Construction group hit by further waste job losses but posts improved half-year results

Costain has suffered further losses on a problem PFI waste job in Manchester, but nonetheless posted a rise in profit, revenue and order book for the first half of 2016.

The construction group posted pre-tax profit of 拢11.3m, up from 拢10m last year, despite being hit by an 拢8.4m loss - on top of the 拢7.4m loss it made in the half-year period last year - in its natural resources division due to problems on its Manchester waste PFI contract.

The loss includes further costs and provisions of 拢11.4m in relation to the completion of the legacy Greater Manchester Waste Disposal Authority PFI contract awarded in 2007.

Costain reported a rise in revenue to 拢791m, up from 拢621m, while its order book is up 5% to a record 拢3.9bn.

The majority of revenue came from the firm鈥檚 infrastructure division, which posted a jump in revenue 拢613m, up from 拢475m

.Costain said the order book for the division has increased to 拢2.9 billion from 拢2.7bn last year, with infrastructure tendering activity high as it continues to prioritise its bidding activity 鈥渋n the areas that currently provide the greatest opportunity.鈥�

The firm said the development of the M4 corridor around Newport, Crossrail, London Bridge, Thames Tideway, Network Rail鈥檚 拢2bn electrification programme and the 拢100m Shieldhall Tunnel - a sewage tunnel in Glasgow being built by a Costain and Vinci joint venture - all contributed to its increase in revenue.

Despite the uncertainty from the Brexit vote, the firm said it had not yet been impacted and remained upbeat, highlighting the 鈥渕ajor customers who are continuing to spend billions of pounds addressing critical UK infrastructure needs鈥�.

Commenting on the results, chief executive Andrew Wyllie said: 鈥淭hese are exciting times as billions of pounds are being spent upgrading and renewing the country鈥檚 energy, water and transportation infrastructure.

鈥淭here is a revolution in the deployment of technology-led innovative solutions to meet the increasingly complex requirements of our national infrastructure needs, and we are continuing to rapidly transform the Costain business to be at the heart of the opportunity this presents.鈥�

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