Interim Management Statement

RNS Number : 8350R

Costain Group PLC

07 May 2009

 



Costain Group PLC 

('Costain' or the 'Group')

AGM and Interim Management Statement

Costain is issuing, ahead of its AGM to be held later today, an Interim Management Statement covering the period from 1 January 2009 to the current date.

Overview

Following on from the strong performance in 2008, the Group has continued to perform well and in line with the Board's expectations.

We continue to operate in market sectors where there is a commitment to expenditure and have won a number of high quality contracts. The Group's focussed strategy is providing resilience in these challenging times.

Order Book 

Since the beginning of the year, the Group's high quality forward order book has significantly increased by 20% to a new record level of £2.4 billion. In addition, it has preferred bidder positions in excess of £800 million.

To date over £900 million of revenue has been secured for 2009, which is ahead of the comparable figure last year.

The current level of tendering activity for new work remains high, including opportunities in infrastructure, water, waste, energy, health and education. 

Operations

Our Civil Engineering operations, which represent over 85% of the Group's order book and incorporate our Environment and Infrastructure related activities, are performing very well and have made excellent progress with a number of significant new orders secured since 1 January 2009. 

In Environment, which includes the Group's activities in the water, waste and marine markets, Costain, in joint venture, won a major 10-year contract with Severn Trent with an estimated total value of £400 million, commencing with the next Asset Management Period, AMP5, which begins in April 2010. Severn Trent is a new client for Costain for the AMP programme and this contract award again emphasises the Group's reputation as an industry leader in the water sector. 

Reflecting our focus on the growing opportunities in the waste sector, the Group was awarded a £397 million four-year contract to design and build municipal waste treatment infrastructure as part of the Greater Manchester Waste Disposal Authority's (GMWDA's) PFI Waste and Recycling Contract, the largest municipal waste contract in Western Europe. 

In Infrastructure, which includes the Group's activities in the highways, rail, nuclear and airport sectors, Costain, in joint venture, was awarded a five-year £200 million Managing Agent Contractor ('MAC') contract to carry out routine operational and maintenance services and deliver improvements on the motorways and trunk roads in Area 12, which covers Yorkshire and North Lincolnshire. This third MAC contract is a significant award for Costain as it further underpins our growing position in the highways maintenance arena.

Costain, in joint venture, was selected as one of several contractors for Crossrail's advance works framework agreement, which has a potential value in excess of £250 million and a four-year duration.  

In Building, which includes the Group's activities in the health, education and retail markets, the focus is on improving performance and we anticipate progress in 2009. 

In Spain, conditions remain challenging for the Group's land development division and, as anticipated, no land sales are expected in 2009 and action has been taken to reduce costs.  Construction of the 800-berth yacht marina, adjacent to the Spanish border with Gibraltar, is progressing well and the first phase, for which there has already been strong interest, will be completed in 2010.  

Building on the excellent performance seen in 2008, the Group's Oil, Gas and Process division continues to perform well during 2009 and offers significant opportunities for future growth. Our nuclear engineering and design activity has delivered good results and we continue to develop this area of expertise as part of Costain's overall approach to this important market. 

Cash Position

The Group has a strong cash position well in excess of £100 million and has no significant borrowings.  The average cash balance since the year end is running slightly ahead of the average for 2008. 

Outlook

With trading in line with its expectations and a significant number of excellent new contract awards, the Board is pleased with the start to the current year.

In a period of economic uncertainty, the Group continues to focus on major blue chip customers who are expected to implement their long-term investment programmes. The Group's order book is in good shape and, with robust finances underpinned by a strong cash position and an ongoing rigorous focus on cost management, Costain is well positioned to deliver further progress.

7 May 2009

ENQUIRIES:

Costain Group PLC	Tel: [phone]
Andrew Wyllie, Chief Executive
Tony Bickerstaff, Finance Director
Graham Read, Public Relations
College Hill	Tel: [phone]
Mark Garraway
Adam Aljewicz

 

END

 

 

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