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Costain positive about 2010 as operating profit rises

Contractor Costain this morning said it was “confident for the future” after annoucing half year results showing profit from operations up 11% to £8.3M, a record order book of £2.4bn and no net debt.

Last week Costain retained its title as NCE/CECA Major Civil Engineering Contractor of the Year for a recession-busting performance that has seen its order book soar to a record £2bn-plus.

“We have had a very good first half of the year and we are confident about the future,” chief executive Andrew Wylie told NCE.

Wylie said the firm remained focused on its big customers who are being driven by legislative or by strategic need, which included those in the energy, waste, water and infrastructure sectors.

Over £1bn of new work has been secured by the firm during the six month period ended 30 June 2009 including Greater Manchester Waste Disposal Authority’s £397M contract, a £400M AMP5 deal with Severn Trent, a five year £200M joint venture maintenance Managing Agent Contract (“MAC”) for the Highways Agency, an east and south east framework for the Highways Agency and an advance works civil framework agreement for Crossrail.

The group has also recently won contracts with the Sellafield nuclear power plant, and renewed its place on AMP5 frameworks with United Utilities and Southern Water.

Wylie said that spending was essential for the UK to meet energy and waste targets, and that cash for major infrastructure projects would also be found. “There are clearly some big issues but we cannot not invest in our infrastructure. Money for the big infrastructure projects such as Crossrail and High Speed rail will have to be found,” he said.

Costain was a key player in the High Speed 1 project, and Wylie is confident about winning work on Crossrail and HS2.

“There are relatively few contractors in our view with the capacity to deliver major infrastructure projects,” said Wylie

Finance director Tony Bickerstaff added that Crossrail was a great opportunity for the organisation.

“We are on the advance works framework and the bidding is underway for work on that. And the major works such as tunnels and stations we will be very much looking to win work on the back of what we did on High Speed 1 and St Pancras station itself,” he said, adding that a joint venture team was being put together.

 

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