Interim Results
2002年9月4日 - 4:02PM
ＲＮＳを含む英国規制内ニュース （英語）
RNS Number:7230A
Costain Group PLC
04 September 2002
COSTAIN GROUP PLC
Interim results for the half-year end 30 June 2002
Costain, the international engineering and construction group, announces interim
results for the half-year ended 30 June 2002.
HIGHLIGHTS
* Group results
- Profit before tax up 24%: #4.7m (2001: #3.8m)
- Group turnover up 23%: #252.4m (2001: #205.5m)
- Earnings per share up 44%: 1.3p (2001:09p)
* UK trading
- Improved profitability
- No material impact from adoption of UITF34 (bid costs)
* Management team in place
- A move to a more balanced board structure
- Further management appointments - MDs for Building and COGAP
* Significant progress on achieving strategic objectives
- Increase in asset management contracts
- Increase in partnering - type arrangements
- New management systems in place
* Contract highlights
- Government praise for the A43 Silverstone Bypass
- COGAP 'shut down and turnaround' maintenance contract in Abu Dhabi
* Recent contract wins
- Continued success in Asset Management: #250m United Utilities contract
- A303 Stonehenge Project awarded by the Highways Authority &
#311m CTRL contract awarded
- Nominated as one of the NHS Estates ProCure21 Framework contractors
Commenting on the announcement, Stuart Doughty, Chief Executive of Costain Group
PLC said:
"The first half saw a strong performance reflected in an increase in UK
operating profitability. The Board is confident that its strategy is working
and is pleased with the progress that has been made to date."
4 September 2002
ENQUIRIES:
Costain Group PLC Tel: 020 7705 8444
Stuart Doughty, Chief Executive
Charles McCole, Finance Director
Graham Read, Public Relations
College Hill Tel: 020 7457 2020
Mark Garraway Email: mark.garraway@collegehill.com
Lisa Pearson Email: lisa.pearson@collegehill.com
CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT
We took the opportunity in March 2002, on announcement of our annual results, to
re-state our strategic objectives for the next five years. We have continued to
make significant progress towards achieving these aims. During the past six
months we have maintained our focus on restructuring the business and are
putting in place the management systems necessary to ensure the successful
delivery of the strategic objectives.
The results of these actions are showing improvement in the financial position
of the Company and will ensure that in the future the management team is
properly focused on delivering consistent, acceptable rates of return from our
core activities of construction engineering and asset management.
In accordance with our declared intent in the 2001 Annual Report, we have
continued to de-risk the business. We have increased asset management work and
concentrated on entering into partnering arrangements with the client, sharing
risk and reward. In keeping with these principles, highlights of the first six
months include:
* the award, in joint venture, of the A303 Stonehenge Project by the
Highways Authority. This was the first of the major pathfinder schemes.
* being nominated as one of the NHS Estates ProCure 21 Framework Contractors.
* the award, in joint venture, of the United Utilities framework agreement,
with a potential value of up to #250m over the next three years to
undertake various construction projects including water and wastewater
treatment works. This award brings the forward order book on asset
management work to over #340m, which is moving towards our declared
strategy.
* the award, in joint venture, of Channel Tunnel Rail Link ("CTRL") Contract
108 and the subsequent negotiation to combine this contract with CTRL
Contract 105, resulting in the award of a #311m contract.
85% of the work-in-hand is now in asset management and partnering type
arrangements.
Results
The results for the six months ended 30 June 2002 show a profit before tax of
#4.7m (2001: #3.8m) up 24% on group turnover up 23% at #252.4m (2001:
#205.5m). Earnings per share rose to 1.3p (2001: 0.9p), up 44%.
UK operations produced an operating profit of #1.0m against a #3.0m loss for the
same period last year. Operating profit from overseas was #1.9m compared to
#3.5m in 2001, last year having benefited from the final settlement of various
completed contracts. At the half-year, work-in-hand was up 23% at #700m (2001:
#570m).
We have always expensed PFI bid costs as incurred and only recognised them as an
asset where on financial close the costs have been recharged to the consortium
company. The implementation of the new accounting rules for pre-contract costs
(UITF 34) has no material impact and has not necessitated any restatement of
prior years results.
Finance
The Group has no significant borrowings and net cash balances at the half-year
totalled #65.2m (2001: #45.5m), including the Group's share of cash held by
joint arrangements (construction joint ventures) of #39.2m (2001: #30.0m). This
represents a cash outflow during the first half of the year of #2.6m (2001:
#2.8m inflow), which was expected given the changing profile of the business.
Trading and Prospects
The Government's commitment to invest in health and transport will contribute to
Costain's role as a leading player in the public sector market.
Health
Costain has been selected as one of the principal supply chain partners to carry
out the design and construction of new healthcare facilities in the North West
and West Midlands over the next four years, under the NHS initiative ProCure 21.
This selection is a testament to the effectiveness of our supply chain
management system, which played a crucial role in the award.
The aims of NHS ProCure 21 will be delivered through the adoption of the 'Egan'
principles and implementation of the Government initiative 'Achieving
Excellence' in partnering, design quality and benchmarking. The Framework
expects to deliver over 40 NHS schemes over the next four years. After
commencement of the Framework, Costain was approached by a number of Health
Trusts seeking a partner to deliver their healthcare facilities and we are
currently in negotiation for our first hospital contract under this form of
procurement.
Also, in the health sector, Costain was awarded a third contract at Rampton
Secure Hospital in Nottinghamshire for the construction of a 70-bed treatment
wing, which brings the total value of work being undertaken at this hospital to
approximately #27m. These contracts are in addition to work being undertaken at
Broadmoor Secure Hospital valued at #18m.
Our PFI healthcare portfolio includes the #76m King's College Hospital project
in south London, which is due to receive its first patients in October 2002 -
ahead of the original programme. The state-of-the-art facility will enhance the
Trust's ability to deliver modern medical services in the area. Costain, as part
of the Hospital Partnership Consortium with Skanska, Noble PFI Fund Ltd and
Sodexho, will be responsible for running and maintaining the building for a
further 35-year term.
Costain is a member of the Integrated Care Services Consortium which has also
been named as a private sector partner with Kent County Council for a PFI
project to design, construct and maintain the integrated Social and Healthcare
Centres at West View, Tenterden and Canterbury Road, Margate. These centres
will provide specialist residential and recuperative care to people in Thanet
and Ashford and free up hospital beds, which is a vital part of the Government's
health strategy.
Transport
Capital works in the transport sector continues to be a major target market for
the Company. In May it was announced that Costain, in joint venture, would start
work on the new #311m Channel Tunnel Rail Link contract for St Pancras Station.
Contract 105 was awarded in 2001 for the building and civil engineering works to
double the length of the existing station. Contracts 108, 109 and 139
(subsequently brought together and known as Contract 108), which involves the
refurbishment of St Pancras Station, with the architectural and service fit-out
for the entire CTRL terminal was awarded earlier this year. Following the award
of the second contract the parties agreed Contracts 105 and 108 would be
combined to ensure alignment of objectives between the contractors and the
clients, in order to achieve the best possible out-turn.
Our joint venture Contract 240 for CTRL which involves the construction of
4.67km of twin running tunnels from the Stratford Station Box to Barrington
Road, along with two ventilation shafts and cross passages is progressing well.
It is a technically demanding project as the tunnels have to be driven through
some of the wettest ground conditions in London and Essex. We have formed an
alliance with the three adjacent contracts and the client in order to set
certain goals and objectives to ensure a satisfactory delivery of the project
for the client.
Costain further enhanced its brand reputation on the A43 project. We were asked
to accelerate the programme to accommodate spectators arriving for this year's
British Grand Prix at Silverstone. This was successfully done and our efforts
received praise from the Government Transport Minister, John Spellar. The
project involved a partnering style approach and is due to be completed ahead of
programme which is remarkable since the project was delayed by 12 weeks because
of the foot and mouth outbreak last year.
Another key project with the Highways Agency is the A303 Stonehenge Improvement
Scheme which has been awarded to Costain, in joint venture. The project
involves tunnelling the A303 for 2km which improves the landscape of this world
famous site. This was the first of the major Pathfinders projects, which is an
innovative "Early Contractor Involvement" contract. In this type of contract
the Contractor and its designers work as a team with the client and the client's
agent to take a project from conception to the planning stage, through a public
enquiry and ultimately to construction and completion.
Various other road contracts, principally the A2/M2 and M62, are progressing on
programme to completion.
Asset Management
Asset management was identified as a principal element in our strategy and we
have experienced continued success in this area. We now have long-term
framework contracts with Southern Water, Thames Water, United Utilities, Wessex
Water and Yorkshire Water. In the case of United Utilities, this contract was
recently won in joint venture and has a potential value of #250m. In February,
we were also awarded the #23m Lostock & Rivington water treatment works by
United Utilities. The combined result of which gives rise to a projected
turnover for asset management this year of #90m.
This client portfolio will give us the platform to meet our strategy of
producing a business capable of achieving equal proportions of asset management
and contracting.
Construction
We have strengthened our position in the retail sector through further
partnering arrangements with Tesco, ensuring the delivery of client requirements
in an efficient and cost-effective manner. We are also working with John Lewis,
producing a major new design and build store in Cheltenham, complete with major
infrastructure improvements. These projects are good examples of our
partnership approach reducing costs for both the client and the company and
ensuring delivery on time to the client's satisfaction.
Major construction work is currently spearheaded by the project for the Ministry
of Defence to relocate the Met Office Headquarters from Bracknell to Exeter, by
November 2003. Work includes assisting with the permanent relocation of over
1100 of their staff into the Exeter area and fully maintaining the facility and
services for the client for 15 years from 2003. Progress on the contract is
good and is being delivered by a team which also includes Group 4 Falck,
Skanska, Haden Young, Logica and leading consultants Broadway Malyan and Arup
Associates.
The new Hungerford twin footbridges are nearing completion. The upstream bridge
was opened to the public for the Royal Jubilee celebrations, the downstream
bridge will be opened in September 2002. The contract, in partnership with
Westminster City Council and Norwest Holst, was undertaken at the busiest part
of the Thames. This presented challenging bridge engineering and design
solutions, in one of the most complex building areas, involving both underground
and aboveground structures.
This project has resulted in an attractive well-lit structure which is proving
popular with the public.
COGAP
Costain Oil, Gas & Process Limited (COGAP) completed the successful shutdown and
turnaround maintenance contract for ADGAS on Das Island in Abu Dhabi, delivering
ahead of schedule and incurring 650,000 man hours with no lost accident time.
This contract has been renewed for a further 3-year term. It has further
enhanced COGAP's reputation in the region and opened up the possibility of other
maintenance contracts.
The gas-processing terminal in Barrow-in-Furness for Burlington Resources Ltd.
which is valued at #70m is progressing and is due for completion in December
2003. This project is being undertaken in partnership with the Company's
regional civils business.
International
International expansion will be based on developing our close relationships with
our major shareholders in the Middle and Far East and extending our presence in
areas where we have resource and experience such as West Africa. We are about
to complete, in joint venture, the #57m depot building for the Kowloon Canton
Railway Corporation (West Rail) in Hong Kong. This summer we will also complete
the radio and TV studios plus headquarters buildings in Gaberone for the
Government of Botswana, which we have undertaken in joint venture with our major
shareholder, Kharafi.
We also operate successfully in Zimbabwe, despite the political uncertainty, and
are well placed to take advantage of an improvement in the economic climate.
The business in Zimbabwe is gradually being indigenised. The Company does not
have a material financial exposure in Zimbabwe.
In Spain, we have a 50 percent interest in Alcaidesa Holding SA ("Alcaidesa"), a
residential development and leisure company. Alcaidesa is developing a 2000
acre estate on the Costa del Sol, some 20 minutes driving time east of
Gibraltar. The site has a 1.7km sea frontage to the Mediterranean and as a
result of motorway developments, completed this August, is now just over a one
hour drive from Malaga Airport. The development is progressing well with much
of the first phase either completed or in an advanced stage of construction.
Sales of Alcaidesa's own housing promotions in the initial phase are going well
with over 50 percent of homes under construction already sold.
The next major phase of the scheme should enable the construction of three
hotels, a further 18-hole golf course, a clubhouse and over 1700 residential
units. This is planned to start in Autumn 2002, once definitive approval has
been obtained. Forward land sales will then fund the necessary infrastructure
and should guarantee a significant future income stream for the Company for the
next ten years.
Alcaidesa intends to build on its unique position and relationships to further
develop real estate opportunities in the immediate area.
Insurance
The Company maintains a number of insurance contracts. The cost of the premiums
this year has risen by approximately #2m over the cost of the premiums last
year, this represents an increase of 60%. This has impacted at all levels in
the construction industry. The effect on the Company has been greater because we
took advantage of the soft market some two years ago and wrote two-year
insurance contracts. The Company has not been involved in any noticeable
increase in claims although the increase in turnover does impact on the cost of
insurance. The Company has also taken the precaution of engaging an independent
consultant to review its in-house broking department and the consultant found
that the premiums negotiated were either consistent with or below market rates.
Health, Safety and Environment
Safety continues to be of paramount importance to the entire Costain Group and
is the ultimate responsibility of the Chief Executive.
Stringent targets are constantly being set and monitored in line with Government
regulations and guidelines and industry best practice to ensure a safe working
environment for employees, subcontractors and members of the public.
A new safety initiative has been launched throughout the organisation to
strengthen discipline and procedures, not only in our own workforce but also in
those of subcontractors and the supply chain. In an attempt to improve site
culture, ensuring there is always an awareness of the need to perform in a safe
manner.
It was particularly pleasing that COGAP received the President's Award at the
Royal Society's Prevention of Accidents Awards. In addition, COGAP also won the
Gold Medal, two Silvers, two Bronze and a Merit. Other parts of the Costain
Group also won awards.
On the Environmental front, Costain Limited and COGAP have achieved registration
to ISO 14001 (the environmental standard) and Costain is currently representing
the Civil Engineering Contractors Association on the new Civil Environmental
Quality Assessment and Award Scheme.
Board and Senior Management
The Board is now better balanced between non-executive directors representing
major shareholders and independent non-executive directors. We believe this
revised structure will provide a key platform for the future growth of the Group
and brings us into closer alignment with UK corporate governance principles.
We have strengthened the management team by the appointment of William Dube as
Managing Director of COGAP and Mark Gordon as Managing Director of the Building
Division together with a number of other key senior management appointments.
Conclusion
The first half saw a strong performance reflected in an increase in UK operating
profitability. The Board is confident that its strategy is working and is
pleased with the progress that has been made to date.
Management appointments have brought a range of new skills which have
complemented the technical strengths that existed in Costain, enabling the
Company to more effectively meet the requirements of our clients in a consistent
manner.
Looking ahead, the Government's reaffirmed commitment to infrastructure spending
means Costain is well placed to take advantage of new opportunities, especially
in the health, transport, prisons and education sectors.
DAVID G JEFFERIES
Chairman
STUART J DOUGHTY
Chief Executive
4 September 2002
Consolidated Profit and Loss Account
Half year ended 30 June, Notes 2002 2001 2001 Year
year ended 31 December Half year Half year
#m
#m #m
Turnover
Group and share of joint ventures 1 252.4 205.5 462.9
Less: share of joint ventures turnover (0.8) (1.1) (5.8)
Group undertakings 251.6 204.4 457.1
Group operating profit
Group undertakings 2.3 0.4 0.3
Share of operating profit of joint ventures 0.6 0.1 1.9
Profit on ordinary activities before interest 1 2.9 0.5 2.2
Net interest receivable/(payable) and similar
charges
Group undertakings 1.1 1.2 2.5
Joint ventures (0.3) (0.1) (0.5)
Other finance income 2 1.0 2.2 4.5
Profit on ordinary activities before taxation 4.7 3.8 8.7
Taxation (0.5) (0.6) (0.5)
Profit on ordinary activities after taxation 4.2 3.2 8.2
Minority interests 0.1 - 0.1
Retained for the period 4.3 3.2 8.3
Earnings per share 3 1.3p 0.9p 2.5p
All results derive from continuing operations
Consolidated Cash-flow Statement
Half year ended 30 June, 2002 Half 2001 2001
year ended 31 December year Half year Year
#m #m #m #m #m #m
Net cash (outflow)/inflow from operating activities (2.7) 0.8 19.4
Net cash inflow from returns on investments and
servicing of finance 1.1 1.2 2.5
Tax paid - - (0.2)
Capital expenditure and financial investment
Capital expenditure less sales of tangible fixed (0.4) 0.3 0.2
assets
Loans to joint ventures (0.2) - (0.4)
Repayment of loans to joint ventures - - 3.1
Net cash (outflow)/inflow from capital expenditure and
financial investment (0.6) 0.3 2.9
Net cash (outflow)/inflow before financing (2.2) 2.3 24.6
Financing
Net loan repayments - (3.1) (2.9)
(Decrease)/increase in cash (2.2) (0.8) 21.7
Cash outflow from reduction in loan financing - 3.1 2.9
Exchange differences (0.4) 0.5 0.5
Movement in net cash (2.6) 2.8 25.1
Opening net cash 67.8 42.7 42.7
Closing net cash 65.2 45.5 67.8
Consolidated Balance Sheet
Half year as at 30 June, Notes 2002 2001 2001
year as at 31 December Half year Half year Year
#m #m #m
Fixed assets 2.8 3.4 2.8
Investments 1.1 1.1 1.1
Investments in joint ventures
Share of gross assets 50.3 47.1 48.6
Share of gross liabilities (39.5) (37.7) (40.9)
14.7 13.9 11.6
Current assets
Other debtors and stocks 113.2 99.0 96.7
Cash at bank, monies on deposit and in hand 65.5 50.1 69.1
178.7 149.1 165.8
Creditors: amounts falling due within one year
Borrowings (0.3) (4.6) (1.3)
Other creditors (183.3) (152.0) (166.3)
(183.6) (156.6) (167.6)
Net current assets/(liabilities)
Due within one year (8.8) (12.2) (7.3)
Debtors due after more than one year 3.9 4.7 5.5
(4.9) (7.5) (1.8)
Total assets less current liabilities 9.8 6.4 9.8
Other creditors falling due after more than one year
and provisions
(11.4) (13.0) (15.0)
Net liabilities excluding pension asset (1.6) (6.6) (5.2)
Pension asset 4 10.0 35.8 9.5
Net assets including pension asset 8.4 29.2 4.3
Equity shareholders' funds 8.3 28.8 4.1
Minority interests 0.1 0.4 0.2
8.4 29.2 4.3
Notes to the Accounts
1. Geographical segment information
In the opinion of the directors the administering of engineering and
construction projects is the only material class of business.
Turnover Operating profit/(loss)
2002 2001 2001 2002 2001 2001
Half year Half year Year Half year Half year Year
#m #m #m #m #m #m
United Kingdom 224.8 178.8 415.6 1.0 (3.0) (2.2)
Rest of the world 27.6 26.7 47.3 1.9 3.5 4.4
252.4 205.5 462.9 2.9 0.5 2.2
2. Other finance income
The other finance income comprises the expected return on the assets of
pension scheme less the increase in the present value of the schemes
liabilities. The expected return is based on the value of assets of the
pension scheme at the start of the period and the lower asset value at 1
January 2002 compared to 1 January 2001 explains the reduction in the other
finance income.
3. Earnings per share
The calculation of earnings per share is based on profit after taxation and
minority interests of #4.3m (2001 half year #3.2m, 2001 full year #8.3m)
and 337,136,350 ordinary shares (2001 half and full year 337,136,350) being
the number of shares in issue during the period.
4. Pension asset
The pension asset has not been revalued at the balance sheet date in
accordance with FRS17, which does not require revaluations for interim
accounts.
Except as noted below, the results of the Group for the six months to 30 June
2002 and 30 June 2001 were prepared in accordance with the accounting policies
stated in the Company's 2001 statutory accounts and are unaudited. The adoption
of UITF 34 'Pre-Contract Costs' has not required the restatement of the figures
for 30 June 2001 or 31 December 2001.
The figures for the year ended 31 December 2001 do not constitute the Company's
statutory accounts within the meaning of Section 240 of the Companies Act 1985,
but are extracted from them. The Company's statutory accounts for 2001 were
delivered to the Registrar of Companies. The Company's auditors have reported
on those accounts; their report was unqualified and did not contain statements
under Section 237 of the Companies Act 1985.
Shareholder information
The Company's Registrar is Lloyds TSB Registrars, The Causeway, Worthing, West
Sussex BN99 6DA. Their web site address is www.lloydstsb-registrars.co.uk. For
enquiries regarding your shareholding, please telephone 0870 600 3984. You can
also view up-to-date information about your holdings by visiting the shareholder
web site at www.shareview.co.uk. Please ensure that you advise Lloyds TSB
Registrars promptly of a change of name or address.
ShareGift
The Orr Mackintosh Foundation (ShareGift) operates a charity share donation
scheme for shareholders with small parcels of shares whose value makes it
uneconomic to sell them. Details of the scheme are available on the ShareGift
Internet Site www.ShareGift.org. Lloyds TSB Registrars can provide stock
transfer forms on request. Donating shares to charity in this way gives rise
neither to a gain nor a loss for Capital Gains Tax purposes. UK taxpayers can
claim income tax relief on the value of shares donated to charity. This service
is completely free of charge.
This information is provided by RNS
The company news service from the London Stock Exchange
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