TIDMCOST
RNS Number : 6030K
Costain Group PLC
23 August 2012
Costain Group PLC
("Costain" or the "Group")
23 August 2012
Interim results for the half-year ended 30 June 2012
Costain, a leading engineering solutions provider, delivering
integrated consulting, project delivery and operations and
maintenance services, announces another strong performance with a
16% increase in underlying operating profit(2) and an 8% increase
in the dividend for the first six months of 2012.
H1 2012 H1 2011 FY 2011
Revenue(1) GBP477.9m GBP468.5m GBP986.3m
Operating Profit
* Underlying(2) GBP10.7m GBP9.2m GBP24.1m
Profit from Operations
* Adjusted(3) GBP17.9m GBP9.4m GBP23.6m
GBP16.3m GBP9.3m GBP22.0m
* Reported
Profit before tax
* Adjusted(3) GBP17.0m GBP10.2m GBP25.5m
GBP15.4m GBP10.1m GBP23.9m
* Reported
Basic earnings per share
* Adjusted(3) 23.1p 12.1p 31.1p
* Reported 21.2p 11.9p 29.2p
Net cash
Cash balance GBP131.5m GBP149.2m GBP140.1m
Average month-end cash balance GBP120.0m GBP132.8m GBP130.4m
Dividend per share 3.5p 3.25p 10.0p
1. Including share of joint ventures & associates
2. Underlying operating profit (before amortisation of acquired
intangible assets and employment related acquisition consideration)
of GBP10.7m in 2012 excludes the GBP2.7m one-off costs resulting
from pension scheme liability actions
3. Results stated before amortisation of acquired intangible
assets and employment related acquisition consideration and after
GBP10.5m profit arising from transfer of PFI assets into Group
pension scheme and GBP2.7m one-off costs resulting from pension
scheme liability actions
-- Revenue up 2% to GBP477.9 million (June 2011: GBP468.5 million)
-- Underlying operating profit(2) increased by 16% to GBP10.7
million (June 2011: GBP9.2 million)
-- Adjusted profit before tax(3) up 67% to GBP17.0 million (June 2011: GBP10.2 million)
-- Basic earnings per share up 78% to 21.2 pence (June 2011: 11.9 pence)
-- Strong net cash position of GBP131.5 million (June 2011:
GBP149.2 million), after GBP17.9 million of acquisition spend in
August 2011, and average month-end cash balance of GBP120.0 million
during first six months of the year (June 2011: GBP132.8
million)
-- Forward order book of GBP2.4 billion (30 June 2011: GBP2.3
billion) with over 90% repeat orders including new awards and
extensions to existing contracts. In addition, preferred bidder
position maintained at over GBP400 million
-- Over GBP850 million of revenue secured for 2012as at the end
of the first half, including an increasing proportion of support
services activities, now standing at 28%
-- Interim dividend increased for fifth successive year, by 8%
to 3.50 pence (June 2011: 3.25 pence)
Commenting on the results, the Chairman, David Allvey, said:
"This is another strong performance with an increase in profit,
robust cash balance and a high quality order book comprising both
new contract awards and contract extensions.
"We now meet the integrated service requirements of major
customers, whose repeat orders account for over 90% of the order
book and who are continuing to invest in essential infrastructure
projects. Despite the ongoing challenging economic conditions, we
remain on course to deliver a result for the year in line with the
Board's expectations."
A video interview with Chief Executive Andrew Wyllie and Finance
Director Tony Bickerstaff in which they discuss the half-year
results announcement is available at www.costain.com
ENQUIRIES:
Costain Group PLC Tel: 01628 842 444
Andrew Wyllie, Chief Executive
Tony Bickerstaff, Finance Director
Graham Read, Group Communications Director
College Hill Tel: 020 7457 2020
Mark Garraway
Helen Tarbet
Notes to Editors
Costain is a leading UK engineering solutions provider,
delivering integrated consulting, project delivery and operations
and maintenance services, with a portfolio spanning almost 150
years of innovation and technical excellence. The Group's core
business segments are in Infrastructure (Highways, Rail and
Airports), Environment (Water and Waste) and Energy & Process
(Hydrocarbons & Chemicals, Nuclear Process and Power).
The Group's 'Choosing Costain' strategy involves focusing on
blue chip customers in chosen sectors whose major spending plans
are underpinned by strategic national needs, regulatory commitments
or essential maintenance requirements.
Costain has worked on a number of high profile infrastructure
projects in the UK, including the St Pancras railway station and
the Channel Tunnel Rail Link. The Group's current major projects
include the municipal waste treatment infrastructure for the
Greater Manchester Waste Disposal Authority, EVAP D at Sellafield,
one of the largest nuclear projects in the UK, and the Network Rail
contract for the redevelopment of London Bridge Station.
For further information please visit the company website:
www.costain.com
Chairman's and Chief Executive's Statement
Costain delivered another strong performance in the first half
of the year.
As a result of the successful implementation of our 'Choosing
Costain' strategy, we are now a leading engineering solutions
provider, delivering integrated consulting, project delivery and
operations and maintenance services to major customers.
Our success is the direct result of our focus on major customers
who are continuing to invest in capital, operations and maintenance
contracts to address essential national infrastructure requirements
across the transport, energy, water and waste sectors.
Our focus on providing innovative and cost effective solutions
to increasingly complex and large-scale national needs, along with
our partnership approach, is enabling Costain to secure long-term
relationships with major customers. This is reflected in the fact
that over 90% of our order book comprises repeat order work, a
significant proportion of which is extensions to existing
contracts.
We will continue to grow the business both organically and by
targeted acquisition. Our acquisition strategy will be the key
driver of the addition of further high-quality support service
related activities to the Group's portfolio. The two businesses
which we acquired last year have been fully integrated and are
performing well.
Results
Revenue, including the Group's share of joint ventures and
associates, for the half-year ended 30 June 2012 increased by 2% to
GBP477.9 million (2011: GBP468.5 million). Group operating profit,
before other items and a one-off pension cost, rose 16% to GBP10.7
million (2011: GBP9.2 million), and profit before tax, before other
items, increased by 67% to GBP17.0 million (2011: GBP10.2 million)
including profit on the transfer of PFI equity investments into The
Costain Pension Scheme of GBP10.5 million and a one-off pension
cost of GBP2.7 million. Basic earnings per share, including the
profit on PFI transfer and one-off pension cost, were up 78% to
21.2 pence (2011: 11.9 pence).
Net finance expense amounted to GBP0.9 million in the period
compared to an income of GBP0.8 million last year, the change
mainly being due to the pension scheme related net finance
element.
The Group continued to enjoy a strong cash position and
following GBP21.1 million of acquisition expenditure on
ClerkMaxwell and Promanex in 2011, net cash at 30 June 2012, was
GBP131.5 million (2011: GBP149.2 million), with an average month
end cash balance during the first six months of the year of
GBP120.0 million (2011: GBP132.8 million).
The Group continues to have supportive and flexible financing in
place to facilitate its strategy of organic and acquisitive growth
with total banking and bonding facilities of GBP465 million.
Order Book
The first half saw a number of major new contract awards and
extensions to existing contracts and the order book, as at 30 June
2012, was GBP2.4 billion (June 2011: GBP2.3 billion). The order
book includes GBP850 million of revenue secured for 2012, of which
28% is support services related activities.
It is pleasing to note that the order book continues to provide
good long-term visibility with circa GBP600 million of revenue
secured for 2013 and in excess of a further GBP1.4 billion of
revenue secured for 2014 and beyond.
The Group has also maintained a strong preferred bidder position
of over GBP400 million.
Dividend
The Board has declared an increased interim dividend of 3.50
pence per share (2011: 3.25 pence per share). The dividend will be
paid on 26 October 2012 to those shareholders on the register as at
the close of business on 21 September 2012.
Pension
Over a number of years the Board has taken various decisive
actions to address the Group's legacy Costain Pension Scheme
('CPS'), with the result that the deficit has been substantially
reduced.
In February 2012, the Group announced two further actions being
taken to manage the obligations in the CPS. The first of these was
the transfer of the Group's interest in two PFI investments into
the CPS at an agreed value of GBP20.3 million which was completed
on 22 February 2012 and resulted in an accounting profit on the
transfer of GBP10.5 million. The second action was the
implementation of Enhanced Transfer Value ('ETV') and Pension
Increase Exchange ('PIE') offers to the members of the CPS. The ETV
and PIE exercises have now been completed and resulted in a
reduction in the scheme liabilities and assets of approximately
GBP35 million and has resulted in a one-off accounting cost of
GBP2.7 million expensed in the first half. Together, the actions
reduce the accounting pension deficit (before deferred tax) by
approximately GBP18 million.
The deficit at 30 June 2012 was GBP29.6 million net of deferred
tax (June 2011: GBP26.5 million) a reduction from the position at
31 December 2011 of GBP39.7 million. The assumptions and
sensitivities used in the valuation of the pension scheme are set
out in the notes to the interim financial statements.
Board & Management
Following the period end, Costain announced the appointment of
Jane Lodge as a Non-Executive Director with effect from 1 August
2012. Jane will Chair the Audit Committee from 31 October 2012,
replacing James Morley who will become the Senior Independent
Director. James will succeed John Bryant, who will retire at the
end of 2012 after nearly 11 years as a Board member. Jane spent 35
years at Deloitte LLP (UK), 25 of which as an audit partner
advising global companies in the manufacturing and infrastructure
sectors.
In June 2012, Costain further strengthened its Executive Board
with a number of appointments.
Mark Rogerson joined the Group from Serco in the new role of
Chief Development Officer and will be responsible for developing
and negotiating large long-term contracts with customers. These
will combine the broadening range of design, construction and
maintenance services provided by the Group and Mark's focus will be
on growth through the further development of effective partnering
strategies, optimising business development capability and playing
a major part in the achievement of future targets through long term
customer relationships, new contracts and acquisitions.
Tim Bowen was appointed Regional Development Director, based in
the Middle East and he was succeeded as Highways Director by Simon
Ellison.
Operational Review
One of the key strengths of Costain is the ability to focus
group-wide resources to meet specific customer requirements,
address opportunities and optimise returns for the Company as a
whole irrespective of divisional structure.
As a consequence, revenue (including share of joint ventures and
associates) in the Infrastructure division during the period was up
27% to GBP279.5 million (2011: GBP219.4 million), with adjusted
profit from operations of GBP10.9 million (2011: GBP5.7 million).
The improved profit margin performance reflects strong operating
returns and additional gains on successfully completed
projects.
The order book for the division has grown to GBP1.5 billion
(June 2011: GBP1.1 billion) and the level of tendering activity
remains high. The increase in the order book and revenue in the
Infrastructure division results from the successful increased focus
on opportunities in this area.
Costain is a major player in the Highways sector and is the
leading supplier to the Highways Agency. Good progress has been
made in the period across our large portfolio of construction and
maintenance contracts. New contract awards include the GBP102
million joint venture upgrade of the A8 Belfast to Larne
carriageway in Northern Ireland, announced on 3 August 2012. The
Group is well-placed to secure further contracts in this sector
where strong emphasis is placed on providing innovative solutions
that meet the customer's demands.
In Rail, with the award to our joint venture of the Eleanor
Street project, Costain has now secured five Crossrail contracts,
and believes that its combination of specialist skills and ability
to deliver solutions to complex requirements make it an attractive
Tier One delivery partner for this customer. These skills are being
successfully employed on the major London Bridge Station
redevelopment project for Network Rail, in which Costain is
providing integrated services including design, construction,
logistical and environmental operations whilst ensuring that the
Station remains open throughout.
The Riverside Resource Recovery Energy from Waste facility at
Belvedere is now operational and progress is being made closing out
the final account.
The acquisition of Promanex in August 2011 is fully integrated
and has progressed very well. The resulting additional support
services capabilities in the Group have significantly enhanced the
broad service offering we can offer customers and have greatly
increased tendering opportunities in this area. Our enhanced
support services offering helped Costain secure the three-year
GBP60 million asset support contract for the operation and
maintenance of the Government Pipeline and Storage System,
announced in March 2012.
In the Environment division, revenue, including share of joint
ventures and associates, during the period was GBP127.1 million
(2011: GBP159.8 million), with profit from operations, excluding
the profit on PFI transfers, of GBP1.6 million (2011: GBP6.7
million). The reduction in revenue has been influenced by our
strategic focus on other activities in the Group. Margins in this
division declined in the period following the one-off margin
benefits from successful close-out of a number of legacy issues
well within our allowances in the comparative period and as a
result of a provision for additional costs to complete a
project.
The divisional order book at the period end stands at GBP0.7
billion (June 2011: GBP1.1 billion). Our key target markets in the
Environment division are water and waste, where significant
opportunities exist for the Group as the market in the UK undergoes
major change. In recognition of this, during the period Costain
announced a Joint Venture agreement with Severn Trent Plc to
provide complete business water and wastewater management services
to high volume commercial and industrial water users, commencing in
the second half of the year.
Costain is engaged in a number of ongoing AMP5 framework
contracts with Northumbrian Water, Severn Trent, Southern Water,
United Utilities and Welsh Water. In addition, after the period
end, the Group was awarded a contract by Severn Trent Water to
replace its largest covered service reservoir sited near Ambergate
in Derbyshire.
The Group's leading position provides an exceptionally strong
platform to secure future opportunities in the water sector as it
begins to look ahead to the next regulatory review period, which is
expected to recommend a more integrated service offering, and to
the extension or award of new contracts.
In the Waste sector, the Group is currently completing Europe's
largest waste PFI contract for the Greater Manchester Waste
Disposal Authority. Several of the key facilities on the scheme,
which utilises a range of sophisticated waste management
technologies, have been handed over, with the remainder still in
the commissioning phase and commercial discussions regarding
completion continuing.
In Energy & Process, revenue, including share of joint
ventures and associates, during the period was GBP70.5 million
(2011: GBP88.6 million), with an adjusted profit from operations of
GBP2.4 million (2011: GBP1.8 million). Whilst the profit has
increased in the period the anticipated operating margin has been
impacted by a reduced divisional turnover compared with the same
period in 2011 and high business development costs. The order book
has increased and stands at more than GBP0.2 billion (June 2011:
GBP0.1 billion).
In Hydrocarbons & Chemicals, operations continue for a
number of customers both in the UK and overseas. ClerkMaxwell, an
engineering consultancy based in Aberdeen acquired in 2011 to boost
our position in upstream oil & gas, is performing well and
providing significantly enhanced opportunities to win new work in
this high-growth area.
In Nuclear Process, work continues on the Evaporator D contract
at Sellafield, the UK's largest nuclear process project, with the
delivery of further modules to site. In addition, the design of the
Magnox Bradwell Fuel Element Debris Dissolution plant (part of a
multi-faceted ten-year framework contract) is well advanced.
In Power, we are providing consultancy services to a number of
the major UK utilities. Work continues with the Energy Technologies
Institute in the development of a technology to significantly
reduce the amount of carbon dioxide produced by coal fired power
stations. This will be a critical factor in the UK's ability to
meet its climate change targets, and demonstrates that Costain is
at the forefront of the design and development of innovative
solutions to meet national needs and add value to our
customers.
Land Development revenue for the period was GBP0.8 million
(2011: GBP0.7 million) with a loss after tax of GBP1.0 million
(2011: loss after tax of GBP0.7 million). The loss in the period
reflects the continuing running costs of the operations in Spain.
Economic conditions in Spain remain very challenging, with a
depressed real estate market and weak demand for development land
and we continue our moratorium on development activity on our
land-bank. Our activities during the year have been focused on our
leisure businesses of golf courses and our 600 berth yacht marina
adjacent to Gibraltar which is reporting increasing levels of
activity.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Group's medium
term performance, and the factors which mitigate these risks, have
not significantly changed from those set out on pages 38 to 39 of
the Group's Annual Report for 2011, a copy of which is available
from our website www.costain.com.
The Business Review and the notes to these interim financial
statements include consideration of uncertainties affecting the
Group in the remaining six months of the year.
Outlook
Costain achieved a strong performance with an increase in
profit, robust cash balance and a high quality order book
comprising both new contract awards and contract extensions.
Costain now meets the integrated service requirements of major
customers, whose repeat orders account for over 90% of the order
book and who are continuing to invest in essential infrastructure
projects. Despite the on-going challenging economic conditions,
Costain remains on course to deliver a result for the year in line
with the Board's expectations.
DAVID ALLVEY
Chairman
ANDREW WYLLIE
Chief Executive
23 August 2012
Condensed consolidated income statement
Half-year ended 30
June, 2012 2011 2011
year ended 31 December Half-year Half-year Year
Before Before Before
other Other other Other other Other
items items Total items items Total items items Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- ------- ------- ------- -------
Revenue 3 477.9 - 477.9 468.5 - 468.5 986.3 - 986.3
Less: Share of revenue
of joint ventures and
associates (43.2) - (43.2) (59.6) - (59.6) (117.8) - (117.8)
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Group revenue 434.7 - 434.7 408.9 - 408.9 868.5 - 868.5
Cost of sales (409.9) - (409.9) (387.5) - (387.5) (818.8) - (818.8)
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Gross profit 24.8 - 24.8 21.4 - 21.4 49.7 - 49.7
Administrative expenses (14.1) - (14.1) (12.2) - (12.2) (25.6) - (25.6)
Pension liability
management 9 (2.7) - (2.7) - - - - - -
Amortisation of
acquired
intangible assets - (0.7) (0.7) - (0.1) (0.1) - (0.9) (0.9)
Employment related
deferred
consideration - (0.9) (0.9) - - - - (0.7) (0.7)
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Group operating profit 8.0 (1.6) 6.4 9.2 (0.1) 9.1 24.1 (1.6) 22.5
Profit on sales of
interests
in joint ventures and
associates 10.5 - 10.5 - - - 0.3 - 0.3
Profit on sale of
non-consolidated
subsidiary - - - 0.5 - 0.5 0.5 - 0.5
Share of results of
joint
ventures and
associates (0.6) - (0.6) (0.3) - (0.3) (1.3) - (1.3)
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Profit from operations 3 17.9 (1.6) 16.3 9.4 (0.1) 9.3 23.6 (1.6) 22.0
Finance income 14.2 - 14.2 17.0 - 17.0 34.1 - 34.1
Finance expense (15.1) - (15.1) (16.2) - (16.2) (32.2) - (32.2)
----------------------- ----- ------ ------- ------ -------
Net finance
(expense)/income 4 (0.9) - (0.9) 0.8 - 0.8 1.9 - 1.9
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Profit before tax 17.0 (1.6) 15.4 10.2 (0.1) 10.1 25.5 (1.6) 23.9
Income tax 5 (2.0) 0.4 (1.6) (2.5) - (2.5) (5.6) 0.4 (5.2)
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Profit for the period
attributable
to equity holders of
the
parent 15.0 (1.2) 13.8 7.7 (0.1) 7.6 19.9 (1.2) 18.7
----------------------- ----- ------- ------ ------- ------- ------ ------- ------- ------- -------
Earnings per share
Basic 6 23.1p (1.9)p 21.2p 12.1p (0.2)p 11.9p 31.1p (1.9)p 29.2p
Diluted 6 22.6p (1.8)p 20.8p 11.9p (0.2)p 11.7p 30.0p (1.8)p 28.2p
During the period, previous period and previous year the impact
of business disposals was not material and, therefore, all results
are classified as arising from continuing operations.
Condensed consolidated statement of comprehensive income and
expense
Half-year ended 30 June, year ended 31 December 2012 2011 2011
Half-year Half-year Year
GBPm GBPm GBPm
------------------------------------------------------- ------------ ----------- -------
Profit for the period 13.8 7.6 18.7
-------------------------------------------------------- ----------- ----------- -------
Exchange differences on translation of foreign
operations (0.6) 0.6 (0.8)
Cash flow hedges
Group:
Effective portion of changes in fair value
during period (0.1) 0.5 (0.1)
Net changes in fair value transferred to the
income statement 0.1 0.2 0.2
Tax recognised on changes in fair value - (0.2) -
Joint ventures and associates:
Effective portion of changes in fair value
(net of tax) during period (0.1) (0.3) (2.8)
Net changes in fair value (net of tax) transferred
to the income statement 4.0 - -
Actuarial losses on defined benefit pension
scheme (9.1) (1.2) (22.1)
Tax recognised on actuarial losses recognised
directly in equity 0.7 (0.9) 3.0
Other comprehensive expense for the period (5.1) (1.3) (22.6)
-------------------------------------------------------- ----------- ----------- -------
Total comprehensive income and expense for
the period attributable to equity holders of
the parent 8.7 6.3 (3.9)
-------------------------------------------------------- ----------- ----------- -------
Condensed consolidated statement of changes in equity
Share Share Translation Hedging Retained Total
capital premium reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- -------- -------- ----------- -------- --------- -------
At 1 January 2011 31.7 2.0 6.8 (2.2) (0.7) 37.6
Profit for the period - - - - 7.6 7.6
Other comprehensive income/(expense) - - 0.6 0.2 (2.1) (1.3)
Issue of ordinary shares under
employee share option plans 0.2 - - - (0.2) -
Equity-settled share-based payments - - - - 1.2 1.2
Dividend paid - 0.1 - - (3.9) (3.8)
------------------------------------- -------- -------- ----------- -------- --------- -------
At 30 June 2011 31.9 2.1 7.4 (2.0) 1.9 41.3
Profit for the period - - - - 11.1 11.1
Other comprehensive expense - - (1.4) (2.9) (17.0) (21.3)
Transfer between reserves - - 0.1 - (0.1) -
Issue of ordinary shares under
employee share option plans 0.4 1.1 - - - 1.5
Equity-settled share-based payments - - - - 0.2 0.2
Dividend paid 0.1 0.1 - - (2.2) (2.0)
At 31 December 2011 32.4 3.3 6.1 (4.9) (6.1) 30.8
Profit for the period - - - - 13.8 13.8
Other comprehensive (expense)/income - - (0.6) 3.9 (8.4) (5.1)
Issue of ordinary shares under
employee share option plans 0.3 - - - (0.3) -
Equity-settled share-based payments - - - - 1.2 1.2
Dividend paid - 0.2 - - (4.4) (4.2)
------------------------------------- -------- -------- ----------- -------- --------- -------
At 30 June 2012 32.7 3.5 5.5 (1.0) (4.2) 36.5
------------------------------------- -------- -------- ----------- -------- --------- -------
Condensed consolidated statement of financial position
Half-year as at 30 June, year as 2012 2011 2011
at 31 December Notes Half-year Half-year Year
GBPm GBPm GBPm
-------------------------------------- ------ ----------- ----------- ------
Assets
Non-current assets
Intangible assets 8 19.6 3.8 20.3
Property, plant and equipment 8 10.4 9.2 11.4
Investments in equity accounted
joint ventures 20.4 23.6 21.4
Investments in equity accounted
associates 1.2 1.7 1.4
Loans to equity accounted joint
ventures 15.3 13.6 13.7
Loans to equity accounted associates 1.5 8.7 6.4
Other receivables 26.1 13.6 16.4
Deferred tax 16.1 17.1 17.4
-------------------------------------- ------ ----------- ----------- ------
Total non-current assets 110.6 91.3 108.4
-------------------------------------- ------ ----------- ----------- ------
Current assets
Inventories 1.8 1.5 2.3
Trade and other receivables 182.9 174.2 188.0
Cash and cash equivalents 133.2 151.2 141.7
-------------------------------------- ------ ----------- ----------- ------
Total current assets 317.9 326.9 332.0
-------------------------------------- ------ ----------- ----------- ------
Total assets 428.5 418.2 440.4
-------------------------------------- ------ ----------- ----------- ------
Equity
Share capital 10 32.7 31.9 32.4
Share premium 3.5 2.1 3.3
Foreign currency translation reserve 5.5 7.4 6.1
Hedging reserve (1.0) (2.0) (4.9)
Retained earnings (4.2) 1.9 (6.1)
-------------------------------------- ------ ----------- ----------- ------
Total equity attributable to equity
holders of the parent 36.5 41.3 30.8
Liabilities
Non-current liabilities
Retirement benefit obligations 9 39.0 35.8 52.9
Other payables 7.3 6.2 6.1
Provisions for other liabilities
and charges 2.3 2.5 2.3
-------------------------------------- ------ ----------- ----------- ------
Total non-current liabilities 48.6 44.5 61.3
-------------------------------------- ------ ----------- ----------- ------
Current liabilities
Trade and other payables 338.3 326.5 342.9
Income tax liabilities 1.7 1.6 1.7
Bank overdrafts 1.7 2.0 1.6
Provisions for other liabilities
and charges 1.7 2.3 2.1
-------------------------------------- ------ ----------- ----------- ------
Total current liabilities 343.4 332.4 348.3
-------------------------------------- ------ ----------- ----------- ------
Total liabilities 392.0 376.9 409.6
-------------------------------------- ------ ----------- ----------- ------
Total equity and liabilities 428.5 418.2 440.4
-------------------------------------- ------ ----------- ----------- ------
Condensed consolidated cash flow statement
Half-year ended 30 June, year ended 31 2012 2011 2011
December Half-year Half-year Year
GBPm GBPm GBPm
------------------------------------------------ ----------- ----------- -------
Cash flows from operating activities
Profit for the period 13.8 7.6 18.7
Adjustments for:
Share of results of joint ventures and
associates 0.6 0.3 1.3
Finance income (14.2) (17.0) (34.1)
Finance expense 15.1 16.2 32.2
Income tax 1.6 2.5 5.2
Profit on sales of interests in joint
ventures and associates (10.5) - (0.3)
Profit on sale of non-consolidated subsidiary - (0.5) (0.5)
Depreciation of property, plant and equipment 1.2 0.7 1.9
Amortisation of intangible assets 0.7 0.1 0.9
Employment related deferred consideration 0.9 - 0.7
Pension liability management 1.9 - -
Share-based payments expense 1.6 1.2 1.9
Cash from operations before changes in
working capital and provisions 12.7 11.1 27.9
Decrease/(increase) in inventories 0.4 (0.2) (1.0)
Increase in receivables (4.6) (6.3) (10.1)
(Decrease)/increase in payables (4.7) 22.3 25.0
Movement in provisions and employee benefits (5.6) (3.9) (7.1)
------------------------------------------------ ----------- ----------- -------
Cash (used by)/from operations (1.8) 23.0 34.7
Interest received 0.3 0.4 1.8
Interest paid (1.0) (0.4) (1.7)
Net cash (used by)/from operating activities (2.5) 23.0 34.8
------------------------------------------------ ----------- ----------- -------
Cash flows from investing activities
Dividends received from joint ventures
and associates 0.5 - 1.4
Additions to property, plant and equipment (0.2) (0.3) (2.9)
Additions to intangible assets - - (0.1)
Proceeds of disposals of property, plant
and equipment - - 0.2
Proceeds of disposal of non-consolidated - 0.5
subsidiary -
Additions to loans to joint ventures and
associates (2.2) (11.4) (13.5)
Loan repayments by joint ventures and
associates - - 0.4
Proceeds from sale of interest in joint
venture - - 0.3
Proceeds from sale of subsidiary - - 0.5
Acquisitions of subsidiaries (net of acquired
cash and cash equivalents and overdrafts) - (3.2) (21.1)
Net cash used by investing activities (1.9) (14.4) (34.8)
------------------------------------------------ ----------- ----------- -------
Cash flows from/(used by) financing activities
Issue of ordinary share capital - - 1.5
Ordinary dividends paid (4.2) (3.8) (5.8)
Cash used by financing activities (4.2) (3.8) (4.3)
------------------------------------------------ ----------- ----------- -------
Net (decrease)/increase in cash, cash
equivalents and overdrafts (8.6) 4.8 (4.3)
Cash, cash equivalents and overdrafts
at beginning of the period 140.1 144.3 144.3
Effect of foreign exchange rate changes - 0.1 0.1
Cash, cash equivalents and overdrafts
at end of the period 131.5 149.2 140.1
------------------------------------------------ ----------- ----------- -------
Notes to the interim financial statements
1. General information
Costain Group PLC (the Company) is a public limited company
incorporated in the United Kingdom. The address of its registered
office and principal place of business is Costain House, Vanwall
Business Park, Maidenhead, Berkshire SL6 4UB.
The Condensed consolidated interim financial statements are
presented in Pounds sterling, rounded to the nearest hundred
thousand.
The comparative figures for the financial year ended 31 December
2011 are not the Company's full statutory accounts for that
financial year. Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
After making enquiries and reviewing the latest forecasts, the
directors believe that the Group has adequate resources to continue
in operational existence for the foreseeable future. Accordingly,
they continue to adopt the going concern basis in preparing the
interim financial statements.
2. Statement of compliance
This interim financial information for the half-year ended 30
June 2012 has been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the European Union and with the
Disclosure and Transparency Rules of the Financial Services
Authority. The interim financial information should be read in
conjunction with the Annual Report for the year ended 31 December
2011.
The accounting policies and presentation applied in this
Condensed set of financial statements are consistent with those
described in the Annual Report for the year ended 31 December
2011.
The Board approved the unaudited interim financial statements on
23 August 2012.
The Group's principal risks and uncertainties are consistent
with those noted in the Annual Report for the year ended 31
December 2011. The Directors consider that the significant areas of
judgement made by management that have significant effect on the
Group's performance and estimates with a significant risk of
material adjustment in the second half of the year are unchanged
from those identified on page 87 of the Annual Report for the year
ended 31 December 2011.
3. Business segment information
The Group has four business segments: Environment,
Infrastructure, Energy & Process and Land Development
operations in Spain. The segments are strategic business units with
separate management reporting to a segment managing director and
have different core customers or offer different services.
Half-year ended 30 Energy Land Development Central
June 2012 Environment Infrastructure & Process costs Total
GBPm GBPm GBPm GBPm GBPm GBPm
External revenue 84.7 279.5 70.5 - - 434.7
Share of revenue of
JVs and associates 42.4 - - 0.8 - 43.2
Total segment revenue 127.1 279.5 70.5 0.8 - 477.9
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Group operating profit/(loss) 1.2 10.9 2.4 - (3.8) 10.7
Pension liability management - - - - (2.7) (2.7)
Profit on sale of investments 10.5 - - - - 10.5
Share of results of
JVs and associates 0.4 - - (1.0) - (0.6)
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Profit/(loss) from
operations before other
items 12.1 10.9 2.4 (1.0) (6.5) 17.9
Other items
Amortisation of acquired
intangible assets - (0.7) - - - (0.7)
Employment related
deferred consideration - (0.5) (0.4) - - (0.9)
--------
Profit/(loss) from
operations 12.1 9.7 2.0 (1.0) (6.5) 16.3
--------
Net finance expense (0.9)
--------
Profit before tax 15.4
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Half-year ended 30 Energy Land Development Central
June 2011 Environment Infrastructure & Process costs Total
GBPm GBPm GBPm GBPm GBPm GBPm
External revenue 103.7 219.4 85.8 - - 408.9
Share of revenue of
JVs and associates 56.1 - 2.8 0.7 - 59.6
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Total segment revenue 159.8 219.4 88.6 0.7 - 468.5
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Group operating profit/(loss) 5.9 5.7 1.7 - (4.1) 9.2
Profit on sale of
non-consolidated subsidiary 0.5 - - - - 0.5
Share of results of
JVs and associates 0.3 - 0.1 (0.7) - (0.3)
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Profit/(loss) from
operations before
other items 6.7 5.7 1.8 (0.7) (4.1) 9.4
Other items
Amortisation of acquired
intangible assets - - (0.1) - - (0.1)
--------
Profit/(loss) from
operations 6.7 5.7 1.7 (0.7) (4.1) 9.3
--------
Net finance income 0.8
--------
Profit before tax 10.1
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Year ended 31 December Energy Land Development Central
2011 Environment Infrastructure & Process costs Total
GBPm GBPm GBPm GBPm GBPm GBPm
External revenue 281.8 448.5 138.2 - - 868.5
Share of revenue of
JVs and associates 93.6 17.5 5.2 1.5 - 117.8
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Total segment revenue 375.4 466.0 143.4 1.5 - 986.3
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Group operating profit/(loss) 16.1 10.2 4.6 - (6.8) 24.1
Profit on sale of
interest in JV 0.3 - - - - 0.3
Profit on sale of
non-consolidated subsidiary 0.5 - - - - 0.5
Share of results of
JVs and associates 0.6 - 0.1 (2.0) - (1.3)
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Profit/(loss) from
operations before
other items 17.5 10.2 4.7 (2.0) (6.8) 23.6
Other items
Amortisation of acquired
intangible assets - (0.7) (0.2) - - (0.9)
Employment related
deferred consideration - (0.3) (0.4) - - (0.7)
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
Profit/(loss) from
operations 17.5 9.2 4.1 (2.0) (6.8) 22.0
--------
Net finance income 1.9
--------
Profit before tax 23.9
------------------------------- -------------- ----------------- ----------- ----------------- -------- --------
4. Net finance (expense)/income
Finance income includes the expected return on the assets of the
pension scheme of GBP13.7 million (2011 half-year GBP16.3 million,
2011 year GBP32.3 million) and finance expense includes the
expected increase in the present value of the pension scheme
liabilities of GBP14.1 million (2011 half-year GBP15.4 million,
2011 year GBP30.5 million). The expected return and the increase in
present value are based on the value of assets and liabilities of
the pension scheme at the start of the period.
5. Income tax
2012 2011 2011
Half-year Half-year Year
GBPm GBPm GBPm
---------------------------------------- ----------- ----------- ------
UK taxation - (0.1) (0.1)
Deferred tax 1.6 2.6 5.3
---------------------------------------- ----------- ----------- ------
Income tax expense in the consolidated
income statement 1.6 2.5 5.2
---------------------------------------- ----------- ----------- ------
Effective tax rate 10.3% 24.8% 21.8%
The tax charged is represented by the estimate of the effective
tax rate for the period.
No account has been taken in these interim financial statements
for the reduction in the rate of corporation tax from 24% to 23%
with effect from April 2013. If that 1% had been applied to the
deferred tax asset at 30 June 2012, a reduction of GBP0.7 million
would have arisen (GBP0.9 million credited to the income tax
expense and GBP1.6 million charged to comprehensive income).
A further reduction to reflect the proposed corporation tax rate
of 22% from April 2014 would reduce the deferred tax asset by
another GBP0.6 million.
6. Earnings per share
The calculation of earnings per share is based on profit for the
period of GBP13.8 million (2011 half-year GBP7.6 million, 2011 year
GBP18.7 million) and the number of shares set out below:
2012 2011 2011
Half-year Half-year Year
Number Number Number
(m) (m) (m)
--------------------------------------- ----------- ----------- --------
Weighted average number of ordinary
shares in issue for basic earnings
per share calculation 65.1 63.7 64.1
Dilutive potential ordinary shares
arising from employee share schemes 1.3 0.8 2.2
--------------------------------------- ----------- ----------- --------
Weighted average number of ordinary
shares in issue for diluted earnings
per share calculation 66.4 64.5 66.3
--------------------------------------- ----------- ----------- --------
7. Dividends
Six months Six months Year ended
Dividend ended 30 June ended 30 31 December
per share 2012 June 2011 2011
pence GBPm GBPm GBPm
Final dividend for the
year ended 31 December
2010 6.25 - 3.9 3.9
Interim dividend for
the year ended 31 December
2011 3.25 - - 2.2
Final dividend for the
year ended 31 December
2011 6.75 4.4 - -
Amount recognised as
distributions to equity
holders in the period 4.4 3.9 6.1
----------------------------- ----------- --------------- ----------- -------------
Dividends settled in
shares (0.2) (0.1) (0.3)
----------------------------- ----------- --------------- ----------- -------------
Dividends settled in
cash 4.2 3.8 5.8
The proposed interim dividend of 3.50 pence (2011: 3.25 pence)
has not been included as a liability in these interim financial
statements because it had not been approved at the period end date.
The dividend totalling GBP2.3 million will be paid on 26 October
2012 to shareholders on the register at the close of business on 21
September 2012. A scrip dividend alternative will be offered.
8. Non-current assets
During the interim period, the Group spent GBP0.2 million on
plant and equipment (2011 half-year GBP0.3 million, 2011 year
GBP2.9 million).
9. Retirement benefit obligations
2012 2011 2011
Half-year Half-year Year
GBPm GBPm GBPm
---------------------------------- ----------- ----------- --------
Present value of defined benefit
obligations (581.8) (579.2) (600.8)
Fair value of scheme assets 542.8 543.4 547.9
---------------------------------- ----------- ----------- --------
Recognised liability for defined
benefit obligations (39.0) (35.8) (52.9)
---------------------------------- ----------- ----------- --------
Movements in present value of defined 2012 2011 2011
benefit obligations Half-year Half-year Year
GBPm GBPm GBPm
---------------------------------------- ----------- ----------- -------
Opening balance 600.8 576.7 576.7
Interest cost 14.1 15.4 30.5
Actuarial losses/(gains) 10.4 (1.6) 18.2
Pension increase exchange (1.7) - -
Benefits paid (including ETV transfer) (41.8) (11.3) (24.6)
---------------------------------------- ----------- ----------- -------
Closing balance 581.8 579.2 600.8
---------------------------------------- ----------- ----------- -------
Movements in fair value of scheme 2012 2011 2011
assets Half-year Half-year Year
GBPm GBPm GBPm
---------------------------------------- ----------- ----------- -------
Opening balance 547.9 537.1 537.1
Expected return on scheme assets 13.7 16.3 32.3
Actuarial gains/(losses) 1.3 (2.8) (3.9)
Contributions by employer 25.3 4.1 7.0
Benefits paid (including ETV transfer) (45.4) (11.3) (24.6)
Closing balance 542.8 543.4 547.9
---------------------------------------- ----------- ----------- -------
The following actuarial assumptions have been used in the IAS 19
valuations of the Group's defined benefit pension scheme (expressed
as weighted averages)
2012 2011 2011
Half-year Half-year Year
% % %
Discount rate 4.60 5.50 4.80
Expected rate of return on scheme
assets 4.95 6.11 4.95
Future pension increases 2.80 3.50 2.90
Inflation assumption 2.90 3.50 3.00
----------------------------------- ----------- ----------- ------
In February 2012, the Group completed and announced the transfer
of the Group's interest in two PFI investments into The Costain
Pension Scheme (CPS) at an agreed value of GBP20.3 million. The
implementation of Enhanced Transfer Value (ETV) and Pension
Increase Exchange (PIE) offers to the members of the CPS. The ETV
and PIE exercises have now been completed and resulted in a
reduction in the scheme liabilities and assets and will result in a
one-off accounting cost of GBP2.7 million, including expenses of
GBP0.8 million incurred directly by the Group.
The discount rate, inflation and pension increase and mortality
assumptions have a significant effect on the amounts reported.
Changes in these assumptions would have the following effects on
the Group's defined benefit scheme:
Pension liability
GBPm
Increase discount rate by 0.25%, decreases pension liability
by 27.2
Decrease inflation (and pension increases) by 0.25%,
decreases pension liability by 25.9
Increase life expectancy by one year, increases pension
liability by 15.4
10. Share capital
Issued capital as at 30 June 2012 amounted to GBP32.7 million
(2011 half-year GBP31.9 million, 2011 year GBP32.4 million).
The Company announced on 24 May 2012 that shareholders had,
pursuant to the Scrip Dividend Scheme, elected to receive 133,133
ordinary shares of 50 pence each in the Company in lieu of cash in
respect of all or part of their final dividend for the year ended
31 December 2011.
The 2009 Long-Term Incentive Plan (LTIP) award vested in April
2012 resulting in the issue of 634,767 shares. Full details will be
disclosed in the annual financial statements.
Following admission of the shares issued pursuant to the Scrip
Dividend Scheme, together with the 2009 LTIP award and the SAYE
awards, the Company's issued share capital at the end of the period
comprised 65,478,625 ordinary shares of 50 pence each.
The Group has established a Long-Term Incentive Plan under which
directors and senior employees can receive awards of shares subject
to the Group achieving earnings per share growth targets, and a
Defined Share Bonus Plan under which directors and senior employees
can receive awards of shares subject to the Group achieving profit
targets. Full details of these plans are disclosed in the annual
financial statements.
11. Related party transactions
Details of transactions between the Group and The Costain
Pension Scheme are included in Note 9. There have been no other
changes in the nature of related party transactions since the last
annual financial statements as at, and for the year ended, 31
December 2011.
Responsibility Statement of the Directors in respect of the
interim financial report
We confirm that to the best of our knowledge:
-- the Condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
Condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
On behalf of the Board
David Allvey - Chairman
Andrew Wyllie - Chief Executive
23 August 2012
Independent review report to Costain Group PLC
Introduction
We have been engaged by the Company to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2012 which comprises the Condensed consolidated
income statement, the Condensed consolidated statement of comprehensive
income, the Condensed consolidated statement of changes in equity,
the Condensed consolidated statement of financial position, the Condensed
consolidated cash flow statement and the related explanatory notes.
We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the requirements
of the Disclosure and Transparency Rules ("the DTR") of the UK's
Financial Services Authority ("the UK FSA"). Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the
DTR of the UK FSA.
The annual financial statements of the Company are prepared in accordance
with IFRSs as adopted by the EU. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial
report based on our review.
Scope of review
We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued
by the Auditing Practices Board for use in the UK. A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2012
is not prepared, in all material respects, in accordance with IAS
34 as adopted by the EU and the DTR of the UK FSA.
Stephen Bligh
for and on behalf of KPMG Audit
Plc
Chartered Accountants
London
23 August 2012
UNSOLICITED MAIL
The Company is legally obliged to make its share register
available to the general public. Consequently, some shareholders
may receive unsolicited mail, including correspondence from
unauthorised investment firms. Shareholders who wish to limit the
amount of unsolicited mail they receive can contact:
The Mailing Preference Service
Freepost (LON 20771)
London WE1 0ZT
SHAREHOLDER INFORMATION
The Company's Registrar is Equiniti, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA. For enquiries regarding your
shareholding, please telephone 0871 384 2250. You can also view
up-to-date information about your holdings by visiting the
shareholder website at www.shareview.co.uk. Please ensure that you
advise Equiniti 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 website www.sharegift.org. Equiniti
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. This service is completely free of
charge.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DLLFLLVFFBBK
Costain (LSE:COST)
過去 株価チャート
から 6 2024 まで 7 2024
Costain (LSE:COST)
過去 株価チャート
から 7 2023 まで 7 2024
