PFI now accounts for 12% of the group's business. Roberts said: "It's very competitive now and the margins are reducing all the time. Some contractors are wincing at the costs and the long gestation period of PFIs. You have to be selective about which you choose." He added that PFI was important but not the be-all and end-all. He said: "I certainly don't see it as the panacea. It's like everything; you have to take the best bits." Costain already has a £76m PFI contract to build King's College Hospital in south London, a joint venture with Skanska. The hospital is due to open in December next year.
The group is also part of a consortium running Bridgend Prison in South Wales, which was built under a PFI deal. It is also bidding for some police stations.
Costain announced pre-tax profit of £6.5m for the year to 31 December 2000, marginally up from £6.4m the year before. Turnover increased slightly from £378m to £386m.
Chief executive John Armitt said Costain had dropped the "scatter-gun approach" to contracts that had seen it reach the brink of collapse in the late 1990s. He said the group was concentrating on repeat business in specialist sectors. Clients include Waitrose, Tesco, Thames Water and the Highways Agency. He said the group's order book now stood at £600m, the best for four years.
