Interim Management Statement


 

TIDMCOST 
 
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 GBP2.4 billion. In 
addition, it has preferred bidder positions in excess of GBP800 million. 
 
 
To date over GBP900 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 GBP400 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 GBP397 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 
GBP200 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 GBP250 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 GBP100 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: 01628 842 444 | 
+----------------------------------------------+------------------------------------+ 
| Andrew Wyllie, Chief Executive               |                                    | 
+----------------------------------------------+------------------------------------+ 
| Tony Bickerstaff, Finance Director           |                                    | 
+----------------------------------------------+------------------------------------+ 
| Graham Read, Public Relations                |                                    | 
+----------------------------------------------+------------------------------------+ 
|                                              |                                    | 
+----------------------------------------------+------------------------------------+ 
| College Hill                                 |                 Tel: 020 7457 2020 | 
+----------------------------------------------+------------------------------------+ 
| Mark Garraway                                |                                    | 
+----------------------------------------------+------------------------------------+ 
| Adam Aljewicz                                |                                    | 
+----------------------------------------------+------------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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