Costain sells PFI stakes to reduce pension deficit

Costain has transferred its interest in a portfolio of six PFI contracts in a bid to reduce the firm’s pension deficit by £22m.

In an interim management statement released today the company said that the deal would significantly reduce its pension deficit and result in a reduction in the group’s future annual cash contributions into the pension fund. The group’s pre-tax profit for the end of the year will also benefit from an additional £7.5m as a result of the deal.

In the same statement the contractor reported a strong performance for the first half of 2010 and said it had secured around £700m of revenue for 2011 and had forward orders of around £2.4bn.

Major contract awards since 30 June include the Bond Street station upgrade and a 10-year nuclear framework contract for Magnox South as well as a cable tunnel contract for National Grid. In addition, the group is currently preferred bidder on contracts with an aggregate value of more than £400m.

Looking forward the company said whilst challenging market conditions are set to continue for the foreseeable future, it expects to report continued progress at the year-end in line with its expectations.