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Company results

News

COSTAIN

Costain's new chief executive Stuart Doughty emphasised this week that construction expertise remained vital to the firm's success despite plans to boost its lucrative asset management market share.

Doughty, who took over from John Armitt in July, cited successful partnerships with Yorkshire and Thames Water which, he said, showed how a sound construction base was needed to develop longer term relationships with clients.

Asset management and client services account for around 30% of Costain's business. Boosting this, he said, meant better margins and not having to chase business continually.

The recent award of two contracts in joint venture on the Channel Tunnel Rail Link project plus the Kings Cross passenger facilities upgrade for London Undergound underlined the desire to work more closely with clients on big infrastructure projects, Doughty said.

Half year results showed pretax profits stable at £3.8M compared to this time last year - taking into account a £1M overstatement in the 2000 figures. Turnover for the half year was up by £10M to £205.5M.

Doughty said the firm would start to look at more work overseas, particularly in joint ventures with its overseas shareholders. However, his target of raising margins to 3% within 12 months would, he said, be underpinned by work in the still buoyant UK transport, utilities and retail markets.

AMEC

Global transport spending will insulate Amec from any recession, chief executive Peter Mason said this week.

He explained that the contractor was moving its US construction management business away from property development work to tap into multi-billion dollar government roads and airport construction programmes in the US.

Construction margins across the Amec group were static at 2.4% during the first half of the year.

Amec capital projects produced an operating profit of £21.7M compared with £18.6M during the first half of 2000. Turnover was up from £777.4M to £907.4M.

Mason said static margins reflected its move away from unprofitable work to build workload around long term clients.

Amec group's profits were boosted by its continued move into outsourced services. Group turnover was £2.07bn compared with £1.69bn in the first half of 2000. Pretax profits were up from £32.4M to £38.8M.

KELLER GROUP

Foundations specialist Keller Group blamed wet weather and contract delays caused by the foot and mouth outbreak for lower than expected half year profits in the UK.

Despite winning large contracts on the Channel Tunnel Rail Link and continuing to work in the housebuilding market, results showed UK operating profits down slightly to £1.1M from £1.3M this time last year.

However, the contractor underlined its commitment to developing a global business by reporting strong growth in the US and continental Europe.

It also reported a return to profit in Australia after restructuring its business and refocusing its market.

Overall the group reported pretax profits up 30% to £8.2M on turnover up 29% to £189.2M.

WSP

Consultant WSP's stock is undervalued, Williams de Broe analyst Stephen Williams said on release of the company's results this week and recommended the shares as a good buy.

The view came as WSP announced turnover for the half year up 56% to £96.2M and pre-tax profits up from £4.32M to £6.78M for the same period last year.

However, the turnover includes one month's contribution of £8.6M from the company's new Swedish acquisition Jacobson & Widmark (NCE 17 May).

'We are now the third largest consultant in Europe, ' claimed chief executive Chris Cole.

Over 50% of the company's business is overseas, up from 15% in 1999, achieved by organic growth and acquisition. No major acquisitions are expected until mid 2002.

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