Group weathers downturn in public spending by focusing on long-term partnerships.
Costain has increased pre-tax profit by 21% to £19.5m. The construction group said that focus on long-term partnerships will bring in further growth in 2005. Its forward order book increased by 37% to £1.1bn at 31 December 2004. Turnover was up 8% at £702.9.
Costain acknowledged that there had been a slowdown in central governmnet investment in roads and healthcare infrastructure but said that an increase in the proportion of private work had lessened the impact of fewer public contracts.
Chief executive Stuart Doughty said: “The year not only saw significant progress in performance, but also demonstrated the success of our focus on building long-term partnership relationships. The majority of contracts won during the year and of our forward order book comprises 5-10 year projects.”
Large contracts won in 2004 included a significant proportion of the water utilities captial asset programmes for the next ten years.
Costain is part of a team that was today announced preferred bidder for the major part of a £1.6bn Southern Water environmental improvement and water quality programme.
The 4Delivery consortium comprising United Utilities, Costain and Montgomery Wastson Harza would be responsible for delivering more than 250 water and waste improvement schemes which form part of Southern Water’s five-year capital investment programme.
The Costain Building Division increased turnover from £142 million in 2003 to £225 million. A joint venture with China Harbour has given the group access global ports and harbours market where there is considerable investment projected by port operators. The Costa Azul Gas project in Mexixco worth $170m was the first project resulting from the Costain China Harbour alliance.
In Iraq Costain said that workflow had been slow because of security issues and the focus on the election, but the group expected more project wins in the first six months of 2005.
Costain also has its sights set on the nuclear market and the group has pre-qualified for a number of schemes for AWE, BNFL and UKAEA. This includes contracts for project management, design and build treatment plants and short listing for the design of a major cementitious plant for nuclear waste, and pre-qualification for the first substantial decommissioning project, worth over £150m.