Problem jobs send firm nosediving further into the red
Problem jobs sent pre-tax losses at Costain close to 拢100m last year, the firm announced this morning.
The contractor had already flagged woes on the A465 Heads of the Valleys road scheme in south Wales as well as a job for National Grid, a 拢113m deal it signed in 2016 to upgrade compressor stations in Peterborough and Huntingdon.
It said charges from these two schemes had hit it for 拢94.7m while it was also hit with a 拢5m cost on a highways maintenance contract called ASF South which it finished for Highways England five years ago.
The problems meant pre-tax losses widened from 拢6.6m to 拢96.1m on turnover down from 拢1.2bn to 拢978m.
The firm said it had learnt lessons from the problems and added: 鈥淲e have strengthened the senior leadership team, introduced greater accountability from top to bottom, improved our governance and controls and completed a root and branch exercise to identify and manage potential contract risk.鈥�
Costain said the cost of dealing with covid hit it for 拢9.2m while it added that it had received 拢2m in money from the government鈥檚 Coronavirus Job Retention Scheme after furloughing around 300 staff at the peak of the pandemic last year. The firm said it had also deferred 拢10m of VAT payments because of the pandemic.
It added the cost of renegotiating its bank facilities had hit it for 拢1.2m while it made a 拢1.4m profit on the sale of non-core assets in Zimbabwe and Spain.
Costain ended the year with net cash of 拢102.9m after completing a rights issue in June which saw Dubai-based contractor ASGC become its largest shareholder with a 15% stake. Average month-end net cash improved to 拢73.8m from 拢41.2m.
No comments yet