Maidenhead construction firm Costain reports 19% revenue rise
Costain, a Maidenhead-based construction and engineering firm, has reported an unaudited revenue rise of 19 per cent for the six months ending 30 June.
The group says that its rise to £665.2 million revenue primarily reflects volume growth and inflation protection mechanisms written into existing contracts.
Costain has also reported a rise in its operating profit of 21.7 per cent, bringing it to £14 million.
The group’s adjusted operating margin (measuring the profit the group makes on a pound of sales after paying variable costs) remains at the 2.1 per cent recorded in half 1 of 2021 as investment and increased bid activity offset operational improvements and volume increases.
In terms of operational improvements, the group has reported continuing momentum in Transportation, with road and rail performing strongly, while its Natural Resources operations have grown through stable Water revenue and an increase in consultancy services in Energy and Defence.
Looking forward to the second half of the year, the group has secured £560 million in contracts, making up 90 per cent of expected group revenue for the period.
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Alex Vaughan, Chief Executive Officer of Costain Group, said: "In the first half of the year we delivered a strong operating performance reflecting volume increases and the inflation recovery mechanisms built into our contracts.
“Our adjusted operating profit increased by 22% year-on-year, and we had a strong adjusted free cash performance, ending the period with £95.9m, with a positive net cash flow expected in the second half.
"Despite material availability and inflation challenges, we have managed the supply chain pressures effectively, while delivering a robust operational performance with new contracts being won on attractive commercial terms with appropriate risk.
“Our four chosen markets of Transport, Water, Energy and Defence remain resilient, and the pipeline of potential new business is healthy. We undertook a very high level of bidding activity in the first half, with award decisions expected in H2 22 and in H1 23.
"While we remain mindful of the macro-economic backdrop, we are pleased with the quality and scale of our order book, including secured multi-year infrastructure programmes, the volume of preferred bidder work and the additional long-term framework contracts which will deliver continued progress in 2023 and beyond."
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