Costain shows strength and resilience in 2023

Costain's strength and resilience has been demonstrated in its half year results for 2023, as the firm announced revenues of £664.4m, with operating profit up 7.1% to £15m, reflecting growth in natural resources and benefits from the company's transformation programme.

The engineering consultancy and construction firm, which prides itself on transforming the performance of infrastructure by creating and delivering pioneering solutions across the UK's energy, water, transport and defence markets, boasts a high quality order and preferred bidder book valued at £4bn.

Recent contract wins for the firm come from the likes of HS2, Magnox, bp, the Department for Transport and Transport for London.

Alex Vaughan, CEO of Costain, said the performance in the first half of 2023 demonstrated the "strength and resilience of our business" with an increase in adjusted operating profit supported by the robust growth in natural resources, resilience in transportation and continued positive cash generation. 

“In the period, we delivered important actions to strengthen our balance sheet, including finalising our actuarial pension review, and securing the refinancing of our banking and bond surety facilities; both of which increases our ability to generate further cash for the Group," he said. 

"Our transformation programme to create efficiencies within the Group is on track, with further benefits to come in H2 [the second half] of 23 and FY [full year] 24. 

"The increase in operating performance and the positive outcomes regarding the pension review and refinancing, enables the Board to consider the resumption of dividend payments, including the payment of an interim dividend in respect of the period to 30 June 2023."

He added there remains a "positive outlook" across the firm's markets, while recognising the short-term rephasing of the government’s transport spending. 

"We expect that the sectoral growth we have seen in natural resources, together with the rephasing and rescoping of some infrastructure projects in rail and road to continue for the remainder of the year and into 2024," Vaughan said.

“While we are mindful of the macro-economic backdrop, recognising the timing of customer procurement cycles, the quality of our secured and preferred bidder work gives us good visibility on future revenue, with more than 90% of revenue secured for the remainder of 2023. 

"Our expectations for 2023 remain unchanged and we continue to be confident in the Group’s long-term prospects.”

Read the full half year report.