains group revenue for the half a year to 30th June was up 19% to 665.2m (2021 H1: 556.8m). Pre-tax profit was up 23% to 11.2m (2021 H1: 9.1m).

The order book is down, reduced to 2.7bn by 30th June 2022, in comparison to 4.0bn per year before and 3.4bn in the beginning of 2022, but bidding activity is reported to be high.

Leader Alex Vaughan said: “In the initial half of the entire year we delivered a solid operating performance reflecting volume increases and the inflation recovery mechanisms included in our contracts. Our adjusted operating profit increased by 22% year-on-year, and we’d a solid adjusted free cash performance, ending the time with 95.9m, with a confident net cashflow expected in the next half.

“Despite material availability and inflation challenges, we’ve managed the supply chain pressures effectively, while delivering a robust operational performance with new contracts being won on attractive commercial terms with appropriate risk. Our four chosen markets of transport, water, energy and defence remain resilient, and the pipeline of potential home based business is healthy. We undertook an extremely advanced of bidding activity in the initial half, with award decisions expected in H2 2022 and in H1 2023.

“In July, the business experienced a fatality using one of its rail projects. We have been shocked and saddened by this tragic incident and we, and our subcontractor, will work with the authorities and our client within an investigation to totally understand its causes. We have been centered on supporting the household and on the wellbeing of our colleagues.

“While we remain mindful of the macro-economic backdrop, we have been pleased with the product quality and scale of our order book, including secured multi-year infrastructure programmes, the quantity of preferred bidder work and the excess long-term framework contracts that will deliver continued progress in 2023 and beyond.”

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