TIDMCOST
RNS Number : 9909Y
Costain Group PLC
06 January 2011
Costain Group PLC
("Costain" or "the Group")
Pre Close Trading Update
Costain, which expects to announce preliminary results for the
year ended 31 December 2010 on Wednesday 9 March 2011, is issuing a
trading update ahead of entering its Close Period.
Trading update
Since the announcement of the Group's Interim Management
Statement on 8 November 2010, Costain has continued to perform well
and consequently finished the year in line with the Board's
expectations.
The Group's operations have continued to benefit from its
'Choosing Costain' strategy of focussing on targeted blue chip
customers in chosen sectors whose major spending plans are
underpinned by strategic national needs, regulatory commitments or
essential maintenance requirements. Costain has a proven scale and
capability to deliver successfully complex solutions in markets
with significant potential, including power waste, rail and nuclear
and will continue to broaden its capability in providing a range of
lifecycle solutions to its customers and, as a result, has entered
2011 with a strong order book and pipeline of opportunities.
As at 31 December 2010, the Group's Forward Order Book was
GBP2.4 billion (2009: GBP2.6 billion), and included circa GBP800
million of work secured for 2011.
The order book has benefited from a number of major contract
awards during the year, including:
- Bond Street station upgrade, in joint venture, for London
Underground;
- 5-year MAC 14 highways maintenance contract
- Highways Agency Managed Motorway framework
- A 10-year nuclear framework contract for Magnox South
- Cable tunnel infrastructure for National Grid
- Welsh Water AMP 5 contract
- Lewisham BSF contract for the construction of four schools;
and
- Highways contract for Neath Port Talbot County Borough
Council
In addition, the Group is currently preferred bidder on
contracts with an aggregate value of more than GBP400 million and
the level of tendering activity for the Group's target customers
remains very high.
Costain maintained its strong cash position in excess of GBP100
million and no significant borrowings.
The further improvement of the Group's future cash flows as a
result of the PFI transfer to significantly reduce the pension
deficit, announced with the Interim Management Statement in
November 2010, will also strengthen the Group's financial position
going forward.
Revised Approach to Mouchel Group plc
The Group has announced separately today that it has approached
the Board of Mouchel Group plc with a significantly enhanced
proposed all share offer for the entire issued and to be issued
share capital of Mouchel.
The Board of Costain continues to believe that there is a
compelling strategic rationale for combining Mouchel and Costain,
with the significant benefits that such a combination would provide
for both sets of shareholders.
Accordingly, the Board of Costain looks forward to discussing
this significantly enhanced proposal with the board of Mouchel as
soon as possible.
The full announcement can be viewed at
http://www.costain.com
Summary
The Board is pleased to report that the Group made good progress
in 2010 and that the year concluded in line with its expectations
which will also benefit from the additional GBP7.5 million profit
resulting from the PFI transfer transaction completed during the
year.
Andrew Wyllie, Chief Executive, commented:
"Whilst economic conditions are expected to remain challenging,
we continue to benefit from our strategy of focusing on major
customers in chosen sectors whose major spending plans are
underpinned by strategic national needs, regulatory commitments or
essential maintenance requirements, as evidenced by the strength of
our order book and the type of contracts that we are winning."
6 January 2010
There will be a conference call for analysts at 08.00 this
morning (Thursday 6th January 2011). Please contact Adam Aljewicz
on 020 7457 2020 or at adam.aljewicz@collegehill.com for
details.
Enquiries:
Costain Tel: 01628 842 444
Andrew Wyllie, Chief Executive
Tony Bickerstaff, Finance
Director
Graham Read, Communications
Director
Investec Tel. 020 7597 5970
David Currie
Charles Batten
James Rudd
College Hill Tel: 020 7457 2020
Mark Garraway
Mike Davies
Adam Aljewicz
Notes to Editors
Costain is an international engineering and construction group
with a reputation for technical excellence founded on more than 140
years of experience. The Group has significant and growing
consultancy and maintenance activities, alongside a leading
construction and engineering capability. At 30 June 2010, 14 per
cent. of Costain's GBP2.5 billion order book was in operations and
maintenance.
The Group continues to benefit from its 'Choosing Costain'
strategy of focussing on targeted blue chip customers in chosen
sectors whose major spending plans are underpinned by strategic
national needs, regulatory commitments or essential maintenance
requirements. The Group continues to develop its scale and
resources to meet successfully the increasingly complex delivery
programmes and outsourcing needs of major customers.
Over the next decade, the Board believes that those programmes
will be primarily in three growth markets:-
Infrastructure - particularly Highways, Rail and Airports
Environment - particularly Water and Waste
Energy & Process - particularly Nuclear, Power, and
Hydrocarbons & Chemicals
Therefore, Costain's strategy is both to build on the Group's
current strengths and to broaden and improve the quality of
earnings streams by accelerating the development of an integrated
business, providing front-end engineering consultancy, construction
and ongoing care and maintenance services. As previously announced,
it is expected that the Group's growth aspirations for the business
will be achieved through a combination of organic growth and by
suitable acquisitions in line with strategy.
Costain has worked on a number of significant infrastructure
projects in the UK, including the St Pancras railway station and
the Channel Tunnel Rail Link, and is currently working on a number
of significant projects including the municipal waste treatment
infrastructure for the Greater Manchester Waste Disposal Authority
and EVAP D at Sellafield, one of the largest nuclear projects in
the UK.
A copy of this announcement will shortly be available, free of
charge, on the Company's website at www.costain.com
Forward looking statements
This announcement contains statements about Costain and Mouchel
that are or may be forward looking statements. All statements other
than statements of historical facts included in this announcement
may be forward looking statements. Without limitation, any
statements preceded or followed by or that include the words
"targets", "plans" "believes", "expects", "aims", "intends",
"will", "may", "anticipates", "estimates", "projects" or words or
terms of similar substance or the negative thereof, are forward
looking statements. Forward looking statements include statements
relating to, among other things: Costain's expected growth markets
over the next decade and the expected benefits of the proposed
combination of Costain and Mouchel.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements, including, among others, risks relating to the
successful combination of Mouchel with Costain; higher than
anticipated costs relating to the combination of Mouchel with
Costain; and facts relating to Mouchel that may impact the timing
or amount of benefit realised from the combination that are unknown
to Costain. Due to such uncertainties and risks, readers are
cautioned not to place undue reliance on such forward looking
statements, which speak only as of the date hereof. Costain
disclaims any obligation to update any forward looking or other
statements contained herein, except as required by applicable
law.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
This announcement does not constitute an offer and it should not
be construed as constituting an offer nor does it evidence a firm
intention to make an offer, the making of which is not subject to
any pre-conditions. This announcement does not amount to any
commitment to make or proceed with an offer and is not intended to
give rise to any obligation to make an announcement pursuant to
Rule 2.2 of the Takeover Code or otherwise. Accordingly, there can
be no certainty that any offer will ultimately be made. The making
of any offer will be subject to a number of pre-conditions,
including the satisfactory completion of due diligence and the
recommendation of the board of Mouchel. Costain reserves the right
to waive any or all of such pre-conditions. In addition, Costain
reserves the right to amend any of the potential terms of such an
offer that have been mentioned in this announcement, in the event
that (i) the board of Mouchel agrees and recommends any such
change, (ii) a third party announces a firm intention to make an
offer for Mouchel, or (iii) Mouchel announces, declares or pays a
dividend or any other distribution or other payments to its
shareholders. Further, Costain reserves the right to vary the form
and/or mix of consideration and/or introduce other forms of
consideration in relation to any offer.
This announcement does not constitute an offer to purchase any
securities, or an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any offer to purchase or
sell securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. No offering of securities
may be made in the United States except pursuant to registration
under the US Securities Act of 1933 or an exemption from
registration.
The release, distribution or publication of this announcement in
jurisdictions other than the UK may be restricted by law and
therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about and
observe any applicable requirements.
Unless otherwise determined by Costain, this announcement and
any proposed offer will not be made, directly or indirectly, in or
into any jurisdiction where to do so would violate the laws of that
jurisdiction (a "Restricted Jurisdiction") or the United States, or
by the use of any means or instrumentally (including, without
limitation, telex, facsimile transmission, telephone, internet or
other forms of electronic communication) of interstate or foreign
commerce, or of any facility of a national securities exchange of
any Restricted Jurisdiction or the United States. Unless so
determined by Costain, the proposed offer will not be capable of
acceptance by any such use, means or instrumentally or facility of
any Restricted Jurisdiction or the United States.
Copies of this announcement will not be, and must not be,
directly or indirectly, mailed or otherwise forwarded (including,
without limitation by telex, facsimile transmission, telephone,
internet or other forms of electronic communication), distributed
or sent in, into or from any Restricted Jurisdiction or the United
States.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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