Costain has revealed a record of order book of £2.4bn on the back of major contract wins in the water, waste and highways sectors.
The news was reveaed in an Interim Management Statement covering the period from 1 January 2009 and was issued ahead of its AGM later today.
“Following on from the strong performance in 2008, the Group has continued to perform well and in line with the Board’s expectations,” said the statement. “We continue to operate in market sectors where there is a commitment to expenditure and have won a number of high quality contracts.
“The Group’s focussed strategy is providing resilience in these challenging times,” it said.
Since the beginning of the year, the Group’s high quality forward order book has significantly increased by 20% to a new record level of £2.4bn. In addition, it has preferred bidder positions in excess of £800M. To date over £900M of revenue has been secured for 2009, which is ahead of the comparable figure last year.
It added that the current level of tendering activity for new work remains high, including opportunities in infrastructure, water, waste, energy, health and education.
In Environment, which includes the Group’s activities in the water, waste and marine markets, Costain, in joint venture, won a major 10-year contract with Severn Trent with an estimated total value of £400M starting in April 2010. Severn Trent is a new client for Costain for the AMP programme.
In the waste sector, the Group was awarded a £397M million four-year contract to design and build municipal waste treatment infrastructure as part of the Greater Manchester Waste Disposal Authority’s (GMWDA’s) PFI Waste and Recycling Contract, the largest municipal
waste contract in Western Europe.
In Infrastructure, which includes the Group’s activities in the highways, rail, nuclear and airport sectors, Costain, in joint venture, was awarded a five-year £200M Managing Agent Contractor (‘MAC’) contract to carry out routine operational and maintenance services and deliver improvements on the motorways and trunk roads in Area 12, which covers Yorkshire and North Lincolnshire. This is the firm’s third MAC contract.
The statement added that the Group has a strong cash position well in excess of £100M and has no significant borrowings. The average cash balance since the year end is running slightly ahead of the average for 2008.
“With trading in line with its expectations and a significant number of excellent new contract awards, the Board is pleased with the start to the current year,” it said. “In a period of economic uncertainty, the Group continues to focus on major blue chip customers who are expected to implement their long-term investment programmes. The Group’s order book is in good shape and, with robust finances underpinned by a strong cash position and an ongoing rigorous focus on cost management, Costain is well positioned to deliver further progress.”