Contractor Costain has announced a record order book of £3bn, with the firm buoyed by recent wins with Thames Water and EdF’s Hinkley Point project.
Trading updates from two of Britain’s biggest contractors paint contrasting pictures of the market today.
11am: Gloomy prognosis from Balfour Beatty who say that lack of major projects work will continue to suppress its order book.
The firm reported a broadly flat order book over the last quarter of trading when assessed at constant exchange rates. However at actual exchange rates, the adverse impact of the weaker US dollar resulted in a small reduction in the order book to £13.8bn compared with £13.9bn at the end of the first half.
Within this, the Professional Services and support services order book has remained stable since the half year. A slight recovery in housebuilding helped its construction order book, but the firm is concerned about a weak order intake in the UK major projects business.
“In the major projects business, there continues to be an absence of large infrastructure projects,” it said. “The visible pipeline looks weak, and we see little prospect for change in the next couple of years. We therefore anticipate a continuing shift in our business mix away from major infrastructure and into regional work.”
“Furthermore, our Engineering Services business relies on major infrastructure and complex buildings for growth and consequently, its outlook remains somewhat subdued,” it added.
It added that its UK rail projects business remains “difficult” and that it anticipates that it will be “modestly loss-making” for the full year.
10am: Buoyant Costain has told the City that its order book has increased further since its half-year results announcement and now stands at a new record level of £3.0bn.
At half-year it stood at £2.9bn.
As well as including over £700M of revenues secured for 2014, the order book also provides good long-term visibility with circa £2.1bn of revenues secured for 2015 and beyond, the balance of the order book being for the remainder of 2013. Over 90% of the order book is a target cost, cost reimbursable form of contract.
The Group also has a strong preferred bidder position of over £400M